Re: IRS, Schiff, and Economic Freedom

Pat Fallon (
Fri, 07 Nov 1997 10:47:45 -0500

Nicholas Rich wrote:
> At 04:31 PM 11/6/97 -0700, Frederick Mann wrote:
> >This article deals with my seventh principle of the
> >Economic Means to Freedom: Exit tax systems to the
> >extent you can do so legally -- with an acceptable
> >level of risk
> Before anyone undertakes to exercise any of the techniques advocated by Mr.
> Mann to "exit the tax system," they would do well to review the several
> dozen cases outlined at the following "tax protester" website. All of the
> cases involve failed attempts by defendants to use one or more of the
> "legal theories" which generally abound for "escaping the tax system."
> I should point out that I am deeply opposed to taxation in any form.
> However, my opposition is on moral grounds--that being that taxation is
> robbery. I think that using "legal theories" as a basis for not filing
> returns and or not paying taxes serves only to affirm that authoritarian
> law has a place in civilized society and that taxation is A-OK (they just
> need an explicit law for it).
> >Note that, in his advertisement above, Irwin Schiff is offering
> >$50,000.00 to charity, if the "honorable gentlemen" addressed
> >are able to cite any "specific laws making Americans 'liable'
> >for and/or requiring them 'to pay' income taxes."
> One of the cases on the website concerns a lawsuit by an attorney against
> Schiff for breach of contract (failing to pay the reward). Schiff won the
> case and the appeal. However, strangely, Schiff's defense was not that the
> attorney did not provide proof that taxation was lawful and that average
> citizens are required to file and pay. Schiff's defense was that the
> acceptance of the offer was not timely (the attorney contacted Schiff after
> seeing a rebroadcast of the original program where the offer was made).
> While it's true that you have a good chance of not getting caught if you
> don't file, I think that has a lot more to do with the inefficiency of the
> IRS that it has to do with any "legal theories."
> Nicholas Rich
> Sachs, Savage & Noble
> Debt Management Professionals 2530 Berryessa Rd Suite 218
> Alternative Dispute Resolution San Jose CA 95132
> Out-of-Court Settlements t: 408.279.1979
> Results-Only f: 408.279.8945

I have read Schiff's books, and other arguments that the income tax is
"voluntary"; that your income tax form can be used in court against you
so therefore to prosecute someone for failure to file would violate the
5th amendment; that the 16th Amendment was not properly ratified, etc.

There is competent scholarship to support the contention that the 16th
Amendment to the US Constitution was never properly ratified by the
required number of states, and the other arguments all have
merit...unfortunately, that is irrelevant.

As I understand it, there is a legal maxim that "specificities in
evidence supersede generalities in evidence." We all are supposed to
have some general protections and rights under the constitution, such as
freedom of speech. However, if I am hired by a client and sign an
agreement not to reveal his confidential information, I cannot later
publish it and claim my 1st Amendment right of freedom of speech. My
general right to freedom of speech was superseded by my specific
contractual agreement not to publish this information.

When you open a bank account, you usually sign an agreement which
includes some seemingly innocuous clause that you will abide by the
rules of the bank. If you read all the fine print you will find that
you agreed to abide by all of the administrative rulings of the
Secretary of the Treasury.

When new Federal Judges are confirmed they are told how to manage "Tax
Protester" trials -- violations of Title 26. Federal Judges have been
instructed that the Supreme Court ruled in 1896 (Davis vs. Elmira
Savings, 161 U.S. 275), that banks are instrumentalities of the
Congress. In other words, the interstate system of banks is the private
property of the state. So as an operation of law, anyone who has a
depository relationship, or a credit relationship, with a bank, such as
checking, savings, charge cards, loans, mortgages, etc., are
experiencing profit and gain created by the state.

During Willful Failure to File trials the IRS surveys the local banks in
the vicinity of the tax protester, and obtains copies of his signature
card. During the prosecution the Federal Judge is sitting up there on
the bench with that agreement with the state in front of him while the
tax protester cites his Constitutional rights.

The judge will ignore all Constitutionally related arguments. He is
operating on the penal clause to a civil contract. And since there is
an agreement to be bound by Title 26, what difference does it make
whether or not Title 26 was ever enacted by the Congress? A contract
does not have to be enacted by Congress in order to make it enforceable.

I recommend "Invisible Contracts" by George Mercier (I found it on a BBS
years ago), which goes into these adhesion contracts in detail.

In the words of Supreme Court Justice Felix Frankfurter: "Equity is
brutal, but we are merely enforcing agreements." Another legal maxim is
that "justice must satisfy the appearance of justice." Until we have
separation of banking and state, we will not have the choice to avoid
this "invisible contract"; we will not have justice.

Pat Fallon