In anticipation of a trial currently set to commence on November 28, 2018 in which the State of Minnesota has alleged that William Bernard Butler has willfully failed to fail a federal income tax return in violation of Minn. Stat. § 289A.63, blog posts between now and November 28, 2018 will outline in detail why and how the federal income tax is a legal and constitutional excise tax that is being applied beyond its express lawful scope.
In the last decade, several individuals, including former IRS criminal investigator Joe Banister and attorney Tom Cryer, have prevailed at trial against the federal government alleging that they had a legal obligation to file a federal income in tax return.
These individuals, and others, have prevailed against the government by showing juries that “there is no law” requiring any typical individual earning income that is not related to or contingent upon a federal contract, right, or privilege, to file a federal income tax return or pay federal income taxes.
PERSONS LIABLE FOR THE FEDERAL INCOME TAX AND REQUIRED TO FILE FEDERAL INCOME TAX RETURNS
There is no “persons liable” section that relates to the income tax. There are only a few identifiable “sources” of federally taxable gross income, all of whom are required to withhold a portion of federally taxable gross income. Every other excise tax in the Internal Revenue Code has a “person’s liable” section.
In the entire income tax part of the Code (Subtitle A), section 1461 is the only section that makes anyone liable for paying anything and it makes only “sources”/payors liable and only as withholding agents for withheld amounts of federally taxable gross income:
Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby indemnified against the claims and demand of any person for the amounts of any payments made in accordance with the provisions of this chapter.
26 U.S.C. § 1461. “This chapter” is chapter 3 (“withholding of tax on non-resident aliens and foreign corporations”) of Subtitle A (“Income Tax”).
The sole and exclusive list of the persons and entities with federally taxable income that is subject to federal income tax withholding as listed in chapter 3 is limited to foreign people and entities doing business in the United States: (1) non-resident aliens (section 1441); (2) foreign corporations (section 1442); (3) foreign tax exempt organizations (section 1443); (4) Virgin Islands source income (section 1444); (5) disposition of U.S. real estate by “foreign persons” (section 1445); and (6) foreign partners’ share of income connected to U.S. operations (section 1446).
The 23 other excise taxes in the Internal Revenue Code that do have an identified “persons liable” section are:
(2) FICA Tax, 26 U.S.C. § 3102(b);
(3) Railroad Retirement Tax, 26 U.S.C. § 3505;
(4) Luxury Passenger Automobile Excise Tax, 26 U.S.C. §§ 4002, 4003 (section 4003 identifies those secondarily liable) (now repealed);
(6) Tire Manufacturer Excise Tax, 26 U.S.C. § 4071;
(7) Manufacturer’s Excise Tax, 26 U.S.C. § 4219;
(8) Wagers Tax, 26 U.S.C. § 4401;
(9) Wagering Occupational Tax, 26 U.S.C. § 4411;
(10) Vehicle Use Tax, 26 U.S.C. § 4481:
(11) Petroleum (Gas) Tax, 26 U.S.C. § 4611;
(12) Chemicals Tax, 26 U.S.C. § 4662;
(13) Qualified ERISA Pension Plans Contributions Tax, 26 U.S.C. § 4972;
(14) Excise Tax for Failure to Offer COBRA Group Health Continuation Coverage, 26 U.S.C. § 4980B;
(15) Excise Tax for Failure to Meet Certain Group Health Plan Requirements, 26 U.S.C. § 4980D;
(16) Excise Tax for Failure of Applicable Plans Reducing Benefit Accruals to Satisfy Notice Requirements, 26 U.S.C. § 4980F;
(17) Gallonage Tax on Distilled Spirits, 26 U.S.C. § 5005;
(18) Gallonage Tax on Wines, 26 U.S.C. § 5043;
(19) Storage Tax on Imported Distilled Spirits, 26 U.S.C. § 5232;
(20) Tax on Wine Imported in Bulk, 26 U.S.C. § 5364;
(21) Tax on Beer Imported in Bulk, 26 U.S.C. § 5418;
(22) Excise Tax on Tobacco, 26 U.S.C. § 5703; and
(23) Tax on Purchase, Receipt, Possession or Sale of Tobacco Products, 26 U.S.C. § 5751.
There are no other references to “persons liable” in all of Subtitle A, which represents the statutory universe of federal income tax law. The only specific individuals and entities “required to file” a federal income tax return are the “sources” or payors of federally taxable income identified in sections 1441 to 1446.