The Privacy Act of 1974 and Paperwork Reduction Act of 1980 say that when we ask you for information we must first tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it and whether your response is voluntary, required to obtain a benefit, or mandatory under the law.
This notice applies to all papers you file with us, including this tax return. It also applies to any questions we need to ask you so we can complete, correct, or process your return; figure your tax; and collect tax, interest, or penalties.
Our legal right to ask for information is Internal Revenue Code sections 6001. 6011, and 6012(a) and their regulations. They say that you must file a return or statement with us for any tax you are liable for. Your response is mandatory under these sections. Code section 6109 and its regulations say that you must show your social security number on what you file. This is so we know who you are, and can process your return and other papers. You must fill in all parts of the tax form that apply to you. But you do not have to check the boxes for the Presidential Election Campaign Fund.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB Control Number (Search for "26CFR602"). Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by Code section 6103.
We ask for tax return information to carry out the tax laws of the United States. We need it to figure and collect the right amount of tax.
We may give the information to the Department of Justice and to other Federal agencies, as provided by law. We may also give it to cities, states, the District of Columbia, and U.S. commonwealths or possessions to carry out their tax laws. And we may give it to foreign governments because of tax treaties they have with the United States.
If you do not file a return, do not provide the information we ask for, or provide fraudulent information, you may be charged penalties and be subject to criminal prosecution. We may also have to disallow the exemptions, exclusions, credits, deductions, or adjustments shown on the tax return. This could make the tax higher or delay any refund. Interest may also be charged.
Please keep this notice with your records. It may help you if we ask you for other information. If you have questions about the rules for filing and giving information, please call or visit any Internal Revenue Service office.
Let's first see whether or not you are a "person liable." To start with, I look at the two
code sections that address this issue under: Title 5, Section 552a(e)(3) [The Privacy Act], and
Title 44, Section 3504(c)(3)(C) [The Paperwork Reduction Act].
The Privacy Act states that the Agency requesting information to:
(3) inform each individual whom it asks to supply information, on the form which it uses to collect the information or on a separate form that can be retained by the individual---
(A) the authority (Ether granted by statute, or by executive order of the President) which authorizes the solicitation of the information and whether disclosure of such information is mandatory or voluntary;
(B) the principal purpose or purposes for which the information is intended to be used; (C) the routine uses which may be made of the information, as published pursuant to paragraph (4)(D) of this subsection; and
(D) the effects on him, if any, of not providing all or any part of the requested information...
The Paperwork Reduction Act states that the Director of the Office of Management and Budget must include with his/her information request:
¼ a statement to inform the person reviewing the request why the information is being collected, how it is to be used, and whether responses to the request are voluntary, required to obtain a benefit, or mandatory..."
Now, here we have two statutes directing the government to tell us whether giving the IRS an income tax return is voluntary or mandatory. The IRS responds to the directives of the Privacy Act and Paperwork Reduction Act Notice with the following statement:
"Our legal right to ask for information is Internal Revenue Code section 6001, 6011 and 6012(a) and their regulations. They say that you must file a return or statement with us for any tax you are liable for. Your response is mandatory under these sections."
I have to point out to you that the IRS again uses the word "liable for".
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Now, let's look at the Internal Revenue Code to see what it has to say. The two sections 6001 and 6011 follow as written in the code of 1994.
SECTION 6001. Notice or regulations requiring records, statements, and special returns
Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such roles and regulations as the Secretary may from time to time prescribe. whenever in the judgment of the Secretary it is necessary, he may require any person, by notice served upon such person or by regulations, to make such returns, render such statements, or keep such records, as the Secretary deems sufficient to show whether or not such person is liable fur tax under this title. The only records which an employer shall be required to keep under this section in connection with charged tips shall be charge receipts, records necessary to comply with section 6053(c), and copies of statements furnished by employees under section 6053(a).
SECTION 6011. General requirement of return, statement, or list
(a) General rule--When required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title, or with respect to the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary. Every person required to make a return or statement shall include therein the information required by such forms or regulations.
In these two sections we are instructed to file a return or statement for any tax we are liable for. indeed, Section 6001 refers to "Every person liable for any tax imposed by [The Internal Revenue Code]..." and Section 6011 refers to "...any person made liable for any tax imposed by [The Internal Revenue Code]..." But, as you can see, nowhere in either of these two sections are we told who is liable for, in this case, the income tax. The government has in effect, told us that a response is mandatory if we are liable for the tax, but neglected to tell us whether or not we are liable for the tax. The government has been very explicit in telling us that a response, either a return or statement, is mandatory for any tax that we are liable for; however, the government has remained silent in telling us who is liable for the tax. Thus, even after reading the government's official notices under the Privacy Act and Paperwork Reduction Act, we still do not know if an income tax return is required of us. In my opinion, by maintaining silence on this central issue, the government has not complied with either the spirit or the letter of the law of the two Acts. This opinion is shared by courts as well:
"`Silence' is species of conduct, and constitutes an implied representation of the existence of facts in question... When silence is of such character and under such circumstances that it would become a fraud...it will operate as an estoppel." Carmine v. Bowen 64 AT. 932 .
Since the government has not told you whether you are required to file an income tax return, you have asked me to research this matter. Since you must be a "person liable" to be a "person required", lets address this issue.
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The right to tax comes from the United States Constitution, the supreme law of the land, which authorizes the federal government to impose two broad categories of taxes: direct taxes under Article I, Section 2 and Article I, Section 9, and indirect taxes under Article I, Section 8. Direct taxes are required to be apportioned among the states, while indirect taxes must be uniform throughout the United States.
Briefly, a direct tax is a tax on an ownership interest which the owner cannot pass on, while an indirect tax is on an event where the transaction and the impact of the tax can be passed on, in whole or in part, to others. In order for a tax to fall into the indirect tax category the individual liable for the tax cannot be the ultimate, final consumer. This is so since the one paying the tax can then add it on to the price of the thing being taxed and recover it (pass it on) when it is sold. The ultimate, final consumer would have no way to recover (pass on) the tax, so any tax which the ultimate, final consumer is liable for would be a direct tax based on an ownership interest.
"The Sixteenth Amendment does not extend the power of taxation to new or excepted subjects Pack v Lowe, 247 U.S. 165. "The Sixteenth Amendment conferred no new power of taxation Stanton v Baltic Mining Co., 240 US. 103, at 112.
"The individual, unlike the corporation, cannot be taxed for the mere privilege of existing., The corporation is an artificial entity which owes its existence in charter powers to the State, but the individual's right to live and own property are natural Rights for which an excise cannot be imposed." Redfield v Fisher, 292 P.813, at 819.
"Neither can the tax be sustained on the [natural] person, measured by income. Such a tax would be, by nature, a capitation rather than an excise. "Peck v Lowe, 247 US. 165. (emphasis added).
"Income has been taken to mean the same thing as used in the Corporate excise Tax of 1909 (36 Stat. 112). The individual worker does not receive a profit or gain from his/her labors - merely an equal exchange of funds for services. "Brushaber v. Union Pacific R.R.. 240 US. 1, l7, 36 S. CT.236, 241.
"The taxpayer must be liable for the tax. Tax liability is a condition precedent to the demand. Merely demanding payment, even repeatedly, does not cause liability" Bothke v. Terry, 713 F. 2d 1405, at 1414 (1983).
"The Treasury Department cannot, by interpretive regulations, make income of that which is not income within the meaning of the revenue acts of Congress, nor can Congress, without apportionment, tax as income that which is not income within the meaning of the Sixteenth Amendment." Helvering v. Edison Bros. Stores, 133 F.2d 575.