NoSSN - UPDATES:

October 10, 2000

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The Tax Freedom 101 Report
*Updates* - *News* - *Information*
The Constitutional Revival Movement's News Source
- October 10, 2000 -
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http://www.nossn.com/tf101

Patriot Web Hosting and Mastering - Using Apollo Web Applications and Linux Servers
www.oosterman.com

UPDATES:
* The IRS and Volunteerism
Looking to step up to the mandate: "Ask not what your country can do for you, ask what you can do for your country", uttered by John F. Kennedy? The IRS has some opportunities, check it out here. We actually might take them up on the offer! ;~)

* Children Train as Russia's Tax Police
AT a newly opened school in Moscow the children are studying extra subjects on top of the normal reading, writing and arithmetic - they are taught hand-to-hand combat and how to strip a machine gun.

Set up last month, the Third Moscow Cadet Corps of Tax Police school is training the next generation of the elite tax corps. Best know for storming company offices, Russia's tax police wear black ski masks and carry Kalashnikov rifles. But the children at the school are convinced that they will be serving the public good.

Read the rest of the story here.

* Test Your Knowledge with: The Constitutional Quiz Question of the Week!
This week's question: How were the delegates to the (Philadelphia) Constitutional Convention of 1787 chosen?
Last week's question and answer is provided in the TAX FREEDOM 101 Discussion Forum at: www.egroups.com/group/taxfreedom101

Learn the "Three Maxims" for Tax Freedom!
Are you living in a glass house with your pants down? You may be if you have not discovered
the fundamentals of protecting your wealth, property and privacy! Follow these three maxims
and you are most assuredly guaranteed to be one who passes wealth on to your heirs instead
of having it stolen and eroded by taxes. Learn the three simple rules for Tax Freedom here - or -
send an email to taxfree@taxfreedom101.com?Subject=Three Maxims for more information.

NEWS:
* The Fellowship is Honored Once Again
The enemies of Liberty are at it again, and the Fellowship is honored that its efforts must really be bothering them. This time their false statements are found on the following website: http://www.treasurytaxsecrets.com/warn/wsap-1.htm

This site is registered to one Bruce Hatcher of Wayne, West Virginia. If this gentleman is not an agent provocateur, then a review of his website reveals that he surely is a novice.

A disgruntled ex-employee of the Fellowship, Steve (Fitzgearld) Deluca, originally obtained the documents that Hatcher refers to from the Department of Justice six years ago. Deluca has threatened several times since then, for reasons known only to himself, that he was going to destroy the Fellowship.

The reason we contend that the author of the website in question is a novice in his misunderstanding and use of the legal term "United States." Based on this misunderstanding, he disregards all of the evidence found in the Fellowship video presentation, "Just The Facts," that the domestic income of citizens and resident aliens is not taxed. There are many definitions of the legal term United States, but this is not brought up or discussed on his website.

There are other points that can be made, but I frankly do not have the time or the inclination to address them. If I did that I would be doing exactly what our enemies would like us to do, running around doing nothing else but trying to put out all the diversionary brush fires they set.

When I first involved myself in the Cause of Liberty, 1963, I told my wife that if I go to jail that would be a good sign of my success. Well, that occurred in 1982, and they have tried twice since then to re-incarcerate me, but failed. To sum this up, I might be incarcerated again before I go to be with the Lord, but I doubt it will be from the efforts of rank amateurs such as Mr. Hatcher.

John B. Kotmair, Jr.
Fiduciary, Save-A-Patriot Fellowship

To learn about the founding of the fellowship and John's personal experience with incarceration listen to: The Creature From Maxwell Part 1, Part 2, Part 3, Part 4 (requires Real Player - download here for free) This live telephone interview was conducted by the National Representative for the Save-A-Patriot Fellowship, Gordon Phillips, and the founder and fiduciary of the Fellowship, John B. Kotmair. The interview was held for the benefit of all who are presently evaluating the fellowship, and would like a detailed explanation of how and why the fellowship was created.

Related audio recording: Save-A-Patriot Fellowship - Where Liberty Comes First.

Attention Employers and Employees, and Self-Employed - or - Those Working for Wages!
Discover why America's workforce is converting to the many advantages of non-covered employee contracting!
No SSN, No W2's, No 1099's, no more 941's and Payroll Preparation and Administration!
To learn more about non-covered employee contracting click here.

INFORMATION:
"NOTICE OF LEVY": A Frightening Fraud - by John L. Sasscer
Notice of Levy forms are routinely sent by Internal Revenue Service (IRS) agents to employers, banks and other financial institutions with the intent of inducing them to surrender to the IRS money that is owed to the employee or the property of the depositor. Most employers, officials of banks, etc., and even their accountants and attorneys are unaware that an IRS Notice of Levy that is sent to them has no force of law, such as a court order would have.

The IRS is an administrative agency, not a court of law. When sent to companies, banks, etc., Notice of Levy forms create no levies, but are demands for money that have no force of law. Relatively few people know that property (or money) must be in the possession of the U.S. government in order for it to be property subject to levy. Section 6331(a) of the Internal Revenue Code (IR Code), authorizes the issuance of a Notice of Levy to the agencies, instrumentalities, etc. of the U.S. government only. There is no authority in Section 6331 or elsewhere in the IR Code to send such notices to those outside the U.S. government. The sending of such a Notice to anyone outside the U.S. government is an unauthorized action by the agent issuing the form.

The authority for the IRS to make levies is provided in Section 6331(a) of the IR Code. Subsection (b) of 6331 defines the circumstances under which a Levy can be made. It states: '...a Levy shall extend only to property possessed and obligations existing at the time thereof..." This means that THE IRS CANNOT LEVY ON ANY PROPERTY UNLESS IT IS POSSESSED BY THE UNITED STATES GOVERNMENT! Private company employers and bank officials are generally not aware of this important fact, making it easy for IRS agents to fraudulently deceive them into believing that a lawful Levy has been made. The recipient of the Notice can be frightened into "voluntary compliance' with the demand to surrender a designated amount of money, by calling his attention to the craftily worded provisions of IR Code Section 6332. Three subsections of Section 6332 contain deceptive wording that frightens most recipients of Notice of Levy forms into complying with the demands.

They are, (1) the requirements for surrendering property provided in subsection (a); (2) the penalties for failure to surrender property provided in subsection (e); and (3) the protection from liability to the owner of the surrendered property provided in subsection (d). Section 6332 states that these three provisions are applicable in situations involving, "...property or rights to property subject to levy upon which a levy has been made."

Since property must be in the possession of the U.S. Government before it can be property, "...subject to levy upon which a levy has been made...", it is very clear that the provisions of those subsections do not apply to anyone other than those having control of property possessed by the U.S. government. IR Code Section 6331 can also be used to deceive non-U.S government employers and banks into believing that a Levy is made when a Notice of Levy is served. The wording of Section 6331(a) states: "Levy may be made upon the accrued salary or wages ... (of employees) ... by serving a notice of levy on the employer as defined in section 3401(d)...". The "employer" is defined in Section 3401(d) as the one who employs the "employee", defined in Section 3401(c). This Section defines an "employee" as one who is employed by the U.S. government, its agencies or instrumentalities. So, the "employer" mentioned in Section 6331(a) is the U.S. government! Unpaid salaries and wages of such employees are property in the possession of the U.S. government. They are specified in Section 6331(a) as being property upon which a Levy can be made, if the employee is a "person liable to pay a tax" who neglects or refuses to pay it. However, if the employee is not liable for the tax, the IRS has no authority to levy (seize) his property or even collect tax from him.

When property is not in the possession of the U.S. government, the only way a Levy can be lawfully enforced is by seizure of the property sought to be levied upon. However, Section 6502(b) explains that a seizure alone is insufficient as a basis for a Levy, because it is the issuance of a Notice of Seizure that creates a Levy. That subsection states: "The date on which a levy on property or rights to property is made date on which the notice of seizure provided in section 6335(a) is given". Thus, Section 6502(b) shows that there must be a seizure followed by a Notice of Seizure given to the owner of the seized property in order for there to be a Levy. The wording in Section 6331(b) supports the provision in Section 6502(b) that a seizure must exist before there can be a Levy. Section 6331(b) states, "In any case in which the Secretary may levy upon property or rights to property, he may seize and sell such property or rights to property ...". This shows that in every ease where the IRS has the power to Levy, it must have the power of seizure.

The definition of the word "levy" in Blacks Law Dictionary, Fifth Edition, shows that a levy is dependent upon a seizure: "Levy, n. A seizure. The obtaining of money by legal process through seizure and sale of property ...". Section 333.1 (10-29-79) of the IRS Legal Reference Guide for Revenue Officers, states: "... it should be borne in mind that a levy requires that property levied upon be brought into legal custody through seizure. There must be actual or constructive physical appropriation of the property levied upon. Mere intent to reduce to possession and control is insufficient." The decision in Freemen v. Mayer 152 F. Supp. 383 (D. NJ. 1957) is cited as authority for the statement. The Legal Reference Guide further states, in Section 334.3 (10- 29-79): 'To complete the levy upon property there must be a seizure of the property levied upon; that is, the taxpayer's property must be reduced to possession and control.", citing "United States v. O'Dell 160 F. 2d 304 (6th Cir. 1947); Freeman v. Mayer, 152 F. Supp. 383 (D. N.J. 1957) aff'd; 253 F. 2d 295 (3rd Cir. 1958), as authorities for the statement.

There is no IR Code Section authorizing the making of a Levy at any time other than when the IRS serves a Notice of Levy on the U.S. government's payroll department and when a Notice of Seizure is given to the owner of previously seized property. IRS Publication 643, titled "Bulletin Index Digest System", lists the IR Code Sections that provide the authority for the IRS to engage in the activities allowed by law. It lists Section 7608 as being the enforcement authority statute for the IRS's power of Levy. Section 7608 authorizes seizures by IRS personnel. Agents may make seizures of "property subject to forfeiture" only. No other property is mentioned as being subject to seizure. "Property subject to forfeiture" is defined in IR Code Sections 7301, 7302, and 7303, listed under the heading: "PROPERTY SUBJECT TO FORFEITURE". In 7301, it is defined as: "Any property on which ... any tax is imposed by this title which shall be found in the possession or custody within the control of any person, for the purpose of being sold or removed by him in fraud of the internal revenue laws ... may be seized and shall be forfeited to the United States." Section 7301 also lists raw materials, equipment, packages, vehicles, etc., used to transport, conceal, etc., the taxable property and/or the other related items, as also being subject to forfeiture.

Examples of such property would be "bootleg" whiskey, the materials from which it is made, the "still" in which it is distilled, the bottles, barrels, etc. used to contain it and the cars and trucks etc., used to haul the whiskey equipment or supplies. Agencies of government have only the authority specified by statutes (law). Courts have ruled that the authority of the tax statues may not be extended by implication (see Gould v. Gould 245 U.S. 151, at 153 [1971]).

The wording of 7608 means that IRS agents have authority to seize "property subject to forfeiture" and nothing else! Because there is no mention of wages, salaries or bank accounts as being property which may be seized and forfeited to the IRS, they are not subject to seizure! In the early 1980's there was much news coverage about the seizure of a Volkswagen automobile in Alaska. It resulted from an IRS claim that the owner(s) had failed to pay income tax. The method of seizure was unusually brutal. It was reported that IRS agents broke through the car's windows, showering glass onto the woman occupant. She was then dragged out through the broken glass. The fact that the IRS agents had no authority to seize the car for an income tax claim, because the car was not "property subject to forfeiture", was never mentioned in any of the articles that this writer has ever read. Because there was no authority to seize the car for unpaid income tax, every agent involved in the seizure action could have been charged criminally. In hindsight, the incident could have been used to expose the public to the little-known limitations on the seizure powers of the IRS.

IR Code Section 6331 contains some other important provisions that should not be overlooked. Among them: "If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax ... by levy upon all property and rights to property ... belonging to such person ...". The words "person liable to pay" show that the power of Levy can be applied only to those persons who are liable for payment of a tax and haven't paid it. No money is owed until there is a valid assessment. The only section that the IRS could reasonably claim as authority to make an assessment of the tax imposed on "taxable income" is IR Code Section 6201(a)(1)(A). It provides the IRS with the authority to make assessments of all taxes for which required returns are made.

Assessments can be made by the IRS against only those persons specified by some section of the IR Code as being liable for payment of a tax (see Botta v. Scanlon 288 F.2d 504 [1961]). For income tax there is no assessment authority, such as created by Sections 5061(b) and 5703(d). These authorize assessments against "persons liable", the "taxpayers" for alcohol and tobacco taxes, even though no returns have been filed. As there is no section specifying that any individual citizen is liable for payment of the tax imposed on "taxable income" by Section 1 of the Code, "upon whom all assessment can be made. The underlined words, "after notice", refers to a Notice of Assessment and Demand For Payment, which is required, by IR Code Section 6303, to be sent within 60 days after making a tax assessment. The IRS usually sends only an unsigned Demand for Payment. The recipient, generally unaware of the required procedures, erroneously assumes that proper and lawful procedures have been followed and the IRS has the authority to make an assessment against him.

The words, "levy upon all property", do not extend the IRS's authority for seizure, which is limited to "property subject to forfeiture" by the wording of Section 7608. In a reference book, titled, "IRS Practices and Procedures", by Michael I. Saltzman (published by Warren, Gotham and Lamont, Inc., Copyright 1981, Library of Congress Catalog Card No. 81- 50262), the author, an expert on IRS procedures and a member of the California, District of Columbia and New York Bars, states: "Consequently, a tax lien arises when three events have happened: (1) a tax assessment has been made; (2) the taxpayer has been given notice of the assessment stating the amount and demanding its payment; and (3) the taxpayer has failed to pay the amount assessed within ten days after the notice and demand. When these three events have occurred the tax lien that arises is enforceable ..." The author further explains the fact that there can be no valid lien nor valid levy when no Notice of Assessment has been given to the "taxpayer". He states: "Failure to send a notice and demand nullifies the assessment and any action the Service may have attempted to collect the amount assessed. No lien can arise, nor can a levy be effective, absent a notice and demand." Saltzman includes the following footnotes as his authority for the above statement: "United States v. Coson, 286 F. 2d 453 (9th Cir. 1961); Bauer v. Foley, 404 F.2d 1215 (2d Cir. 1968), on rehearing 408 F.2d 1331 (2d Cir. 1969) (effect on lien of no faulty notice); L.O.C. Indus. Inc. v. United States, 423 F. Supp. 265 (M.D. Tenn. 1976) (no notice and demand prior to levy; held, seized funds must be returned); Mrizek v. Long 176 F. Supp. 830 (N.D. Ill. 1959) (levy served five days before notice and demand; held, invalid); see Shapiro v. Secretary of State, 499 F. 2d 527, 531n.12 (D.C. Cir. 1974), aff'd 424 US614(1976) ('in the present case there are allegations that the Commissioner failed to provide the taxpayer the required notice prior to serving 'Notices of Levy' on the taxpayer's New York banks. If so, then the Commissioner may well have violated Shapiro's right to due process")."

The IRS may try to justify sending a Notice of Levy to a company or bank, which is an action unauthorized by the Code, by claiming that such a tactic was necessary to collect tax that the IRS claims to be owed. When such tactics are used against citizens who are not liable for a tax, any claims of assessments against them are invalid. It is very important for citizens to understand that the only authority that the IRS can claim to have, to make an assessment of "income" tax, is provided in Section 6201(a)(1) of the IR Code. That Section authorizes the assessment of taxes shown on a return. If no return is made, the IRS has no grounds whatsoever to claim authority to make assessment of the tax on "taxable income" imposed by Section 1 of the IR Code.

The IRS, like all government departments, agencies, etc., has its authority limited to that specified in statutes. If the law doesn't say they can do something, or if any agent carries out any action unauthorized by statute on approval from those in higher authority, he, along with those superiors, are acting without lawful authority and all are in violation of authorized procedure. All involved IRS personnel then become personally responsible for such actions which could be in violation of State and Federal criminal laws. There must be a valid assessment and proper procedures must be followed before collection actions are legally authorized.

When the IRS tries to collect money for "income" tax by issuing form letters, Notice of Levy, Notice of Lien, etc., indicating that assessments have previously been made against those who have filed no returns for the years involved, recent experiences have shown that the IRS generally creates false records. These records indicate that returns have been filed, as grounds to support the IRS claim that they have the power to make such assessments. The creating of such false records is indirectly an acknowledgment by the IRS that a return must be filed in order for them to claim to have the authority to make an assessment for 'income" tax. The IRS, when confronted with the fact that no returns were filed by citizens against whom they were claiming assessments and liens, has responded by claiming that it executed returns under the authority of Section 6020(b). IRS manuals require agents reviewing Forms executed under 6020(b), to certify the accuracy of the dollar amounts shown on them, by signing and inscribing the 'returns' with wording indicating that they were prepared under the authority of 6020(b). Documents obtained under the Privacy Act and the Freedom Of Information Act (FOIA) show that these so-called "returns", identified as 'Substitute for Return", contained only the name, address, and Social Security Number (SSN) of the citizen from whom they were attempting to extract money. Significantly, there were no dollar amounts entered as "income", no signatures and no handwritten or rubber-stamped messages as required. Therefore, these so-called "returns" couldn't possibly qualify as legitimate returns, even under 6020(b).

After learning of the requirement provided in Section 6303, that a Notice of Assessment be sent to the taxpayer, investigation by those studying the issue has shown that no citizen they know of has ever received a Notice of Assessment. They have received Demands for Payment and Notice(s) of Intent to Levy, but such documents are not 'notices of assessment'. The question arises: what IRS Form is used to give Notice of Assessment? A statement in Saltzman's book begins to explain: "However, the Service does usually use the form it has for giving notice of assessment and making demand for the payment of the assessed amount (see footnote 17)." Footnote 17 states: "See Form 10-1 "Notice Of Jeopardy Assessment" on page 10-24." Note: Form 10-1 does not state that a tax has been assessed against the individual(s) named on them. The tax shown is not identified as being 'income' tax. A District Director has no authority to make an assessment. The Form merely says he "approved" an assessment. According to Saltzman, IRS Form 10-1 Notice Of Jeopardy Assessment, is the Form that is used to give "notice of assessment and demand for payment". The Form is issued to get around the 10 day waiting period specified in Section 6331, supposedly to enable the IRS to make a quick seizure. However, any seizure, even that referred to on Form 10-1 as an "enforced collection action", is still limited to "property subject to forfeiture', as provided in IR Code Section 7608. Since the IRS has official forms for actions authorized by law, and, according to Saltzman's statements and information, the Notice of Jeopardy Assessment appears to be the Notice of Assessment form that they use, the IRS must not have a form for giving Notice of Assessment for "income" tax. The absence of such a form leads to the conclusion that the IRS has no authority to make assessments against individuals for the tax on "taxable income", regardless of whether they filed a return or not.

There is no assessment authority in the IR Code for "income' tax per se, and taxes can be assessed against those specified by statute as being liable for tax, (see Botta v. Scanlon 288 F.2d 504 [1961]) and there is no section of the IR Code making individual citizens liable for the tax on "taxable income", the conclusion appears logical. Think about it! Agents attempting to collect a tax which has not been validly assessed or for which proper procedure has not been followed could be subject to the penalties provided in the IR Code. Section 7214(a)(2) provides criminal penalties for any IRS agent "Who knowingly demands other or greater sums than are authorized by law...". And 7214(a)(7) agents, "Who makes or signs any fraudulent entry in any book or makes or signs any fraudulent certificate, return or statement ...". To violate 7214(a)(2) an action must be done knowingly. It is suggested that any individual from whom IRS personnel are attempting to collect 'income' tax, notify such personnel by Certified Mail (Return Receipt Requested), of any absence of a valid Assessment (no Form 23C and supporting documents) and/or any IRS failure to send a Notice of Assessment. Either circumstance would invalidate any Lien or Levy, according to tax- expert Saltzman. Any further attempt to collect 'income' tax could be considered to be a "knowing" criminal violation.

This writer's experiences with many supposedly knowledgeable people, including a tax attorney whose background included a career as an IRS Revenue Agent, and another attorney who is vice president and legal officer of a major bank, has shown to me an appalling lack of knowledge of relevant court decisions and many important provisions of the IR Code, some of which are discussed in this article. This writer believes that when one receives notice from an employer or bank, etc. that a 'Notice of Levy" has been received from the IRS, he should promptly contact the employer, bank, etc. personally and explain the legal facts of the issue. One should be prepared and knowledgeable about the relevant sections of the Code and their provisions in order to make an effective challenge to the "Notice of Levy," by educating the one receiving the Notice. If the employer, etc. is reluctant to acknowledge the truth when shown to him, try to contact his legal advisor who might better understand the legal facts. It may be helpful to quote from or use this article to convey the information about the law. The income tax seam has been fostered on the people because of their ignorance of the law. Included is most of the legal fraternity. It is absolutely necessary that the public be informed of the truth about the income tax. Although there are many legal actions that can be taken that might result in stopping an IRS violation of the rights of one individual, the overall situation is not likely to change until the public becomes more informed about the deliberate misinterpretation and misapplication of the law by the IRS. Most people do not understand that the cleverly worded "news" articles using the legal term "taxpayer", continually put out by the IRS to deceive and intimidate the public, are slick propaganda that is so effective it would make Adolph Hitler envious. Those who know the facts of the income tax seam have an obligation, not only to themselves, but to their children, to do whatever is necessary to restore Truth and Honesty in the tax collection system.

Wishing you and yours a tax-free day,
The Tax Freedom 101 Staff

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