Tax Attorney Confirms Article on W-4 * Larry Becraft, Jr.
Thu Jan 25, 2007 17:04

-------- Original Message --------
Subject: Tax Attorney Confirms Article on W-4 * Larry Becraft, Jr.
Date: Thu, 25 Jan 2007 08:11:35 -0500

Presently, I have an appeal in a criminal tax case pending before the Eleventh Circuit which raises the issue as to who is liable for the federal income tax.

The government filed its brief in this case and I was utterly amazed at the government's answer to my argument.

Due to the admission so made, I now realize that my argument is monumentally significant and I feel compelled to tell other attorneys involved in similar litigation.

Last year, I tried a case in Orlando, Florida wherein **** was charged with tax evasion. **** was a student and follower of a man named George Arlen, who, like Irwin Schiff, advocated the who's liable argument built around 26 USC sections 6001, 6011, and 6012.

**** had engaged in a constant stream of letters to both the IRS and his employers which squarely raised the issue that he didn't believe he was liable for the tax because he found no section of the Code that made him expressly liable.

This position formed the factual foundation for our defense that he didn't act willfully. It also afforded me the excellent opportunity to raise the same legal argument via requested instructions and motions for judgment of acquittal.

The essence of my argument was that the income tax, pursuant to Subchapter N of the Code, imposed the tax only on aliens and foreign corporations who had sources of income outside the U.S., and also within U.S. possessions. The only persons expressly made liable for the income tax are section 1461 withholding agents for aliens and foreign corporations.

This was the legal argument created by my requested instructions and my Rule 29 Motion.

My brief in Ward's case to the Eleventh Circuit had several major parts which constitute my ultimate conclusion that state citizens were not taxed on their sources of income within the states.

First, I treated the question of the jurisdiction of the United States and showed that its jurisdiction was only in Washington, D.C., the federal enclaves within the states and the territories and insular possessions of the United States.

Next, I discussed all the federal income tax statutes from the 1913 act forward and showed that, statutorily, the tax was one imposed only in its jurisdiction.

I then treated all prior regulations promulgated for all the prior income tax acts and showed that the regulations clearly stated that the tax was jurisdictional.

My argument was thus ended with the conclusion that state citizens are outside the jurisdiction of the United States and were not thus taxed. As my brief says:

For U.S. citizens, the sources subjected to taxation are treated in Section 911 and 931. In Section 911, a U.S. citizen living and working abroad, and thus having sources without the U.S., is subjected to taxation. In Section 931, the sources subjected to taxation are those sources earned within a possession of the United States. For U.S. citizens, who were born in the U.S., who are domiciled in the U.S., and who have sources of income within the U.S., there is no income tax imposed.

Since **** did not fall within the statutory classes of individuals subject either to the tax or filing requirement under section 6012, the District Court committed error in denying his motions for acquittal.

I then presented the subchapter N argument and concluded that the only persons liable for the tax pursuant to 26 USC sections 6001, 6011, and 6012, were section 1461 withholding agents.

I had expected that the government would respond with a lengthy, detailed argument showing that state citizens were taxed via some complicated manner that directly or indirectly so imposed the tax.

But, when I received the government's brief, I found one page thereof that addressed my issue;.. After calling my argument frivolous, the U.S. attorney then stated as follows:

"The government is unable, therefore, to offer case authority for the universally accepted proposition that a citizen of the United States, working and residing in the United States, subject to federal law, earning wages, and responsible for filing an income tax return, is liable for taxation."

Although these are the words of Bruce Hinshelwood, I feel confident that most other prosecutors would have been compelled to make the same admission. There, indeed, is no case, or statute, that expressly holds a state citizen liable for the income tax.

It is my hope that you and other attorneys will study this issue... From my viewpoint, we certainly need to raise this issue in other circuits.

P.S. Why is it that the only court which has been given jurisdiction of Title 26 crimes is the U.S. District Court in Guam? See 48 USC 1421.

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