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This return is for calendar r.,._, or fiscal ear ended.. For p"f""work Reduction Act notice, see page 6. If the name or address shown above is different from that shown on the original return, check here.
This return is for calendar r.,._, or fiscal ear ended.. For p"f""work Reduction Act notice, see page 6. If the name or address shown above is different from that shown on the original return, check here.
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This return is for calendar r.,._, or fiscal ear ended.. For p"f""work Reduction Act notice, see page 6. If the name or address shown above is different from that shown on the original return, check here.
Copyright:
Attribution Non-Commercial (BY-NC)
Verfügbare Formate
Als PDF, TXT herunterladen oder online auf Scribd lesen
OMB No. 1545..0091 (Rev. November 2001) ..,._ See instructions. This return is for calendar r .,._ , or fiscal ear ended .,._
For P"f""Work Reduction Act Notice, see page 6.
A If the name or address Shown above is different from that shown on the original return, check here . . ..... )rJ B Has the original return been changed or audited by the IRS or have you been notified that it will be? . . 0 Yes No C Filing status. Be sure to complete this line. Note. You cannot change from joint to separate returns after the due date. On original rewm ._ 0 Single filing joint return D Married filing separate rewm D Head of housetlold 0 Qualifying wldow(er) On this return .,. 0 Single Mamed fir.ng joint return 0 Married ll6ng separate rerum 0 Head of household* 0 Qualifying widow(erj If the qualifying person is a chifd but not your dependent, see page 2. B. Net d'Jange- Use Part II on the Back to Explain any Changes I": Origin;>l- ex amoum of increase c. """""' --------,---------:-::-::--:---::--------::-::;-------,----las adjusted or (t:le<:fflase}- lncome and Deductions (see pages
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1 Adjusted gross income (see page 3) . . . _ 1 2 Itemized deductions or standard deduction (see page 3) . ! 3 Subtract line 2 from line 1 _ . _ . . _ tm 4 Exemptions. If changing. fill in Parts I and 11 on the back _ 4 *+------j-..... r<f---- 5 Taxable income. Subtract line 4 from line 3 . . . _ : 6 Tax {see page 4). Method used in col. c ______________________ _ 7 Credits (see page 4) _ _ 7 8 Subtract line 7 from fine 6. Enter the result but not less than zero 8 )C 9 Other taxes (see page 4) _ _ 9 10 Total tax. Add lines 8 and 9 . . _ . . . . . . . 10 11 Federal income tax withheld and excess SOCial security and RRTA tax withheld. If changing, see page 4 _ 12 Estimated tax payments, including amount applied from prior year's return _ _ _ _ _ 13 Earned income credit (EIC) . . . 14 Additional child tax credit from Form 8812 . _ 11 12 'J..O, S"7'f 13 14 15 Credits from Form 2439 or Form 4136. . . . . '-'1'5..!. _______ -Jc_ ___ .,-::;-+------- 16 Amount paid with request for extension oftime to file (see page 4) 16 fT 11 Amount of tax paid with original return plus additional tax paid after it was filed . . 17 18 Total oavments. Add lines 11 thmuah 17 in column C _ .. _ 18 Refund or Amount You Owe 19 Overpayment. if any, as shown on original return or as previously adjusted by the IRS 20 Subtract line 19 from line 18 (see page 5} . _ _ _ _ _ 21 Amount you owe. If fine 10, column c, is more than line 20. enter the differeflce and see page 5 22 If line 10, column c. is less than line 20, enter the difference _ 23 Amount of line 22 you want refunded to you . . . . . . . . . i -. 1 - - 24 Amount of line 22 You want to yOur estimated tax 24 1 19 20 21 22 lfS. "iOO 'k 23 1Z 1::: too .,. .. Sign Under penalties of peljury, I dedare IITat I have an onginal return and IITat I have examined liTIS amended retum. accompanymg schedule-s to the best of my knowledge and belief, liTIS amended rewm 1S true. carect. and cornpi!!OO DeclaratiOn of !ftparer (other than Here "'""''"" '"' 1.-. .[)_ Paid Preparer's Use Only Preparer"s a.._ r Firm's name (or yours if and ZIP Code - Check if , 1 Preparer"s SSI\I or PTIN self-employed 0 I '" Phone no. ( Cat. No. 11360L Form 1040X (Rev. 11-2001) * A: ),0(.\ M(" 0\MtO ' = ' " ' " " " ~ T t\tJO Q ~ A.. cw-<torJ lfii'TI Explanations (continued from Parts I and/or II} Form 8275 jRev. 5-2001) f<7!Tl1040X {Rell. 11-2001) ,.,, 25 26 27 28 29 30 31 . See Form 1040 or 1040A; A. Original If you are not changing your exemptions. do not complete this part. number of c.""""" exemptions If daiming more exemptions, complete lines 25-31. "'#))Oted or as B. Net change number of """"""'" exemptions If claiming fewer exemptions, complete lines 25-30. adjusted Yourself and spouse . . . . . . . . . . . . A caution. If your parents (or someone else) can claim you as a dependent (even if they chose not to), you cannot claim an exemption for yourself. 2ti Your dependent children who lived with you . . . . . . Your dependent children whO did nor live with you due to divorce or 27 separation . . . . . . . . . . . . . . Other dependents . . . . . . . . . . . . I 20 Total number of exemptions. Add lines 25 through 28 . . . . 29 Multiply the number of exemptions daimed on line 29 by the amount listed below for the tax ye<lr you are amending. Enter the result here and on line 4. But see the instructions for Ta. Exemption line 4 on page 3 if the ,..... amount on line 1 is owr: "'"' $2,900 $99,725 2000 '""" 96,700 ""' 2.750 94,975 1998 2.700 93,400 I Dependents (children and other) not claimed on original (or adjusted) return: No. ofym.- children on line 31 who: D {b) Dependent's social (d) ./ if quallfyi1g lived with child 1a>: secliity number <oy<ru ln'dit (see fl'l!ll! 5) """ . .
(o) First name
lfod not liv-e with you due to divorce or D separation (see S) .
Dependents D on line 31 not entered 8bcNe 1 of to ,and Enter the line number from the front of the form for each item you are changing and give the reason for each change. Attach only the supporting forms and schedules for the items changed. If you do not attach the required information, your Form 1040X may be returned. Be sure to include your name and social security number on any attachments. If the change relates to a net operating foss carryback or a general business credit carryback, attach the schedule or form that shows the year in which the foss or credit occurred. See page 2 of the instructions. Also, check here _ . . . . D
ii.MJII!I Presidential Election Campaign Fund. Checking below will not increase your tax or reduce your refund. If you did not previously want $3 to go to the fund but now want to, check here . . . . . . . . D If a joint return and your spouse did not previously want $3 to go to the fund but now wants to, check here _ . . .,_ D * Foon 1040X (Rev. 11-2001)
8275 Disclosure Statement OMB No. 1545-0889 !Rev. May 2001) Do not use this fonn to disclose items or positions that are contrary to Treasury regulations. Instead. use Form 8275-R, Regulation Oi5Ciosure Statement. See separ.rte instructions. Attachment DepMment ct tile 11easuy Sequence No. 92 ln!erll<ll Revenue Service ... Attach to your taJ: return. 1'" _ht!Q_ P. (uii'IW lK, 7,-"'7i( 1 ltijl General Information {see instructions) ., (o) (o)
1 2 3 1:&111!1 Information About Pass-Through Entity. To be completed by partners, shareholders, beneficiaries, or residual interest holders. Complete this part only if you are making adequate disclosure for a pass-through item. Note: A pass-through entity is a partnership, 5 corporation, estate, trust, regulated investment company (RIC}, real estate investment trust (REm, or real estate mortgage investment conduit (REMJC) 1 Name, address, and ZIP code of pass-through entif,y 2 Identifying number of pass-through entity 3 Tax year of pass-through entity I I to I I 4 Internal Revenue Service Center where the pass-through entity filed its return For Paperwork Reduction Act Notice. see separate instructions. Cat- No. 61935M FOWl 8275 (ReV. 5-2001) Tom Clayton, MD 15 Mirror Ridge Drive The Woodlands, Texas 77382 Date: 4-6-2002
RE: Attachment to 1998 1040X Tax Return Charles Thomas Clayton, MD SS # 462-78-5051
I, Charles Thomas Clayton, MD, SS # 462-78-5051, formally request that this 1998 1040X return and all accompanying documents be made a part of my permanent administrative record pursuant to the provisions of the Privacy Act of 1974, as codified at 5 U.S.C. 552a of the United States Code. At the end of this attachment, I have listed specific information that I am requesting from the Internal Revenue Service, including a demand for production of documents and/or records.
Congress has incorporated Section 1203 in the 1998 Restructuring and Reform Act, which specifically makes IRS personnel liable for not complying with mandates and prohibitions of the Internal Revenue Code. Specifically, such employees are required to obey the Treasury regulations as written, as well as published policy, meaning that such employees are now individually responsible for the accuracy of their decisions, and such decisions must be backed by specific citations of law.
When my 1998 1040 federal income tax return was filed on the advice of my CPA, I had never seen the law that others told me required me to pay federal income taxes. A fundamental error has been made by most US citizens for nearly 87 years, including myself prior to 1998, either because they relied on tax professionals who did not understand a critical section of the law, or simply assumed that the receipt of income was the same thing as gross income, when this is not the case.
The federal income tax (26 USC 1) is imposed on the taxable income of US citizens. In order to completely understand exactly what the law means by gross income and taxable income, a US citizen (like myself) with sources of income from within the 50 states must use 26 USC 861(b) and 26 CFR 1.861-8 (specifically 26 CFR 1.861-8(b)(1), 1.861-8T(d)(2)) to determine whether or not their income becomes taxable income with the legal meaning of 26 USC 1.
Therefore, the Internal Revenue Service is required to administer the federal income tax laws and seek income tax returns from those who have taxable income sources. As a result of past federal income tax returns that I am now aware were filed in error, the IRS already knows and has known that I am a US citizen who receives my income entirely from intrastate sources of income within Texas.
Tom Clayton, MD 1998 1040X return 4-6-2002 2 The IRS is or should be aware that such sources of income earned by US citizens are not taxed under federal law. Why then have I never been notified that I have been paying federal income taxes in error all these years and the moneys returned to me? Accepting an income tax return obviously in error is a direct violation of 26 USC 7214, as well as a violation of Section 1203 of the IRS Restructuring and Reform Act.
You can confirm the accuracy of the citations of law that I am relying upon by contacting Mark Weinberger, Assistant Secretary of the Office of Tax Policy in the Treasury Department, because he is the person in charge of all of the federal income tax regulations. This 1040X return is being mailed to him as well. His address is as follows: Mark A. Weinberger Assistant Secretary Office of Tax Policy Department of the Treasury 1500 Pennsylvania Avenue, NW Washington, D.C. 20220
My Position:
I was not required by law to file a 1040 federal income tax return for 1998 because I did not receive gross income within the meaning of 26 USC 61 in excess of my exemption amounts (see 26 USC 6012). The items of income I received in 1998 were excluded for federal income tax purposes, pursuant to 26 CFR 1.861-8(b)(1), 1.861-8T(d)(2). I did not receive any taxable income from sources within the United States in 1998 pursuant to 26 USC 861(b) and 26 CFR 1.861-8.
Explanation:
The above conclusions were arrived at after I studied the full text of the actual law itself (now available in its entirety on the Internet), which I had never before seen. Even more astonishing was that the accountants and lawyers had not bothered to look at the full text of the income tax law and were making recommendations without bothering to see if the law really did state what they assumed that it did.
Although the above citations alone prove my position, it is important that every citizen, including IRS employees, understand exactly how the federal income tax law was reorganized, renumbered, and rewritten in 1954, making it very difficult for the average reader to find ALL parts of the law that must be used together to determine if a person has taxable income or not within the meaning of 26 USC 1.
The reason why this is so important is that I have become aware that many IRS employees are using the statutes alone without the 861 regulations in determining if a
Tom Clayton, MD 1998 1040X return 4-6-2002 3 US citizen has taxable income, when such determination cannot be made without these regulations under 26 USC, Subchapter N, Section 861 and following.
Recently I became aware that the true legal nature of the income tax is an excise tax, where what is actually being taxed are certain specific sources of income (the activity that generates the income), and the income is only the measure of the amount of (taxable) activity that is occurring.
After searching for the taxable sources of income under federal law, I discovered (as shown in the above citations), that my income does not derive from a taxable source under federal law. The truth of the law is found in the full text of the federal income tax statutes and regulations, particularly the interpretive regulations under Section 861 and following.
Excises, generally speaking, are taxes imposed on certain activities or privileges. In the Congressional Record from March 27, 1943 (page 2580), there is a statement by a Mr. F. Morse Hubbard, formerly of the legislative drafting research fund of Columbia University, and a former legislative draftsman in the Treasury Department (clearly someone whose job would require a comprehensive understanding of the proper application of the law). His comments include the following: 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 the tax. I then discovered Treasury Decision 6258, which specifically stated what part of the law I was to go to in order to determine whether I had taxable income or not. Rules are prescribed for determination of gross income and taxable income derived from sources within and without the United States, and for the allocation of income derived partly from sources within the United States and partly without the United States or within United States possessions. 1.861-1 through 1.864. (Secs. 861-864; 54 Code.) [Treasury Decision 6258]
Therefore, the correct sequence of all parts of the law that must be used to first determine if a US citizen has taxable income within the meaning of 26 USC 1 is as follows:
26 USC 1, Subtitle A, Chapter 1:
Subchapter A. Determination Of Tax Liability Subchapter B. Computation Of Taxable Income
Tom Clayton, MD 1998 1040X return 4-6-2002 4 Subchapter N. Tax Based On Income From Sources Within Or Without The United States
1. 26 USC 1 imposes the income tax on taxable income. 2. 26 USC 61 defines gross income as income from whatever source derived. 3. 26 USC 61 cross-reference (under notes at the bottom, which directs the reader to where the law treats income from sources):
Income from sources - Within the United States, see section 861 of this title. Without the United States, see section 862 of this title. 4. 26 USC 63 defines taxable income as gross income minus deductions. 5. 26 USC 861 and 26 CFR 1.861 determine the taxable sources of income. 6. 26 CFR 1.861-8 shows that the taxable sources of income from within the United States apply only to those engaged in international or foreign commerce (including commerce within federal possessions).
There is an even simpler way to summarize; the tax is upon "taxable income," and citizens are taxed on their taxable income, whether it is "from sources within or without the United States." 1. The tax imposed is upon TAXABLE INCOME (determined by subtracting the allowable deductions from gross income)." [26 CFR 1.1-1(a)] 2. "In general, all citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received FROM SOURCES WITHIN OR WITHOUT THE UNITED STATES." [26 CFR 1.1-1(b)] 3. "The taxpayer's TAXABLE INCOME FROM SOURCES WITHIN OR WITHOUT THE UNITED STATES will be determined under the rules of Secs. 1.861-8 through 1.861-14T." [26 CFR 1.863- 1(c)] This allows the all important question to be correctly answered: to whom does this income source excise tax apply? While there are some complicated rules about various foreign tax credits, various federal possessions, etc., the statutes and regulations, past and present, show that there are only three situations in which there can be taxable income subject to the federal income tax:
Tom Clayton, MD 1998 1040X return 4-6-2002 5 1. Nonresident aliens and foreign corporations receiving income from within the United States. 2. Citizens of the United States receiving foreign income. 3. Domestic corporations receiving a large percentage of income from within federal possessions (which are technically foreign to the 50 states). This begins to make perfect sense, because under the Constitution, the federal government was to be funded by exports and foreign commerce. The Income Tax Act of 1913 did not change that fact, as the law itself clearly shows, and the 16 th
Amendment is irrelevant to the federal income tax. The rules that a direct tax must be apportioned and that an indirect tax must be geographically uniform apply only after a tax is imposed; these rules have nothing to do with WHAT Congress can tax.
Why under the Constitution did the federal tax law have to be written this way? The sections of the Constitution that restrict WHAT Congress can tax are found in the Constitution under Article 1, Section 8 and the 10 th Amendment; Congressional jurisdiction extends only to foreign and international commerce, not intrastate commerce. As the Supreme Court has ruled countless times, Congress has no business in states business, and what could be more states business than their commerce? It is astonishing to me that Constitutional experts could have missed this fundamental concept. The law itself proves that this taxation restriction exists.
And, without these very specific regulations that clearly show the limited scope of the federal income tax, I came to an incorrect conclusion about my federal income tax liability in 1998, here corrected. These regulations clearly show that: 1. The income I receive comes from activities which do not constitute source[s] of income for purposes of the income tax (26 CFR 1.861- 1), and; 2. I engage in no activities which generate taxable income, according to the section for determining taxable income from sources within the United States (26 CFR 1.861-8), and; 3. The income I receive is excluded from the list of non-exempt income (26 CFR 1.861-8T(d)(2)) (due to being exempted by Article I, Section 8 and the Tenth Amendment to the Constitution).
The critical part of the law where the tax professionals and most of the public make a mistake in reading occurs in 26 USC 61, where gross income is defined as all income, from whatever source derived. The reader cannot simply conclude that
Tom Clayton, MD 1998 1040X return 4-6-2002 6 this means, no matter where it comes from, but they must let the law tell them what it means by income source.
Indeed, the law does tell the reader what it means by source in the Cross References at the bottom of Section 61, where it specifically directs them to go to Section 861 and following [and the regulations thereunder]. CROSS REFERENCES [26 USC 61] Capital gains and losses, see section 1201 et seq. of this title. Guaranteed payments to partner for services or use of capital considered as made to one not member of partnership for purposes of this section, see section 707 of this title. Income from sources - Within the United States, see section 861 of this title. Without the United States, see section 862 of this title. Items [Notes, then cross references under 26 USC 61] At this point it then becomes crystal clear to the reader (in Section 861 and following and the regulations thereunder) that from whatever source derived does NOT mean, no matter where it comes from under federal law. This is also consistent with the fact that the income tax is an excise tax on certain specific sources of income, and so it makes sense that there is a part of the law that specifically talks about the sources of income for purposes of the income tax. The reader can then specifically determine if they have any taxable sources of income or not, and such determination is impossible to make by the statutes alone. Again:
Income from sources
Within the United States, see section 861 of this title. Without the United States, see section 862 of this title [26 USC 61 cross-reference] The reader is then able to understand the critical concept of federal income taxation of US citizens: A US citizen with income is taxed by the federal income tax law on that income only if the income is derived from a taxable source, as outlined in 26 USC 861 and following and the regulations thereunder, and only then does an item of income listed in 26 USC 61 and following become taxable gross income. To review, the law treats the taxable sources of income for purposes of the income tax in Subchapter N, Section 861 and following and the regulations thereunder. When I get to Section 861 and following, and the regulations thereunder, I find that I am indeed in the right place because the correct citations are all over the place, the law really does mean what the words say:
Tom Clayton, MD 1998 1040X return 4-6-2002 7 "Determination of taxable income. The taxpayer's taxable income from sources within or without the United States will be determined under the rules of Secs. 1.861-8 through 1.861-14T for determining taxable income from sources within the United States." [26 CFR 1.863-1(c)] "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." [26 CFR 1.861- 8] "The taxable income from sources within the United States shall be determined by deducting therefrom, in accordance with sections 861(b) and 863(a), [allowable deductions]. See Secs. 1.861-8 and 1.863-1." [26 CFR 1.861-1] "Sec. 1.861-8 [is the section] for determining the taxable income from sources within the United States." [26 CFR 1.862-1] "Secs. 1.861-1 to 1.863-5 [give the principles] for determining the gross and the taxable income from sources within and without the United States." [26 CFR 1.863-6] And when I worked my way through these sections, I discovered that the only taxable sources of income have nothing whatsoever to do with the domestically earned income sources of US citizens earned exclusively from within the 50 states (such as the sources of my income from within Texas). The specific list of taxable sources is found in 26 CFR 1.861-8(f)(1), which are the specific sources subject to the income tax: The operative sections of the Code which require the determination of taxable income of the taxpayer from specific sources or activities and which gives rise to statutory groupings to which this section is applicable include the sections described below. (i) Overall limitation to the foreign tax credit (ii) [Reserved] (iii) DISC and FSC taxable income [international and foreign sales corporations] (iv) Effectively connected taxable income. Nonresident alien individuals and foreign corporations engaged in trade or business within the United States (v) Foreign base company income (vi) Other operative sections. The rules provided in this section also apply in determining-- (A) The amount of foreign source items
Tom Clayton, MD 1998 1040X return 4-6-2002 8 (B) The amount of foreign mineral income (C) [Reserved] (D) The amount of foreign oil and gas extraction income (E) (deals with Puerto Rico tax credits) (F) (deals with Puerto Rico tax credits) (G) (deals with Virgin Islands tax credits) (H) The income derived from Guam by an individual (I) (deals with China Trade Act corporations) (J) (deals with foreign corporations) (K) (deals with insurance income of foreign corporations) (L) (deals with countries subject to international boycott) (M) (deals with the Merchant Marine Act of 1936) [26 CFR 1.861-8(f)(1)] None of these sources apply to United States citizens who live and work exclusively within the United States, such as myself. (Federal possessions, such as Guam, Puerto Rico, etc., are considered foreign under the law.) This is the only list of sources in Part I of Subchapter N, or the regulations thereunder, which (as the regulations say) determine the sources of income for purposes of the income tax. The regulations under Section 861 twice define the term class of gross income, saying that a class of gross income may consist of one or more items of gross income enumerated in section 61. The regulations then refer the reader to paragraph (d)(2) of this section which provides that a class of gross income may include excluded income. In other words, the items of income listed in Section 61 are not necessarily taxable, but may be exempt or excluded from the federal income tax. Paragraph (d)(2) states only [Reserved] (meaning there is no current regulation) but refers the reader to paragraph (d)(2) of the temporary regulations at 26 CFR 1.861-8T. That section describes what is meant by exempt income. (ii) Exempt income and exempt asset defined--(A) In general. For purposes of this section, the term exempt income means any income that is, in whole or in part, exempt, excluded, or eliminated for federal income tax purposes. [26 CFR 1.861-8T(d)(2)(ii)] The section then goes on to specify what is not exempt. The following should be read carefully, since it starts with a double negative. If a certain kind of income is not exempt, it means it is subject to the federal income tax. Therefore, after being told that there are items of income (which make up classes of gross income) that may not be taxable, a list is given of the types of income that are subject to the federal income tax: (iii) Income that is not considered tax exempt. The following items are not considered to be exempt, eliminated, or excluded income and, thus, may have expenses, losses, or other deductions allocated and apportioned to them:
Tom Clayton, MD 1998 1040X return 4-6-2002 9 (A) In the case of a foreign taxpayer (B) In computing the combined taxable income of a DISC or FSC (C) ...the gross income of a possessions corporation (D) Foreign earned income as defined in section 911 [26 CFR 1.861- 8T(d)(2)(iii)] This is the entire list of non-exempt income; notice once again that this only has to do with foreign and international commerce, and has nothing to do with the sources of my income from within Texas. The idea that other types of income are also taxable (not exempt), despite not being listed, is contradicted by the regulations stating that paragraph (d)(2) provides that a class of gross income [consisting of the items of income listed in 26 USC 61] may include excluded income. Unless those types of income not listed are exempt, paragraph (d)(2) does not show that the items of income listed in Section 61 may be exempt. (A basic principle of law is that such a list is assumed to be exclusive and complete, unless a phrase such as including, but not limited to is used.) This part of the law clearly shows that Congress did not tax such income sources in the law, which is consistent with the fact that (under the Constitution) Congress could not and cannot do so for the simple reason that Congress has no business in states business. Intrastate commerce is NOT under Congressional jurisdiction, and the law must be constitutional (which it is because it is so limited).
I have also discovered (on the Internet) that the US Attorney prosecution manual is severely flawed because it is incomplete in telling the US Attorneys what the law means by gross income. Those sections (6001, 6011, and 6012) are specifically refuted here by the interpretive regulations under Section 861:
"Sections 6001, 6011, and 6012 create the requirement to file" On close examination, Sections 6001, 6011, and 6012 do not create the requirement to file, because they are conditional. What are those conditions? Sections 6001 and 6011 require the filing of a return by those liable for a tax, and 6012 requires the filing of a return by individuals who receive a certain level of "gross income" (26 CFR 1.6012- 1). The filing requirement depends upon "gross income" received, NOT "income" per se. Some income is "excluded by law" from being "gross income" (26 CFR 1.61-1). While most IRS employees and tax professionals incorrectly assume that the only certain "items" specifically exempted by statute (e.g. 26 USC 101) are "excluded income," and assume that the "items" listed in 26 USC 61 are always taxable, the Treasury regulations state otherwise. According to 26 CFR 1.861-8(a)(3) and 1.861-8(b)(1), the "items" of income listed in 26 USC 61 (such as "compensation for services," "interest," etc.), which make up "classes of gross income," may include income that is "excluded" for federal income tax purposes (see also 26 CFR 1.861-8T(d)(2)(ii)). The regulations then go on to give a list of those circumstances in which the "items" in Section 61 would NOT be
Tom Clayton, MD 1998 1040X return 4-6-2002 10 "excluded by law" (i.e. when they WOULD constitute taxable "gross income"). That list, found in 26 CFR 1.861-8T(d)(2)(iii), excludes the income of most Americans.
Information Requested and Demand for Production of Documents
Finally, as of this date, the IRS has not informed me that I became liable for any federal income taxes for the 1998 calendar year. Although the above citations are very clear, I must be certain that no liability exists for calendar year 1998 relating to my income source, therefore I respectfully request/demand:
Pursuant to 26 CFR 301.6203-1, a copy of any record(s) of assessment, including 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.
In connection with these record(s) of assessment, I am specifically requesting the following forms: verified, certified copies of Form 23C Summary Record of Assessment, Form 17 or 17A Notice of Assessment and Demand (or successor form). Form 4340 Certificate of Assessments and Payments.
Obviously, this information is critical to making certain that such a determination is absolutely correct, and I would not want to file or submit any documents that were not true, correct, and complete, especially since those documents are required to be signed under penalty of perjury. It is a felony to swear under penalty of perjury that something is true when the person knows and can prove that it is not true. Unless this information shows that I have a federal income tax liability, this completes my final determination that I am exempt from federal taxation.
If I am shown any part of the law that creates such a federal income tax liability, then I will of course pay what I owe. I am personally convinced that most IRS employees are honest and try to do the best job that they can, and that they are only just now becoming aware that they have been deceived, just like the general public. Most IRS employees have been misinformed about what the law truly requires because they have been misdirected to use the statutes alone, when as you can see above, the regulations must be used as well.
In years past, the public is supposed to have read the law as I have done, and that is what the government says as well, but prior to the Internet, this was rarely done because access to the law was limited and the public was deliberately kept in the dark about the organization of the law and how to read it; statutory law is really quite logical and makes good sense. But the law means what the words say, not what some courts think the law says.
Tom Clayton, MD 1998 1040X return 4-6-2002 11 A fundamental distinction separates the language of the legislature-the body (such as Parliament or Congress) which institutes a legal text-and the language of the judiciary-the body (the law courts and judges) which interprets and applies that text. A pivotal role is played by the set of constitutional statements, statutes (Acts), and other documents which come from the legislature. In these cases, the words, literally, are law. [The Cambridge Encyclopedia of The English Language, 1995]
Finally, case law below the level of the Supreme Court is worthless, as it is full of mistakes. The IRS ignores such law and so do I. If case law does not correlate with and come to the same conclusions as statutory law, then it is wrong, pure and simple. The law does not need to be interpreted by judges, because the official interpretation has already been done by the Secretary of the Treasury in the regulations; the truth is in the regulations.
And these regulations are binding on the public, the IRS, and the courts. I enclose a complete report (Taxable Income) that explains exactly how the law says what I have concluded above, and how it has ALWAYS said this, once you know where to look and what to look for. By signing below, I hereby swear under penalty of perjury that the above information is true and correct to the best of my knowledge. If the Service disagrees with these conclusions, then I hereby request the citations of law that refute my findings and an in-person conference to discuss the matter. If you have any questions, please contact me in writing at the address listed on the letterhead, so that there is no misunderstanding. Thank you for your assistance in this matter.
Sincerely,
________________________________
Charles Thomas Clayton, MD SS# 462-78-5051 Email: ironman@excessiron.org Enc: Taxable Income 1998 1040X Return Form 8275 Critical Section 61 and 861 regulations