September 26, 2000
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The
Tax Freedom 101 Report
*Updates* - *News* - *Information*
The Constitutional Revival Movement's News Source
- September 26, 2000 -
This weekly HTML formatted e-newsletter contains:

* * * * * * * * * * * * * * * * * * * * * * * * * *

UPDATES:
* Save-A-Patriot Fellowship Convention Update
* Test Your Knowledge with: The Constitutional Quiz Question of the Week!

NEWS:
* The Cost of Energy - Inflation Control...?

INFORMATION:
* Statement of Citizenship Accepted in Lieu of SSN

Dear Netizen: Do you find the material in The Tax Freedom 101 Report interesting, useful, educational, and enjoyable? You do? Great! Then why don't you recommend this newsletter to a friend or two. They don't have to be a crazed liberty-lovin "radical" like you and me - even raging communists enjoy reading our newsletter! Spread the word... the forward button is just a click away...

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UPDATES:
* Save-A-Patriot Fellowship Convention Update
We have received word that the Save-A-Patriot Fellowship Convention taking place November 9th through 12th is filling up fast. If you still plan on attending and would like to reserve a seat for any of the four days you can email Edward Akehurst at sapf-ir@home.com for details. Keynote speakers: Len Horowitz, author of "Aids & Ebola"; with Bernard VonNothaus of NORFED plus much more. This convention will be held at the the "National Bunker" in Westminster, Maryland.

* Test Your Knowledge with: The Constitutional Quiz Question of the Week!
This week's question: How many delegates were chosen by the States to attend the Convention held at Philadelphia?
The answer will be provided next Monday in the TAXFREEDOM 101 Discussion Forum at: www.egroups.com/group/taxfreedom101


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NEWS:
* The Cost of Energy - Inflation Control....?
It is no secret now that we are going to have an "energy crisis". However what are the external pressures that have now brought about a "shortage" of black gold? Is there really a shortage? Was the shortage planned? Certainly it can be argued that there is increasing demands for the lifeblood we call oil in many industrialized nations today. However we may need to ask some very fundamental questions to understand the real reason why energy prices are fluctuating in only one direction - up.

The higher energy prices are just the mere evidence of inflation, which has not been brought into check as of yet. Costs for goods and services will also begin to rise across the board, and this will provide yet another release valve for inflationary pressures due to the far-and-wide credit expansion of the last two years. Over the past year the "Fed" has attempted to accomplish bringing the rampant inflation into control primarily through the incremental raising of interest rates. They thought no one would notice.


Up until now small increases in the interest rate have been somewhat successful, but more drastic measures are required. These measures where planned months ago according to Don McAlvaney with respect to oil prices, and the timing couldn't be more perfect. Also, if people think that dipping into the strategic oil reserve by the Clinton Administration is purely a political measure they're right; it is an election year after all. We will not see but a hiccup in the price of energy when a release in the S.O.R. is made.

The tax slant: Interestingly, the federal gas tax (a uniform indirect tax) present throughout the country will increase proportionally to the percentage rise in fuel costs, and the government coffers will soon be replenished to pay for other "Big Dig" projects like the one in Boston Massachusetts.

The short and long of it all is that higher prices at the pumps are a way of abating inflation, and guaranteeing a fair price to the countries that produce the commodity. The real culprit is inflation, the hidden tax. More credit expansion in the USD reduces the value of all currency already in circulation. The oil producing nations are not stupid - they know how it works. They took a beating for a few months while we paid only just over a buck for regular not too long ago. We also were flooded with money by the Fed during this time. It may now be time to pay the piper - or should we say pumper?!

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INFORMATION:
* Statement of Citizenship Accepted in Lieu of SSN.
The following article titled, "Statement of Citizenship Accepted in Lieu of SSN" came from a past issue of the Reasonable Action newsletter distributed to members of the Save-A-Patriot Fellowship. We are using this article to illustrate the process people may expect when approaching a potential or current employer with the issue of having to divulge an SSN and execute a W4 by citizens for "employment".

[Begin Article]
Reasonable Action
Statement of Citizenship Accepted in Lieu of SSN
To the Editor --

My name is Steven, and I live in New York. I am a Licensed Practical Nurse working for the local hospital in town. During the summer of 1992, I applied for a position with a local health center that was affiliated with another hospital. I learned of the position through an advertisement placed in a local newspaper which said that a part time or per diem position was opening for an L.P.N. and that applications were being taken at their office.


I filled out the application (minus a social security number) and dropped it off at the nursing office. Several weeks went by without a response, and since I was busy with several other private duty positions, I'd pretty much forgotten about the job. Several months passed and one afternoon I was in the grocery store and ran into the nurse that was in charge of the health center. She asked me why I had not applied for the job and I explained to her that I had submitted an application but had not yet been contacted for an interview. She asked me to give her a call at the office and said she would make sure that I was interviewed if I was still interested.

Within a few days the lady who does the hiring contacted me and asked if I could come in for an interview and "fill out the required paperwork." When I arrived at the office I went thru a small orientation. Then I filled out the forms but when she handed me the final form to fill out it was a W-4. I told her that I was not required to file this form and that I did not have a social security number. She said "ALL" Americans are required to file this form so that the proper amount of taxes can be withheld each week. I remained calm and polite but informed her that she was mistaken. I explained that not all Americans were required to do this and that in fact, compliance was voluntary. She was becoming visibly upset with me.


I thought it would be wise to explain that I had the documentation she would need to accept my claim and that if she or her superior would comply with the law they would be informed by the I.R.S. that I was correct. She emphatically replied, "Well... I have never in my life heard of such a thing!" She was adamant, and in her mind she just knew that I was required to file the W-4, "just like everyone else," but she agreed to listen anyway. I gave her a copy of my signed "Statement of Citizenship" (in duplicate), a copy of I.R.S. Publication 515, a copy of C.F.R 26, sec. 1.1441-5, and a copy of the suggested letter of transmittal supplied by S.A.P. I went thru each and every page and explained to her what it all meant. Then I advised her that the burden of responsibility for these claims rested with me, and that regardless of what she believed, the law required her to forward my "statement of citizenship" to Philadelphia so that they could make a determination. I went on to explain that she would be obeying the law and that there was no reason to fear any repercussions for doing so. I thought that it was important to carefully explain the "Letter of Transmittal" to make sure that it was directed to the I.R.S. in Philadelphia ONLY.

It never seems to fail. No matter how many times you explain this to someone, they will call or write the local office of the I.R.S. instead of Philadelphia. The local office will immediately give the employer incorrect information and then the employer tells the employee, "I told you so."


She was unsure of what to do even after I explained the correct procedure, so she forwarded my paperwork to their main office it the hospital in New York to dump the problem on them.

Just as I thought, the Finance Director at the main office ignored the requirements of the law and called the local IRS office to ask what they should do. Naturally they told her that I was wrong and that I was "required" to file the same W-4 as everyone else.


Well, in the meantime I started to work for the health center. They made the standard deductions without my permission, and I waited to hear from the home office about the disposition of my statement of citizenship not realizing they had contacted the local IRS. It was a month later before the office manager finally informed me that the "Statement of Citizenship" and related paperwork was invalid and that she was under pressure from New York to get a signed W-4 with a social security number. I delayed as long as was possible while trying to explain to the director that she had made a mistake by not following the directions I had given, and that this could all be resolved by simply sending the letter of transmittal to the Philadelphia Office of the IRS. She refused, and kept taking money from my paycheck each week.

I decided it was time to call Save-A-Patriot. After talking with Irma in the National Workers Rights department, she wrote a letter to the New York office to explain the law. About a week or so later I received an inter-office memo from the home office with a check for $224.00 and a letter of apology from the Finance Director. She said that she had never encountered a situation such as this, and was returning what they had deducted up until that time to cover state and federal taxes. Not only did I receive a complete refund, but I am currently receiving my full paycheck with no deductions and they no longer want a W-4 or a social security number.

[End Article]

Tax Freedom 101 comments: While this story ends happily ever after, we do not want to give the impression that all employers when earnestly presented with the law will obey it. To the contrary, it is the rare employer who will uphold the rights of its' workers when they wish to work without a number, and do not voluntarily execute a W4.

As you have read the first thing that an employer will do is consult the local IRS office, or they may even retain their high priests and wizards at the local accounting or legal branch to get a professional "opinion". These opinions presented to the confused employer by the "professional" usually turn out to be based largely upon their personal "beliefs" - not the law. However, the employer need not go any further with the issue since his hired professional certainly should understand the law - that is why they attend IRS sponsored workshops and stack their bookshelves with IRS publications and circulars. We should clarify that publications and circulars are not the law, but be that as it may it still looks good when a potential client enters the office. They are reassured that surely this guy is "on top of things".

So now what is the worker/citizen to do? The member in this article contacted a division at fellowship headquarters known as the National Workers Rights Committee (NWRC). The NWRC prepares letters on behalf of members with regard to, among other issues, stopping the withholding of income and employment taxes in the workplace. They provide their professional expertise by actually citing the law in their letters to the employer and carbon copying their accountant or lawyer. This can be very embarrassing to the local professional charged with knowing the law. In most instances the professional retained by the employer responds with invective charging that they can find numerous instances where people who use this "stuff" (the law) get into trouble with the IRS.

The employer is now in a quandary. Who does he rely upon for advice? The tax "pro" or this employee who has retained the services of what appears to be some large organization defending workers rights? His choice is he relies upon neither. He takes the route of who can damage him the most - the IRS or his employee. The IRS certainly can cause problems, the employee... well? So it goes routinely that the issue is ignored and the ball is back in the worker's court. The worker can sue his employer if he continues to withhold under the State crime of conversion if he so chooses. NWRC has settled out of court on this issue, more than once, and for some hefty sums. However this does not always place the employee in the best of light with his employer.

There are three possibilities left if one does not challenge (sue) the employer on the issue. 1. The worker can ask to be put on as a contract employee, and take care of their own tax liability as they understand it, and relieve the employer of the responsibility, 2, quit and go work for themselves, or 3, sit back and allow the theft to continue while funding the black hole known as Social Security.

We should also interject here that due to widespread exposure of the truth by the Save-A-Patriot Fellowship and others, 1.1441-5 was repealed January 1, 1999. This still does not change the fact that if you are a citizen working for another, that taxes can be withheld without consent. A citizen employer hiring a citizen worker really had no duty to tender an SOC to the IRS for the purposes of stopping tax withholding. The SOC never did belong in the regulations in the first place since citizens have never needed relief from a law which doesn't apply to them. However, the fellowship continues to use these regulations as a tactical measure. We'll let the IRS explain why it was "in there" for decades!
Wishing you a tax-free day,
The Tax Freedom 101 Staff

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