robert a. mcneil v us gov & internal revenue service (ram-060)

8/10/2019 Robert A. McNeil v US Gov & Internal Revenue Service (RAM-060)

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Robert A. McNeil4400 Memorial Dr. #1200

Houston, Texas 77007 713-806-5199

August 9, 2007

SENT VIA COURIER

Mr. Roger CarisRevenue Officer Employee #76-42930Department of the TreasuryInternal Revenue Service8701 S. Gessner, STOP5433HALHouston, Texas 77074

Subject: Response to Summons

Dear Mr. Caris:

I received a Summons to appear in your office at 10:00am on August 10, 2007 to give testimony,and bring with me for examination, various documents related to an alleged income tax liabilityfor the years 2003, 2004, 2005, and 2006. (Please see Exhibit A )

It was the first Summons I had ever received so, like any responsible person would do, I read theentire document very carefully. I took special notice of the fact that the Summons was issued byThe Commissioner of Internal Revenue, to me, Robert A. McNeil, under the authority of theInternal Revenue Code, and was signed in the bottom portion of the page by Roger Caris,Revenue Officer. There was no signature of an Approving Officer on the Summons.

I turned the page over and read the Provisions of the Internal Revenue Code on the back,noting that the authority of the Commissioner to issue the Summons apparently comes from:

Section 7602 Examination of books and witnesses Section 7603 Service of summons Section 7604 Enforcement of summons Section 7605 Time and place of examination

Section 7610 Fees and costs of witnesses Section 7610 Failure to obey summons

A reasonable person would conclude that, since the Summons references Section 76XX as itssource of authority, you are claiming authority to enforce the Summons under Section 7608Authority of internal revenue enforcement officers.

Based on my research of the following case law, I am required by the U.S. Supreme Court toknow the authority of the agent who is taking such action.


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State ex rel McConnell v. First State Bank , 22 Tenn. App. 577, 124 S.W.2d 726, 733 (1938):Bank insolvency case:

" All persons dealing with public off icers are bound to take notice of the law prescribing their authori ty and powers."

Continental Casualty Co. v. United States , 113 F.2d 284 (5th Cir. 1940):

" Public off icers are merely the agents of the public, whose powers and author ity are defi ned and l imi ted by l aw. Any act wi thout the scope of the authori ty so defi ned does not bind the principal, and all persons dealing with such agents are charged with knowledge of the extent of their authority," 113 F.2d, at 286.

Section 1132.55 of the Internal Revenue Manual (entitled Criminal Investigation Division) begins as follows:

Th e Cr iminal I nvestigation Division enforces the criminal statutes applicable to income, estate, gift, employment, and excise tax laws involving Uni ted States citizens residing in foreign countr ies and nonresident aliens subject to F ederal income tax fi lin g r equirements [IRM, Section 1132.55 (1991 Ed.)]

The decision reached in the case of Bothke v. Fluor Engineers and Constructors, Inc. 713 F.2d1405 (9th Cir. 1983) states in part,

" When and i f I RS Personnel are notif ied to ir regulari ties, pr otests, objections, etc., i t is up to the officer or agent to prove authori ty." I f the IRS off icer or agent f ails to prove authori ty when challenged, s/he may be held li able, without immuni ty, if it later proves that there were in fact, procedural flaws and authority was imposed without the force of law.

Per Ryder v. United States , 115 S.Ct. 2031, 132 L.Ed.2d 136, 515 U.S. 177, I am required toinitiate a direct challenge to authority of anyone representing himself or herself as a governmentofficer or agent prior to the finality of any proceeding in order to avoid implications of de factoofficer doctrine. When challenged, those posing as government officers and agents are requiredto affirmatively prove whatever authority they claim.

In the absence of proof, they may be held personally accountable for loss, injury and damages.See particularly, the former 26 U.S.C. 7804(b), now published in notes following 7801. Per

26 U.S.C. 7214(a), if and when IRS personnel exceed authority prescribed by law, or fail tocarry out duties imposed by law, they are criminally liable.

Putting my research skills to work, I set out to find the implementing regulations for each of theSections referenced on the back of the Summons.


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As you are probably aware, the Parallel Table of Authorities lists rulemaking authority (except 5U.S.C. 301) for regulations codified in the Code of Federal Regulations.

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Source: http://www.access.gpo.gov/nara/cfr/parallel/parallel_table.html

[Code of Federal Regulations][Parallel Table][Revised as of January 1, 2006][From the U.S. Government Printing Office via GPO Access]

PARALL EL TABLE OF AUTHORITI ES AND RULES

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The following table lists rulemaking authority (except 5 U.S.C. 301) for regulations codified in the Code of Federal

Regulations. Also included are statutory citations which are noted as being interpreted or applied by thoseregulations.

The table is divided into four segments: United States Code citations, United States Statutes at Large citations, public law citations, and Presidential document citations. Within each segment, the citations are arranged innumerical order: For the United States Code, by title and section; For the United States Statutes at Large, by volume and page number; For public laws, by number; and For Presidential documents (Proclamations, Executive orders, and Reorganization plans), by document number.

Entries in the table are taken directly from the rulemaking authority citation provided by Federal agencies in their regulations. Federal agencies are responsible for keeping these citations current and accurate. Because Federal

agencies sometimes present these citations in an inconsistent manner, the table cannot be considered all-inclusive.The portion of the table listing the United States Code citations is the most comprehensive, as these citations areentered into the table whenever they are given in the authority citations provided by the agencies. United StatesStatutes at Large and public law citations are carried in the table only when there are no corresponding United StatesCode citations given.

This table is revised as of January 1, 2006.

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Just a few minutes of research revealed that the Sections of Title 26, referenced on the Summons,

derive their rulemaking authority from the relevant Parts of Title 27, as shown below:

26 U.S.C. (1986 I.R.C.)

7601-760627 Part 707602.27 Parts 29, 46, 296 7608.27 Part 70, 296 7610..27 Part 70


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You can imagine my surprise and confusion when I searched the internet for Title 27 Part 70 andfound the following:

Source:http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div6&view=text&node=27:2.0.1.4.7.1&idno=27

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TI TL E 27--Alcohol, Tobacco Products and Fir earms

CHAPTER I--ALCOH OL AND TOBACCO TAX AND TRADE BUREAU, DEPARTM ENT OF THE TREASURY

SUBCH APTER F --PROCEDURES AND PRACTI CES

PART 70--PROCEDURE AND ADMINISTRATION

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I decided to read further, in the hopes that I could see the connection between a Summons for analleged tax liability under 26 USC Subtitles A and C Internal Revenue Code, and your claim of authority to summon me along with my books and records, under 26 USC Section 7608, derivedfrom 27 USC Part 70 Alcohol, Tobacco Products and Firearms.

So, I started at the beginning and clicked on the link to Subpart A Scope and took note of the paragraphs related to the issuance of summonses, examination of books and records, entry of premises, and preparation of returns.

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Title 27: Alcohol, Tobacco and Firearms PART 70PROCEDURE AND ADMINISTRATION Subpart AScope 70.1 General.

(a) The regulations in Subparts C, D, and E of this part set forth the procedural and administrative rules of the Alcohol and Tobacco Tax and Trade Bureau for:

(1) The issuance and enforcement of summonses, examination of books of account and witnesses,administration of oaths, entry of premises for examination of taxable objects, granting of rewards for information, canvass of regions for taxable objects and persons, and authority of TTB officers.
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div6&view=text&node=27:2.0.1.4.7.1&idno=27http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=2930b934d07519d087bf3fc4f311a283&rgn=div5&view=text&node=27:2.0.1.4.7&idno=27http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr;rgn=div5;view=text;node=27%3A2.0.1.4.7;idno=27;sid=d8a65cadabb2d8287f8f9f2c3adcb7a8;cc=ecfrhttp://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr;rgn=div5;view=text;node=27%3A2.0.1.4.7;idno=27;sid=d8a65cadabb2d8287f8f9f2c3adcb7a8;cc=ecfrhttp://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=2930b934d07519d087bf3fc4f311a283&rgn=div5&view=text&node=27:2.0.1.4.7&idno=27http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div6&view=text&node=27:2.0.1.4.7.1&idno=27


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(3) The preparing or executing of returns; deposits; payment on notice and demand; assessment;abatements, credits and refunds; limitations on assessment; limitations on credit or refund; periods of limitation in judicial proceedings; interest; additions to tax, additional amounts, and assessable penalties; enforced collection activities; authority for establishment, alteration, and distribution of stamps, marks, or labels; jeopardy assessment of alcohol, tobacco, and firearmstaxes, and registration of persons paying a special tax.

[T.D. ATF376, 61 FR 31031, June 19, 1996, as amended by T.D. TTB44, 71 FR 16958, Apr.4, 2006]~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

As you can see, Subpart A talks solely about matters related to alcohol, tobacco products, andfirearms, therefore, I could find no legal basis for your claim of authority, under 26 USC Section7608, derived from 27 USC Part 70 Alcohol, Tobacco Products and Firearms.

If I have erred in my research and you claim authority under a different Section of the U. S.Code, or Commissioners Delegation Order (CDO), or Treasury Delegation Order (TDO), youwill have the opportunity to clarify that point in your response to the Affidavit of Authority ,attached to this letter as Exhibit B .

Until I receive the completed Affidavit from you, I offer this response to the Summons:

I, Robert A. McNeil, state, unequivocally, that I have not now, nor have I ever been,engaged in any business activity related to alcohol, tobacco products, or firearms.Therefore, I have no documents responsive to the Summons.

Which leads me to the subject of Constructive Notice:

Constructive Notice: Notice arising by presumption of law f rom the existence of facts and circumstances that a par ty had a duty to take notice of... notice presumed by law to have been acquired by a person and thus imputed to that person. (Black's Law Di ctionary, Seventh Editi on)

Constructive Notice serves to inform a party of the existence of facts and circumstances that a party had duty to take notice of. It also serves to deny the informed party the defense that he/shehad no knowledge of the facts and circumstances relevant to the issues at hand.

Which leads me to the subject of fraud :

You are hereby NOTICED of the definition of the word fraud :

A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment. Blacks Law Dictionary ~ ThirdPocket Edition ~ 2006, page 300.


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Further,

Fr aud: Deceit, deception, artifi ce, or trickery operating prejudicially on the r ights of another, and so i ntended, by i nducing him to part with property or surr ender some legal right. 23 Am J2d Fraud 2. Anything calculated to deceive another to his prejudice and

accomplishing the purpose, whether it be an act, a word, silence, the suppression of the tr uth,or other device contrary to the plain rules of common honesty. 23 Am J2d Fraud 2. An affirmation of a fact rather than a promise or statement of intent to do something in the fu ture. McInnes v Sutli ff , 241 111 521, 89 NE 651.

Morrison v. Coddington, 662 P. 2d. 155, 135 Ariz. 480(1983). Fraud and deceit may arise from silence where there is a duty to speak the truth, as well as from speaking an untruth.

McNally v. U.S., 483 U.S. 350, 371-372, Quoting U.S. v Holzer, 816 F.2d. 304, 307: F raud in its elementary common law sense of deceit includes the deliberate

concealment of materi al i nformation i n a setting of fi duciary obligation. A publi c official is a fiduciary toward the public, and if he deliberately conceals material information fr om them he is guilty of fraud.

It is well established in American jurisprudence that:

Fraud destroys the validity of everything into which it enters, Nudd v. Burrows, 91U.S 426 ; F raud vitiates everything , Boyce v. Grundy , 3 Pet. 210; Fraud vitiates the most solemn contracts, documents and even judgments, U.S. v. Throckmorton,98 U.S. 61.

You are hereby NOTICED that, without proper authority, the Summons issued by theCommissioner, through you, is fraudulent and, therefore, null and void.

You are hereby NOTICED that it is fraud for an IRS agent to impersonate a criminalinvestigator of the Intelligence Division, and fraud vitiates everything that it enters into,including this summons. In your response to the Affidavit of Authority , you will be required to provide evidence of your authority to act as a criminal investigator in the Intelligence Division.

You are hereby NOTICED of the following case law related to the search and seizure of private books and papers:

BOYD v. U S, 116 U.S. 616, 623 (1886): " The search for and seizure of stolen or forfeited goods, or goods liable to duties and concealed to avoid the payment thereof,are totall y dif ferent things from a search for and seizure of a man' s pr ivate books and papers for the purpose of obtaining information therein contained, or of using them as evidence against him. The two things differ toto coelo. I n the one case, the government is entitled to the possession of the property; in the other it is n ot." " Papers are the owner's goods and chattels; they are his dearest property, and are so far from enduring a seizure, that they will hardly bear an inspection; and though the eye cannot by the laws of England be guil ty of a trespass, yet where private papers are


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removed and erried away the secret nature of those goods will be an aggravation of the tr espass, and demand more considerable damages in that respect. Where i s the wri tten law that gives any magistrate such a power? I can safely answer, there i s none; and therefore it is too much for us, without such authority, to pronounce a practice legal which would be subversive of all the comfor ts of society." , at 628.

It appears that there is no written law giving you the power to search for and seize mypersonal books and records.

You are hereby NOTICED of the following U.S. Supreme Court case, setting forth the essentialelements of tax evasion and willful failure to file, which the Government is required to prove:

CHEEK v. UNITED STATES, 498 U.S. 192 (1991): Wi ll fu lness, as constru ed by our prior decisions in criminal tax cases, requires the Government to prove that the (1) law i mposed a duty on the defendant, (2) that the defendant knew of thi s duty, and (3) that he volun tarily and i ntentionally violated that duty." There are thr ee essential elements to the crime of tax evasion, namely (1) willfulness; (2) existence of a tax deficiency; and (3) an affirmative act constituting an evasion or attempted evasion of the tax. Sansone v. United States, 380 U.S. 343, at 351, 85 S.Ct. 1004, at 1010 (1965); United States v. Bishop, 264 F .3d 535 (5th Ci r. 2001); U ni ted States v. Dack, 747 F .2d 1172, at 1174 (7th Cir . 1984); and Un ited States v. M al, 942 F .2d 682, at 687 (9th Ci r.1991); Uni ted States v. Silkman, 156 F .3d 833 (8th Cir. 1998). See also Lawn v.United States, 355 U.S. 339, at 361, 78 S.Ct. 311 (1958.

You are hereby NOTICED of the recent case against Tommy K. Cryer (Case #06-50164-01) ,involving tax evasion and willful failure to file. After two years of investigation and preparation,the Department of Justice attorneys withdrew the felony tax evasion charges at the start of the

trial. In addition, the attorneys could not provide the law that made the defendant liable for theFederal Income Tax. As a result, Mr. Cryer was acquitted by the jury of the charges of willfulfailure to file. This case was decided on July 13, 2007. (Please see Exhibit D )

United States v. Tommy K. Cryer No. 06-50164-01 Western District of Louisiana Shreveport Division

Apparently, Mr. Cryer did a good job of explaining to the jury what he read in the Brushaber,Stanton, and Eisner Supreme Court cases about the legal meaning of the word "income" and

what he read in the Internal Revenue Code - everything but the law that required him to file. Hehad asked the IRS to show him the law that made him liable, but the IRS did not respond.

You are hereby NOTICED of the numerous U.S. Supreme Court cases prohibiting a direct taxon the citizens of the United States without apportionment according to the census, as set forth inArticle I, Section 2, Clause 3 and Article I, Section 9, Clause 4. (Please see Exhibit C )


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In the Tommy Cryer case, as well as others, the Department of Justice attorneys committed fraud by claiming that these Supreme Court cases had been overturned by Tax Court cases and byunpublished decisions.

In truth, these Supreme Court cases have never been overturned and support the fact that ArticleI, Section 2, Clause 3 and Article I, Section 9, Clause 4 of the Constitution remain in full effecttoday.

The conclusion to be reached by this discussion is that there is no law requiring me or anyother U.S. citizen to file a tax return or pay Federal Income Taxes.

If you have knowledge of such a law, you will have the opportunity to state it in the Affidavit of Authority .

Which brings me to the following:

My first contact from the IRS for an alleged tax liability occurred when I received a ProposedIndividual Income Tax Assessment for the tax year 2002. That document was dated July 25,2005. Over the next 18 months, I repeatedly provided the IRS with evidence that I did not havea tax liability for 2002, or any other year.

My first contact with you was your letter to me on February 9, 2007, informing me that you werein the process of gathering information from various third parties related to unfiled returns.Since that time, you have taken the following actions:

Refused to acknowledge the U. S. Supreme Court cases cited; Refused to fill out and return the Affidavit of Authority (even going so far as to detach

the Affidavit from my original letter and mailing it back to me, staple holes and all); Refused to provide me with a list of all persons contacted by any employee, contractor,

agent, officer, or other representative of the Internal Revenue Service, along with thename(s) and employee number(s) of any employee(s), contractor(s), agent(s), officer(s)or other representative(s) of the Internal Revenue Service who contacted them, as Irequested in my letter dated March 16, 2007;

Placed Federal Tax Liens on my assets; Confiscated $1,358.76 from my bank accounts; Caused me to incur $136.00 in insufficient funds charges, as a result of the confiscation

of my funds; Threatened and intimidated my clients, causing them to remit $18,937.71 to the

Department of Treasury for a tax liability that I do not owe; As a direct result of your threats, at least one client has refused to engage me for any

future projects, thereby depriving me of my most basic right.. the right to contract andwork where and for whom I choose.

Butcher's Union vs. Crescent City, 111 US 746, 756 (1884) " It has been well said that the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. " ;


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Exhibit A

Summons


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Exhibit B

Affidavit of Authority

Please fill out the following Affidavit and return by certified mail to Robert A. McNeilwithin 10 days. You may fill out only those items that you are prepared to swear to or

affirm. You may refuse certain items by drawing a line through the items and initialingthose items in the margin.

Please be notified that if you refuse to swear to or affirm any of the listed items, relying onyour 5 th amendment rights of not being compelled to testify against yourself, that suchrefusal shall be the equivalent of standing mute and the court will be forced to make itsdeterminations based on the sworn testimony and evidence provided by Robert A. McNeil.


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Affidavit of Authority

I am an authorized representative of the Internal Revenue Service.

1) I understand that Robert A. McNeil is a citizen of Texas and the United States and

is not engaged in a corporate activity and is not liable for the income tax under the

corporate income (excise) tax and does not have earnings from foreign sources.

2) Robert A. McNeil is liable for the individual income tax, that is a direct tax on his

property, levied without the Apportionment provision of the U.S. Constitution.

3) IRC section 7608 or section _________ authorizes agents with my title to perform

collection actions under subtitle A and C.

4) I certify that I am duly delegated to issue Notices of Lien and Levy by Delegation

Order number ____________ from the Secretary.

5) My delegation orders from the Secretary to perform collection actions under IRC

Section 6331 are listed in delegation order number(s) ________________.

6) I am authorized to take collection actions against Robert A. McNeil, under the

authority of the 16 th Amendment without the constitutional requirements of

Apportionment. I understand that Robert A. McNeil is not operating as a corporate

entity and has not received taxable income under the definition of income in the

16 th Amendment, as stated by U.S. Supreme Court rulings.

7) The Internal Revenue Service has the lawful authority under subtitle A to require

Robert A. McNeil to file 1040s and require him to include his sources of income as if those sources were income defined by the U.S. Supreme Court.

8) The Internal Revenue Service has the lawful authority to require Robert A. McNeil

to file form 1040s under penalty of perjury for any and all years in question and this

would not violate Robert A. McNeils Constitutional protections.


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9) Our lawful authority to impose an individual direct tax without Apportionment,

that makes Robert A. McNeil liable for the individual income tax, is the Internal

Revenue Code, section _______, paragraph(s) ________, and regulation number

___________, paragraph ________ of the Code of Federal Regulations, Title 26.

10) I further certify that the IRS is acting under all lawful and correct collection

procedures.

I declare under the penalty of perjury and under the laws of the United States that the foregoingis true and correct, except for items that I have crossed out and initialed.

Signed _______________________________ Date: ___________________

Printed Name of Agent __________________________________________

Agents Employee Number ______________________

Agents Title ________________________

Agents IRS Division Name _______________________________

Witness Signature and Printed Name _________________________________

The State of Texas

County of _________________________

Before me, a Notary Public, on this day personally appeared_____________________________, known to me (or proved to me on the oath of__________________________) to be the person whose name is subscribed to theforgoing instrument and acknowledged to me that he executed the same for the purpose and consideration thereinexpressed.

Given under my hand and seal of office this _______day of _________________ A.D. 20_______

________________________________________

Notary Public, State of Texas

________________________________________

(Print name of Notary Public here)

My commission expires the______ day of____________________20______


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Notice of Non-Compliance

Notice is hereby given that if you fail to produce this affidavit, signed by an authorized

agent, your failure to do so shall be construed as prima facie evidence that there is no agent

in your department or agency who is authorized to take collection actions under IRC

section 6331, or subtitle A or C, or under Title 26 and shall create the legal presumption or

conclusion that you have been taking illegal collection actions against Robert A. McNeil,

while acting under color of law and are engaged in an extortion and fraud scheme

against Robert A. McNeil.

Important footnotes follow;

In Federal Cr op I nsurance v. M err ill , 332 U.S. 380 , the Supreme Court ruled:

Whatever the form in which the government functions, anyone entering into anarrangement with the government takes a risk of having accurately ascertained that hewho purports to act for the government stays within the bounds of his authority, eventhough the agent himself may be unaware of the limitations upon his authority. Alsosee Utah Power & Light Co. v. United States, 243 U.S. 389; United States v. Stewart,311 U.S. 60; and generally, in re Floyd Acceptances, 7 Wall. 666 .

F ederal Tr ade Commission v. Raladam Co. , 283 U.S. 643, 51 S.Ct. 587 (1931):

"Official powers cannot be extended beyond the terms and necessary implications of the grant. If broader powers be desirable, they must be conferred by Congress. Theycannot be merely assumed by administrative officers; nor can they be created by thecourts in the proper exercise of their judicial functions," 283 U.S., at 649.

State ex rel M cConnell v. F ir st State Bank , 22 Tenn. App. 577, 124 S.W.2d 726, 733 (1938):

"All persons dealing with public officers are bound to take notice of the law prescribingtheir authority and powers."

Continental Casualty Co. v. United States , 113 F.2d 284 (5th Cir. 1940):

"Public officers are merely the agents of the public, whose powers and authority aredefined and limited by law. Any act without the scope of the authority so defined doesnot bind the principal, and all persons dealing with such agents are charged withknowledge of the extent of their authority," 113 F.2d, at 286.

Quaker Oats Co. v. Fed. Securi ty Admin istrator , 129 F.2d 76, 80 (7th Cir. 1942), reversed onother grounds at 318 U.S. 218, 63 S.Ct. 589 (1943):


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Exhibit C

The U.S. Constitution and the 16 th Amendment

The Constitution of the United States prohibits a direct un-apportioned tax in two places: Article 1, Section 2, Cl ause 3 and Ar ticle 1, Section 9, Clause 4 .

Article 1, Section 2, Clause 3: Representati ve and di rect Taxes shal l be apportioned among the several states which may be in cluded in this Union, according to their respective Numbers..

Article 1, Section 9, Clause 4: N o Capitation, or other dir ect, Tax shall be laid, unless in Proportion to the Census or enumeration herein befor e directed to be taken.

This prohibition against a direct un-apportioned tax remains in full force and effect today.

16 th Amendment (Passed by Congress July 2, 1909. Ratified February 3, 1913): The Congress

shal l have power to lay and coll ect taxes on incomes, fr om whatever source der ived, without apportionment among the several States, and without r egard to any census or enumerati on.

The Internal Revenue Service falsely states that the Constitution and the 16th Amendmentauthorize a tax on every individual. The following cases show that such claim is false andfraudulent.

STATE OF RHODE ISLAND v. COM. OF MASSACHUSETTS, 37 U.S. 657 (1838): " The government of the Uni ted States may, therefore, exercise all , but no more than all the judicial power provided for it by the constituti on." 37 US 657, 672. (Underline emphasis)

Murdock vs. Com. of Penn., 319 US 105, at 113; 63 S Ct at 875; 87 L Ed at 1298 (1943): Astate may not impose a charge for the enjoyment of a right granted by the F ederal Constitution.

Nothing can be clearer than that what the constitution intended to guard against was the exercise by the general government of the power of directly taxing persons and property withi n any state through a majority made up from the other states. Pollock vs. Farmers Loan andTrust Co. on original intent , 157 US 429, 582 (1895).

Brushaber vs. Union Pacific, 240 US 1, 12 (1916), on original intent , " ... the all embracing character of the two gr eat classif ications, i ncluding, on the one hand, Dir ect Taxes subject to

apportionment, and on the other, excises, duties, and imposts subject to uniformity, held the law to be unconstitutional in substance for these reasons: concluding that the classification of Dir ect was adopted for the purpose of renderi ng it impossible to burden by taxation accumulations of property, real or personal, except subject to the regulation of apportionment,..." (Underline emphasis)

10th Amendment to the Constitution states: "The powers not delegated to the United Statesby the Constitution, nor prohibited by it to the States, are reserved to the Statesrespectively, or to the People."


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Pollock vs. Farmers Loan and Trust Co., 157 US 429, 629 (1895): " Excise' is defined to be an inland imposition, sometimes upon the consumption of the commodity, and sometimes upon the retail sale; sometimes upon the manufactur er, and sometimes upon the vendor.

Knowlton vs. Moore, 178 US 41, 47 (1900): " Direct Taxes bear upon persons, upon possession and the enjoyment of r ights" ;

FLINT v STONE TRACY, 220 US 107, 151 - 152 (1911): Duties and imposts are terms commonly applied to levies made by governments on the importation or exportation of commodities. Excises are 'taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon li censes to pursue certain occupations, and upon corporate pri vileges.' Cooley, Const. L im. 7th ed. 680. (Underline emphasis)Thus, in the matter of taxation, the constitution recognizes the two great classes of direct and indirect taxes, and lays down two rules by which their imposition must be governed, namely,the rule of apportionment as to direct taxes, and the rule of uniformity as to duties, imposts,and excises. Pollock, 157 US 429, 556 (1895);

The Code of Federal Regulations cites direct and indirect taxes in 19 CFR 351.102 Definitions.

Direct tax. ``Direct tax'' means a tax on wages, profits, interests, rents, royalties, and all other forms of i ncome, a tax on the ownership of real property, or a social welf are charge.

I ndir ect tax. ``I ndir ect tax' ' means a sales, excise, tur nover , value added, f ranchi se, stamp,transfer, inventory, or equipment tax, a border tax, or any other tax other than a direct tax or an import charge.

See above Brushaber vs. Union Pacific, 240 US 1, 12 (1916), on original intent .

U.S. vs. Whitridge, 231 US 144, 147 (1913): " As repeatedly pointed out by this court, the corporation tax law of 1909... imposed an excise or privilege tax, and not in any sense a tax upon property or upon income merely as income." ;

MERCHANTS LOAN & TRUST CO. v SMIETANKA, 255 US 509, 518 - 519 (1921): The Corporation Excise Tax Act of August 5, 1909, was not an income tax law, but a definition of the word income was so necessary in its administration I t is obvious that these decisions in principle ru le the case at bar if the word income has the same meaning in the Income Tax Act of 1913 that it had in the Corporation Excise Tax Act of 1909, and that it has the same scope of meaning was in eff ect decided i n Southern Pacif ic v L owe, where it was assumed for the purpose of decision that there was no difference in its meaning as used in the

act of 1909 and in the Income Tax Act of 1913. There can be no doubt that the word must be given the same meaning and content in the Income Tax Acts of 1916 and 1917 that it had in the act of 1913. When we add to thi s, E isner v M acomber the defi nition of income which was applied was adopted from Strattons Independence v Howbert, supra, arising under the Corporation Excise Tax Act of 1909 there would seem to be no room to doubt that the word must be given the same meaning i n al l the I ncome Tax Acts of Congress that was given to it in the Corporation Excise Tax Act, and that what that meaning is has now become definitely settled by decisions of th is Court. (Underline emphasis)


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EISNER v MACOMBER, 252 US 189, 205 - 206 (1920): The 16 th Amendment must be construed i n connection with the taxing clauses of the ori ginal Constitution and the eff ect attributed to them befor e the amendment was adopted. A s repeatedly held, this did not extend the taxing power to new subjects it becomes essenti al to distinguish between what i s and i s not income, as the term i s there used.. we find little to add to the succinct defini tion adopted in two cases arising under the Corporation Tax Act of 1909(Stratton s and Doyle)

SOUTHERN PACIFIC CO. v. LOWE, 247 U.S. 330, 335 (1918): " We must reject in this case,as we have rejected in cases ari sing u nder the Corporation Excise Tax A ct of 1909, the broad contention submitted on behalf of the government that all receipts, everything that comes in,are income within the proper defini tion of the term 'gross income'. Certainly the term 'income' has no broader meaning in the Income Tax Act of 1913 than in that of 1909, and for the present purpose we assume there is no difference in its meaning as used in the two acts."

FLINT v. STONE TRACY CO., 220 U.S. 107, 162 (1911): I n the case at bar we have already discussed the limitations which the Constitution imposes upon the right to levy excise taxes,and it could not be said, even if the principles of the 14th Amendment were applicable to the present case, that there is no substantial difference between the carrying on of business by the corporations taxed, and the same business when conducted by a private firm or individual.The thing taxed is not the mere dealing in merchandise, in which the actual transactions may be the same, whether conducted by individuals or corporations, but the tax is laid upon the privileges which exist in conducting business with the advantages which inhere in the corporate capacity of those taxed, and which ar e not enjoyed by private fi rms or individuals. (Underline emphasis)

Stratton's Independence, 231 US 399, 417 (1913): Evidently Congress adopted the income as the measure of the tax to be imposed with respect to the doing of business in corporate form because it desired that the excise should be imposed, approximately at least, with regard to the amount of benefi t presumably der ived by such corporations from the cur rent operations of the government. In Flint v. Stone Tracy Co. 220 U.S. 107, 165, 55 S. L. ed. 107, 419, 31 Sup. Ct.Rep. 342, Ann. Cas. 1912 B. 1312, it was held that Congress, in exercising the right to tax a legitimate subject of taxation as a fr anchise [231 U.S. 399, 417] or privilege, was not debarred by the Constitution from measuring the taxation by the total income, although derived in part fr om property which, considered by itself , was not taxable. (Underline emphasis);

Sims v. Ahrens et al., 271 SW Reporter at 730: Income is necessarily the product of the joint efforts of the state and the recipient of the i ncome, the state furn ishing the protection necessary to enable the recipient to produce, receive, and enjoy it, and a tax thereon in the last analysis i s simply a porti on cut f rom the income and appropriated by the state as its share (Underline emphasis)

Redfield v. Fisher, 135 Or. 180, 292 P. 813, 819 (Ore. 1930): " The individual, unlike the corporation, cannot be taxed for the mere pri vilege of existing. The corporation is an ar tif icial entity which owes its existence and charter powers to the state; but the individual's rights to li ve and own property are natural ri ghts for the enjoyment of which an excise cannot be imposed." (Underline emphasis)


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Doyle v. Mitchell Bros., 247 U.S. 179, 183 (1918): " An examination of these and other provisions of the Act (Corporation Excise Tax Act of August 5, 1909) make it plain that the legislative purpose was not to tax property as such, or the mere conversion of property, but to tax the conduct of the business of corporations organized for profit upon the gainful returns fr om their business operations." (Underline emphasis)

STANTON v BALTIC MINING CO., 240 US 103, 112 -114 (1916): Not being within the authority of the 16 th Amendment, the tax is therefore, within the rul ing of Pollack a dir ect tax and void for want of compliance with the regulation of apportionment.; (Underlineemphasis)

STANTON v BALTIC MINING CO., 240 US 103, 112 -114 (1916): it was settled in Stratton s I ndependence that such tax i s not a tax upon property but a tr ue excise levied on the resul t of the business... (Underline emphasis) ;

Jerome H. Sheip Co. v. Amos, 100 Fla. 863, 130 So. 699, 705 (1930): " A man is free to lay hand upon hi s own proper ty. To acquir e and possess property is a ri ght, not a pr ivil ege ... The right to acquire and possess property cannot alone be made the subject of an excise .... nor,generally speaking, can an excise be laid upon the mere right to possess the fruits thereof, as that ri ght is the chief attribute of ownership." (Underline emphasis);

U.S. v. BALLARD, 535 F2d 400 (1976): Gr oss income and not gross receipts is the foundation of income tax liabili ty At 404, The general term income is not defined in the Internal Revenue Code. At 404, gross income means the total sales, less the cost of goods sold, plus any income from investments and from incidental or outside operations or sources.

Doyle vs. Mitchell, 247 US 179, at 183, at 185 (1918): " Whatever diff icul ty there may be about a precise and scientific definition of 'income" ; it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax; conveying rather the idea of gain or incr ease ari sing f rom corporate activities." (Underlineemphasis) ;

Evans vs. Gore, 253 US 245, 263 (1920); " ... It manifestly disregards the fact that by the previous r uli ng it was settled that the provisions of the 16th Amendment conferr ed no new power of taxation." (Underline emphasis);

Brushaber vs. Union Pacific, 240 US 1, 12 (1916), " ... the whole purpose of the Amendment was to relieve all income taxes when imposed f rom apportionment fr om a consideration of the source..." and on the contrary shows that i t was drawn with the object of maintaining the limi tations of the Constitution and harmonizing their operation. (Underline emphasis);

Peck vs. Lowe, 247 US 165, 173 (1918); " The Sixteenth Amendment, although referred to in argument, has no r eal beari ng and may be put out of view. As poin ted out in recent decisions,it does not extend the taxin g power to new or excepted subjects (Underline emphasis)

Bowers vs. Kerbaugh-Empire, 271 US 170, 174 (1926), " I t was not the purpose or eff ect of that Amendment to br ing any new subject wi thin the taxing power." (Underline emphasis);


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Helvering vs. Edison Brothers, 8th Cir. 133 F2d 575 (1943); " The Treasury cannot by interpretive regulation make income of that which is not income within the meaning of the revenue acts of Congress, nor can Congress, wi thout apportionment, tax that which is not income within the meaning of the 16th Amendment." ;

Also see Southern Pacific vs. Lowe, 247 US 330, 335 (1918); Butcher's Union vs. Cresent City,111 US 746, 756 (1884) " It has been well said that the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. " ;

Pollack, 157 US 429, 556, 573, 582, and 436-441 (1895), No capitation, or other direct, tax shall be laid, unless in proportion to the census. And, As to the states and their municipalities, this (contributions to expense of government) is reached largely through the imposition of direct taxes. As to the federal government, it is attained in part through excises and indirect taxes upon luxuries and consumption generally, to which direct taxation may be added to the extent the ru le of apportionment allows. ;

Flint vs. Stone Tracy, 220 US 107, 161, 165 (1911); Coppage vs. State of Kansas, 236 US 1, 23-24 (1915), The court held it unconstitutional, saying: 'The right to follow any lawful vocation and to make contracts is as completely wi thin the protection of the Constitu tion as the right to hold property free from unwarranted seizure, or the liberty to go when and where one will.One of the ways of obtaining property is by contract. The right, therefore, to contract cannot be infringed by the legislature without violating the letter and spirit of the Constitution. Every citizen i s protected in h is ri ght to work where and for whom he will . He may select not only hi s employer , but al so his associates. (Underline emphasis) ;

Truax vs. Corrigan, 257 US 312, 348 (1921); That the right to conduct a lawful business, and thereby acquir e pecuniary profits, is proper ty, is indisputable.

Meyer vs. State of Nebraska, 262 US 390, 399 (1923); Without doubt, it denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of li fe..."

Sims vs. Ahrens, 167 Ark. 557; 271 S.W. 720, 730-733 (1925), " The l egislatur e has no power to declare as a privilege and tax for revenue purposes, occupations that are of common right..." (Underline emphasis);

Taft vs. Bowers, 278 US 470, 481 (1929); Under former decisions here the settled doctri ne is that the Sixteenth Amendment confers no power upon Congress to define and tax as income without apportionment something which theretofore could not have been properly regarded as income. ;

Jack Cole vs. MacFarland, 337 S.W. 2d 453, 455-56 (Tenn. 1960), " Realizing and receiving income or earn ings is not a pri vilege that can be taxed." ... " Since the right to receive income or earnings is a right belonging to every person. This right cannot be taxed as a privilege." (Underline emphasis)


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Exhibit D

Shreveport TimesJuly 13, 2007

Tommy CryerCase #06-50164-01


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robert a. mcneil v us gov & internal revenue service (ram-060)

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