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The Dangerous Allegations Of Idiots And Scoundrels

...and an all-purpose, universal debunk.

AN ARGUMENT HAS CIRCULATED FOR YEARS within the "tax honesty" community that the application of the income tax cannot extend outside the boundaries of the District of Columbia. Some variations extend the reach of the tax to other areas exclusively within federal territorial jurisdiction.

Unfortunately, the scholarly-looking argument, which is promoted at the websites of "SEDM (FamilyGuardian)" and others who prey on vulnerable people in the "tax honesty" community, is a fraud. It is just another of the many, many false artifacts infecting cyberspace and targeted at those focused on the income tax issue in the hope of distracting them away from the actual truth about the tax.

THIS PARTICULAR FALSE ARGUMENT rests its "territorial jurisdiction" assertions on provisions of 4 U.S.C. § 72 concerning the exercise of offices attached to the seat of government, and excerpts from a number of Supreme Court rulings. Most fundamental to the argument's intended point is the following, which the authors excerpt from Caha v. United States 152 U.S. 211 (1894):

“The laws of Congress in respect to those matters do not extend into the territorial limits of the states, but have force only in the District of Columbia, and other places that are within the exclusive jurisdiction of the national government.”

This is deployed to suggest that the Supreme Court is saying that the income tax laws "do not extend into the territorial limits of the states", as here on SEDM (FamilyGuardian)'s site:

"I know this is hard to believe, but the 16th Amendment and Subtitle A of the Internal Revenue Code are "special law" rather than "public law", which is to say that they apply ONLY to federal territories over which the United States government exercises exclusive legislative jurisdiction:

“A canon of construction which teaches that [sic] of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” U.S. v. Spelar, 338 U.S. 217 at 222 (1949)

“The law of Congress in respect to those matters do not extend into the territorial limits of the states, but have force only in the District of Columbia, and other places that are within the exclusive jurisdiction of the national government.” Caha v. United States, 152 U.S. 211 (March 5, 1894)"




The idea is that the "territorial jurisdiction" of Congress only extends to DC and other enclaves within the overall USA, and that the tax laws are "the laws of Congress" being referred-to by the Caha court.

But in fact, in describing the canon to which it refers the Spelar court is referring to "territorial jurisdiction" as inclusive of the several states and all US territories and possessions. Spelar distinguishes this territorial jurisdiction only from the territory of foreign countries over which the United States has no sovereignty whatsoever, delegated or otherwise (in this case, Newfoundland).

In fact, Spelar makes a very useful observation in regard to the meaning of 'foreign" that needs to be tattooed on the foreheads of every tin-foil-hat advocate of "citizenship/residency" nonsense regarding the income tax:

See Mr. Justice Brown for the Court in De Lima v. Bidwell, 182 U. S. 1, 182 U. S. 180: "A foreign country was defined by Mr. Chief Justice Marshall and Mr. Justice Story to be one exclusively within the sovereignty of a foreign nation, and without the sovereignty of the United States. The Eliza, 2 Gall. 4; Taber v. United States, 1 Story 1; The Adventure, 1 Brock. 235, 241."

United States v. Spelar, 338 U.S. 217 at 222 (1949), fn. 5 (emphasis added)

As a consequence of the delegation of certain powers to the federal government, some federal jurisdiction extends throughout the entire USA-- federal territories, possessions and enclaves and the several states included. Only places where there is no United States jurisdiction-- which is to say, foreign countries in the common usage of the expression, as opposed to any of the several states, are "foreign" in the meaning used here by the Spelar court, and in most usages in federal law. (See this and this for related material.)

The meaning ascribed to this excerpt from Spelar is a falsehood. It is either false for being deliberately misrepresented, or for being implicitly offered as a part of a well-researched, trustworthy argument.

LIKEWISE, WHAT IS SUGGESTED by the excerpt from the Caha ruling in the presentation above is also NOT what the Caha court actually says. In fact, the excerpt is deceptively pulled out of this actual passage in the ruling:

"Neither can it be doubted that the District Court of Kansas had jurisdiction over a prosecution for the crime of perjury committed at the place named in violation of the provisions of Rev. Stat. § 5392. That section -- and under it this indictment was found -- reads as follows:

""Every person who, having taken an oath before a competent tribunal, officer, or person, in any case in which a law of the United States authorizes an oath to be administered, that he will testify, declare, depose, or certify truly, or that any written testimony, declaration, deposition, or certificate by him subscribed is true, willfully and contrary to such oath states or subscribes any material matter which he does not believe to be true is guilty of perjury."

"This statute is one of universal application within the territorial limits of the United States, and is not limited to those portions which are within the exclusive jurisdiction of the national government, such as the District of Columbia. Generally speaking, within any state of this union, the preservation of the peace and the protection of person and property are the functions of the state government, and are no part of the primary duty, at least, of the nation. The laws of Congress in respect to those matters do not extend into the territorial limits of the states, but have force only in the District of Columbia and other places that are within the exclusive jurisdiction of the national government. It was in reference to such body of laws that § 2145, Rev. Stat., was enacted, and the argument which is sought to be drawn by the counsel therefrom against the jurisdiction of the District Court of Kansas has no foundation.

"It is enough that § 5392 has uniform application throughout the territorial limits of the United States; that by § 563, the district courts are given jurisdiction generally "of all crimes and offences cognizable under the authority of the United States committed within their respective districts," and that, by the Act of January 6, 1883, c. 13, § 2, 22 Stat. 400, the territory in question was annexed to and made a part of the United States Judicial District of Kansas."

Caha v. United States, 152 U.S. 211 (March 5, 1894) (emphasis added)

Contrary to the assertions of SEDM and other misleading will-o'-the-wisps infesting the "tax honesty" community, Caha absolutely does NOT say that, "The laws of Congress in respect to [taxation] do not extend into the territorial limits of the states, but have force only in the District of Columbia and other places that are within the exclusive jurisdiction of the national government." The only laws spoken of in the deceptively excerpted sentence from Caha are federal police powers related to "the preservation of the peace and the protection of person and property," and Caha elsewhere expressly acknowledges acts of Congress "not limited to those portions [of the United States] which are within the exclusive jurisdiction of the national government, such as the District of Columbia."

Every poor soul taken in by the argument that the federal income tax only applies to "US citizens" or does not extend, or cannot be enforced, inside the several states should re-read all the above until this dangerous nonsense is thoroughly purged from his/her mind. This nonsense is the upchuck of idiots and the Kool-Aid of scoundrels.

IN FACT, Caha says the opposite of what the deceivers suggest, and expressly recognizes the extension of the federal income tax authority throughout the entire USA. This is because the federal income tax structure hinges directly on the federal perjury statutes.

It's this simple: when a payment is reported on an "information return" such as a W-2, a 1099, or a K-1, it alleges every necessary prerequisite of qualification for that payment to be a gain from a taxable activity. Thus, even if "US citizenship" or "DC residency" or having been born during a thunderstorm were actual requirements for the application of the tax, the allegation of that thing is incorporated in an information return report.

Unless and until such a qualified payment allegation is rebutted it imposes the requirement on its target of all its implications and consequences. There is only ONE WAY to rebut such allegations, and that is by way of a signed, sworn 1040.

The law is plainly stated:

"Provided, that any party, in his or her own behalf, or as guardian or trustee, as aforesaid, shall be permitted to declare, under oath or affirmation, the form and manner of which shall be prescribed by the Commissioner of Internal Revenue, that he or she was not possessed of an income of [the current personal exemption amount], liable to be assessed according to the provisions of this act..."

Revenue Act of 1862, § 93

A sworn 1040 is the "form and manner" prescribed by the Commissioner.

The only thing that really matters on a 1040 is the amount of "income" reported. It is from the amount of "income" (gains from federally-excisable activities) received that liability for the tax arises.

As seen above, the language of the law does not provide for declaring that one is not a "US citizen", or not a "DC resident", or not born on a stormy day-- because these things aren't relevant to the application of the tax. The only thing provided for is a declaration that one didn't receive more than the exemption amount of "income" liable to be assessed according to the provisions of this act (which is to say, excise-relevant income).

Anyone who believes such things can say in big bold print on a 1040 (or any other instrument) that (s)he is not a "US citizen", or lives in Texas, or was born on a sunny day. None of that will mean or do anything.

An allegation of receiving "income" is an allegation of everything necessary for the presumption of liability for the tax, whatever that might be. The only way that presumption can be rebutted is by a report on a 1040 of a total "income" below the personal exemption amount.

If a 1040 rebutting those "income" allegations is not submitted once the person about whom they are made has been put on notice, all those allegations stand as proven. In the absence of that rebuttal those allegations will not be arguable in any other time, place or manner.

And here's the kicker, and why Caha-- read honestly and not as false support for pet theories or deliberate dis-information to divert Americans from the true path to understanding the tax-- actually supports the legal USA-wide application of the tax: 1040s must be signed sincerely, under penalties of perjury.

As the Caha court says, the perjury statutes have USA-wide application, and therefore the declaration-based structure of the "income" tax is jurisdictionally-viable throughout the same range. An allegation can be made (in DC, if you like, but anywhere, really), and unless a rebuttal is made on a sworn, sincere 1040, the appropriate tax will be deemed due and owing.

That tax will be collected in whatever way is possible. This could mean seizing American-located assets of a Frenchman living in Paris about whom an unrebutted allegation of federally-taxable "income" was made, or seizing the property of a Texan found in Dallas or in a foreign bank which bows to the will of Uncle Sam.

SO, HERE'S THE BOTTOM LINE. There are lots of efforts being made out there to keep more Americans from learning the actual truth about the income tax. Many of these efforts involve a pretense of dedication to "tax truth" coupled with attractive, often simple and silver-bullet-ish assertions about the tax which are tarted-up in seemingly serious, scholarly robes.

Being taken in by any of this nonsense will cause harm of lesser or greater degree. It might mean merely being kept from learning the truth for a while or it might mean being led into making bad filings (or none), and letting presumptions of liability become established, or improperly withheld amounts go un-reclaimed.

Spreading this nonsense will entrap others, and ensure that the actual truth about the tax faces a much more skeptical audience both among those predisposed to the subject and those predisposed against it.

Don't be fooled. READ EVERY CITED CASE FOR YOURSELF, with a skeptical eye.

Or, for the much, much simpler and safer approach, follow this easy rule: If you didn't (or don't) see an assertion concerning the tax in CtC or my other books, or in something else I have written on the subject (such as here on losthorizons.com), it is either irrelevant to the tax, outright wrong, or both.


P. S. SOME FOLKS WILL FIND the harshness of my expression, "idiots and scoundrels" off-putting or inappropriate. Let me explain:

The excerpt of the Caha ruling is a deliberate deceit. It was done in knowledge of the larger passage from which it was deceivingly teased out for use in support of something Caha does not support.

Or, the misrepresentation of Caha was done by someone who didn't even bother to read the case, and just came across the snippet excerpted by someone else. This person then presented their offering with the manifest intention that it be taken as the product of careful, competent and honest research. This plainly is not true, and just as much a deliberate deception as the first possibility.

Both of these same things can be said of the use made of Spelar.

These are not honest mistakes. They are deliberate deceptions, and they have surely done harm to people who have been misled thereby.

In any event, they must be presumed to have been meant to do harm. Why else engage in such deceptions?

If anything, my use of "idiots and scoundrels" is too kind.