WHO IS REALLY LIABLE FOR THE FEDERAL PERSONAL INCOME TAX?
This tax has been around for such a long time it is silly to believe that it is not a genuine and
constitutional tax. All taxes, including this one, have to be clear and certain. It is clear that the tax covers
just about every trade, business and occupation but the problem with the tax is the common belief that the
tax applies to everyone. That is incorrect. This brochure will correct that and other misconceptions.
Even before we get into Subtitle A of the Internal Revenue Code, where the tax is found, I can tell you
that the tax you think of as an income tax is imposed on the receipt of money from the United States
Treasury. The United States government is so vast that every type of business and every manner of
earning money has been compensated out of the U.S. Treasury at some time. However, the only people
actually made liable for the tax are those acting as federal employers for the individual contractors and
employees who receive the income. This can be a very convenient and practical way to collect the tax
provided private employers understand that Section 3403 does not apply to them. The Sixteenth
Amendment permits an indirect income tax on all sources of income over which Congress has power but
it may only tax using the legislative power contained in the rest of the Constitution. The income of
individuals who have contracted to work for government is one large source. Another source of taxable
income are retail sales in Washington, D. C. and all other federal possessions. These and all other sources
of taxable income are to be found in Article I, Section 8 and Article IV, Section 3, Clause 2 of the
Constitution.
WHY IS THE FEDERAL INCOME TAX LAW SO COMPLICATED?
Congress has a lock on money paid through the federal Treasury but to tax private money it must deceive
those persons over whom it has no power. It does this by making people believe there is a requirement to
file income tax returns. Complexity is how it does it. No matter how complicated the Code becomes the
only persons who have to understand it are the federal employers who pay out government money and
withhold some to pay the tax. The federal income tax law is contained in Subtitle A of the Internal
Revenue Code Sections 1 through 1564. Section 1, imposes an income tax on the taxable income of a
married individual who makes a single return jointly with a spouse and on a married individual who does
not make a single return jointly with a spouse. A tax is imposed on the taxable income of single
individuals and heads of households, without mentioning the making of any return. The person liable for
the tax, the federal employer, determines what is taxable income and withholds it from the individual
federal employee or contractor.
HOW DOES CONGRESS GET AWAY WITH SUCH A COMPLEX, EVIL SCHEME?
The tax is clear and certain and it is imposed without regard to the filing of a return. It is the filing of an
income tax return that gums up everything. All Congress had to do was write a law that makes you think
you have to file. The caption of the first section of the tax law is titled: “Married individuals filing joint
returns and surviving spouses.” Section 6013 which is also mentioned in Section 1, is entitled:
“Joint returns of income tax by husband and wife” Do not assume that a joint return is a form 1040 an
individual makes with his wife. Section 7806 states that the captions, titles, cross references, tables of
contents and such are not part of the law. All references to the filing of a return are made in the places
that should be ignored in determining the actual law of income taxation. This means that the persons
whose income is being taxed do not have to file returns or even pay the tax. The federal employer does
everything but earn the taxable income. Everything done for government by its employees is “filed” and
in government custody at all times. Besides the deceptive filing requirement Congress has come up with
special filing status, deductions, special credits and exemptions to create a perceived need to file. All that
complexity creates a tax liability where none exists and the persons who file returns are as guilty as
Congress for the income tax mess.
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HOW IS THE FEDERAL INCOME PAID?
The IRC does require in many places the making of a return but it is not always clear that reference is just
being made to a document like a 1040. Because the tax is on government money any payment is a return
of income which makes a tax on the employer the best way to collect the tax. Section 3401(d) defines an
employer as the person for whom an individual performs any service of whatever nature. Section 3401©
makes it absolutely clearly that an individual is a federal government employee. Section 3403 makes the
federal employer liable for Chapter 24-COLLECTION OF INCOME TAX AT SOURCE OF WAGES.
AM I SUBJECT TO THE FEDERAL INCOME TAX?
To determine for yourself if you are liable follow the same procedure used in this brochure. Employ
critical reading techniques to read the Constitution and the tax laws of the United States. They can be
found at your local library but you should have your own copies. You, too, will discover there is no law
that requires private persons to make and submit to the federal government written confessions that
income taxes are owed. Once you are free from this imaginary tax burden you can start educating others,
including an employer who has been taking your money to pay the “make believe tax”.
HOW CAN I BE CERTAIN THE TAX ONLY APPLIES TO FEDERAL WORKERS?
If you start with the power of Congress you will quickly see that the national government has no taxing
power over the people doing purely local things in the states and may only tax people using the indirect
excise tax. Congress has taxing power over its own employees under Article I, Section 8, Clauses 11, 12,
13 and 14, (the War Powers), and 17. Congress was given no power over ordinary people doing ordinary
things in the states of the Union. Ask yourself: What power does the Congress have over a dentist filling
cavities in Chicago? The answer is none. The state of Illinois can require a dental competence certificate
and the City of Chicago a business license but what Congress can’t control it cannot tax. If Congress has
control over the source of your income you are subject to the income tax. Congress may impose direct
taxes using the power to raise revenue, however, your own state would have to collect this tax from you
and Congress has not imposed this kind of tax in over 130 years.
WHY DO SO MANY PEOPLE FILE INCOME TAX RETURNS IF THEY DON’T HAVE TO?
The IRC is written to make it appear that such a filing requirement exists. Lawyers are no longer trained
to read the law so everything gets by them. They advise people to file and they do so out of fear.
WHY DO LAWYERS CLAIM THE TAX IS AN UNAPPORTIONED DIRECT TAX?
Government controls public and private education so law schools teach what government wants lawyers
to know. Lawyers are taught the Sixteenth Amendment permits such a tax and they cannot understand
what you have read in this brochure. Lawyers are the butt of jokes because they deserve to be.
WHY WAS THIS BROCHURE PREPARED?
I have studied and practiced law for more than three decades and it seems that lawyers know less about
government and taxation then ever. This is an attempt to make everyone think. If I am wrong I want to
hear about it.
Dr. Eduardo M. Rivera
Attorney and Counselor at Law
Member of the California Bar
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