Aluminum Foil

(originally launched into cyberspace on 03/09/2007)

Dear Subscriber,

After I sent my message to this list concerning
the comments of Mr. Siegel, law professor at George Washington
University, having to do with the 861 evidence, a bunch of you
apparently sent him comments. In response, he made some additions
to his web page, adding (as he put it in an e-mail to me) "more
quotations, citations, and arguments demonstrating the error of
[my] position." Here are the two links he gave me:

http://docs.law.gwu.edu/facweb/jsiegel/Personal/taxes/861.htm
http://docs.law.gwu.edu/facweb/jsiegel/Personal/taxes/861det.htm

I'll address the first one here, and the second one in my next
message.

Once upon a time, someone discovered a clever way to foil
(no pun intended) radar-guided missiles. (Yes, this does relate to
the discussion at hand.) When a missile locked onto a plane's radar
signature, the plane would release a cloud of aluminum foil shreds,
giving a mess of a radar signature that would confuse the missile,
which couldn't distinguish between the plane and the distractions.
It would be drawn to the aluminum, of course, and blow up nothing.

Much of the discussion of the income tax ends up being an attempt
to isolate the target from the irrelevant debris, while some are
throwing out aluminum-foil-style distractions. Let's look at a few
shreds. Here are ALL of the "citations" and "quotations" which Mr.
Siegel added to the web page I referenced in my last message:

1)
He mentioned 26 USC 2(d), which explains that, in the case of a
nonresident alien, the income tax "shall apply only as provided by
section 871 or 877." Mr. Siegel then quotes Section 871 as imposing
a 30 percent tax on "the amount received from sources within the
United States by a nonresident alien individual." Not to be
nitpicky, but Mr. Siegel seems to be confusing the purpose of
subsection 871(a) and
subsection 871(b): the former imposes a
separate, flat tax (NOT the normal income tax) upon U.S. income
received by foreigners which is NOT connected with doing business
in the U.S. (such as passive investment income), while the latter
states that nonresidents "shall be taxable as provided in section 1
or 55 on his taxable income which is effectively connected with the
conduct of a trade or business within the United States."

Mr.
Siegel then explains that "foreigners need to know whether their
income is from sources within or without the United States, because
they are taxed only on their U.S.-source income." That is, to a
certain extent, true (though actually, a foreigner CAN have taxable
foreign-source income, if it comes from business conducted inside
the U.S.). Mr. Siegel then asserts, however, that U.S. citizens are
taxed on all of their income, regardless of source. He (again)
gives no citation supporting that assertion.

Now let's stand back
for a moment, and see if we've been looking at a plane or at
aluminum foil. The discussion has to do with the purposes of 861
and related regulations: are they really "irrelevant," and do they
really not "matter" for most U.S. citizens (as Mr. Siegel
suggests), or are they the sections to use to determine everyone's
taxable domestic income (as I suggest, and as the regulations
state)? Notice that the citations and quotations added by Mr.
Siegel don't even MENTION 861 at all. (Section 871 mentions 861
only in one obscure rule regarding certain interest and dividends
which aren't taxable.) So how do citations which DON'T MENTION 861
support Mr. Siegel's claim about what that section is for? (Note
that everything I cited very explicitly talks about 861 and/or its
regulations, and very clearly states what
those sections are for.)

Once again, distinguishing between domestic and foreign income IS
one thing which 861 and following (and related regulations) do. (It
would be pretty dang tough to give rules about determining taxable
domestic income and determining taxable foreign income, without
including rules about determining what is domestic and what is
foreign.) How does it follow that no one else should look there to
determine their taxable income? It doesn't.

2) The only other
citations added to that page were references to Sections 27 and 901
of the tax code, which discuss the foreign tax credit. Again,
neither section mentions 861 at all. More aluminum foil.

(Yes,
again, distinguishing between domestic and foreign income, which IS
one thing that 861 and 862 (and related regs) do, does come into
play in determining foreign tax credits. How does it follow that
the rest of us should ignore those sections? It doesn't, especially
since the regulations repeatedly tell us, unequivocally and
unconditionally, to look there to determine our "taxable income
from sources within the
United States.")

Mr. Siegel then says,
"That's really all one needs to know," but then gives a link to
another page on his site (which I'll address in my next message).
Um... where's the plane? All he added was a few citations that
don't even MENTION 861, and then he repeated his still unsupported
assertion that you and I don't need to look to 861 at all, because
all income we receive, be it foreign or domestic, is taxable.
Sorry, but I still fail to see the error of my ways.

In closing,
Mr. Siegel throws in this little dig: "Readers might also be
interested to know that Mr. Rose served a substantial jail term
following his conviction on tax evasion charges. One might wish to
consider this in deciding whether he is a trustworthy source of tax
information." Ah, one of my favorite logical fallacies: he got
punished, so he must be wrong. (Wasn't I just discussing Galileo on
this list?) Incidentally, it was willful failure to file, not tax
evasion. More importantly, as I've mentioned before, at trial the
court and the prosecution avoided the actual issue like the plague
(and kept my report, my video, all the letters I wrote to the
government, the transcripts of my meetings with the IRS, everything
from my web sites, and basically everything I've written in the
last decade, away from the jury). Those of you who were at the
trial know full well that there was no debate at all over the
substance of the issue. Their entire case was "We TOLD him he was
wrong!" And Mr. Siegel wants you to take that as proof that my
conclusions are incorrect?

Well, one good dig deserves another:
Readers might also be interested to know that Mr. Siegel served a
substantial term as a lawyer for the DOJ. One might wish to
consider this in deciding whether he is a trustworthy source of tax
information. (Just kidding... sort of.)

Sincerely,

Larken Rose
www.larkenrose.com

Credentials versus Evidence

(originally launched into cyberspace on 03/06/2007)

(Please pardon the length of this e-mail. Unlike some people, I
have a nasty habit of actually quoting citations to support the
points I make, which tends to lengthen things considerably. Plus,
I'm naturally long-winded.)

Dear Subscriber,

Yet another "expert"
opinion poo-pooing the 861 evidence was recently brought to my
attention. It would be a full-time job to respond to all of them
(the status quo always has a lot of beneficiaries, and therefore
proponents), but the general gist of most of them can be addressed
with one response. The example I'll use this time comes from a
professor of law at the George Washington University Law School (in
DC), so one would think that it would at least be a little more
credible than the remarks of some untrained paper-pusher. Here is
the link to the (attempted) refutation of the 861 evidence:

http://docs.law.gwu.edu/facweb/jsiegel/Personal/taxes/861.htm

An
important first thing to note about the article is that it cites
absolutely nothing from the law. Not one word. Anywhere. As is
often the case, it consists of a string of unsupported assertions.
The closest thing to legal support Mr. Siegel gives is to say that
"the rest of the tax code (especially sections 1, 61 and 63) shows
that U.S. citizens are taxed on their income from all sources,
whether from within or outside the United States." Again, nothing
from the law is quoted.

As many of you know, Section 1 imposes a
tax on one's "taxable income." It says nothing about how to
determine what is and what is not "taxable income." Section 63
generally defines "taxable income" to mean "gross income" minus
deductions. It says nothing about how to determine what is or is
not to be included in "gross income." Section 61 not only says
NOTHING about geographic origin of income, or the type of commerce
which generates the income (which is addressed in great detail in
Subchapter N of the code, beginning with Section 861), but Section
61 itself, for many decades, was followed by a cross-reference
referring the reader to Section 861 regarding "Income from sources
WITHIN the United States," and to Section 862 regarding income from
OUTSIDE of the United States. (If the wording of Section 61 meant
that geographic origin didn't MATTER, why on earth would we be told
to look somewhere else concerning geographic origin?)

I expect
that Mr. Siegel is basing his conclusion upon the wording "all
income from whatever source derived" from Section 61, though he did
not bother to quote even that. But the first thing that should be
addressed is actually a psychological point: WHY did he feel no
need to cite ANYTHING from the law? My guess is that, being a
professor of law, he is accustomed to having his students assume
that he knows what he's talking about. In other words, his
credentials ARE his support, and the only support he thinks he
needs. (Conversely, many people might view my LACK of credentials
as all that is needed to render my "opinion" worthless, despite the
fact that I quote from the law itself constantly, as you'll see
below.)

Mr Siegel asserts that 861 and its regs exist, not to
determine whether domestic income is taxable, but merely to
"determine[] whether income is considered to be from a source
within the United States or from a source outside the United
States." While that is ONE thing that those sections do (though he
cites nothing demonstrating that), the implication is clearly that
one should NOT look there to determine whether his domestic income
is TAXABLE. Again, nothing is cited supporting such a claim.

Being
sans credentials myself, I must defer to the statutes and
regulations. Mr. Siegel states that whether one's income is foreign
or domestic "doesn't matter" and that 861 "is irrelevant" for most
U.S. citizens, "because U.S. citizens are taxed on all income from
all sources." However, here is what the official Executive branch
regulations say:

“(c) Determination of taxable income. The
taxpayer’s taxable income from sources WITHIN OR WITHOUT the United
States WILL BE DETERMINED under the rules of Secs. 1.861-8 [and
following].” [26 CFR § 1.863-1(c)]

Of course, to determine what
(if anything) you owe, you must first determine your TAXABLE
income, be it foreign and/or domestic. So how does one DETERMINE
his taxable domestic income? I think the above is pretty darn clear
about that. I believe the following is pretty darn clear as well:

“Sections 861(b) and 863(a) state in general terms HOW TO DETERMINE
TAXABLE INCOME OF A TAXPAYER FROM SOURCES WITHIN THE UNITED STATES
after gross income from sources within the United States has been
determined. Sections 862(b) and 863(a) state in general terms how
to determine taxable income of a taxpayer from sources WITHOUT the
United States after gross income from sources without the United
States has been determined.” [26 CFR § 1.861-8]

Clearly implied in
Mr. Siegel's comments is that you DON'T NEED to go to Section 861
and its regs to determine the "taxable income of a taxpayer from
sources within the United States." The rest of the code, he say
(without quoting anything from it), says that citizens are taxed on
their income regardless of its geographic source. Someone can have
taxable domestic income, taxable foreign income, both, or neither.
(There can't be taxable income that doesn't come from anywhere.)

Consider the following, which is what the first section of
regulations under 861 says, and has said since before I was born
(with minor wording changes). While reading it, keep in mind that
this professor of law says you should NOT be looking to 861 to
determine your taxable domestic income:

Ҥ1.861-1 Income from
sources within the United States
(a) Categories of income. Part I
(section 861 and following), subchapter N, chapter 1 of the Code,
and the regulations thereunder DETERMINE THE SOURCES OF INCOME FOR
PURPOSES OF THE INCOME TAX. ... The statute provides for the
following three categories of income:
(1) WITHIN the United
States The gross income from sources within the United States,
consisting of the items of gross income specified in section 861(a)
plus the items of gross income allocated or apportioned to such
sources in accordance with section 863(a). See §§ 1.861-2 to 1.861-
7, inclusive, and § 1.863-1. The TAXABLE INCOME FROM SOURCES WITHIN
THE UNITED STATES, in the case of such income, shall be determined
by deducting therefrom, in accordance with sections 861(b) and
863(a), the [allowable deductions]. See §§ 1.861-8 and 1.863-1.

(2) Without [outside of] the United States ...
(3) Partly within
and partly without the United States ...
(b) Taxable income from
sources within the United States.
The TAXABLE INCOME FROM SOURCES
WITHIN THE UNITED STATES shall consist of the taxable income
described in paragraph (a)(l) of this section plus the taxable
income allocated or apportioned to such sources, as indicated in
paragraph (a)(3) of this section.” [26 CFR § 1.861-1]
In giving his
reason for 861's existence, without (in his words) "going into all
the situations where section 861 matters," Mr. Siegel gives two
examples: 1) a foreigner distinguishing between taxable domestic
income and non-taxable foreign income, and; 2) a citizen entitled
to the foreign tax credit, who must determine domestic versus
foreign to figure out the limit on the credit. Again (sorry to beat
a dead horse), he cites nothing supporting his claim that 861 is
only to be used in such unusual circumstances. Above, you can see
for yourself what the OFFICIAL government regulations say about
what the sections are for. Notice that they give NO indication that
only CERTAIN people should be referring to those sections. Here is
yet another example of an official IRS document summarizing the
purpose of 861 and following. See if you see ANY indication that
most people should ignore the section entirely, as Mr. Siegel
suggests.

“Rules are prescribed for DETERMINATION OF GROSS INCOME
AND TAXABLE INCOME derived from sources WITHIN AND WITHOUT the
United States, and for the allocation of income derived partly from
sources within the United States and partly without the United
States or within United States possessions. §§ 1.861-1 through
1.864. (Secs 861-864; ‘54 Code.)” [Treasury Decision 6258]

I just
can't relate to this strange psychological phenomenon wherein
someone with credentials can assert ANYTHING, and somehow people
think it needs responding to. "That section is only for
foreigners/Americans with foreign income/albino wombats named
Edmund." They ASSERT who should look there, and people
automatically give it credibility, though the asserters cite
NOTHING from the law supporting it. They can assert until they're
blue in the face that 861 is for someone other than you, but when
have you ever seen any of them QUOTE anything from the statutes or
regulations which comes close to supporting that claim? Show me ANY
citation which says that 861 is NOT to be used by everyone to
determine their taxable domestic income. You will NEVER see one.
I've done text searches through ALL of the tax statutes and
regulations, reviewing EVERY mention of Section 861. NEVER is there
any indication, or even a subtle hint, that most people should
IGNORE 861 when it comes to determining their taxable domestic
income. Quite the opposite, as you can see above.

So let's review:
we have lots of assertions but ZERO citations saying that we
shouldn't use 861--that's it's not for us--and at least half a
dozen official citations (including those shown above) which say,
unequivocally and unconditionally, that those ARE the sections to
use for "determining taxable income from sources within the United
States." Why are people so reluctant to believe their own eyes, or
to accept what is right in front of them in black and white? Why do
they continue to give weight to the provably-false, utterly
baseless assertions of people, just because those people have
credentials (i.e., pieces of paper that say they SHOULD know what
they're talking about)?

I must admit, my respect for Mr. Siegel
dropped a few notches when his otherwise civil comments ended with
a reference to a completely substance-free attempt by Irwin Schiff
to discredit the 861 evidence. Mr. Siegel mentions Mr. Schiff's
comments, and adds that "When even the tax protestors reject your
tax protestor argument, you know it's got problems." Aside from the
fact that he uses the ever-popular spin
of mischaracterizing the
issue as being about "protesting" a tax (when anyone with basic
reading comprehension can see that it's not), his little dig is
intellectually dishonest, if not borderline schizophrenic. I'm sure
Mr. Siegel's deferring to Mr. Schiff as some sort of authority
would not apply when Mr. Schiff is disagreeing with conventional
wisdom--only when he's disagreeing with me. Furthermore, a
professor of law should certainly be able to recognize that Mr.
Schiff's comments about Section 861 and its regulations--which Mr.
Schiff ADMITS to not understanding--are not a substantive rebuttal
at all, but merely a complaint that I don't argue what Mr. Schiff
wants people to argue (that wages aren't income). What kind of
rebuttal is that?

I've long since lost track of how many supposed
experts have ASSERTED that we shouldn't be looking at 861 at all,
but I know exactly how many actual citations of law I've seen
supporting that claim: ZERO. If you ask me, lots of evidence and no
credentials is more compelling than lots of credentials and no
evidence. (I'm funny that way.) I should add, however, that there
ARE some people who have credentials AND cite evidence. For an
excellent example, put on a pot of coffee, make a sandwich, and dig
into THIS:

http://www.wethepeoplefoundation.org/MISC/Cryer/CRYER--MotiontoDismiss.pdf

(I haven't yet read the entire motion, but I
agree wholeheartedly with the parts I've reviewed so far.)

Sincerely,

Larken Rose
www.larkenrose.com

The Long Run

(originally launched into cyberspace on 03/04/2007)

Dear Subscriber,

When combatting a current and ongoing
injustice, it's easy to get impatient. I know I do. Every day that
someone is wrongfully imprisoned, every day that the IRS is
terrorizing someone, ruining someone's life, swiping someone's bank
account, etc., is a day too many. And it was my desperation to end
that, not some day in the distant future, but NOW, which led me to
invite the government to prosecute me. And when I lost--when twelve
(presumably) randomly-selected Americans gave their blessing to the
government's vilification and intimidation tactics--when, with
their verdict, they declared that us peasants have no business
looking at the law, and that it is a mortal sin for us to ever
disbelieve a federal bureaucrat who makes an assertion (however
ignorant the bureaucrat and however bogus the assertion)--it was a
huge letdown for a lot of people. It was an opportunity lost, which
could have been a giant leap towards ending the largest financial
fraud in history. Instead, it was a leap backwards, giving the feds
another trophy for their mantle-piece; another example to point to
and say, "If you don't blindly believe us and do as you're told
(and ignore all those pesky statutes and regulations and stuff),
here's what will happen to you." (And by the way, for those who
have asked, I never expected the government or the courts to follow
the law or provide justice; I did, however, have a shred of hope
that a jury of "normal" folk might be able to see the bleeding
obvious, and do the right thing. Apparently not.)

All things
considered, it's easy (and tempting) to sit around wallowing in
discouragement, depression, frustration, anger, and so on--and I've
done my share of that in the last year. But there's some good news
as well. Let's do a flashback to something that happened 335 years
(and two days) before I was born. There was this dude who was
saying stuff that the authorities of the day couldn't refute, but
really didn't like. And so, as people with power often do, they
decided to use the time-honored "debating" method of using brute
force, locking the guy up and threatening to do nasty things to
him, if he didn't stop contradicting their official doctrine.
Eventually their thuggery paid off, and the dude wrote this (not in
English, though):

"I, Galileo, son of the late Vincenzo Galilei,
Florentine, aged seventy years, arraigned personally before this
tribunal, and kneeling before you, Most Eminent and Reverend Lord
Cardinals, Inquisitors-General against heretical depravity
throughout the entire Christian commonwealth, having before my eyes
and touching with my hands, the Holy Gospels, swear that I have
always believed, do believe, and by God's help will in the future
believe, all that is held, preached, and taught by the Holy
Catholic and Apostolic Church. But whereas -- after an injunction
had been judicially intimated to me by this Holy Office, to the
effect that I must altogether abandon the false opinion that the
sun is the center of the world and immovable, and that the earth is
not the center of the world, and moves, and that I must not hold,
defend, or teach in any way whatsoever, verbally or in writing, the
said false doctrine, and after it had been notified to me that the
said doctrine was contrary to Holy Scripture -- I wrote and printed
a book in which I discuss this new doctrine already condemned, and
adduce arguments of great cogency in its favor, without presenting
any solution of these, and for this reason I have been pronounced
by the Holy Office to be vehemently suspected of heresy, that is to
say, of having held and believed that the Sun is the center of the
world and immovable, and that the earth is not the center and
moves."

I find it particularly amusing that he "confessed" to
giving "arguments of great cogency" for the earth orbiting the sun,
without giving any compelling contrary arguments (since none
exist). Sounds familiar. Anyway, that Galileo dude went on to
declare "with sincere heart and unfeigned faith" (under threat of
punishment) that he was wrong, that he was really, really sorry,
and he swore that in the future he would never again suggest or
teach that the earth moves, and that it goes around the sun.

It's
tempting to think, based on that example, that not a whole lot has
changed with the way the world works: "authority" declares what
beliefs are acceptable, and terrorizes those who voice contrary
beliefs. (Who needs logic, evidence, and reason, when you have guns
and prisons?) That's not exactly encouraging. But here's something
else to consider: who won? Whose ideas prevailed? What became of
that dude's radical, ridiculous, heretical "theory"?

It became
the universally-accepted, undisputed truth. Despite all of the
threats, vilifications, and punishments dished out by those in
power, the truth won. It sometimes takes a long time (it only took
300 years for that particular authority to apologize to Galileo),
but the truth will ALWAYS outlast a lie in the long run. Why?
Because a lie requires an ongoing, perpetual effort to preserve it.
And once it falls, it's nearly impossible to revive. (Do you think
it will ever again be conventional wisdom that the sun goes around
the earth? Not likely.)

At my trial, the "authorities" didn't
bother to try to refute any of the evidence on which my "belief" is
based. They avoided the substance of the issue entirely, except for
a quick, provably flawed blurb which the prosecutor gave AFTER my
closing argument, knowing I would have no chance to respond.
(Incidentally, it was a blatant violation of the rules of court to
let the prosecutor advise the jury on what the law is, but the
judge let him do it anyway, while making sure I was prohibited from
doing so. As usual, I obeyed the rules, and they didn't.) The
prosecution knew they didn't have to deal with substance or logic.
They could declare "we TOLD him he was wrong," and to most people
(twelve in particular), that's good enough. The powers that be had
declared the accepted doctrine; who was I to doubt it?

But they
can't refute the evidence, and it's not going to go away. They
can't make it disappear, and they can't keep people from being
exposed to it. They can vilify people, slander people, threaten
people, rob people, imprison people--who knows, they may get around
to killing someone for this kind of heresy (Ed Brown comes to
mind). But intimidation and violence can never outlast evidence, or
keep it suppressed forever.

As long as people are being extorted,
vilified, persecuted, etc., I'm going to be impatient to see
justice happen. And I know the same is true of a lot of you. But,
if you need a little pick-me-up amongst the barrage of bad news
these days, here it is: it may not happen soon, but the truth will
always win. When it does, even if it's after I'm dead, I'll be glad
to have been on the right side. There are a lot of people in power
who now gloat, who history will remember as the lawless thugs and
tyrants they are. They cannot hold off the truth forever. As a
(fictional) radical extremist once put it, ideas are bulletproof.

Sincerely,

Larken Rose
www.larkenrose.com

(P.S. I managed to
lose the contact info for the couple who so graciously had a copy
of "V for Vendetta" sent to me. So I'll thank you in front of 6,000
people instead (right now), and hope you notice this.)

More Emphasis

(originally launced into cyberspace 02/20/2007)

Dear Subscriber,

I probably didn't do a good enough job
prefacing my prior message with something saying how important it
was. If you only read one thing from me, and especially if you only
act on one thing, have it be my prior message, "A Good Cause." If
you're not eager to put what you have on the line to battle the IRS
yourself (which would be understandable), or to draw the attention
and wrath of the feds by being vocal about the issue, then at least
give a little help--anonymously, if you prefer--to someone who did,
and is now paying the price. That message, "A Good Cause," and all
of the messages in the series leading up to it (in case you missed
any), can be found at the link below:

http://www.synapticsparks.info/LarkenRose/index.html

I will
probably shut up again for a few days, as I have things to do
around the house. As I've said before, don't be offended or
insulted if I can't respond to all of my e-mails on an individual
basis. Just know that Tessa and I are extremely thankful for all
those who have supported us along the way.

Sincerely,

Larken
Rose
www.larkenrose.com