One of the famous sayings in American culture is that there are two certainties: death and taxes. While that phrase does carry some truth, it doesn’t tell the full story.
As many things related to governance and ruling over a large group of people go: phraseology is fraught with distortions and half-baked thinking.
The theme song for the Internal Revenue Service could very well be Hotel California by The Eagles, where it is proclaims that once you’re checked in: “You can check out any time you like, but you can never leave.”
This we know to be false, though this fact is unknown to a majority of people born sovereign in the Constitutional Republic. It doesn’t help matters that the National Government obscures the truth with its clever legalese.
“There is a distinct way that Americans born in one of the 50 states enter the books of the Internal Revenue Service,” says Adele Weiss, principal of Weiss+Associates, a European-based tax consultancy firm specializing in the U.S. Federal Income Tax. “They remain there year after year until they find the dark, narrow hallway that leads them out. Unfortunately, there isn’t a bright, neon sign directing those members to the Exit Door.”
The entry and exit doors Weiss is referring to are legal, yet the government preys on the unsuspecting public not aware of the legal ramifications of their decisions.
The Entry Door: An American enters the U.S. Tax Club when he files his first Form 1040 Individual Income Tax Return. This serves as the application to join the so-called “country club,” a club consisting of people whose membership is both mandatory and voluntary. Those who have no choice but to be members are those born in the District of Columbia and territories like Puerto Rico and Guam. They must pay dues every year, period.
Of course, the largest segment of membership comes from those who voluntarily joined, those born in one of the 50 states of the Union and protected by the Constitution. They must pay dues every year until they voluntarily end their membership. This is the Exit Door that millions of people don’t realize is there.
“Americans should ponder this for a moment: Why did I file my first Form 1040?” Weiss suggested. “Was there a law requiring it, or did I merely do it out of social convention?
“The answer is: there is no law requiring it, even in light of the 16th Amendment, which only applies within federal territory. However once you indeed file, you become a target.”
The key, Weiss points out, is that there is an Exit Door, so that whether or not you made a mistake, you can choose to leave. This was a provision made so not to violate the 13th Amendment outlawing slavery and involuntary indentured servitude.
That Exit Door is found in statutory law at 26 USC 6013(g)(4)(A), where an election (voluntarily joining the U.S. Tax Club) may be revoked by the taxpayer.
“Many of our clients wonder why lawyers and financial advisors have missed this important citation,” Weiss says, “but we also know the key is understanding jurisdiction and the somewhat cryptic phraseology used by politicians who want to gain an advantage over the populace.”
Take a look at 26 USC 6013(g), the section that outlines the revocation procedure. The heading of that section reads, “Election to treat nonresident alien individual as resident of the United States.”
This introduces the term ‘nonresident alien individual’ into the lexicon. If you were to ask the average American on the street whether he was a nonresident alien, he would likely say, “Of course not!” But this was crafted specifically to draw you off the trail.
After understanding that there exists two jurisdictions that are called the “United States,” it’s much easier to understand the meaning behind this vague terminology. In relation to the statutory United States, consisting of the District of Columbia and its territories, John Q. Public is “nonresident” as he resides in Arizona, Texas, Florida, etc. And he is “alien” to those statutory rules that apply only within D.C., Puerto Rico, etc.
This “nonresident alien” tag is tied into Federal Income Tax liability at 26 CFR 1.871-1(a)which describes the types of income considered taxable to aliens. There are three ways in which nonresident aliens become taxpayers: 1) when they choose to work for the National Government by holding a public office; 2) when they choose to live in American Samoa or Puerto Rico; or 3) when they choose to have their earnings treated like a Resident Alien.
Here’s what that regulation states to the third point: “However, nonresident alien individuals may elect, under section 6013 (g) or (h), to be treated as U.S. residents for purposes of determining their income tax liability under Chapters 1, 5, and 24 of the code.”
It’s important to emphasize the words, “may elect,” as being those of choice, not obligation. The third point contains the majority of Americans today, whether they knowingly joined the club or not. This also reinforces the testimony made by IRS bureau chief Dwight Avis in 1953 when he said the “income tax was 100 percent voluntary.”
Weiss’ firm helps Americans define their true status and lawfully leave the U.S. federal income tax scheme if they so choose.