An Examination of IRS' Alleged Authority Under 26 U.S.

C 6020(b) to Prepare
So-called Substitute for Returns (SFRs) for Individuals
by Pitman Buck, Jr.
Section 6020(b)I of the Internal Revenue Code (IRC) authorizes the Internal Revenue Service (IRS) to act as
follows: "If any person fails to make any return required by any internal revenue law or regulation made thereunder
at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make
such return from his own knowledge and from such information as he can obtain through testimony or otherwise."
See also below the texts of other official documents relevant to this paper, viz., GAO Report No. GAO/GDD-0060RII; also that portion of Part 21III, Chapter 8, Section 3 subtitled, "6020(b) processing" from an IRS handbook that
I downloaded from the IRS' official Internet web site entitled, "Tax Professional's Corner"; and also IRM 5293 IV
under the heading, "Returns Prepared Under IRC 6020(b)" and the Internal Revenue Service Manual, 6/3/94,
subtitled, "5290 Refusal to File -- IRC 6020(b) Assessment Procedure SUBSECTION-1: 5293 Returns Prepared
Under IRC 6020(b)". For convenience of the reader, other relevant items, tax statutes and regulations are attached.
Let us get right to the heart of the matter. The purpose of this paper is to prove (or at least to create a reasonable
doubt) that the IRS has no legal authority to manufacture its so-called Substitute for Returns (SFRs) for people who
live and work in their natural capacities as individuals1 (as opposed to artificial entities or fiduciaries) and that in
doing so the IRS violates the law and contradicts itself. For this purpose, it is important to note that employment,
excise and partnership taxes are all excises2, 3, 4 or indirect taxes. It is equally important to note that while the IRS
utilizes the income tax Form 1040 to prepare SFRs for individuals under color of 6020(b) which is a statute that
concerns only indirect taxes, the IRS otherwise contends in published documents (IRS Publication 21, et. al.) that
the income tax is a direct tax. Thus, the IRS contention that income taxes are direct taxes raises the ethical question,
even if it were not a legal question, of how the IRS can honestly prepare Form 1040 type SFRs proposing that
individuals owe income tax which the IRS contends is a direct tax when IRS procedures that presumably are
pursuant to 6020(b) list only such IRS forms as are relevant to excise taxes, such as employment, excise and
partnership taxes, none of which the IRS recognizes as direct taxes. (See III and IV.)
Let us walk through this maze of mirrors a bit further. Official IRS guidelines in the "Tax Professional's Corner"
section of The Digital Daily (posted on IRS' Internet web site) state the following: "Employment and excise tax
cases (except IRC Chapters 41, 42, 43, 44, and 45 excise taxes) cannot be litigated in the Tax Court. Therefore, any
unagreed tax is assessed without issuance of a notice of deficiency." ( For the reader's information, Chapter 41
imposes an excise tax on "excess lobbying expenditures of any organization...." Chapter 42 imposes an excise tax
"on each private foundation...." Chapter 43 imposes an excise tax on employers who fail to meet the minimum
funding of a section 412 plan. Chapter 44 imposes an excise tax on Real Estate Investment Trusts (REITs) in certain
situations of the REIT's distribution of ordinary income. Chapter 45 imposed an excise tax "on the windfall profit
from taxable crude oil removed from the premises..." but that tax has been repealed.
Now consider the following:
(1) The IRS guidelines state that "Employment and excise tax cases (except IRC Chapters 41, 42, 43, 44, and 45
excise taxes) cannot be litigated in Tax Court."
(2) The guidelines then state, "Therefore, any unagreed [excise] tax [except those referred to IRC Chapters 41, 42,
43, 44, and 45] is assessed without issuance of a notice of deficiency."
(3) Careful examination shows that all the excises imposed in IRC Chapters 41, 42, 43, and 44 (Ch. 45 taxes have
been repealed) concern organizations, foundations and employers, i.e., fiduciaries. Thus, the excises imposed in
these IRC chapters do not relate to individuals acting in their natural capacities.
(4) An excise tax (see Footnote 3 and extensive discussion thereunder) is a tax based on taxable activity.
In view of IRS' statements quoted in (1) and (2) above, and IRS' contention that the income tax is a direct tax, a few
questions necessarily arise: (1) Where in 6020(b) or anywhere else in the IRC is IRS' authority to prepare - for
individuals who live and work in their natural capacities as individuals - SFRs that propose (see the GAO report)
that such individuals owe "x" amount of "direct" income taxes? (To be logical in these matters, one must remember
that the IRS contends that the income tax is a "direct" tax, not an excise, and we will hold the IRS to this
contention until it changes). (2) Where in 6020(b) is IRS' authority to issue a notice of deficiency that proposes an
"x" amount of income tax is owed based upon an SFR, on the face of which appears absolutely no figures from
which to calculate anything? (3) Does IRS' statement that "excise tax cases ... cannot be litigated in Tax Court" (see
above), explain why the IRS mails - with a notice of deficiency - its Publication 1 to inform the recipient that the
"direct" income tax that the IRS proposes as owed in the notice of deficiency may be appealed to Tax Court? (4)
Why, as a matter of practice, does the IRS fail to inform the individuals that the notice of deficiency may also be
appealed directly to U.S. district courts where the individuals' full panoply of due process rights would be available

(if not actually obtained) under the Constitution's Bill of Rights and not merely some statutory rights that Congress
made available under its two statutory Taxpayer's Bill of Rights, I and II?
In view of the definition of an excise tax (see Footnote 3 and the extensive discussion thereunder) as a tax imposed
because of taxable activity, it is absurd and contradictory for the IRS to contend that income tax based on taxable
income derived from taxable activity is not an excise tax but a direct tax. Moreover, the reader's attention is drawn
to the fact that Section 4 of IRM 6209 - in which the IRS illustrates and explains how it assigns the Document
Locator Number (DLN) to different types of tax returns - states that "The third digit is the tax class." (p.1) On page
2, the IRS lists the third digit "2" of a DLN as used to designate "Individual Income Tax, Fiduciary Income Tax,
Partnership return". Thus, by its own illustration and explanation, the IRS has proved its own deviousness by linking
the income tax that it contends is a a direct tax to fiduciary and partnership taxes which plainly are excise taxes. Do
IRS officials and other government crooks really think that they can get away with this chicanery forever?
Let us continue our walk through this maze of mirrors. In the face of the Supreme Court's holding in Brushaber6 and
in other cases that the income tax is an excise in the class of indirect taxes, the IRS insists on arguing in litigations
and in publications that the income tax is a direct tax but utilizes 6020(b) that addresses only excise taxes in order
to manufacture SFRs for individuals. This maze of mirrors has been smoked up further with the recent admission
made by IRS officials to the United States General Accounting Office (GAO) "that they do not generally prepare
actual tax returns."II R-e-a-l-l-y!
By examining a copy of one of these SFRs that the IRS manufactures for individuals we will readily understand why
the IRS has finally admitted (see II, GAO Report No. GAO/GDD-00-60R) that not only are these SFRs not actual
tax returns but they don't even look like tax returns! I have in my possession several copies of SFRs that I obtained
through Freedom of Information Act and Privacy Act requests. The following aptly describes a SFR that the IRS
generously prepared for me for the year 1988:
1. The SFR is on a Form 1040 with the usual title, "U.S. Individual Income Tax Return".
2. The SFR bears the written notation "SFR-RTF".
3. The SFR has the Document Locator Number (DLN) "1821027204439-0" stamped on it.
4. My name, address and a social security number (assigned when I was a minor) is filled in.
5. Line 3 has an "x" to indicate "Married filing separate return".
6. Line 12 which is titled, "Business income or (loss)", bears the handwritten notation "Rec'd" and the date "SEP 14
1990" stamped with an ink pad.
7. None of the other 67 numbered lines have any entry whatsoever; not line 31 for "adjusted Gross income," not line
37 for "taxable income," not even an entry on line 55 to indicate any "total tax" owed.
8. The SFR bears no signature whatsoever.
Let us now briefly analyze a few of the above-listed characteristics of the examined copy of the SFR that the IRS
prepared for me and compare them with "a return required by this title [26] or by regulations prescribed thereunder,"
and we will quickly learn why the IRS officials admitted to the GAO that the SFR prepared for an individual by the
IRS is generally "no actual tax return."
1. The SFR was created on Form 1040 titled "U.S. Individual Income Tax Return" and the 3rd digit of the DLN - the
"2" - indicates that the type of tax for which the SFR was prepared is either an "Individual Income Tax", "Fiduciary
Income Tax" or a "Partnership return". In (6) above, I mentioned that the examined SFR's "Line 12 which is titled,
"Business income or (loss)", bears the handwritten notation "Rec'd" and the date "SEP 14 1990" stamped with an ink
pad. In April of 1989, my wife and I filed an unsigned 1988 Form 1040 with a Schedule C attached (we are sole
proprietors). (Of course, these and other such documents that were not actual tax returns because they were not
signed.) Marriage is officially recognized as two individuals joined in one relationship and therefore, as sole
proprietors (of a small business that requires no license to legally operate) and without acting on behalf of anyone
else, neither of us is a fiduciary (as that term is legally defined) while conducting our sole proprietorship. This
explanation is deemed necessary to negate IRS' listing the number "2" of the DLN as possibly indicating that the
1988 SFR was prepared with respect to a "Fiduciary Income Tax". In any case, I have never been a member of any
business partnership for profit, but assuming, arguendo, that I was such a business partner in 1988, the IRS should
have used Form 1065, not Form 1040 to prepare a partnership return. (See III below.) The IRS' use of Form 1040
and the number "2" as the third digit of the SFR's DLN and thus associate the "Individual Income Tax" with the
indirect, excise class of "Fiduciary Income Tax" and "Partnership return", is plainly in conflict with its contention
that the income tax is a direct tax. Thus, in the vocabulary of the IRS, the term "Fiduciary Income Tax" is an
oxymoron. When properly understood and used, the term "Fiduciary Income Tax" is not an oxymoron as the term
clearly denotes an indirect, excise tax.
2. There are absolutely no numerical numbers on the face of the SFR from which a tax can be computed. Had this
SFR been filed by an individual instead of by IRS agents, the individual at the very least would have been penalized

$500 for filing a so-called "frivolous" return. As a matter of fact, my wife and I were fined $500 for filing the
aforementioned unsigned 1988 Form 1040 with the Schedule C attached. As if to prove that the unsigned 1988 Form
1040 that we had filed was not an actual tax return, the IRS prepared a SFR for me (the one that we are now
examining) which is the kind of SFR that it has since admitted (to the GAO) is not an actual return! A summary of
our lawsuit to recoup the $500 appears in the appendix.
3. The SFR does not bear the signature of the Secretary (or his/her delegate) as described in 26 U.S.C. 6020(b)(1)
(2) which states: "Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for
all legal purposes." This SFR that the Secretary manufactured for me for the year 1988 is not "so made and
subscribed by the Secretary" and therefore under 6020 it is not "prima facie good and sufficient for all legal
purposes."
For the third reason alone, the SFR is not a valid, processible return and thus is totally unacceptable based on
criteria for tax returns as laid out in the IRC and its tax regulations. Reasons (1) and (2) make the 1988 SFR that the
IRS prepared for me look all the more ridiculous, if that is possible. The IRS cannot have it both ways. The IRS
must be consistent in its acts, litigations, arguments, briefs and publications and act within its lawful authority. In the
past few years, several congressional inquiries into IRS abuses and illegal practices strongly indicate that the people
are getting sick and tired of IRS' Orwellian, duplicitous ways. And having been through the federal court system all
the way to the U.S. Supreme Court, I feel compelled to express my deep disappointment with the federal courts that
allow the IRS to get away with inconsistent, dishonest behavior at the peoples' expense.

I
26 USC Sec. 6020 01/05/99
TITLE 26 - INTERNAL REVENUE CODE
Subtitle F - Procedure and Administration
CHAPTER 61 - INFORMATION AND RETURNS
Subchapter A - Returns and Records
PART II - TAX RETURNS OR STATEMENTS
Subpart D - Miscellaneous Provisions
Sec. 6020. Returns prepared for or executed by Secretary
(a) Preparation of return by Secretary
If any person shall fail to make a return required by this title or by regulations prescribed thereunder, but shall
consent to disclose all information necessary for the preparation thereof, then, and in that case, the Secretary may
prepare such return, which, being signed by such person, may be received by the Secretary as the return of such
person.
(b) Execution of return by Secretary
(1) Authority of Secretary to execute return
If any person fails to make any return required by any internal revenue law or regulation made thereunder at the
time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make
such return from his own knowledge and from such information as he can obtain through testimony or otherwise.
[Bold added]
(2) Status of returns
Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for all legal
purposes. [Bold added]
(Aug. 16, 1954, ch. 736, 68A Stat. 740; Pub. L. 90-364, title I, Sec. 103(e)(3), June 28, 1968, 82 Stat. 264; Pub. L.
94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 98-369, div. A, title IV, Sec. 412(b)(4),
July 18, 1984, 98 Stat. 792.)
AMENDMENTS
1984 - Subsec. (b)(1). Pub. L. 98-369 struck out ''(other than a
declaration of estimated tax required under section 6015)'' after
''make any return''.
1976 - Pub. L. 94-455 struck out ''or his delegate'' after
''Secretary'' wherever appearing.
1968 - Subsec. (b)(1). Pub. L. 90-364 struck out reference to
section 6016.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-369 applicable with respect to taxable
years beginning after Dec. 31, 1984, see section 414(a)(1) of Pub.

L. 98-369, set out as a note under section 6654 of this title.

EFFECTIVE DATE OF 1968 AMENDMENT
Amendment by Pub. L. 90-364 applicable with respect to taxable
years beginning after Dec. 31, 1967, except as provided by section
104 of Pub. L. 90-364, see section 103(f) of Pub. L. 90-364, set
out as a note under section 243 of this title.
CROSS REFERENCES
Assessment authority, see section 6201 of this title.
Limitations on assessment and collection, see section 6501 of
this title.
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 6229, 6248, 6501, 6651,
6664 of this title.
****
Below is the text of the IRS regulation, 26CFR301.6020-1, that implements 26 USC Sec. 6020:
[Code of Federal Regulations]
[Title 26, Volume 17, Parts 300 to 499]
[Revised as of April 1, 1999]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6020-1]
TITLE 26--INTERNAL REVENUE
PART 301--PROCEDURE AND ADMINISTRATION--Table of Contents
Sec. 301.6020-1 Returns prepared or executed by district directors or other internal revenue officers.
(a) Preparation of returns--(1) In general. If any person required by the Code or by the regulations prescribed
thereunder to make a return fails to make such return, it may be prepared by the district director or other authorized
internal revenue officer or employee provided such person consents to disclose all information necessary for the
preparation of such return. The return upon being signed by the person required to make it shall be received by the
district director as the return of such person.
(2) Responsibility of person for whom return is prepared. A person for whom a return is prepared in accordance with
subparagraph (1) of this paragraph shall for all legal purposes remain responsible for the correctness of the return to
the same extent as if the return had been prepared by him.
(b) Execution of returns--(1) In general. If any person required by any internal revenue law or by the regulations
prescribed thereunder to make a return (other than a declaration of estimated tax required under section 6015 or
6016) fails to make such return at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent
return, the district director or other authorized internal revenue officer or employee shall make such return
from his own knowledge and from such information as he can obtain through testimony or otherwise. [Bold added]
(2) Status of returns. Any return made in accordance with subparagraph (1) of this paragraph and subscribed by
the district director or other authorized internal revenue officer or employee shall be prima facie good and
sufficient for all legal purposes. [Bold added]
(3) Deficiency procedures. For deficiency procedures in the case of income, estate, and gift taxes, see sections 6211
to 6216, inclusive, and Secs. 301.6211-1 to 301.6215-1, inclusive.
(c) Cross references. (1) For provisions that a return executed by a district director or other authorized internal
revenue officer or employee will not start the running of the period of limitations on assessment and collection, see
section 6501(b)(3) and paragraph (c) of Sec. 301.6501(b)-1.
(2) For additions to the tax and additional amounts for failure to file returns, see section 6651 and Sec. 301.6651-1,
and section 6652 and Sec. 301.6652-1, respectively.
(3) For additions to the tax for failure to pay tax, see section 6653 and Sec. 301.6653-1.
(4) For criminal penalties for willful failure to make returns, see sections 7201, 7202, and 7203.
(5) For criminal penalties for willfully making false or fraudulent returns, see sections 7206 and 7207.
(6) For authority to examine books and witnesses, see section 7602 and Sec. 301.7602-1.

II
GAO Report No. GAO/GDD-00-60R
Subject: Internal Revenue Service: Preparing Substitute for Returns (SFRs) for Individuals
Excerpts quoted from the GAO Report

The GAO Report No. GAO/GDD-00-60R that was prepared by the United States General Accounting Office (GAO)
states in a footnote on page 1:
"In its response to this letter, IRS officials indicated that they do not generally prepare actual tax returns. Instead,
they said IRS prepares substitute documents [sic] that propose assessments. Although IRS and legislation refer to
this as the substitute for return program, these officials said that the document [sic] does not look like an actual tax
return." p. 1 (Italics and [sic] added by PB)
"We [GAO] requested comments on a draft of this letter from the Commissioner of Internal Revenue or his
designee. On February 9, 2000, we received comments from responsible IRS officials in the Examination and
Customer Service Divisions. Although the Examination Division said it had no comments, Customer Service
Division officials commented on the phrase, "Substitute for Return." They asked us to emphasize that even though
the program is commonly referred to as the SFR program, no actual tax return is prepared. Instead, these officials
noted that IRS prepares a document that substitutes for the return and that proposes an assessment, which is posted
to the taxpayer's account and is subject to the collection process. We added a footnote to the letter to explain this and
revised references in the draft to clarify this point." pp. 2, 3 (Italics added)
"If these individuals do not respond, IRS is to assess the tax shown on the substitute for return and seek payment for
the balance due through its regular collection process." p. 2 (Italics added)
""If IRS does not receive a response within the allotted time, the tax, penalty, and interest on the substitute for return
are to be assessed." p. 6 (Italics added) Note: There are no figures on the face of the SFR - at least on the face of the
1988, SFR that IRS prepared for me, examined herein on pp. 2,3.
"In all other substitute for return situations, IRS is to calculate the tax liability using a single filing status." p. 8
The IRS has surely pulled a rabbit out of its magician's hat if in fact the agency can show a calculated amount of tax
on a "substitute for return" which by its own admission is "no actual tax return."
Below is an article of mine (here slightly modified) that is available on the Internet at
http://www.pointecom.net/~sunlight and also at http://iresist.com/ice
Substitutes for Tax Returns that Never Existed Are Impossible
The Internal Revenue Service (IRS) claims that it has authority under 26 U.S.C. 6020(b) to file an income tax return
(called a "Substitute For Return," or SFR) on behalf of someone who did not file a return. This claim has made me
curious about the IRS' use of the word "substitute." Black's
Law Dictionary, 6th ed., defines the term "substitute" to mean, "One who or that which stands in the place of
another person or thing; to exchange." (Bold added.) So, in the real world, to be a substitute for another person or
thing, the other person or thing must already exist or must have existed. To illustrate, no spectator has ever seen,
known or heard of an athletic coach sending a substitute into a game for another player who wasn't already in the
game or for a player who does not exist and never existed. Likewise, in the real world, to be a substitute for a thing let's say the thing is John Doe's 1995 tax return - then that thing, John Doe's 1995 tax return, must already exist or
must have already existed.
However, the IRS makes the incredible claim under section 6020(b) that it may exchange what it chooses to call a
"substitute for return" for one that John Doe did not file, i.e., for another return that does not exist and which never
existed. WOW! What magic! It is simply amazing to me that the IRS claims that the law empowers it with the
magical ability to exchange a thing that it created for another thing that never existed and yet get something in
return!
The evidence suggests that reality means little, if anything, to the IRS. The agency's so-called "substitute returns"
that it acquires in mystical exchanges for other things that do not exist -- "a something for nothing" exchange -- is
another example of Orwellian newspeak and reminds me of the revealing transactions that the U.S. Tax Court
uncovered in Phillips v. Commissioner, 88 TC 529 (1987):
"Respondent's [IRS's] counsel may not choose to litigate against officially published rulings of the Commissioner
without first withdrawing or modifying those rulings. ... The forms ...were no more than dummy returns filed for
processing purposes." The court continued: "The only evidence
in the record that even suggested that any [IRS] substitute return existed was a transcript of account that reflected
actions taken inconsistently with the law (86 T.C. at 437 n. 5) and consistently with the conclusion that the only
paper filed by respondent [IRS] was a first page of a Form 1040 for the taxable year 1979. 86 T.C. at 437. This form
reported only petitioner's name, address, and social security number, and was not executed by respondent [the IRS].
86 T.C. at 437. ... It was, therefore, unreasonable for respondent [IRS] to pursue his groundless position that these
dummy returns, which failed to meet the requirements of section 6020(b) and his own regulations, were 'returns' for
purposes of section 6013(b). The record could not reasonably be viewed as supporting this argument [of IRS]."
(Bold added)

III
The following is from that part of the IRS' official web site that is subtitled, Tax Professional's Corner.

Part 21
Customer Service
Chapter 8
Liability Determination
Section 3
IRC 6020(b) Processing
21.8.3.1 01-01-1999
IRC 6020(b) Overview
1. IRC 6020(b) provides a way to prepare returns and secure assessments from non-filing taxpayers who:
O Have an open filing requirement;
O Are required to file a return; and
O Do not file a return as required.
21.8.3.2 01-01-1999
What Is IRC 6020(b) Processing?
1. Internal Revenue Code Section 6020(b) is the authority to prepare and process returns for non-filing taxpayers.
2. The authority is given to the Commissioner of the Internal Revenue Service. The authority is further extended by:
O Delegation Order No. 182, which extends 6020(b) authority to Service Center Directors.
O Authority is further delegated to GS-9 and above Service Center Collection Branch (SCCB ) managers.
21.8.3.3 01-01-1999
Criteria For 6020(b) Processing
1. Process a return under the provisions of IRC 6020(b) for Business Master File (BMF ) returns if:
O The entity appears to be liable for the return
O The person required to file the returns does not file it
O Attempts to secure the returns fail.
2. The following BMF returns with corresponding Master File Tax (MFT ) codes are the returns usually prepared
under the provisions of IRC 6020(b):
TAX RETURN
RETURN RETURN TITLE MFT
Form 720 Quarterly Federal Excise 03
Tax Return
Form 940 Employer's Annual Federal 10
Unemployment Tax Return
Form 941 Employer's Quarterly 01
Federal Tax Return
Form 943 Employer's Annual Return 11
for Agricultural Employees
Form 1065 U.S. Partnership Return of 06
Income
Form 2290 Federal Use Tax Return on 60
Highway Motor Vehicles
3.- - - - - - - - - - - - - - - - - - - - - - - - - [End of downloaded text from the IRS' web site, Tax Professional's Corner]
It is significant that Form 1040 is missing from the list of forms that the IRS has indicated as being the forms that are
usually prepared under the provisions or authority of IRC 6020(b); this is especially so because the IRS prepares
many of these SFRs for individuals every year. So why is Form 1040 missing from the 6020(b) list above inasmuch
as the IRS does in fact use the Form 1040 to prepare many of what the IRS chooses to call "substitute for returns"
under the alleged authority of 6020(b)? We have already asked and answered the question of why these SFRs not
actual returns. We have learned that unlike the bogus SFRs manufactured by the IRS for me and other individuals,
real tax returns are signed under the penalties of perjury. See the excerpt from Phillips v. Commissioner, supra,

about the need for tax returns to be signed, subscribed or executed. And why are these Form 1040 SFRs not signed
or executed by the Secretary or by a lawfully delegated agent of the Secretary? Read on, dear friends.
As one might expect, it now appears that Delegation Order No. 182 (referred to in part "21.8.3.2 01-01-1999"
above), and said by the IRS to extend 6020(b) authority to Service Center Directors to prepare SFRs, fails to list
Form 1040 (or Form 2555 for that matter) as one of the forms used in the usual preparing of SFRs. This apparent
failure explains why Form 1040 is not listed above in part "21.8.3.3 01-01-1999". But that's not all. In a letter 5
addressed to me and dated December 15, 1999, Pam C. Bigelow, then Director of the Austin (TX) Service Center of
the Internal Revenue Service, made the following, startling admission that,

"Individual SFR's are not prepared or executed pursuant to a delegation of

authority."
Now that is quite an admission. And remember, IRS officials asked the GAO "... to emphasize that even though the
program is commonly referred to as the SFR program, no actual tax return is prepared." Blacks Law Dictionary
defines the term "actual"as follows: "Real; substantial; existing presently in fact; having a valid objective existence
as opposed to that which is merely theoritically possible." Given Blacks definition of the word "actual" and IRS
admission (with reference to its SFR program) that "no actual tax return is prepared", the logical conclussion is that
these SFRs have no valid objective existence. It is clear, however, that 6020(b) does authorize the IRS to prepare
returns that relate to commercial or business activities. But it is just as clear that neither 6020(b) nor any other law
would authorize the IRS to prepare documents that have no valid, objective reason to exist. The very idea is
ludicrous! So, why does the IRS prepare these bogus SFRs for individuals when IRS officials know very well that
none of its agents have the necessary authority to prepare them? Patriots of course have long known why the IRS
does it; the IRS manufactures these SFRs because the IRS needs income tax returns (but only valid returns as
specified in the tax code) before IRS assessment officers by their verifications (see IRC 6203-1, 6020, 6065 and
their implementing regulations) may lawfully assess income taxes on the IRS' Summary Record of Assessment
(RACS Report-006). But the IRS-created SFRs for individuals are not actual returns as now admitted by the IRS.
They are not actual returns for obvious reasons; they contain no figures from which to compute a tax and they are
not subscribed under penalty of perjury and therefore they are not "prima facie good and sufficient for all legal
purposes." (See IRC 6020(b)(1)(2) and the relevant parts of its implementing regulation.) But most attorneys and
courts let the IRS get away with making income tax assessments that are based upon these unverified, bogus, socalled returns. The court in Phillips v. Commissioner, supra, was a rare exception. It is time that this illicit, deceptive
IRS practice be stopped. Patriots will have to make a public issue of this fraud until the courts can no longer ignore
it with impunity. I do not claim in this paper to have pointed out all of the areas of the law and regulations that the
IRS violates or disregards when preparing SFRs for individuals. However, I believe that enough errors and outright
scams have been pointed out to alarm any thinking, honest citizen.

IV
INTERNAL REVENUE SERVICE MANUAL
6/3/94
PART V - Collection Activity
(snip)
SECTION:
5290 Refusal to File -- IRC 6020(b) Assessment Procedure
SUBSECTION-1:
5293 Returns Prepared Under IRC 6020(b)
SUBSECTION-2:
5293.1 General
TEXT:
(1) If the taxpayer fails to file employment, excise and partnership tax returns by the specified date, the return should
be prepared under the authority of IRC 6020(b) using Form 5604, Section 6020(b) Action Sheet. A field call must be
made prior to the recommendation. [Italics added]
(2) A complete explanation of the basis for the assessment must be included in Section 1 of Form 5604, Section
6020(b) Action Sheet. Information from the taxpayer should be used such as wages paid, income tax withheld and
FTDs to establish the correct liability. If the revenue officer cannot determine the correct liability from the taxpayer
or third parties, the last return amount may be used if documentation from reliable sources clearly establishes that a
liability exists.
(3) The Collection employee's manager will review Form 5604 and related documentation, including returns, for
accuracy of computation and appropriateness of assessment.

(4) After the recommendation is approved, the manager will sign and mail the Letter 1085(DO) or Letter 1616(DO)
with attachments.
(5) Field Support Units may at the option of local management, perform all phases of the IRC 6020(b) clerical and
review process, including signing returns and submitting them for routine processing only. If the taxpayer files a
self-prepared return, it should be forwarded to the Initiator with Form 5604.
(6) In all cases if payment of the proposed return is not received, the procedures in IRM 5263 are applicable.
(7) In unable to locate situations when the proprietors, partners or responsible officers and assets cannot be located
and:
(a) when their SSNs can be determined, process the returns and follow the guidelines in IRM 5263 for returns
without full payment; or,
(b) when their SSNs cannot be determined, close the delinquency using TC 593 with the proper closing code. See
the guidelines in IRM 5235(2)(c).
(8) In unable to contact situation, process the returns via prompt assessment or a preassessment Form 53 Report of
Currently Not Collectible Taxes, should be prepared at the time the return is signed.
Footnotes
1. "Individual. As a noun, this term denotes a single person as distinguished from a group or class, and also, very
commonly, a private or natural person as distinguished from a partnership, corporation or association; ...." Black's
Law Dictionary, 6th ed.
2. Employment and employment tax. 26 U.S.C. Sec. 3111(a): "In addition to other taxes, there is hereby imposed on
every employer an excise tax, with respect to having individuals in his employ, equal to the following percentages
of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b))
-" (Bold added)
Steward Machine Co. v. Davis, 301 US 548 (1937): The employment tax is an indirect, excise tax upon employers;
"Every employer (with stated exceptions) is to pay for each calendar year, 'an excise tax with respect to having
individuals in his employ,' the tax to be measured by prescribed percentages of the total wages payable by the
employer during the calendar year with respect to such employment." (Bold added)
Helvering v Davis, 301 U.S. 619 (1937): "The tax upon employers is a valid excise or duty upon the relation of
employment."
3. Excise Tax. "A tax imposed on the performance of an act, the engaging of an occupation, or the enjoyment of a
privilege. .... A tax on the manufacture, sale, or use of goods or on the carrying on of an occupation or activity, or
a tax on the transfer of property. In current usage, the term has been extended to include various license fees and
practically every internal revenue tax except the income tax...." Black's Law Dictionary, 6th ed.
Tyler v. United States, 281 U.S. 497, 502 (1930): "A tax laid upon the happening of an event, as distinguished from
its tangible fruits, is an indirect tax...." (Bold added)
In view of the solid definition of an excise tax as a tax on activity, it is reasonable to conclude that if the income tax
were a direct tax as contended by the IRS, there would be no rational reason for any court to ever speak of taxable
activities with regard to the income tax or the taxing of income. Succinctly put: Absent taxable activity, there is no
income tax liability. Moreover, given Black's legal definition of an "excise tax" as "a tax on ... activity," there is
no definitive basis for the dictionary's editors to conclude that, "In current [sic] usage, the term [excise tax] has been
extended to include various license fees and practically every internal revenue tax except [sic] the income tax...."
The editors' seeming exclusion of the income tax from the class of excises because of the way the term "excise tax"
is currently used (in the vocabulary of some but certainly not all lawyers), not only flies in the face of the editors'
correct legal definition of an excise tax but might be understood by some folks to imply that the federal tax code no
longer imposes an income tax on taxable activity. Such an implication, whether intended or not, is belied by the text
of the tax code itself and that of its regulations. All of which begs the question, "Who created this seeming
"exception" to the meaning of the term "excise tax." and placed it within the class of direct taxes based upon its
mere usage? Are we to understand - based on the current usage of words - that there is no longer any connection
between their legal definitions and the actual text of the tax code and relevant tax regulations in which the words
appear? If mere, "current usage" of a word may extend its meaning beyond the legal text, there is no need to publish
the written law or tax regulations such as sections 1.861-8(a) and 1.861-8(f)(1) which appear in the current Code of
Federal Regulations of Title 26. These two tax regulations read, in part, as follows:
[Code of Federal Regulations]
[Title 26, Volume 9, Parts 1.851 to 1.907]
[Revised as of April 1, 1999]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.861-8]

[Page 135-162]
Normal Taxes and Surtaxes (Continued)--Table of Contents
Sec. 1.861-8 Computation of taxable income from sources within the United States and from other sources and
activities.
(a) In general--(1) Scope. 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.
This section provides specific guidance for applying the cited Code sections by prescribing rules for the allocation
and apportionment of expenses, losses, and other deductions (referred to collectively in this section as ``deductions'')
of the taxpayer. The rules contained in this section apply in determining taxable income of the taxpayer from
specific sources and activities under other sections of the Code, referred to in this section as operative sections.
(Bold added
Below is a part of 26CFR1.861-8 that teaches taxable income is related to taxable activities:
"As in Example 25, the amount of apportionable taxable income attributable to business activities conducted in
state A is determined by multiplying apportionable taxable income by a fraction (the ``state apportionment
fraction'') that compares the relative amounts of payroll, property, and sales within state A with worldwide
payroll, property and sales." [Bold added]
Below is text of 26CFR1.861-8(f)(1) confirming taxable income is determined from taxable activity:
(f) Miscellaneous matters--(1) Operative sections. The operative sections of the Code which require the
determination of taxable income of the taxpayer from specific sources or activities and which give rise to
statutory groupings to which this section is applicable include the sections described below. (Bold added)
In view of all of this information, it seems incredible that any knowledgeable IRS official can claim with a straight
face that income tax computed from taxable income resulting from taxable activities can be anything but an excise
tax.
From the Congressional Record-House, March 27, 1943, p. 2580, we read:
"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 derived from one source or another. So the amendment made
it possible to bring investment income within the scope of a 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 any 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." (Bold added.)
A report by the Congressional Research Service (CRS) dated June 14, 1990, clearly indicates that the income tax is
an indirect tax when stating that, "...the modern income tax, [was] first enacted as part of the Tariff Act of 1913."
Obviously, if the income tax were a direct tax, Congress would not have included it as part of a federal law that
concerns tariffs, which are indirect taxes.
There simply is no way to even determine if income tax is owed - much less how much income tax may be owed if
- among other basics things - the specific geographical sources and the taxable activities are not known. It is the
texts of the federal tax code itself and its regulations that link the determination of taxable income to taxable
activities to foreclose the notion that somehow the income tax has ceased being an indirect, excise tax because of
current usage and in the transition became a direct tax that does not have to be apportioned. The very purpose of the
16th Amendment, as stated by the Supreme Court in Stanton v. Baltic Mining Co., 240 U.S. 103, 112 (1916), was to
keep judges, and I suspect IRS agents and other public officials, from attempting by specious reasoning to remove
the original, constitutional power of income taxation from the indirect class of taxes. Thus in Stanton the Supreme
Court stated:
"T]he Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and
plenary power of income taxation possessed by Congress from the beginning from being taken out of the
category of indirect taxation to which it inherently belonged...." (Bold added)
The U.S. Supreme Court in Brushaber, supra, said: "[T]he conclusion reached in the Pollock Case did not in any
degree involve holding that income taxes generically and necessarily came within the class of direct taxes on
property, but on the contrary recognized the fact that taxation on income was in its nature an excise entitled to be
enforced as such...."

The case of Flint v. Stone Tracy Co., 220 U.S. 107, 154 (1911), although heard before the 16th Amendment was
declared as ratified in 1913, was relied upon in 1916 by the Brushaber court. The Supreme Court in Flint said:
"Conceding the power of Congress to tax the business activities of private corporations ... the tax must be measured
by some standard...." The Court concluded, "It is therefore well settled by the decisions of this court that when the
sovereign authority has exercised the right to tax a legitimate subject of taxation as an exercise of a franchise or
privilege, it is no objection that the measure of taxation is found in the income." (Bold added)
The mere "current usage" of the term "excise tax" cannot extend its meaning to the point that it conflicts with its
legal meaning. It is abundantly clear from a logical and consistent consideration of the various texts of the federal
tax code, the tax regulations and courts rulings that one must rely upon the law and the facts to determine the class
of a tax. In Bowers v. Kerbaugh-Empire Co, 271 U.S. 170 (1926), the Supreme Court put it this way: "In
determining what constitutes income, substance rather than form is to be given controlling weight." (Bold added)
The substance of this matter - of whether the income tax is an "excise tax" - is clear: the tax code and its regulations
(the regs are written by the IRS) refer to a tax determined or computed from taxable income gained from taxable
activities as an income tax. By legal definition, and as described in the tax code and its regulations, such a tax so
determined is an excise tax. Incredibly, the IRS and some courts* contend otherwise.
*Some of the federal circuit courts claim that the income tax is a direct tax and one court even claims it is neither!
(In United States v. Turano, 802 F.2d 10, 12 (1st Cir. 1986) managed to turn logic on its head.) But plainly, the
federal income tax is either a direct tax or an indirect tax; it cannot be both and it certainly cannot be neither. With
regard to the two great classifications of taxes, the Supreme Court in Steward Machine Co. v. Davis, 301 U.S. 548, at
581 (1937), observed: "The Congress shall have power to lay and collect taxes, duties, imposts and excises." Art. 1,
8. If the tax is a direct one, it shall be apportioned according to the census or enumeration. If it is a duty,
impost, or excise, it shall be uniform throughout the United States. Together, these classes include every form
of tax appropriate to sovereignty. " (Bold added) It must be obvious to all but the most obtuse of minds that both
kinds of taxes cannot be applied by the same method., namely, by 6020(b). Currently there are no direct taxes
imposed by the federal tax code but if there were such, their payments would be required of the several states
through the constitutional process of apportionment Put another way, the payment by the several states of direct
taxes to the federal government (if there were any to pay) could not possibly entail the preparation by the IRS of
SFRs for individuals under the authority of 6020.
4. Partnership. "A business owned by two or more persons that is not organized as a corporation. .... An association
of two or more persons to carry on, as co-owner, a business for profit."
Black's Law Dictionary, 6th ed.
5. The author plans to post a scanned copy of IRS Director Bigelow's letter (or at least a relevant part of it) on the
Internet at the URL: http://www.pointecom.net/~sunlight
****
26 USC Sec. 6065 01/05/99
TITLE 26 - INTERNAL REVENUE CODE
Subtitle F - Procedure and Administration
CHAPTER 61 - INFORMATION AND RETURNS
Subchapter A - Returns and Records
PART IV - SIGNING AND VERIFYING OF RETURNS AND OTHER DOCUMENTS
Sec. 6065. Verification of returns
Except as otherwise provided by the Secretary, any return, declaration, statement, or other document required to be
made under any provision of the internal revenue laws or regulations shall contain or be verified by a written
declaration that it is made under the penalties of perjury.
(Aug. 16, 1954, ch. 736, 68A Stat. 749; Pub. L. 94-455, title XIX, Sec. 1906(a)(6), (b)(13)(A), Oct. 4, 1976, 90 Stat.
1824, 1834.)
REFERENCES IN TEXT
The internal revenue laws, referred to in text, are classified generally to this title.
AMENDMENTS
1976 - Pub. L. 94-455, Sec. 1906(a)(6), struck out provisions relating to the authority of the Secretary or his delegate
to require that any return, statement, or other document to be made under provision of the internal revenue laws or
regulations shall be verified by an oath. Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ''or his delegate'' after
''Secretary''.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 effective on first day of first month which begins more than ninety days after Oct. 4,
1976, see section 1906(d)(1) of Pub. L. 94-455, set out as a note under section 6013 of this title.

CROSS REFERENCES
Fraud and false statements, punishment for, see section 7206 of this title.
Individuals Income tax of, see section 6012 of this title.
Joint income tax by husband and wife, see section 6013 of this title.
Perjury, punishment for, see section 1621 of Title 18, Crimes and Criminal Procedure.
Subornation of perjury, punishment for, see section 1622 of Title 18.
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 6411, 6425 of this title.
****
[Code of Federal Regulations]
[Title 26, Volume 17, Parts 300 to 499]
[Revised as of April 1, 1999]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6065-1]
TITLE 26--INTERNAL REVENUE
PART 301--PROCEDURE AND ADMINISTRATION--Table of Contents
Sec. 301.6065-1 Verification of returns.
For provisions concerning the verification of returns and other documents, see the regulations relating to the
particular tax.
****
[Code of Federal Regulations]
[Title 26, Volume 17, Parts 300 to 499]
[Revised as of April 1, 1998]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6065-1]
TITLE 26--INTERNAL REVENUE
CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY-Information and Returns--Table of Contents
Sec. 301.6065-1 Verification of returns.
For provisions concerning the verification of returns and other documents, see the regulations relating to the
particular tax.
****
[Code of Federal regulations]
[Title 26, Volume 17, Parts 300 to 499]
[Revised as of April 1, 1999]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6203-1]
TITLE 26--INTERNAL REVENUE
In General--Table of Contents
Sec. 301.6203-1 Method of assessment.
The district director and the director of the regional service center shall appoint one or more assessment officers.
The district director shall also appoint assessment officers in a Service Center servicing his district. The assessment
shall be made by an assessment officer signing the summary record of assessment. The summary record, through
supporting records, shall provide identification of the taxpayer, the character of the liability assessed, the taxable
period, if applicable, and the amount of the assessment. The amount of the assessment shall, in the case of tax shown
on a return by the taxpayer, be the amount so shown, and in all other cases the amount of the assessment shall be the
amount shown on the supporting list or record. The date of the assessment is the date the summary record is signed
by an assessment officer. If the taxpayer requests a copy of the record of assessment, he shall be furnished a copy of
the pertinent parts of the assessment which set forth the name of the taxpayer, the date of assessment, the character
of the liability assessed, the taxable period, if applicable, and the amounts assessed.
****
APPENDIX
My wife and I took our 1988 so-called "frivolous return" case to district court but lost. In our petition to the court,
our principal position was that the unsigned 1988 Form 1040 that we filed was not a return as described in 6702
because it was not signed and thus lacked "the self-assessment" upon which a 6702 return is predicated. The court

ruled against us and we appealed unsuccessfully all the way to the U.S. Supreme Court. I wrote a book about it,
titled The Colossal Fraud of Involuntary Perjury and Other Enforced Newspeak, Tricks, and Scams of Big Brother.
After the Supreme Court refused to review our Writ of Certiorari (so much for due process), my wife received a
notice of deficiency for 1988, which she appealed to Tax Court. (See T.C. Memo. 1996-494.) The Tax Court's
published decision states that, "The decision reflected the parties' agreement that petitioner's income tax liability for
1988 is ... $24,939.21" but to my and my wife's knowledge, we made no such agreement. Perhaps her attorney made
such an agreement and we were not made privy to it.
In its decision, the Tax Court also stated that, "On or about June 12, 1995, petitioner and Mr. Buck submitted a joint
Federal income tax return for the taxable year 1988, which the respondent [IRS] processed as a return (the filed
return). The filed return was virtually identical to the proported return, except that petitioner and Mr. Buck signed
the filed return, under penalties of perjury, in the spaces provided for their signature. 5 " This statement by the Tax
Court is misleading and false in several respects: (1) My wife and I did not sign "under penalties of perjury" this
second Form 1040 that we filed in 1995. Immediately by our signatures in the jurat boxes we placed asterisks calling
attention to the attached affidavit in which we specifically denounced our signatures as coerced and therefore null
and void. Though the Tax Court took note of the affidavit and even quoted part of it in a footnote, the court was in
error when it stated that we signed the form "under penalties of perjury."
Moreover, the Tax Court was misleading but perhaps not intentionally (because of what happened later) when it
stated that "the respondent [IRS] processed as a return (the filed return)", i.e., the second 1988 Form 1040 that we
filed in 1995. The statement is misleading because it leaves the impression that the IRS assessed us the full
$24,939.21 shown on the document that the court said was "processed as [sic] a return." Though the court held we
owed $24,939.21 - (the figure shown on the second 1988 Form 1040 that the court said was "processed as a return"
and is the same figure shown on the original, unsigned 1988 Form 1040, being the amount of FRNs that we sent to
the IRS for the year 1988) - in point of fact, of this $24,939.21 that the court said we owed, the IRS kept only the
amount that my wife had "allowed" to be withheld from her paycheck by virtue of her signed Form W-4. The rest of
the $24,939.21 - over $13,000 (including some interest) - was refunded to us. End of story. I hope. April 7, 2000