Our second ad appears today (Friday, 3/2/01) on page 11A of USA TODAY. This is the weekend edition, which means it is available nationwide, through Sunday night. Check it out. It features the photos and names of five employers who have stopped withholding taxes from the paychecks of their employees. They have joined a growing number of former and present IRS officers, attorneys, Certified Public Accountants and retired judges who believe and assert that there is no law that requires most employers to withhold and no law that requires most Americans to file an income tax return or to pay the federal income tax, and that the entire income tax system is founded upon fraud and is operated illegally.

The message also addresses the government's refusal to meet in a public forum to address these issues.

Bob Schulz
Chairman
We The People Foundation
For Constitutional Education
2458 Ridge Rd.
Queensbury, NY 12804
http://www.givemeliberty.org/

by William Cooper

Veritas News Service - Exclusive, February 28, 2001 -- Information gleaned from earthquake data from the last 200 years in the United States produces some surprising, and some not so surprising information. Most Americans would name California as the state most likely to have the largest earthquakes, not so. And who would suspect that Idaho, Montana or Arkansas are potentially big quake states?

Our investigation has revealed that the following states have experienced the largest quakes in the past, and are the ones most likely to experience future earthquakes of magnitude 7.0 or larger. They are listed in order of probability.

1. Alaska (Surprise!)
2. California
3. Hawaii (Includes sea floor in immediate vicinity of the islands)
4. Nevada
5. Washington
5. Idaho
5. Montana
6. Arkansas
6. Missouri

It is not probable that other states could experience large quakes of magnitude 7.0 or larger but it is not impossible. Most states have experienced earthquakes measuring from imperceptible up to and including just under 7.0 in magnitude.

The data also suggests the following:

1. If all of the pressure in the fault was relieved on February 28th, there might not be another major quake in the northwest United States for many years.

2. The earthquake in the Portland, Seattle area could trigger major quakes in other adjacent areas such as California.

3. The Portland, Seattle quake could be the harbinger of a much larger quake in the same area in the near future.

4. Even though Arkansas and Missouri are listed number 6 in probability they are the location of one of the largest earthquakes ever to occur in the recorded history of the North American continent. The quake that hit those two states in mid nineteenth century changed the course of the Mississippi river and even caused the water to run backward for an extended period of time.

5. Anyone who predicts that an earthquake of magnitude of 2.0 or larger will hit any one of the above listed states, in the #1 through #4 probability areas, on any given day stands an 82% chance of being right.

6. Anyone who predicts that an earthquake, no matter the magnitude, will hit on any given day in any of the above listed states stands a 92% chance of being right.

7. Anyone who predicts that an earthquake, no matter the magnitude, will hit Alaska or California on any given day stands a 100% chance of being right. Betting against it will put you in the poor house.

8. Earthquake prediction is far from a perfect science so everything we have reported above could turn out to be wrong... unfortunately, or fortunately depending upon where you are when the next big quake hits.

Tax Liability?
Ask the Internal Revenue Service!

By Dan Meador

Introduction & Confession

It took most of eight years, loss of home, earnings, and everything else, not to mention sixteen months in prison, but I finally unearthed the regulation that compels the Internal Revenue Service to determine whether or not any given individual, business or other enterprise is liable for federal income tax. The regulation is section 601.201 of Title 26 of the Internal Revenue Code, subsection (a)(1):

"It is the practice of the Internal Revenue Service to answer inquiries of individuals and organizations, whenever appropriate in the interest of sound tax administration, as to their status for tax purposes and as to the tax effects of their acts or transactions."

Had I known about the regulation in March 1993 when I first had the audacity to ask a revenue officer several penetrating questions, I might have been spared years of grief. As it was, the revenue officer refused to answer questions I posed, her superiors, up to and including the Commissioner of Internal Revenue, refused to be accountable, and I suffered consequences of the proverbial grist mill that routinely destroys lives of Americans across the nation.

Because IRS has characteristically refused to be accountable, independent researchers were forced to dredge through something like five million pages of tax law, regulations and supplemental material before nailing down particulars of the Federal tax system. In June 1996, I published a memorandum as legal notice in the primary Oklahoma legal newspaper that proved no taxing statute in the Internal Revenue Code has general application, and that the Internal Revenue Service is not an agency of government of the United States as such. Congress did not legislatively create the Internal Revenue Service or its predecessor, the Bureau of Internal Revenue. Consequently, the restriction imposed by Article I, Section 8, clause 18 of the U.S. Constitution, which requires Congress to legislatively empower all branches of government, forecloses IRS from enforcing internal revenue laws of the United States within States of the Union.

Within a month, I received what passed for an indictment for alleged obstruction of justice. I assisted people with a defense pleading then they subsequently didn't answer a summons to their arraignment.

A summons? That's right. There wasn't even a warrant for their arrest, and even though appearance on summonses is voluntary, and there was testimony at my trial confirming that I refused to advise them one way or the other so far as whether or not to appear, I was convicted and subsequently spent sixteen months in Federal custody.

Was I prosecuted on a tax charge? That would be the obvious reason to prosecute me because I didn't file tax returns for 1992 through 1995, and throughout that time was a thorn in IRS' side. So why obstruction of justice on what was obviously a trumped-up charge where the statute isn't even applicable to the alleged offense? Why not willful failure to file or something on that order?

The obvious answer is this: my 1996 memorandum was on point. No income tax imposed by internal revenue laws of the United States has blanket application in States of the Union, and IRS does not have lawful authority for enforcement within the several States.

With that said, why this article? Because April 15th is rolling around again and it's good cop - bad cop propaganda time. The New York Times and every other major mainline newspaper have accommodated IRS threats against a small group of American business owners who checked their respective companies out of the Federal income tax system, and people such as Leo K. O'Drudy III are helping IRS rattle the sword. Mr. O'Drudy recently posted an article titled "Anti-Tax Con Men" on the Free Congress Foundation web site where many of the nation's political conservatives converge for discussion and news. Thus the battle rages, with everything from vitriolic accusations to gentler persuasion such as Mr. O'Drudy's patronizing prose.

Possibly I am considered one of the con men, but to be convincing, the case must be made on something more than glib accusations. Many in the tax reform movement have credentials similar to mine. I have been a publishing writer since 1969, I earned a degree with a double major in English, lacking one course of a third major in philosophy, in the early 1990s, in some circles I was considered one of the more accurate independent economic analysts in the nation, I've owned several small businesses, I've served as managing editor for a rural market center daily newspaper, for seven years I produced Oklahoma's largest farm organization newspaper, and I was well enough respected in the Oklahoma legislature that in 1987 I was instrumental in securing the first three veto over-rides of Henry Bellmon's last term as governor. I've been in independent Christian ministry, largely at my own expense, since 1983. To the point I was indicted, at age 51, I had never been arrested and hadn't even been cited for a moving traffic violation for over 20 years.

With that said, let's examine the Federal income tax system. We will begin with a question that might not be obvious to the novice who isn't ordinarily exposed to law, high finance and inside politics: Is a Federal tax system necessary?

What is Your Fair Share?
Would you continue to file returns and pay Federal income taxes if you learned that (1) you aren't liable for income taxes and (2) government doesn't need income tax revenue to fund operations?

Most Americans would call for the guys with rubber suits if someone said government doesn't need tax money and that he or she isn't liable for Federal income taxes. We grew up hearing that death and taxes are the only two certainties. But there is a paradox in our common belief system. We were also taught that when recognized authorities are of one mind, they're invariably wrong.

With that being said, let's consider the second question first: Does Federal government need income tax revenue to fund operations?

In 1945, Beardsley Ruml gave a speech to American Bar Association members titled Taxes for Revenue are Obsolete (complete article posted at www.taxgate.com). As chairman of the New York Federal Reserve Bank, Ruml understood the nation's tax, credit and monetary systems. Given the time frame, he might have participated in engineering them. His explanation of why government of the United States doesn't need a tax system was simple and direct:

"The necessity for a government to tax in order to maintain both its independence and its solvency is true for state and local governments, but it is not true for a national government. Two changes of the greatest consequence have occurred in the last twenty-five years which have substantially altered the position of the national state with respect to the financing of its current requirements. The first of these changes is the gaining of vast new experience in the management of central banks.

The second change is the elimination, for domestic purposes, of the convertibility of the currency into gold.

Final freedom from the domestic money market exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank, and whose currency is not convertible into gold or into some other commodity.

The United States is a national state which has a central banking system, the Federal Reserve System, and whose currency, for domestic purposes, is not convertible into any commodity. It follows that our Federal Government has final freedom from the money market in meeting its financial requirements. Accordingly, the inevitable social and economic consequences of any and all taxes have now become the prime consideration in the imposition of taxes. In general, it may be said that since all taxes have consequences of a social and economic character, the government should look to these consequences in formulating its tax policy. All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue."

Federal government simply has to borrow money into existence to fund operations. The borrowed money increases money supply in relation to goods and services. The effect is inflation. Inflation is effectively a tax spread uniformly throughout the system. Since the early 1970s, prices of essential goods and services have inflated approximately 400%. If there is such a thing as a fair share, everyone is forced to bite the inflation bullet as it devalues all existing wealth, with the purchasing power of production and working classes being most severely undermined. The inflation effect is somewhat like adding water to a pitcher of fruit punch every time someone drinks some of the punch. The punch is eventually diluted until it is nearly transparent.

The next obvious question is, "If the national government doesn't need tax revenue to fund operations, what is the purpose of the tax system?" Ruml provided an answer:

"Federal taxes can be made to serve four principal purposes of a social and economic character. These purposes are:

1. As an instrument of fiscal policy to help stabilize the purchasing power of the dollar;

2. To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes;

3. To express public policy in subsidizing or in penalizing various industries and economic groups;

4. To isolate and assess directly the costs of certain national benefits, such as highways and social security.

In the recent past, we have used our federal tax program consciously for each of these purposes. In serving these purposes, the tax program is a means to an end. The purposes themselves are matters of basic national policy which should be established, in the first instance, independently of any national tax program."

Is it possible that the Federal income tax system is simply a vehicle for political and social control? If Ruml is to be believed, that's precisely the case. It is used as a mechanism for redistribution of wealth and for probing into financial affairs of the American people. It is a control mechanism, nothing more. In fact, in one of its scathing reports, the Grace Commission flatly stated that little if any of the income tax revenue is used to fund essential government operations.

The genesis of the graduated income tax can be traced to The Communist Manifesto, constructed by Karl Marx as a political agenda for destruction of Western capitalism and free enterprise. No other modern political manifesto even considers graduated income tax as a legitimate means for funding essential government services.

The Paper Tiger
Since 1998, Federal tax liens, levies and seizures are down by over 90%, and by 1998, according to IRS figures, an estimated 65 million Americans were not filing income tax returns.

If you access the Internal Revenue Service web page, you will find that the agency constantly advertises for help. Since 1992, employee numbers are down in excess of 18,000. In the last couple of years reasonably high profile people such as former IRS criminal investigator Joe Banister and former auditor John Turner have abandoned ship and have called for IRS accountability. After four years of fighting IRS resistance, the lady who served as official historian resigned and wrote a scathing account of IRS' internal intrigue and chronic cover-ups. Several whistle-blowers who attempted to bring internal accountability have gone public with complaints about lateral transfers and automatic career dead-ends with few internal disciplinary actions against those involved in corrupt activity.

IRS is the classic case of the Peter Principle manifest: once incompetents fill key positions, they invariably fill responsible positions below themselves with worse incompetents until the system fails.

The Federal income tax hoax notwithstanding, the Internal Revenue Service is on the endangered species list. It is replete with incompetents (the General Accounting Office routinely abandons IRS audits as no more than about 35% of the agency's accounts can be balanced; over half of the audits IRS personnel do are fraught with errors), and because of its internal corruption, it cannot retain capable people who have personal integrity. Those who have had dealings with IRS will for the most part verify that it is staffed with thugs.

The agency is being demoralized from inside and out - it cannot hire and retain capable people and it cannot withstand mounting political winds and legal challenges.

What Tax Do I Owe?
Several years ago Alabama attorney Larry Becraft defended Lloyd Long and others in a high profile case where all defendants were acquitted on indictments for willful failure to file and related charges. The jury concluded that the government never demonstrated that Long and other defendants are subject to any given tax imposed by internal revenue laws of the United States that require keeping books and records and filing returns.

In the eight years I've been studying income tax law, I have yet to find taxing and liability statutes, with attending regulations, that make me a person liable for any of the Internal Revenue Code taxes.

The reason is this: Income taxes, as a category, are indirect or excise taxes where the wage or whatever is the measure, not the object of the tax. The object is a privilege or benefit derived from government of the United States. If whatever sources or activities from which you receive income are not a result of or do not generate a government benefit or privilege, you probably aren't subject to taxes imposed by Subtitles A, B and C of the Internal Revenue Code.

In his discourse, Mr. O'Drudy recommended reading the Congressional Research Service publication titled Frequently Asked Questions Concerning the Federal Income Tax - Report 97-59A (1996). The answer to the first question in the report confirms that income taxes are excise or indirect taxes:

"All taxes which are not direct are indirect and subject to the rule of uniformity. The rule of uniformity requires that an indirect tax not discriminate geographically. For example, it would violate the rule of uniformity to enact a special income tax rate for residents of the State of Texas; however, it does not violate the rule to have a special income tax rate for individuals who make over $50,000 per year." (page 2)

In the March 27, 1943 edition of the Congressional Record--House, at pages 2579 et seq., a report by a former Treasury legislative draftsman is even clearer:

"The sixteenth amendment authorizes the taxation of income from whatever source derived thus taxing investment income without apportionment among the several States. The Supreme Court has held that the sixteenth amendment did not extend the taxing power of the United States to new or excepted subjects but merely removed the necessity which might otherwise exist for an apportionment among the States of taxes laid on income whether it be received from one source or another. So the amendment made it possible to bring investment income within the scope of the general income-tax law, but did not change the character of the tax. It is still fundamentally an excise or duty with respect to the privilege of carrying on the activity or owning any property which produces income.

The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax; it is the basis for determining the amount of tax."

Without resorting to overly much technicality, the Federal income tax system follows these lines: Federal income taxes, as a category, break down into two basic classifications. The first class is conveniently called income tax. These taxes are imposed by Subtitles A & B of the Internal Revenue Code, including the "normal tax" imposed by Chapter 1 which most everybody knows as income tax. The second class is employment taxes, imposed by Subtitle C. The latter includes social welfare taxes and government personnel taxes.

Subtitles A & B income taxes are applicable to nonresident aliens, foreign corporations and foreign partnerships with United States source income, and to citizens and residents of the United States with foreign source income, income from insular possessions of the United States, and trade-related income subject to various treaty provisions such as the China Trade Act. There is a comprehensive list of income sources for which citizens and residents of the United States are liable at section 1.861-8(f)(1)(vi) of Title 26 of the Code of Federal Regulations.

Do nonresident aliens have a constitutionally secured right to engage in income-producing enterprise in the United States? Hardly. Our government, via treaty or otherwise, grants them a privilege. Do citizens and residents of the United States have the right to engage in income-producing enterprise in foreign nations? No, we have that privilege or benefit via negotiated treaties and United States government otherwise provides protection for whatever foreign enterprise Americans undertake.

Employment taxes fall into two categories: Social welfare taxes imposed by Chapters 21 through 23, including the Social Security tax, are mandatory only in territory belonging to the United States. Our various state governments have contracts for participation in the Social Security scheme, but the agreements extent only to state employees and employees of political subdivisions of the state.

Why? Because the Constitution does not vest Congress with authority to impose a national welfare scheme where one is taxed for the benefit of another. In 1935, the U.S. Supreme Court struck down the first social security program Congress enacted, then the subsequent Social Security Act of 1935 was made applicable only to territory belonging to the United States.

Mr. O'Drudy lamented about the definition of the term "United States" many people argue in tax forums. Definitions of "State" and "United States" applicable to the Social Security tax clearly limit application to territory belonging to the United States.

The definitions are at section 31.3121(e)-1 of Title 26 of the Code of Federal Regulations. When reading these definitions of "State" and "United States", note that the Social Security tax applied in Alaska and Hawaii prior to their admission to the Union but not after. Even IRS apologists such as Mr. O'Drudy have trouble jumping these hurdles.

The government personnel tax imposed by Chapter 24 is reasonably easy to document as the "employee" the tax is levied against is defined at section 3401(c) of the Internal Revenue Code.

Here we might ask a simple question of those who are fortunate enough to own their own businesses: Have you received the Form 8655 Reporting Agent Authorization certificate from the Treasury Financial Management Service? If not, what authority do you have to withhold Subtitle C employment taxes from your employees?

What special privileges and benefits do government employees derive from government employment? When you understand the complete Federalism scheme, the list is longer than a well rope. There isn't space enough to list them here.

Going by the Book
Has the tax reform movement been plagued by con artists? You bet it has. But to say everyone in the tax reform movement is a con artist would be like saying every Democrat is a Bill Clinton or every Republican is a Richard Nixon. It simply isn't so. In fact, the rank and file of the tax reform movement, as Mr. O'Drudy acknowledged, is devoutly Christian. And, of course, there has been no want of martyred casualties. As Mr. Ruml told American Bar Association members in 1945, the tax system is employed to impose social control.

Whether intentionally or not, Mr. O'Drudy and others like him carry out an important role. The overall Federalism scheme, of which the tax system is simply a part, relies on mass propaganda and terrorization, reinforced by random victimization, to accomplish its ends. Or put another way, prosecute a few in order to scare the rest into submission.

If memory serves, Mr. O'Drudy described the scheme as voluntary compliance. The term is simply another equivocation.

By about 1990, something of a new breed began joining the tax reform movement. I've already recited some of my credentials. Another, who intended to become a priest when he retired, was a computer programmer for investment banking. Successful stock brokers and money managers have joined the movement, former corporate executives and a multitude of people with highly developed computer and other technical skills. Airline pilots, retired military officers, retired policemen, and, of course, Internal Revenue Service defectors have joined the growing ranks of tax reform advocates.

Things really got under way with the advent of Internet and computer-based law resources. Then Congress chipped in with the IRS reform and restructuring act of 1998. Several sections of the 1998 act provide accountability forums for IRS personnel. When and if they don't comply with mandates and prohibitions of the Internal Revenue Code, Treasury regulations and published policy, penalties range from administrative discipline to criminal prosecution. Congress even created the office of Treasury Inspector General for Tax Administration as an outside investigative Treasury office.

Even though I suspect that any given reader isn't liable for Federal income tax, I'm not the final authority. But we now know that if you are uncertain, you can ask IRS to make a status determination. So long as your request is made within the framework of the good faith and reasonable cause standard, and your position is anchored within the substantial authority standard, you don't have to be concerned about draconian penalties or criminal prosecution. If fact, you don't even have to file a return until the status determination is made and the worst that can happen is you will have to pay the tax you are liable for plus interest for late payment.

There are right ways and wrong ways to go about things. When dealing with government agencies, it is best to go by the book. However, where tax matters are concerned, there has been the problem of determining which of the thousands of books preserve constitutionally secured rights. Thanks to contemporary electronics and thousands of diligent Americans dedicated to unearthing the truth, today we probably know the book better than most IRS personnel know it.

Activists Challenge IRS Using Agency's Rules
Dozens of employers claim statutes allow them to stop withholding taxes

by Jay Reynolds

Veritas News Service - Exclusive, January 29, 2001 -- Over the past several years, many reports of high altitude aircraft emitting unusual contrails http://cimss.ssec.wisc.edu/wxwise/class/contrail.html have been made. These reports, appearing in print, on radio, and the Internet have generated speculation about the origin, purpose, and effects of these lines which appear to be more numerous over the years. This article will examine the answers to these questions, suggest some explanations for what is being seen, and describe what is not yet known about the subject.

Proved RIGHT again!

This story was revealed in "Behold A Pale Horse" by William Cooper 10 years ago.

AIDS flowchart discoverer featured in documentary that proves AIDS originated in US government biological warfare project.

Veritas News Service - Exclusive, January 12, 2000 -- (St. Louis, MO) An independent film crew from Nashville will begin filming this Friday of new author, Boyd E. Graves' book, "STATE ORIGIN: The Evidence of the Laboratory Birth of AIDS." In August 1999, Graves stunned the international scientific community when he unveiled the flowchart of a federal virus development program. World experts continue to validate the flowchart as the "missing link" in the true laboratory origin of AIDS.

"Although the 'Special Virus' 'Flow Chart' is seemingly structured in such a manner that the world would not immediately recognize the real purpose of this officially sanctioned U.S. Federal program, one has to ask oneself 'WHY was the 'Flow Chart' even structured in the first place?'" according to Dr. Basil Wainwright, Kenya.

The flowchart coordinates over 20,000 scientific papers and 15 years of progress reports which detail every experiment and contract of the secret Manhattan project. "Few people are aware that the Manhattan project of the 1940's is the true birthplace of the AIDS virus," said Graves. "We are very fortunate to have found the flowchart, it makes our argument irrefutable."

"We believe review of the experiments conducted under Phase IV of the flowchart will lead to immediate breakthroughs for people living with HIV/AIDS. We can affirmatively demonstrate a federal program (plot) seeking to "create," "produce" and "proliferate" a virus." said Graves.

In 1977, the U.S. government produced 15, 000 gallons of AIDS (Special Virus). Earlier this year, Graves research was validated when top officials from the NIH and NCI confirmed the existence of the secret virus program.

Independent film producer, Brent Leung is heading up the Nashville film crew. According to Graves' publicist, Joel Bales, "'STATE ORIGIN' will be on the shelf by inauguration day. "Once the dust finally settles from the current political tug of war, the laboratory origin of AIDS will dominate the social agenda of humanity, well into the 21st Century."

"It may take some people another hundred years to understand the significance of finding the government's flowchart, in essence, the 'blueprint' of how they made AIDS."

The discovery of the AIDS flowchart will ultimately be regarded as one of the greatest document finds in the history of the world. "I am hopeful the film will capture, a perspective of the truly 'warped mentality' that vigorously led to the hunt, capture and distribution of AIDS."

"If an earthquake has two epicenters - like the AIDS virus: rest assured, just as it was in the Wizard of Oz there IS someone behind a curtain!"

All out WAR in Middle East?
William Cooper Predicts:

The truth about Militias

Must Read!
The Death of Due Process

VNS Exclusives Archives - 2000