There is no law that requires most citizens to file and pay federal income taxes.
The following summarizes the key steps of this argument.
There is a federal law that imposes a requirement upon some citizens and foreigners to file and pay an
income tax. The big question is, of course: to what proportion of citizens does the requirement apply?
Does it apply to most citizens, or just to a small, specifically defined subset of citizens? To answer this,
we must follow a disjointed trail of statutes and regulations to see where they lead. It is a difficult trail to
follow; it is easy to take a wrong path; and there have been few directions or signposts supplied by the
[This explanation does not deal with the 16th amendment question and the constitutional problem of a direct tax
without apportionment or the view that the income tax is in the nature of an indirect excise tax, which, of course does
not have to be apportioned. The approach is not dependent on the resolution of those questions one way or the other,
as it avoids them altogether.]
The statutory trail starts with 26 USC 1, which imposes the income tax on "taxable income," and with
6001, 6011, and 6012, which the IRS uses as the all-encompassing filing-requirement statutes. 6001
says: "Every person liable for any tax imposed under this title...shall keep such records...make such
returns...and comply with such rules and regulations as the Secretary may prescribe." [Secretary refers to
the Secretary of the Treasury or, more realistically, to the IRS Commissioner]. 6011 says: "When
required by regulations...any person made liable by any tax imposed by this title...shall make a return."
6012 says: "Returns...shall be made by...[e]very individual having...gross income which exceeds the
Now we take the trail to find out what "taxable income" and "gross income" are. 63 says that the term
"taxable income" means "gross income minus the deductions allowed by this chapter..." So the definition
mainly depends on the definition of "gross income." We then see in 61 that "gross income" is income from
"whatever source," and we see a list of 15 items which we take to be the sources and that we have been
led to believe we must pay taxes on, such as: compensation for services, fees, commissions, benefits,
gross income from business, interest, rent, dividends, gains from property dealings, etc. It is crucial to be
aware, however, that the term "item" does not mean the same as "source." Therefore, the list does not
identify any sources upon which we must pay a tax. This is most deceptive.
Another stop on the trail towards finding out what gross income is and the sources of it that can make
one liable is at 861, which lists "items" of gross income which are to be treated as income from sources
within the U.S. There is no other part of the Internal Revenue Code that deals with tax based on income
from sources within the U.S. (We can assure ourselves of this by using a computer search engine to look
through the code.) Therefore, all else not on the list must be excluded as being outside the purview of the
If one wonders how, given the wording of 861, one can avoid equating "items" and "sources," take note
that 861 is a statute and that the IRS is bound by the regulations promulgated by the Secretary (or
Commissioner), which actually implement the statutes. The pertinent regulation is CFR 1.861-8(f)(1),
which contains the only list of "sources," from within or without the U.S, from which income must derive
in order to be taxable. The list consists of: overall limitation to the foreign tax credit, DISC (Direct
International Sales Corp) and FSC (Foreign Sales Corp.) taxable income, non-resident alien individuals
and foreign corporations engaged in business within the U.S., foreign base company income, and other
operative sections (the list of which consists of 13 sources outside the U.S.).
Note well that one source in the list under "other operative sections" applies to U.S. citizens, albeit only
to citizens who are entitled to the benefits of 931 and 936 tax credit (which pertain to Guam and Puerto
Rico). This inclusion of a group of U.S. citizens here is very important, because it must therefore include
all citizens with taxable sources of income from within or without the U.S. In other words, if there were
any other citizens whose sources of income were taxable, they'd have to be included on this list, and
there are no others listed.
As you can see, none of this liability applies to the vast majority of citizens, who have been misled into
believing they must file and pay income taxes on the "items" of income noted in 61, above. Instead, it
applies to U.S citizens only insofar as they have foreign earned income. The tax also applies to aliens and
foreign companies doing business in the United States. In fact, only a few years ago, the Secretary
acknowledged that Form 2555 was the form most frequently required to be filed by citizens under 1, and
only if they had foreign income as noted above.
Now let's go back and review 6001, 6011, and 6012. We can see now who these sections are talking
about when they refer, respectively, to "Every person liable," "any person made liable," or "every
individual having...gross income..." We can see that the government, by means of such a circuitous and
disconnected trail of rules and regulations, has made it extremely difficult for most ordinary people to
figure out that they are not liable for the income tax. We can see that the government is duping most
people into voluntarily filing returns, assessing themselves, waiving their 5th amendment rights, and
erroneously paying an income tax for which they are not liable. By comparison, the statutes and
regulations for excise taxes are straight-forward, clear, and unambiguous, proving that the Congress and
IRS are capable of making the rules simple and easy to understand if they want to. This trickery and
deception serves a function of avoiding violations of the Constitution which would be more transparent
otherwise. But beyond the deception there is also the practice of illegal misapplication of the laws and
regulations and denial of due process, which we will look at in a few minutes, after discussing a couple of
other aspects of tax liability.
First, let's look at the withholding aspect of tax liability to see whether it reinforces or adds anything
further to our understanding of tax liability or what kind of income is taxable. If withholding is applied
properly, it should reveal what is taxable. Will an examination of withholding yield results consistent with
the conclusions drawn above?
26 USC 3401(a)(8)(A)(1) defines "wages" for purposes of withholding as all remuneration for services
performed by an employee for his employer; except that such term shall not include remuneration paid
for services for an employer performed by a citizen of the U.S. if it is reasonable to believe that such
remuneration will be excluded from gross income under Section 911. And pursuant to CFR
1.861-8(T)(d)(2)(ii)(A), all income that is excluded or not listed is exempt. So the only sources of
income U.S. citizens earn that is "gross income," and thus taxable and subject to withholding, are found
under 911, which relates to U.S. citizens living abroad or foreign earned income, the same conclusion we
came to above. So withholding law, properly applied, reinforces our earlier conclusion. It is apparent
that employers are being duped into submitting false information about most employees, withholding their
money, making it appear they are liable, and thereby putting them on the defensive, since they must then
dispute that their wages are taxable.
Next, if we look at the laws regarding liability for the Social Security tax, we will find that they derive
from the International Labor Agreement of the 1930s, and that once again, they do not apply to most
U.S. citizens, but to aliens and to some citizens based on foreign income or income from U.S. overseas
So, three sets of statutes and regulations all lead to the "foreign liability" conclusion, not to liability by
So, why are you paying it?