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Taxpayer is not a “citizen” of the United States??

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  • Barry
    I recently rejected a post to this group asserting that to avoid income tax all that was needed was a claim that you were not a US Citizen. I offered to allow
    Message 1 of 5 , Feb 17, 2010
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      I recently rejected a post to this group asserting that to avoid income tax all that was needed was a claim that you were not a US Citizen. I offered to allow a repost if the member could show where what he had proposed had ever worked. I've been running a Google Alert on "frivolous return penalty" and because of that got an Alert that lead me to this post about various defendants that tried the "I'm not a US Citizen" approach [quotes indented below]:

      "Don't need to preach to me, I believe you. It's these guys you have to convince.

      "Contention: Taxpayer is not a "citizen" of the United States, thus not subject to the federal income tax laws.
      Some individuals argue that they have rejected citizenship in the United States in favor of state citizenship; therefore, they are relieved of their federal income tax obligations. A variation of this argument is that a person is a free born citizen of a particular state and thus was never a citizen of the United States. The underlying theme of these arguments is the same: the person is not a United States citizen and is not subject to federal tax laws because only United States citizens are subject to these laws.

      "The Law: The Fourteenth Amendment to the United States Constitution defines the basis for United States citizenship, stating that "[a]ll persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside." The Fourteenth Amendment therefore establishes simultaneous state and federal citizenship. Claims that individuals are not citizens of the United States but are solely citizens of a sovereign state and not subject to federal taxation have been uniformly rejected by the courts. The IRS issued Revenue Ruling 2007-22, 2007-14 I.R.B. 866, warning taxpayers of the consequences of making this frivolous argument.

      In April 2005, a federal district court in Georgia permanently barred Jonathan D. Luman blocking him from selling his "Tax Buster" program that was based on the false theory that customers can avoid paying tax by renouncing their Social Security numbers and becoming sovereign citizens. See http://www.usdoj.gov/opa/pr/2005/April/05_tax_190.htm; see also 2005 TNT 93-17 (Apr. 7, 2005).

      In September 2006, a federal district court in California permanently barred James L. Tolbert from preparing income tax returns for others, because he promoted a fraudulent tax scheme based on the frivolous theory, among others, that state residents are not liable for federal income tax since they are citizens of the state and not of the United States. See http://www.usdoj.gov/opa/pr/2006/Sep..._tax_602.html; see also 2006 TNT 177-31 (Sept. 8, 2006).

      In January 2006, Lynn N. Ealy was sentenced in federal district court to 27 months imprisonment for his conviction on three counts of federal income tax evasion and ordered to pay restitution of $84,174 to the IRS. The evidence against Mr. Ealy demonstrated various affirmative acts of evasion, including the fact that he claimed he was not a citizen of the United States and the tax laws were unconstitutional. See 2006 TNT 18-48 (Jan. 12, 2006).

      In September 2006, a California federal district court barred James L. Tolbert from preparing federal tax returns. Tolbert promoted a tax avoidance scheme representing, among other things, that residents of California or other states are not liable for federal income tax because they are citizens of California (or other state) and not the United States, and that American citizens working in the United States need not file federal income returns because "compensation for labor" is totally different in meaning and in law from "income." See http://www.justice.gov/archive/opa/p...6_tax_602.html.

      In May 2009, a Connecticut federal district court judge granted the government's motion for a permanent injunction against Deowraj Buddhu and Sunita Buddhu, precluding them from: preparing or assisting in preparing federal tax returns; representing customers before the Internal Revenue Service; owning, working for, or volunteering for tax-return-preparation businesses; and promoting tax-fraud schemes. Sunita Buddhu and her father Deowraj Buddhu had operated a tax return preparation business in which they advised their clients that the IRS does not have authorization or jurisdiction to conduct examination of Connecticut residents' tax returns. http://www.justice.gov/opa/pr/2009/May/09-tax-474.html.
      Relevant Case Law:
      United States v. Hilgeford, 7 F.3d 1340, 1342 (7th Cir. 1993) – the court rejected "shop worn" argument that defendant is a citizen of the "Indiana State Republic" and therefore an alien beyond the jurisdictional reach of the federal courts.

      United States v. Sileven, 985 F.2d 962 (8th Cir. 1993) – the court rejected the argument that the district court lacked jurisdiction because the taxpayer was not a federal citizen as "plainly frivolous."

      United States v. Gerads, 999 F.2d 1255, 1256 (8th Cir. 1993), cert. denied, 510 U.S. 1193 (1994) – the court rejected the Gerads' contention that they were "not citizens of the United States, but rather `Free Citizens of the Republic of Minnesota' and, consequently, not subject to taxation" and imposed sanctions "for bringing this frivolous appeal based on discredited, tax-protester arguments."

      United States v. Sloan, 939 F.2d 499, 500 (7th Cir. 1991), cert. denied, 502 U.S. 1060, reh'g denied, 503 U.S. 953 (1992) – the court affirmed a tax evasion conviction and rejected Sloan's argument that the federal tax laws did not apply to him because he was a "freeborn, natural individual, a citizen of the State of Indiana, and a `master' – not `servant' – of his government."

      United States v. Ward, 833 F.2d 1538, 1539 (11th Cir. 1987), cert. denied, 485 U.S. 1022 (1988) – the court found Ward's contention that he was not an "individual" located within the jurisdiction of the United States to be "utterly without merit" and affirmed his conviction for tax evasion.

      O'Driscoll v. IRS, 1991 U.S. Dist. LEXIS 9829, at *5-6 (E.D. Pa. 1991) – the court stated, "despite [taxpayer's] linguistic gymnastics, he is a citizen of both the United States and Pennsylvania, and liable for federal taxes."

      Rice v. Commissioner, T.C. Memo. 2009-169, 98 T.C.M. (CCH) 40 (2009) – the court affirmed the imposition of a section 6702 frivolous return penalty against the taxpayer and rejected the taxpayer's claim that he was not liable for income tax because he resided in the "American Republic of Georgia" and was not a United States citizen.

      Knittel v. Commissioner, T.C. Memo. 2009-149, 97 T.C.M. (CCH) 1837 (2009) – the court imposed a $7,500 section 6673 penalty against the taxpayer for asserting the frivolous argument (among others) that he was "not a United States person as defined in I.R.C. section 7701(a)(30)."

      Bland-Barclay v. Commissioner, T.C. Memo. 2002-20, 83 T.C.M. (CCH) 1119, 1121 (2002) – the court rejected taxpayers' claim that they were exempt from the federal income tax laws due to their status as "citizens of the Maryland Republic," characterized such arguments as "baseless and wholly without merit," and required taxpayers to pay a $1,500 penalty for making frivolous arguments.

      Marsh v. Commissioner, T.C. Memo 2000-11, 79 T.C.M. (CCH) 1327, aff'd, 23 Fed. Appx. 874 (9th 2002), cert. denied, 537 U.S. 1029 (2002) - the court rejected the argument that the United States lacked legal standing to assess taxes because Marsh was a descendant from native Hawaiians. The court held that Marsh was a United States citizen subject to tax and not excluded as a purported member of the "Nation of Hawaii."

      Solomon v. Commissioner, T.C. Memo. 1993-509, 66 T.C.M. (CCH) 1201, 1202-03 (1993), 42 F.3d 1391 (7th Cir. 1994) – the court rejected Solomon's argument that as an Illinois resident his income was from outside the United States, stating "[he] attempts to argue an absurd proposition, essentially that the State of Illinois is not part of the United States. His hope is that he will find some semantic technicality which will render him exempt from Federal income tax, which applies generally to all U.S. citizens and residents. [His] arguments are no more than stale tax protester contentions long dismissed summarily by this Court and all other courts which have heard such contentions."

      http://www.irs.gov/taxpros/article/0...#_Toc224375589
      What this post is intended to do is apprise you of the reality of the situation. As is the case with most legal arguments we become familiar with respecting the income tax have already been tried by somebody in a real to life court situation with verifiable results. When dealing with the income tax it is not time to rely on word-of-mouth pop law; it's time to know what the courts have already ruled and have a realistic plan based on knowledge for dealing with them. As for me, the Name Jahuwah [not the names J-sus, the Lord, or G-d] is a strong tower, the righteous runs into it and is untouchable. Proverbs 18:10 Bear

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    • vze4bqdp@optonline.net
      ... I don t offer this thought as encouragement for claiming that non-citizens cannot be assessed an income tax, quite the opposite, but I do believe you have
      Message 2 of 5 , Feb 17, 2010
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        At 10-0217 16:14, you wrote:
        "The Law: The Fourteenth Amendment to the United States Constitution defines the basis for United States citizenship, stating that "[a]ll persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside." The Fourteenth Amendment therefore establishes simultaneous state and federal citizenship. Claims that individuals are not citizens of the United States but are solely citizens of a sovereign state and not subject to federal taxation have been uniformly rejected by the courts. The IRS issued Revenue Ruling 2007-22, 2007-14 I.R.B. 866, warning taxpayers of the consequences of making this frivolous argument.

        I don't offer this thought as encouragement for claiming that non-citizens cannot be assessed an income tax, quite the opposite, but I do believe you have made an important mistake otherwise.

        The 14th Amendment does read as you say. Gaining citizenship in the state of residence on the basis of having been born in the United States, however, is quite different from gaining American citizenship on the basis of having been born in one of the (sovereign) states. A state of residence is not, necessarily, the state of birth.

        The wording of the 14th Amendment, itself, does seem to defeat any opportunity for addressing citizenship of those born in one of the states of the Union. To that extent I have come to accept the 14th Amendment as particularly narrow in scope and entirely irrelevant among states which now acknowledge citizenship as a function of live births within their respective borders. In my mind, citizenship has returned to being a common law question. The alternative would seem to admit to any number of unreconcilable issues and unanswerable questions.




      • Michael
        ... Ask the wrong question, and you will get the wrong answer every time. Assert the wrong issue, and you will fight the wrong fight everytime. Keep the burden
        Message 3 of 5 , Feb 18, 2010
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          --- In tips_and_tricks@yahoogroups.com, "Barry" <bear@...> wrote:
          >
          > I recently rejected a post to this group asserting
          > that to avoid income tax all that was needed was a
          > claim that you were not a US Citizen.

          Ask the wrong question, and you will get the wrong
          answer every time.

          Assert the wrong issue, and you will fight the wrong
          fight everytime.

          Keep the burden of proof on the one asserting it!

          "I am more than willing to pay all taxes that I am
          legally obligated to pay. Please send me the law
          that requires me to pay taxes."

          Of course, if one has already volunteered by signing
          up to pay taxes, this would not apply, nor would
          most any other argument.
        • Frog Farmer
          ... The courts agree it created a new status that didn t exist before. ... Small p , two groups, many possible situations, but none yet can be described as
          Message 4 of 5 , Feb 21, 2010
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            > "The Law: The Fourteenth Amendment to the United States
            > Constitution defines the basis for United States citizenship,

            The courts agree it created a new status that didn't exist
            before.

            > stating
            > that "[a]ll persons born or naturalized in the United States,

            Small "p", two groups, many possible situations, but none yet can be
            described as universal...

            > and subject to the jurisdiction thereof,

            ...and that's why, because this is another qualifier that surely never
            included every American using that particular definition of "United
            States".

            > are citizens of the United States
            > and of the State wherein they reside."

            Small "c", corporate name, "reside" being a corporate activity as
            defined in my state's (small "s") codes.

            > The Fourteenth Amendment
            > therefore establishes simultaneous state and federal citizenship.

            Yes, for those limited groups not encompassing all Americans due to the
            admission that TWO requirements are presented for fulfillment.

            > Claims that individuals are not citizens of the United States but are
            > solely citizens of a sovereign state and not subject to federal
            > taxation have been uniformly rejected by the courts.

            Reminds me of those who say that the courts have ignored people claiming
            to make a special appearance. Yes, they have.

            > The IRS issued
            > Revenue Ruling 2007-22, 2007-14 I.R.B. 866, warning taxpayers of the
            > consequences of making this frivolous argument.

            "Taxpayers" should never claim to be something they are already shown
            not to be!

            All those citations are great but most rely upon key words called "words
            of art" many of which ring alarm bells when I see them, such as
            "resident", "customer", "business", etc. etc.

            I was recently at a "business Fair" put on by the local chamber of
            commerce. I saw references to "owning a business", "you are a
            business", "you have a business", "you do business", etc.

            I asked everyone who used the word in their signage what the definition
            was that they went by. I didn't get ONE answer! Seems people assume
            definitions adverse to their interests. Nobody said that business is
            what you do to be busy.

            Regards,

            FF
          • windandthestone
            ... words ... definition ... In response to Barry s posting, once you wind up nose-to-nose with the IRS, you have done something wrong. Dealing with the
            Message 5 of 5 , Mar 30, 2010
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              --- In tips_and_tricks@yahoogroups.com, "Frog Farmer" <frogfrmr@...> wrote:

              > > The IRS issued

              > > Revenue Ruling 2007-22, 2007-14 I.R.B. 866, warning taxpayers of the

              > > consequences of making this frivolous argument.

              > "Taxpayers" should never claim to be something they are already shown

              > not to be!

              > All those citations are great but most rely upon key words called "words

              > of art" many of which ring alarm bells when I see them, such as

              > "resident", "customer", "business", etc. etc.

              > I was recently at a "business Fair" put on by the local chamber of

              > commerce. I saw references to "owning a business", "you are a

              > business", "you have a business", "you do business", etc.

              > I asked everyone who used the word in their signage what the definition

              > was that they went by. I didn't get ONE answer! Seems people assume

              > definitions adverse to their interests. Nobody said that business is

              > what you do to be busy.

              > Regards,

              > FF

              >


              In response to Barry's posting, once you wind up nose-to-nose with the IRS, you have done something wrong.  Dealing with the government in most any aspect is like running a maze, where one wrong turn zaps you with a big electric shock!  I am disabled, collect my federal benefit of Social Security disability benefits, and am pro se in an ERISA employment case in federal court.

              Until about 2 years ago, I was just plain ignorant of anything that didn't get in my way — like most working rats on the wheel of life.   Since my lawyer quit after the case dragged on for 4 years, and some of my family began looking into the IRS stuff, I have spent literally thousands of hours in front of a computer reading and learning about the federal maze of laws, regulations, statutes and the Federal Rules of Court Procedure (FRCP).  I learned that making the distinction between the laws — United States Code,  and the implementing regulations — Code of Federal Regulations, is vital to survival.  

              What many people don't know is that the filing of a W-4  is worse than joining the Foreign Service and having your first child run away from home.  I suspect that every one of the people involved in Barry's examples gave someone who was a withholding agent a W-4.  A w-4 is a voluntary agreement to have your compensation taxed as if you were receiving certain federal benefits, not unlike my Social Security benefits which are taxable.

              Sadly, many of these folks hadn't filed notice with the IRS at the International Division in Philadelphia, stating that they were not engaged in any taxable activity at the federal level — Form 4598E is very helpful and in the files section.  Most of what the people say to the courts are true.  But our judical system has been corrupted.  Interestingly, it was the federal judges that were the first to complain about the employment taxes.  You must remember who they work for!!  It's the saddest fraud ever perpeptrated on our country.  But there is a way out in the future, and it's simple. 

                        Do not ever file a W-4, and write a notice to the IRS that you are not actively engaged in trade or business with the federal government and that you are a non-resident alien — UNDER THE TERMS OF THE IRS LAWS.  Use a 1040NR for any refunds.

              Remember that "citizen" is whatever it is defined to be in any given part of the law, and that it changes a number of times, depending on the situation.  The same is true for "wages," "employment," "income," etc.  What it means in one chapter may change in the next.

              I don't know what will happen when most people catch on.  Chinese proverb says, "May you live in interesting times."  Well, we are getting there now that we have medical bills to pay.  


              OPT OPT NOW.  Social Security is a "non-contractual insurance."  This means there is no guarantee it will be there tomorrow, regardless of your contributions.  Think of what you would do with that same amount of money.  The IRS will be implementing the laws of the new health care bill — and there are fines and punishments in the laws.  Won't that be fun!!



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