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192US38 Page 55 BENZIGER v UNITED STATES This provision of the statute should be liberally construed in favor of the importer, and if there were any fair doubt as to the true construction of the provision in question, the courts should resolve the doubt in his favor. American Net & Twine Co. v. Worthington , 141 U.S. 468, 35 L. ed. 821, 12 Sup. Ct. Rep. 55; United States v. Wigglesworth, 2 Story, 369, Fed. Cas. No. 16,690; Rice v. United States, 4 C. C. A. 104, 10 U. S. App. 670, 53 Fed. 910.
263 U.S. 179 Page 188 - U.S. v. MERRIAM But in statutes levying taxes the literal meaning of the words employed is most important for such statutes are not to be extended by implication beyond the clear import of the language used. If the words are doubtful, the doubt must be resolved against the government and in favor of the taxpayer. Gould v. Gould, 38 S. Sup. Ct. 53.
362 US 145 Page 176 FLORA v. UNITED STATES Our system of taxation is based upon voluntary assessment and payment, not upon distraint.
362 US 145 Page 177 FLORA v. UNITED STATES If the Government is forced to use these remedies [distraint] on a large scale, it will affect adversely taxpayers willingness to perform under our voluntary assessment system.
200 U.S. 57 Page 69 GUARDIAN TRUST & DEPOSIT CO v FISHER An individual may be under no obligation to do a particular thing, and his failure to act creates no liability; but if he voluntarily attempts to act and do the particular thing, he comes under an implied obligation in respect to the manner in which he does it.
301 U.S. 548 CHAS. C. STEWARD MACH. CO. v. DAVIS The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises.' Article 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. Cf. Burnet v. Brooks, , 405 S., 53 S.Ct. 457, 464, 465, 86 A.L.R. 747; Brushaber v. Union Pacific R.R. Co., 36 S.Ct. 236, L.R.A.1917D, 414, Ann.Cas.1917B, 713. Whether the tax is to be [301 U.S. 548, 582] classified as an 'excise' is in truth not of critical importance. If not that, it is an 'impost' (Pollock v. Farmers' Loan & Trust Co., 625 S., 15 S.Ct. 912; Pacific Insurance Co. v. Soule, 7 Wall. 433, 445), or a 'duty' (Veazie Bank v. Fenno, 8 Wall. 533, 546, 547; Pollock v. Farmers' Loan & Trust Co., 15 S.Ct. 673; Knowlton v. Moore, 20 S.Ct. 747). A capitation or other 'direct' tax it certainly is not.
319 U.S. 105 MURDOCK v COMMONWEALTH OF PENNSYLVANIA A state may not impose a charge for the enjoyment of a right granted by the federal constitution.
340 F Supp 1130 Page 1131 WESTERN TRADING COMPANY An "assessment" is an administrative determination of tax liability and until the assessment has been made the tax has not been found to be owing. 26 U.S.C.A. (I.R.C.1954) § 6203.
340 F Supp 1130 Page 1133 WESTERN TRADING COMPANY "Found to be owing," as used in this section, means "assessed." The Internal Revenue Code provides for a specific procedure for assessment (26 U.S.C. § 6203). An assessment is an administrative determination of tax liability. Kurio v. United States, 281 F.Supp. 252 ( S.D.Tex.1968); United States v. Miller, 318 F.2d 637 (7th Cir. 1963). And until the assessment has been made, the tax has not been found to be owing.
713 F.2d 1405 Page 1406 BOTHKE v FLUOR ENGINEERS (1983) With Internal Revenue Service's broad power which may disrupt taxpayers lives must come concomitant responsibility to exercise that power within confines of law. U.S.C.A. Const. Art. 1, § 8, el. 1; Amends. 3-5, 8, 10, 14, 16.
For condition precedent to statutorily authorized levy to be met, there must be lawful assessment, either voluntary one by taxpayer or one procedurally proper by Internal Revenue Service. 26 U.S.C.A. § 6331(a).
713 F.2d 1405 Page 1407 BOTHKE v FLUOR ENGINEERS (1983) Because income tax system is based on voluntary self-assessment, rather than distraint, Internal Revenue Service may assess tax only in certain circumstances and in conformity with proper procedures. 26 U.S. C.A. § 6331(a).
713 F.2d 1405 Page 1407 BOTHKE v FLUOR ENGINEERS (1983) Internal Revenue Service, with its expertise, is obliged to know its own governing statutes and to apply them realistically
713 F.2d 1405 Page 1413 BOTHKE v FLUOR ENGINEERS (1983) With the IRS's broad power must come a concomitant responsibility to exercise it within the confines of the law. The Court has emphasized that no official is above the law, and that broad powers present broad opportunities for abuse. Butz, 438 U.S. at 50546, 98 S.Ct. at 2910-11.Cf. Mark v. Groff, 521 F.2d at 1380 n.4.
754 f.2d 804 Page 805 BOSMA v. UNITED STATES DEPARTMENT OF AGRICULTURE Under section of Administrative Procedure Act providing that "except as otherwise provided by statute, the proponent of a rule or order has the burden of proof," "burden of proof" means burden of going forward with evidence. 5 U.S.C.A. § 556(d).
515 P.2d 1217 STATE of KANSAS v HAREMZA "Prima facie evidence" is evidence which, if unexplained or uncontradicted, is sufficient to sustain a judgment in favor of the issue which it supports, but which may be contradicted by other evidence.
Those who drafted the tax legislation which was ultimately enacted by Congress, left it up to the individual to assess himself by filling out forms which provide prima facie evidence that he is subject to and/or liable for a tax.
The individual who files has provided prima facie evidence which indicates that he is a " taxpayer", without regard to whether or not he itemized deductions. But for the individual who does not file, the situation is entirely different.
Fortunately, the old 1040 forms, as well as W-4 forms, are merely pieces of prima facie evidence which can be rebutted with the defendant's testimony.
the instruction is to "encourage" the individual to "voluntarily" provide the prima facie evidence of " taxpayer" status. If the employee does not provide prima facie evidence of being a " taxpayer", the employer has absolutely nothing to support any conclusion that the individual is subject to any tax.
LATCHES - An equitable doctrine used by courts to bar a legal claim or prevent the assertion of a right because of undue delay or failure to assert the claim or right.
69 F.(2d) 160 HIGLEY v. COMMISSIONER OF INTERNAL REVENUE. Liability for taxation must clearly appear from statute imposing tax.
200 U.S. 57 Page 69 GUARDIAN TRUST & DEPOSIT CO. v. FISHER An individual may be under no obligation to do a particular thing, and his failure to act creates no liability; but if he voluntarily attempts to act and do the particular thing, he comes under an implied obligation in respect to the manner in which he does it.
84 F.2d 821Page 821 HOUSTON STREET CORP. v. COMMISSIONER OF INTERNAL REVENUE. Phrases "liable for such tax" and "subject to a tax" are interchangeable, and connote payment of a tax
84 F.2d 821Page 822 HOUSTON STREET CORP. v. COMMISSIONER OF INTERNAL REVENUE. The 1926 Revenue Act (section 2 [26 U.S.C.A. § 1696]) and all subsequent acts have this definition of taxpayer: "The term 'taxpayer' means any person subject to a tax imposed by this act [title]."
84 F.2d 821Page 822 HOUSTON STREET CORP. v. COMMISSIONER OF INTERNAL REVENUE. We see no distinction between the phrases "liable for such tax" and "subject to a tax." Both connote payment of the tax. We consider the terms interchangeable.
84 F.2d 821Page 822 HOUSTON STREET CORP. v. COMMISSIONER OF INTERNAL REVENUE. A person liable for a tax is a person subject to a tax and comes squarely within the definition of a taxpayer in the statute.
288 F.2d 504 Page 505 BOTTA v. SCANLON Tax officials are not vested with absolute power of assessment against individuals not specified in statutes as persons liable for tax without opportunity for judicial review of status before persons property is seized and sold
288 F.2d 504 Page 506 BOTTA v. SCANLON Moreover, even the collection of taxes should be exacted only from persons upon whom a tax liability is imposed by some statute.
288 F.2d 504 Page 506 BOTTA v. SCANLON The only "person" liable for such penalty is the "person required to collect, truthfully account for, or pay over any tax
288 F.2d 504 Page 508 BOTTA v. SCANLON It is equally well settled [sic] that the Revenue laws relate only to taxpayers.
288 F.2d 504 Page 508 BOTTA v. SCANLON However, a reasonable construction of the taxing statutes does not include vesting any tax official with absolute power of assessment against individuals not specified in the statutes as persons liable for the tax without an opportunity for judicial review of this status before the appellation of "taxpayer" is bestowed upon them
277 F.2d 16 Page 16 PENN MUTUAL INDEMNITY COMPANY v. C. I. R. The validity of a tax is not dependent on its bearing an accurate label.
277 F.2d 16 Page 20 PENN MUTUAL INDEMNITY COMPANY v. C. I. R that the tax involved here is an "excise tax" based upon the receipt of money by the taxpayer. It certainly is not a tax on property and it certainly is not a capitation tax; therefore, it need not be apportioned.
CONGRESSIONAL RECORD HOUSE March 27, 1943 The March 27, 1943 House Congressional record reiterates these basic facts.
CONGRESSIONAL RECORD HOUSE 1943 Page 2579 The income tax is an excise tax, and income is merely the basis for determining its amount.
CONGRESSIONAL RECORD HOUSE 1943 Page 2580 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.
CONGRESSIONAL RECORD HOUSE 1943 Page 2580 'If the tax should be construed as a tax on income as a specific fund the disappearance of the fund before the date of assessment would prevent the collection of the tax. (See Foster and Abbott, op. cit., p. 85.) "If the Income is merely the measure of the tax, it is clearly quite immaterial whether the income that is adopted as a measure is that of the past, or of the present, or of the future, provided only it is practically ascertainable." (Foster and Abbott, op. cit., p. 87.)
301 U.S. 548 Pages 581,582 CHAS. C. STEWARD MACH. CO. v. DAVIS 'The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises.' Article 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. Cf. Burnet v. Brooks, 405 S., 53 S.Ct. 457, 464, 465, 86 A.L.R. 747; Brushaber v. Union Pacific R.R. Co., 36 S.Ct. 236, L.R.A.1917D, 414, Ann.Cas.1917B, 713. Whether the tax is to be [301 U.S. 548, 582] classified as an 'excise' is in truth not of critical importance. If not that, it is an 'impost' (Pollock v. Farmers' Loan & Trust Co., 625 S., 15 S.Ct. 912; Pacific Insurance Co. v. Soule, 7 Wall. 433, 445), or a 'duty' (Veazie Bank v. Fenno, 8 Wall. 533, 546, 547; Pollock v. Farmers' Loan & Trust Co., 15 S.Ct. 673; Knowlton v. Moore, 20 S.Ct. 747). A capitation or other 'direct' tax it certainly is not.
281 U.S. 497 Page 502
TYLER v. U.S
255US288 Page 292 DAWSON v KENTUCKY DISTILLERIES and WAREHOUSE The name by which the tax is described in the statute is, of course, immaterial. Its character must be determined by its incidents;
247 U.S. 165 Page 172 WILLIAM E. PECK & CO. v. LOWE
And while it cannot be applied to any income which Congress has no power to tax (see Stanton v. Baltic Mining Co., supra, 240 U. S. p. 113, 36 Sup. Ct. 278)
240 U.S. 103 Page 112 STANTON v. BALTIC MINING CO it was settled that the provisions of the 16th 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, and being placed in the category of direct taxation subject to apportionment
240 U.S. 103 Page 112 STANTON v. BALTIC MINING CO Not being within the authority of the 16th Amendment, the tax is therefore, within the ruling of Pollock v. Farmers' Loan & T. Co. 39 L. ed. 759, 15 Sup. Ct. Rep. 673; 39 L. ed. 1108, 15 Sup. Ct. Rep. 912, a direct tax and void for want of compliance with the regulation of apportionment.
240 U.S. 103 Page 113 STANTON v. BALTIC MINING CO In other words, we are here dealing solely with the restriction imposed by the 16th Amendment on the right to resort to the source whence an income is derived in a case where there is power to tax for the purpose of taking the income tax out of the class of indirect, to which it generically belongs, and putting it in the class of direct, to which it would not otherwise belong, in order to subject it to the regulation of apportionment.
240 U.S. 1 Page 18 BRUSHABER v. UNION PACIFIC R. CO that the contention that the Amendment treats a tax on income as a direct tax although it is relieved from apportionment and is necessarily therefore not subject to the rule of uniformity as such rule only applies to taxes which are not direct, thus destroying the two great classifications which have been recognized and enforced from the beginning, is also wholly without foundation
220 U.S. 107 Page 151 FLINT v. STONE TRACY CO Excises are 'taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges.' Cooley, Const. Lim. 7th ed. 680.
220 U.S. 107 Page 152 FLINT v. STONE TRACY CO If we are correct in holding that this is an excise tax, there is nothing in the Constitution requiring such taxes to be apportioned according to population. Pacific Ins. Co. v. Soule, 7 Wall. 433, 19 L. ed. 95; Springer v. United States, 26 L. ed. 253; Spreckels Sugar Ref. Co. v. McClain, 48 L. ed. 496, 24 Sup. Ct. Rep. 376.
48 Am jur 2d Page 80 The right to labor and to its, protection from unlawful interference is a constitutional as well as a common-law right. 24 Every man has a natural right to the fruits of his own industry. 25
112 NE 853 Page 854 BOGNI v. PEROTI Constitutional Law 275(1) Right to Work -- "Property" Right. The right to work is property of which one cannot be deprived by simple mandate of the Legislator, but it is protected by the US Constitution Amendment 14 and by numerous guaranties of the state Constitution, and the mere fact that it is also a part of the liberty of the citizen does not affect its character as property. [Ed. Note. For other cases, see Constitutional Law, Cent. Dig 830, 839, 843; Dec Dig 275(1)]
208 U.S. 161 Page 173 ADAIR v. U S Such liberty and right embrace the right to make contracts for the purchase of the labor of others, and equally the right to make contracts for the sale of one's own labor;
337 S.W.2d 453 JACK COLE COMPANY v. MacFARLAND Right to receive income or earnings is right belonging to every person, and realization and receipt of income is therefore not a "privilege" that can be taxed. Const. art. 2, § 28.
95 S. W. (2d) Page 620 CORN v FORT Term "Privilege," within constitutional provision *** refers to activity or occupation and not to character of person or entity that pursues activity or occupation ***.
95 S. W. (2d) Page 620 CORN v FORT Right to do business *** in corporate form is a taxable "Privilege"
292P Page 813 REDFIELD v FISHER Individual, unlike corporation, cannot be taxed for mere privileges of existing and owning property which are natural rights.
292P Page 819 REDFIELD v FISHER The individual, unlike the corporation, cannot be taxed for the mere privilege of existing. The corporation is an artificial entity which owes its existence and charter powers to the state; but the individuals' rights to live and own property are natural rights for the enjoyment of which an excise cannot be imposed.
86 United States Tax Courts Reports 433 Page 388 Phillips v Commissioner Held, the Commissioner's dummy returns were not "returns" within the meaning of sec. 6020(b), I.R.C . 1954.
PUBLIC.ACTS 1976 No. 442 Page 1503 Sec. 1. (1) This act shall be known and may be cited as the "freedom of information act".
337 F.2d 797 VORACHER v UNITED STATES If his allegations of jurisdictional facts are challenged by his adversary in any appropriate manner, he must support them by competent proof. McNutt V. General Motors Acceptance Corp., supra, at page 189 of 298 U.S., at page 785 of 56 S.Ct."
PUBLIC.ACTS 1976 No. 442 Page 1503 Sec. 1. (1) This act shall be known and may be cited as the "freedom of information act".
Income Tax Compiled Laws 206.4 Page 10Department of Treasury may not make modifications to federal "adjusted gross income" when arriving at Michigan taxable income. Maxitrol Co. v. Michigan Dept. of Treasury (1994) MIT Nos. 159479, 159480, affirmed in part, reversed in part (1996) 551 N.W.2d 471, 217 Mich. App. 366.
217 Mich App 366 Page 366 Maxitrol Co v Michigan Dept of Treasury 2. Because Michigan tax returns depend on the computations contained in the federal tax returns, and thus, the state and federal returns are inextricably intertwined, any audit by the respondent of Michigan returns would be so limited and superficial as to be totally inadequate if the respondent is not permitted to make its own assessment of the validity of the deductions claimed by a (217 Mich App 366 Page 367) taxpayer on federal income tax statements and returns. Therefore, the respondent property, reviewed the petitioners' federal income tax returns and statements and the Tax Tribunal erred in prohibiting the respondent from reviewing and assessing the validity of federal tax returns and statements in the exercise of its statutory authority to audit Michigan tax returns. Affirmed in part and reversed in part.
217 Mich App 366 Page 367 Maxitrol Co v Michigan Dept of Treasury 2. Taxation - Michigan Department Of Treasury - Tax Audit - Federal Tax Returns. The Michigan Department of' Treasury in exercise of' its statutory audit authority may review a taxpayers federal tax returns and statements and make its own assessments of the validity of the deductions claimed by the taxpayer on federal income statements and returns.
(8 MTT 584 Page 584) The respondent Department may not make modifications to Federal "Adjusted Gross Income."
(8 MTT 584 Page 584) The Department may not make modifications to the Federal 'Adjusted Gross Income" calculated pursuant to the IRC.
(8 MTT 584 Page 585) The starting point on the MI-1040, as established by the Michigan Legislature, is the Federal AGI. The exception of changing the Federal AGI is if a mistake was made in the computation of the Federal 1040 which is later discovered through an audit by the Internal Revenue Service or by the individual. At that time, an amended Michigan tax form is then filed recomputing the tax liability with the recalculated AGI.
(8 MTT 584 Page 585) The guiding principle in determining whether the Department can make modifications to Federal AGI has been set forth in several Michigan cases. "Governmental powers of taxation are controlled by constitutional and statutory provisions ... It is not possible to adjudicate issues arising under taxation laws by the general application of equitable principles."
(8 MTT 584 Page 585) While petitioners have the burden of proving that the tax is unjustified under the facts of the case, the Department has the burden of pointing to a specific statutory power that grants it the authority to impose the tax in issue.
(8 MTT 584 Page 589) Such laws may be made plain, and language thereof, if dubious, is not resolved against the taxpayer. Garavalgia v Department of Revenue, 338 Mich 470-, 61 NW2d 612 (1954). Michigan Allied Dairy Ass'n v State Board of Tax Administration, 302 Mich 643; 5 NW2d 516 (1942). In re Dodge Brothers 241 Mich 665; 217 NW 777 (1928).
Article VI Paragraph 6 - This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.
5US137 Marbury v Madison Any law repugnant to the constitution is null and void of Law
5US137 Syllabus An act of congress repugnant to the constitution can not become a law. The courts of United States are bound to take notice of the constitution.
5US137 Page 180 It is also not entirely unworthy of observation, that in declaring what shall be the supreme law of the land, the constitution itself is first mentioned; and not the laws of the United States generally, but those only which shall be made in pursuance of the constitution, have that rank.
5US137 Page 180 Thus, the particular phraseology of the constitution of the United States confirms and strengthens the principle, supposed to be essential to all written constitutions, that a law repugnant to the constitution is void ; and that courts, as well as other departments, are bound by that instrument.
5US137 Anything that is in conflict is null and void of law. Clearly, for a secondary law to come in conflict with the supreme law was illogical. For certainly the supreme law would prevail over all other law and certainly our fore-fathers had intended that the supreme law would be the basis of all law. And for any law to come in conflict would be null and void of law. It would bear no power to enforce, it would bear no obligation to obey, it would purport to settle as if it never existed for unconstitutionality would date from enactment of such a law, not from the date so branded in an open court of law. No courts are bound to uphold it and no citizens are bound to obey it. It operates as a mere nullity or a fiction of law.
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