The income tax is not what you have been led to believe. It’s a legitimate logical tax but layered on top is a massive deception to tell people that the tax applies to all earnings. If you can imagine a ponzi scheme like the Bernie Madoff’s lie, then multiply that by 300 million people.
The income tax is legitimate tax on federally-connected activities, such as:
- Working for the government
- Using federal land for cattle grazing or oil drilling
- Investing in a federal corporation and the resulting gains or dividends (used to be railroads, but not sure of a current example)
- And a myriad of other activities related to the federal government
It’s called a ‘return’ because the money from these activities comes from the federal government and part of it must be returned to the federal government.
It’s called ‘filing‘ the form because they are, in most cases, speaking to their employees or investors or business partners, and the gov’t is asking these people to file a form.
Technically, the people engaged in the three activities above are making a ‘return of money’ and also ‘filing/filling out a related form’. They’re not ‘filing a return’.
If you work for a private-sector company, such as Apple, you are not engaged in a federal activity and the tax on federal income does not apply. But you and Apple make a few mistakes that make you liable anyway.
THE 16TH AMENDMENT
The 16th Amendment simple said that the income tax applies to item three in the list above. It did not say that the income tax applies to all workers payments in the fifty states.
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.
Now, everyone focus on ‘whatever source derived’, but you need to focus on the word ‘incomes’. Income is a federally connected activity, such as the three listed above. So if you are engaged in income, then any source is fair game – cattle grazing, oil drilling, investments in federal/domestic corporations.
It’s like saying we’re going to tax cooking, from whatever source derived – cooking breakfast, lunch; cooking at home; cooking at a restaurant. If you’re not engaged in cooking, then the tax does not apply.
So, if you’re not engaged in a federally connected activity, then the tax on income does not apply. You are told otherwise but in a vague deceptive way so they can not be prosecuted for deception. They don’t tell you otherwise because they want your money. If you started filling out tax forms for French taxes, the French government would take the money.
The 16th amendment came about because a court case (Pollock) struck down the income tax as unconstitutional with respect to item number three above. The ruling said that if you tax dividends, that is like a direct tax, so this aspect of the income tax is unconstitutional. Not the whole income tax; just with respect to dividends.
So to correct this, all the states passed the 16th amendment. The 16th Amendment purely says that item number three is taxable.
After its passage, a citizen of New York, Frank Brushaber was taxed on his investment in a railroad and he said the tax was unconstitutional. The courts ruled against him because the railroad was a federal corporation, and therefore the source of the gains was federal and the tax applies. Note in the case the railroad is referred to as a ‘domestic’ corporation, because domestic means federal.
It is radically important to note that Brushaber was NOT taxed on his other dividends from private, non-domestic companies. Do you see this? The income tax only applied to his dividends from a federal corporation, in this case a railroad incorporated in Utah when it was a territory (not a state).
THE VICTORY TAX
Fast forward to WW2, when federal employees were of course returning part of their pay to the federal government. During the patriotic fervor of WW2, the people who run the federal government said it would be patriotic to pay the income tax which they positioned as a victory tax. So everyone I expect starting completing the 1040 forms, which were widely distributed, for people to calculate what they should donate, since the tax did not apply to their careers.
WW2 ended but one consequence was that everyone kept paying this tax and then eventually through deception and word tricks, some noted below, people kept paying it.
But you have to pay the tax if you claim that your private earnings are from a federal activity. If you work at a private restaurant and call your pay ‘wages’, which is item number one above, then you have to pay a tax on this. Your mistake and the mistake of the restaurant is to call the pay wages.
You see, in the federal code, they have defined wages to mean item number one above. In the context of the tax forms and the tax code, wages are only federal payments from a federal entity. In the context of the code, the payments from a private restaurant to a worker are NOT wages. They are payments. There is money changing hands. But it’s not wages.
Simply filing out the 1040 may be considered a federal connected activity. Get it? You’re acting like an employee or investor. Why otherwise would you be using this form? Do you complete the internal forms at Wal-Mart????
People get caught up in this mess because their private employers mistakenly use federal tax forms for their business and their workers.
A worker completes a W-4, which is really for federal gov’t employees, contractors, etc.
Then the business completes the W-2 and by doing this mislabels the pay as ‘wages’ and sends this form to IRS.
The worker must correct that form by writing to Social Security and/or IRS and say wages were actually zero. Yes, I received $50,000 in bi-weekly pay checks, but that is not wages, AS DEFINED IN THE U.S. CODE.
$50,000 in payments. $0.00 in wages. This may be hard to see at first. But it’s right there in front of us.
If the US Code said a table has two wings and can fly, then that’s what a table means in the context of the code. The definitions supersede the regular conversational meaning of words. A table is no longer a flat, sturdy material with four legs.
SOCIAL SECURITY STATUS
Even if you correct the W2s and 10999s, then you have to correct your status on the social security number. By using that number, you are implying that all money you take in, is federally connected. It’s called ‘compensation’ in this case. I don’t have all the details here.
But you must contact social security and IRS and tell them that your SSN applies to someone who is not a U.S. citizen (meaning federal employee).
The SSN in essence can be called an employee number used by the government to identify their workers. Completely harmless idea, until they convinced everyone that they needed this number. I think social security is a pension program for federal employees. You apply for a social security card and they assume you’re an employee, just as if you applied for benefits at any other company.
It’s as if you applied for the pension program of a steel company, but you don’t work for them. The steel company loves the idea, because you are ALSO agreeing to ‘return’ 20% of your pay from other companies to the steel company. The deception is so ridiculous, once you see it.
You also have to correct 1099 forms.
Ideally, stop completing the w-4, since it likely does not apply to your work.
Ideally, private companies would stop using these forms and also stop paying the federal corporate income tax, which also only applies to gains from federally-connected activity. A restaurant in the private sector does not need to ‘return’ part of their earnings to the federal government.
Working in the United States means working for the United States (meaning the federal government). You might say you work in a restaurant but you mean you work for a restaurant. Same thing.
In the US code, in most cases, they don’t use the term geographically.
None of what is written here is inflammatory or radical. People are simply mis-labeling their earnings as federally connected and then making themselves liable to make a return of money.
In fact, this short essay is saying that people are committing perjury on federal forms because their earnings are not wages. Unbeknownst to them, they are lying. If you are reading this and you agree, then you can no longer lie on the form. To do otherwise, would be perjury.
Also note that on the 1040 forms, by the signature line, it says, ‘under penalties of perjury’. Penalties is plural because:
- Your signing as a federal employee
- Your signing a document
Now, if you do in fact have federally-connected earnings, then you likely need to complete 1040NR – for Non-Resident aliens.
- if you don’t live in a federal territory or DC, then you are non-resident geographically
- if you were born in one of the 50 states, then you are also considered an alien to the federal government and its territories
I mentioned the famous Brushaber case above. In a subsequent notice from IRS, they refer to him as a nonresident alien. He was a citizen of New York, not DC, Guam, or Puerto Rico, for example.
Also, if you do in fact receive federally-connected payments, and you should complete the W-4, it’s likely you would NOT tick that you are a U.S. citizen. Why?
- In the context of the form, U.S. citizen likely means an office holder in the federal gov’t, as described by Obama.
- Or U.S. citizen means someone living in a federal territory such as Guam
- Or U.S. means United States the corporation, and definitely not the ‘country’ called “The United States of America”
Similarly, on the I-9, you are not likely a U.S. citizen. You are likely a citizen of the state in which you were born or naturalized, and consequently a citizen of The United States of America.
There is no shortage of ink in the federal gov’t. If they meant USofA, they would have said that. But they don’t. They mean U.S. as in United States, the corporation, or United States, in congress assembled, the government body of the federal government.
It’s complex. I know.
But I think I covered every way they connect to you.
- W-2 and 1099s, and your failure to correct this false evidence against you
- SSN status as U.S. citizen rather than should be ‘other’ or non-citizen national
- I-9 status as U.S. citizen rather than should be ‘other’ or non-citizen national
- Completing the 1040 and flat out mislabeling your private-sector payments as ‘wages’ or federally connected!
- the three general types of federally connected activites
- that United States means a corporation or the federal government (itself) not The United States of America
- the special meanings of wage and other words within the code. (You must grasp that the money you get from a private employer is not ‘wages’ in within in the meaning of the IRS ‘code’.
And generally that the law is crystal clear but it’s directed to people such as federal workers, oil drillers, and investors in federal corporations. The laws of France are crystal clear as well unless someone convinced you that you were a French Citizen and needed to pay their tax.
I don’t know if it’s helpful, or it will boggle your mind further, but the USofA is not a country or a nation, it’s a union of nation-states. West Virginia is a nation-state. At the moment, you would say Germany is a nation-state, but give it time, maybe a decade or two, and people will think the European Union is a nation-state, and Germany is just a subservient state within. This is what happened with the perception of the fifty states. Just like Brushaber, noted a few times on this page, he was a citizen of New York. He would still be a citizen of New York today.
The income tax is legal, constitutional, and clear.
It’s just been misapplied, and the feds don’t turn down your money if you want to give it to them.
You must pay your taxes. But which taxes apply to you and your private-sector job?
For more learnings:
- “Cracking the Code” book on Amazon and this synopsis about the 16th Amendment by the same author
- Two e-books by NoThanksIRS
- The Federal Zone