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the daily spew

Wednesday, September 28, 2005

Have you Cracked the Code?

Over the last several years, I have had the occasion to read quite a few websites of folks who claim that the income tax is illegal. Some also claim that it is immoral. None as yet have claimed that it was fattening (although it is hard to tell seeing the rolls of lard hanging off the body politic).

Many site revolved around a piece of the tax code called setion 861. Joesph Bannister is perhaps the most noteworthy among the crowd being a former IRS Criminal Investigation Division Special Agent. Other folks contend that the 16th Amendment was never properly ratified and the income tax as designed is invalid. Others contend that the Buck Act of 1940 created federal districts that overlaid the union states and created federal states that appear like the union state but whose name is spelled with capital letters. They argue that having a Social Security Number or sending mail through the postal service puts a person in the federal state and thus subject to income tax.

While many of these cases have a certain amount of merit, they also raise in the mind questions which are not easily answered. There are some folks out there who have sites that debunk the tax protest arguments, but even they do not completely address the questions that come to mind. That was until I stumbled upon the Team Law website. The site is full of legal information and is a boone to those of us who have never studied law. They have a section that fairly systematically destroys every patroit myth that I have come across while surfing the web. Team Law is a great website and well worth the time for the legal and historical education.

I did find one theme that many tax protest websites have in common: jurisdiction. By some overt action or by subtle conspiracy each system somehow puts a person squarley into the federal jurisdiction and subject to the income tax. Peter Hendrickson author of Cracking The Code also contends that jurisdiction is central to the income tax. He also contends that it is through our ignorance of the Internal Revenue Code (and its supporting body of law) and its labyrinthine method of implementation that we place our earnings under federal jurisdiction voluntarily. By placing our earnings under federal jurisdiction, income can be derived from monies earned and a tax levied.

Peter Hendrickson draws upon US law and Supreme Court cases to arrive at the conclusion that the income tax is an excise and not a direct tax. That an excise tax is a tax on the excercise of some privilege. The excercise of privilige occurs under federal jurisdiction as it relates to the source of income and this income becomes subject to the excise (income) tax. He also argues that non-federally-connected earnings are not subject to income tax, although earnings which are federally-connected are subject to federal taxes.

The kernel of truth that comes from his book is simply this: If people would obey the law, they would find that much of what they earn is not subject to federal taxes. What a novel concept - obey the law and be largely free from the Internal Revenue Service. Using the logic that Hendrickson presents in Cracking the Code it is easy to see that while Vernice Kuglin may have beat the tax evasion charges, her wages are subject to federal income taxes. Why is that? The answer is simple: she holds a FAA pilots license for flying commercial aircraft for FedEx. A license allows its holder to perform some action that would be illegal without said license. It allows her to exercise a federally granted privilege.

Cracking The Code is a book that every American should read. It is concise and uses legally sound reasoning to spell out the legal obligations that we have in paying income taxes.

Did I mention that he got a complete refund of all tax monies surrendered to the IRS including FICA and Medicare taxes? Visit his site and buy and read his book.


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