                           Chapter 5:
                     What State Are You In?
                                
                             Answer:

         Mostly liquid, some solid, and occasional gas!
                                
                                
     This answer  is only  partially facetious.   In something as
important as  a Congressional  statute, one  would think that key
terms like  "State" would  be defined  so clearly  as to leave no
doubt about  their meaning.   Alas, this is not the case in Title
26, the  Internal Revenue  Code (IRC).  The term "State" has been
deliberately defined  so as  to confuse  the casual  reader  into
believing that  it means  one of the 50 States of the Union, even
though it doesn't say "50 States" in so many words.  For the sake
of comparison,  we  begin  by  crafting  a  definition  which  is
deliberately designed  to create absolutely no doubt or ambiguity
about its meaning:


     For the sole purpose of establishing a benchmark of clarity,
     the term  "State" means  any one  of the  50 States  of  the
     Union,  the   District  of  Columbia,  the  territories  and
     possessions belonging  to  the  Congress,  and  the  federal
     enclaves lawfully  ceded to  the Congress  by any  of the 50
     States of the Union.


Now, compare  this benchmark  with the various definitions of the
word "State"  that are found in Black's Law Dictionary and in the
Internal Revenue  Code.  Black's is a good place to start because
it clearly  defines two  different kinds  of "states".  The first
kind defines  a member  of the  Union, i.e., one of the 50 States
which are united by and under the Constitution:


     The section  of territory  occupied by  one  of  the  United
     States***.   One of the component commonwealths or states of
     the United States of America.
                                                 [emphasis added]


The second  kind defines  a  federal  state,  which  is  entirely
different from a member of the Union:


     Any state  of the United States**, the District of Columbia,
     the Commonwealth  of  Puerto  Rico,  and  any  territory  or
     possession subject  to  the  legislative  authority  of  the
     United States.  Uniform Probate Code, Section 1-201(40).
     
                                                 [emphasis added]
                                                                 


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                                                The Federal Zone:


Notice carefully  that a  member of  the Union  is not defined as
being  "subject  to  the  legislative  authority  of  the  United
States".   Also, be  aware that  there are also several different
definitions of "State" in the IRC, depending on the context.  One
of the most important of these is found in a chapter specifically
dedicated to  providing definitions,  that is,  Chapter  79  (not
exactly the  front of the book).  In this chapter of definitions,
we find the following:


     When used  in this  title, where  not  otherwise  distinctly
     expressed  or   manifestly  incompatible   with  the  intent
     thereof-- ...

     (10) State. --  The  term  "State"  shall  be  construed  to
          include  the   District   of   Columbia,   where   such
          construction is  necessary to  carry out the provisions
          of this title.
                                             [26 USC 7701(a)(10)]
                                                 [emphasis added]
                                                                 
Already, it  is obvious  that this  definition leaves  much to be
debated because  it is ambiguous and it is not nearly as clear as
our "established benchmark of clarity" (which will be engraved in
marble a  week from  Tuesday).   Does the definition restrict the
term "State"  to mean  only the District of Columbia?  Or does it
expand the  term "State"  to mean  the District  of  Columbia  in
addition to the 50 States of the Union?  And how do we decide?

     Even some  harsh critics  of federal income taxes, like Otto
Skinner, have argued that ambiguities like this are best resolved
by interpreting  the word "include" in an expansive sense, rather
than a restrictive sense.  To support his argument, Skinner cites
the definitions  of "includes"  and "including" that are actually
found in Title 26:

     Includes  and   Including.  --   The  terms  "includes"  and
     "including" when  used in  a definition  contained  in  this
     title shall  not be deemed to exclude other things otherwise
     within the meaning of the term defined.
                                                 [26 USC 7701(c)]
                                                 [emphasis added]

     Skinner reasons  that the Internal Revenue Code provides for
an expanded  definition of the term "includes" when used in other
definitions contained  in that  Code.  Using his logic, then, the
definition of  "State" at  26 USC 7701(a)(10) must be interpreted
to mean  the District  of Columbia,  in addition to other things.
But what  other things?   Are  the 50 States to be included also?
What about  the territories  and possessions?  And what about the
federal enclaves  ceded to  Congress by  the 50  States?   If the
definition itself  does not  specify any  of these  things,  then
where, pray  tell, are  these other things "distinctly expressed"
in the  Code?   If these  other things  are distinctly  expressed


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                                           What State Are You In?


elsewhere in the Code, is their expression in the Code manifestly
compatible with  the intent of that Code?  Should we include also
a state of confusion to our understanding of the statute?

     Quite apart  from the meaning of "includes" and "including",
defining the  term "include"  in an  expansive sense  leads to an
absurd  result   that  is   manifestly  incompatible   with   the
Constitution.   If the  expansion results  in defining  the  term
"State" to  mean the  District of  Columbia in addition to the 50
States of the Union, then these 50 States must be situated within
the federal zone.  Remember, the federal zone is the area of land
over which  the Congress  has unrestricted, exclusive legislative
jurisdiction.   But, the  Congress does  not  have  unrestricted,
exclusive legislative jurisdiction over any of the 50 States.  It
is bound by the chains of the Constitution in this other zone, to
paraphrase Thomas  Jefferson.  Specifically, Congress is required
to apportion  direct taxes  which it levies within the 50 States.
This is  a key limitation on the power of Congress.  It has never
been explicitly repealed (as Prohibition was repealed).

     Unlike the  Brushaber case, other federal cases can be cited
to support the conclusions that taxes on income are direct taxes,
and that  the 16th  Amendment actually removed this apportionment
rule from  direct taxes laid on "income".  Sorry, but the Supreme
Court is  not always  consistent in  this area, and the Appellate
Courts are  even less  consistent.   These other cases are highly
significant, if  only because  they provide essential evidence of
other attempts  by federal courts to isolate the exact effects of
a ratified  16th Amendment.   The  following ruling  by the Sixth
Circuit Court  of Appeals  is  unique,  among  all  the  relevant
federal cases, for its clarity and conciseness on this question:


     The  constitutional  limitation  upon  direct  taxation  was
     modified by  the Sixteenth  Amendment insofar as taxation of
     income was  concerned, but  the amendment  was restricted to
     income,  leaving   in  effect  the  limitation  upon  direct
     taxation of principal.

          [Richardson vs United States, 294 F.2d 593, 596 (1961)]
                                                 [emphasis added]

The constitutional limitation upon direct taxes is apportionment.
It is not difficult to find Supreme Court decisions which arrived
at the very same conclusion about the 16th Amendment, long before
the Richardson case:

     ... [I]t does not extend the taxing power to new or excepted
     subjects, but  merely removed  all occasion, which otherwise
     might exist,  for an apportionment among the states of taxes
     laid on  income, whether  it be  derived from  one source or
     another.
                        [Peck & Co. vs Lowe, 247 U.S. 165 (1918)]
                                                 [emphasis added]


                        Page 5 - 3 of 20

                                                The Federal Zone:


     And, in what is arguably one of the most significant Supreme
Court decisions  to define  the precise  meaning of "income", the
Eisner  Court  simply  paraphrased  the  Peck  decision  when  it
attributed the  exact same  effect to the 16th Amendment, namely,
income taxes had become direct taxes relieved of apportionment:

     As repeatedly  held, this did not extend the taxing power to
     new  subjects,   but  merely  removed  the  necessity  which
     otherwise might  exist for an apportionment among the States
     of taxes laid on income. ...

     A proper  regard for  its genesis, as well as its very clear
     language, requires  also that  this Amendment  shall not  be
     extended by  loose construction,  so as to repeal or modify,
     except  as  applied  to  income,  those  provisions  of  the
     Constitution that  require  an  apportionment  according  to
     population  for   direct  taxes   upon  property,  real  and
     personal.

               [Eisner vs Macomber, 252 U.S. 189, 205-206 (1919)]
                                                 [emphasis added]
                                                                 
     Contrary to  statements about  it in the Brushaber decision,
the earlier Pollock case, without any doubt, defined income taxes
as direct taxes.  It also overturned an Act of Congress precisely
because that Act levied a direct tax without apportionment:

     First.   We adhere  to the  opinion already announced, that,
     taxes on  real estate being indisputably direct taxes, taxes
     on the  rents or  income of  real estate  are equally direct
     taxes.

     Second.   We are  of the  opinion  that  taxes  on  personal
     property,  or  on  the  income  of  personal  property,  are
     likewise direct taxes.

                           [Pollock vs Farmers' Loan & Trust Co.]
                            [158 U.S. 601 (1895), emphasis added]
                                                                 
     Another Supreme  Court decision  is worthy of note, not only
because it appears to attribute the exact same effect to the 16th
Amendment, but  also because it fails to clarify which meaning of
the term "United States" is being used:

     No  doubt   is  suggested   (the   former   requirement   of
     apportionment  having   been   removed   by   constitutional
     amendment) as  to the power of Congress thus to impose taxes
     upon incomes  produced within  the  borders  of  the  United
     States [?]  or arising  from sources  located therein,  even
     though the income accrues to a non-resident alien.
                                                                 
                                 [Shaffer vs Carter, 252 U.S. 37]
                               [emphasis and question mark added]



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                                           What State Are You In?


     In the  Shaffer decision,  it is obvious that Justice Pitney
again attributed the same effect to the 16th Amendment.  However,
if he  defined "United  States" to mean the federal zone, then he
must have  believed that  Congress also  had to  apportion direct
taxes within  that zone  before the 16th Amendment was "declared"
ratified.   Such a  belief contradicts  the exclusive legislative
authority which Congress exercises over the federal zone:


     In exercising  this power  [to make  all needful  rules  and
     regulations respecting territory or other property belonging
     to the United States**], Congress is not subject to the same
     constitutional limitations,  as when  it is  legislating for
     the United States***.

             [Hooven & Allison Co. vs Evatt, 324 U.S. 652 (1945)]
                                                 [emphasis added]

     On the other hand, if Justice Pitney defined "United States"
to mean  the several  States of the Union, he as much admits that
the Constitution  needed amending  to authorize  an unapportioned
direct tax  on income produced or arising from sources within the
borders of  those States.   Unfortunately  for us, Justice Pitney
did not  clearly specify  which meaning  he was using, and we are
stuck trying  to make  sense of  Supreme  Court  decisions  which
contradict each other.  For example, compare the rulings in Peck,
Eisner, Pollock and Shaffer (as quoted above) with the rulings in
Brushaber and  Stanton vs  Baltic Mining  Co., and  also with the
ruling In  re Becraft  (a recent Appellate case).  To illustrate,
the Stanton court ruled as follows:


     ... [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 ....

          [Stanton vs Baltic Mining Company, 240 U.S. 103 (1916)]
                                                 [emphasis added]
                                                                 
     Now, contrast  the Stanton decision with a relatively recent
decision of  the Ninth Circuit Court of Appeals in San Francisco.
In re Becraft is classic because that Court sanctioned a seasoned
defense attorney $2,500 for raising issues which the Court called
"patently absurd  and frivolous", sending a strong message to any
licensed attorney  who gets  too close  to breaking  the  "Code".
First, the  Court reduced  attorney Lowell  Becraft's position to
"one elemental proposition", namely, that the 16th Amendment does
not authorize  a direct  non-apportioned income  tax on  resident
United States**  citizens and  thus such citizens are not subject
to the  federal income tax laws.  Then the 9th Circuit dispatched
Becraft's entire argument with exemplary double-talk, as follows:



                        Page 5 - 5 of 20

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     For over  75 years,  the Supreme Court and the lower federal
     courts have  both implicitly  and explicitly  recognized the
     Sixteenth Amendment's  authorization  of  a  non-apportioned
     direct income  tax on  United States**  citizens residing in
     the United  States*** and  thus the  validity of the federal
     income tax  laws as  applied to  such citizens.   See, e.g.,
     Brushaber ....  [M]uch of Becraft's reply is also devoted to
     a discussion  of the  limitations of federal jurisdiction to
     United States** territories and the District of Columbia and
     thus the inapplicability of the federal income tax laws to a
     resident of one of the states*** [from footnote 2].

        [In re Becraft, 885 F.2d 547, 548 (1989), emphasis added]
                                                                 
Here, the 9th Circuit credits the 16th Amendment with authorizing
a non-apportioned  direct tax,  completely contrary to Brushaber.
Then the  term "United  States" is used two different ways in the
same sentence;  we know this to be true because a footnote refers
to "one  of the  [50] states".   The  Court also  uses  the  term
"resident" to mean something different from the statutory meaning
of "resident"  and "nonresident", thus exposing another key facet
of their  fraud (see  Chapter 3).   Be  sure to  recognize what's
missing here, namely, any mention whatsoever of State Citizens.

     For the  lay person,  doing this  type of  comparison  is  a
daunting if  not impossible  task, and  demonstrates yet  another
reason why  federal tax law should be nullified for vagueness, if
nothing else.   If  Appellate and  Supreme Court judges cannot be
clear  and   consistent  on   something  as   fundamental  as   a
constitutional amendment,  then nobody  can.   And their title is
Justice.  Are you in the State of Confusion yet?

     When it comes to federal income taxes, we are thus forced to
admit the existence of separate groups of Supreme Court decisions
that flatly  contradict each  other.  One group puts income taxes
into the  class of  indirect taxes;  another group puts them into
the class of direct taxes.  One group argues that a ratified 16th
Amendment did  not change  or repeal  any  other  clause  of  the
Constitution;  another group argues that it relieved income taxes
from  the  apportionment  rule.    Even  experts  disagree.    To
illustrate  the   range  of   disagreement  on  such  fundamental
constitutional issues,  consider once  again  the  conclusion  of
legal scholar Vern Holland, quoted in a previous chapter:

     [T]he Sixteenth  Amendment did  not amend  the Constitution.
     The United  States  Supreme  Court  by  unanimous  decisions
     determined that  the amendment  did not grant any new powers
     of taxation;   that a direct tax cannot be relieved from the
     constitutional mandate  of  apportionment;    and  the  only
     effect of  the amendment was to overturn the theory advanced
     in the  Pollock case which held that a tax on income, was in
     legal effect, a tax on the sources of the income.

                  [The Law That Always, page 220, emphasis added]


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                                           What State Are You In?


Now consider  an opposing  view  of  another  competent  scholar.
After much  research and  much litigation,  author  and  attorney
Jeffrey A. Dickstein offers the following concise clarification:

     A tax  imposed on all of a person's annual gross receipts is
     a direct  tax on personal property that must be apportioned.
     A tax  imposed on  the "income"  derived  from  those  gross
     receipts is  also a  direct tax on property, but as a result
     of the  Sixteenth Amendment, Congress no longer has to enact
     legislation calling  for the  apportionment of a tax on that
     income.
               [Judicial Income and Your Income Tax, pages 60-61]

     Recall now  that 17,000  State-certified documents have been
assembled to  prove that  the 16th  Amendment was never ratified.
As a  consistent group,  the Pollock, Peck, Eisner and Richardson
decisions leave absolutely no doubt about the consequences of the
failed  ratification:     the   necessity  still  exists  for  an
apportionment among the 50 States of all direct taxes, and income
taxes are  direct taxes.   Using  common sense  as our  guide, an
expansive definition  of "include"  results in  defining the term
"State" to  mean the  District of  Columbia in addition to the 50
States.   This expansive definition puts the 50 States inside the
federal zone, where Congress has no restrictions on its exclusive
legislative jurisdiction.   But,  just a  few sentences  back, we
proved that  the rule  of apportionment  still restrains Congress
inside the  50 States.   This  is an  absurd result:   it  is not
possible for the restriction to exist, and not exist, at the same
time, in  the same  place, for  the same group of people, for the
same laws,  within the  same jurisdiction.   Congress cannot have
its cake  and eat  it too,  as much  as it would like to!  Absurd
results are  manifestly incompatible  with the intent of Title 26
(or so I am told).

     Other problems  arise from  Skinner's reasoning.   First  of
all, like  so much of Title 26, the definitions of "includes" and
"including" are  outright deceptions  in  their  own  right.    A
grammatical approach  can  be  used  to  demonstrate  that  these
definitions  are   thinly  disguised   tautologies.     Note,  in
particular, where  the Code states that these terms "shall not be
deemed to exclude other things".  This is a double negative.  Two
negatives make  a positive.   This phrase, then, is equivalent to
saying that  the terms "shall be deemed to include other things".
Continuing  with  this  line  of  reasoning,  the  definition  of
"includes" includes "include", resulting in an obvious tautology.
(I just  couldn't resist.)   Forgive them, for they know not what
they do.

     The definitions  of "includes"  and "including"  can now  be
rewritten so  as to  "include other  things otherwise  within the
meaning of  the term  defined".   So, what  things are  otherwise
within the  meaning of  the term "State", if those things are not
distinctly expressed  in the  original definition?   You  may  be
dying to  put the  50 States of the Union among those things that


                        Page 5 - 7 of 20

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are "otherwise within the meaning of the term", but you are using
common sense.   The  Internal Revenue  Code was  not written with
common sense  in mind;   it  was written  with deception in mind.
The rules  of statutory construction apply a completely different
standard.   Author Ralph  Whittington has  this to  say about the
special definitions that are exploited by lawyers and lawmakers:

     The Legislature  means what  it says.    If  the  definition
     section states  that  whenever  the  term  "white"  is  used
     (within that  particular section  or the  entire code),  the
     term includes  "black," it means that "white" is "black" and
     you are  not allowed  to make additions or deletions at your
     convenience.  You   must  follow   the  directions   of  the
     Legislature, NO MORE -- NO LESS.

                                     [Omnibus, Addendum II, p. 2]

     Unfortunately for  Otto Skinner and others who try valiantly
to argue  the expansive  meaning of  "includes" and  "including",
Treasury Decision  No. 3980,  Vol. 29, January-December 1927, and
some 80 court cases have adopted the restrictive meaning of these
terms:

     The supreme  Court of the State ... also considered that the
     word "including"  was used  as a  word of  enlargement,  the
     learned court  being  of  the  opinion  that  such  was  its
     ordinary sense.   With  this we  cannot concur.   It  is its
     exceptional sense, as the dictionaries and cases indicate.

        [Montello Salt Co. vs State of Utah, 221 U.S. 452 (1911)]
                                                 [emphasis added]

     An historical  approach yields  similar  results.    Without
tracing the  myriad of  income tax  statutes which  Congress  has
enacted  over  the  years,  it  is  instructive  to  examine  the
terminology found  in a  revenue statute  from the Civil War era.
The definition  of "State"  is almost identical to the one quoted
from the  current IRC  at the start of this chapter.  On June 30,
1864, Congress  enacted legislation which contained the following
definition:

     The  word  "State,"  when  used  in  this  Title,  shall  be
     construed to  include the  Territories and  the District  of
     Columbia, where  such construction is necessary to carry out
     its provisions.

                [Title 35, Internal Revenue, Chapter 1, page 601]
                        [Revised Statutes of the United States**]
                            [43rd Congress, 1st Session, 1873-74]

Aside from  adding "the  Territories", the  two  definitions  are
nearly identical.   The  Territories at  this point  in time were
Washington, Utah, Dakota, Nebraska, Colorado, New Mexico, and the
Indian Territory.


                        Page 5 - 8 of 20

                                           What State Are You In?


     One  of   the  most  fruitful  and  conclusive  methods  for
establishing the  meaning of  the term  "State" in Title 26 is to
trace the  history of  changes to  the United  States Codes which
occurred when  Alaska and  Hawaii were  admitted  to  the  Union.
Because other authors have already done an exhaustive job on this
history, there is no point in re-inventing their wheels here.  It
is instructive  to illustrate these Code changes as they occurred
in the  IRC definition  of "State"  found at  the start  of  this
chapter.  The first Code amendment became effective on January 3,
1959, when Alaska was admitted to the Union:


     Amended  1954   Code  Sec.   7701(a)(10)  by   striking  out
     "Territories", and by substituting "Territory of Hawaii".

                                             [26 USC 7701(a)(10)]


The second  Code amendment  became effective  on August 21, 1959,
when Hawaii was admitted to the Union:


     Amended 1954  Code Sec.  7701(a)(10) by  striking  out  "the
     Territory  of   Hawaii  and"   immediately  after  the  word
     "include".
                                                                 
                                             [26 USC 7701(a)(10)]


Applying these  code changes in reverse order, we can reconstruct
the IRC  definitions of  "State" by  using any word processor and
simple "textual substitution" as follows:


     Time 1:   Alaska is a U.S.** Territory
               Hawaii is a U.S.** Territory

7701(a)(10):   The term "State" shall be construed to include the
               Territories and  the District  of Columbia,  where
               such construction  is necessary  to carry  out the
               provisions of this title.


Alaska joins  the Union.  Strike out "Territories" and substitute
"Territory of Hawaii":


     Time 2:   Alaska is a State of the Union
               Hawaii is a U.S.** Territory

7701(a)(10):   The term "State" shall be construed to include the
               Territory of  Hawaii and the District of Columbia,
               where such  construction is necessary to carry out
               the provisions of this title.


                        Page 5 - 9 of 20

                                                The Federal Zone:


Hawaii joins the Union.  Strike out "the Territory of Hawaii and"
immediately after the word "include":

     Time 3:   Alaska is a State of the Union
               Hawaii is a State of the Union

7701(a)(10):   The term "State" shall be construed to include the
               District of  Columbia, where  such construction is
               necessary to  carry out  the  provisions  of  this
               title.


     Author Lori  Jacques has  therefore concluded  that the term
"State" now  includes only  the District of Columbia, because the
former Territories of Alaska and Hawaii have been admitted to the
Union, Puerto Rico has been granted the status of a Commonwealth,
and the  Philippine Islands  have been granted their independence
(see United  States Citizen versus National of the United States,
page 9).   It  is easy  to see how author Lori Jacques could have
overlooked the  following reference  to Puerto Rico, found in the
IRC itself:

     Commonwealth  of   Puerto  Rico.   --  Where  not  otherwise
     distinctly expressed  or manifestly  incompatible  with  the
     intent thereof,  references in  this title to possessions of
     the United  States** shall  be treated  as also referring to
     the Commonwealth of Puerto Rico.
                                                 [26 USC 7701(d)]

     In order  to conform  to  the  requirements  of  the  Social
Security scheme,  a completely different definition of "State" is
found in  the those  sections of  the IRC  that deal  with Social
Security.  This definition was also amended on separate occasions
when Alaska  and Hawaii  were admitted  to the  Union.  The first
Code amendment  became effective  on January 3, 1959, when Alaska
was admitted:

     Amended 1954  Code Sec.  3121(e)(1), as  it appears  in  the
     amendment note  for P.L.  86-778, by  striking out "Alaska,"
     where it appeared following "includes".
                                              [26 USC 3121(e)(1)]

The second  Code amendment  became effective  on August 21, 1959,
when Hawaii was admitted:

     Amended 1954  Code Sec.  3121(e)(1), as  it appears  in  the
     amendment note  for P.L.  86-778, by  striking out "Hawaii,"
     where it appeared following "includes".

                                              [26 USC 3121(e)(1)]

Applying these  code changes in reverse order, we can reconstruct
the definitions of "State" in this Section of the IRC as follows:



                        Page 5 - 10 of 20

                                           What State Are You In?


     Time 1:   Alaska is a U.S.** Territory
               Hawaii is a U.S.** Territory

 3121(e)(1):   The term  "State"  includes  Alaska,  Hawaii,  the
               District of  Columbia, Puerto Rico, and the Virgin
               Islands.

     
Alaska joins  the Union.   Strike out "Alaska," where it appeared
following "includes":


     Time 2:   Alaska is a State of the Union
               Hawaii is a U.S.** Territory

 3121(e)(1):   The term  "State" includes Hawaii, the District of
               Columbia, Puerto Rico, and the Virgin Islands.


Hawaii joins  the Union.   Strike out "Hawaii," where it appeared
following "includes":


     Time 3:   Alaska is a State of the Union
               Hawaii is a State of the Union

 3121(e)(1):   The  term   "State"  includes   the  District   of
               Columbia, Puerto Rico, and the Virgin Islands.


Puerto Rico becomes a Commonwealth.  For services performed after
1960, Guam and American Samoa are added to the definition:


     Time 4:   Puerto Rico becomes a Commonwealth
               Guam and American Samoa join Social Security

 3121(e)(1):   The  term   "State"  includes   the  District   of
               Columbia, the  Commonwealth of  Puerto  Rico,  the
               Virgin Islands, Guam, and American Samoa.


Notice carefully how Alaska and Hawaii only fit these definitions
of "State"  before they  joined the  Union.  It is most revealing
that these  Territories became  States when they were admitted to
the Union,  and yet  the United  States Codes  had to  be changed
because Alaska and Hawaii were defined in those Codes as "States"
before admission to the Union, but not afterwards.  This apparent
anomaly is  perfectly clear,  once  the  legal  and  deliberately
misleading definition  of "State"  is understood.    The  precise
history of  changes to  Title 26,  the Internal  Revenue Code, is
detailed in  Appendix B  of this  book.   The changes made to the
United States  Codes when  Alaska joined the Union were assembled
in the Alaska Omnibus Act.  The changes made to the federal Codes


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when Hawaii joined the Union were assembled in the Hawaii Omnibus
Act. The  following table summarizes the sections of the IRC that
were affected by these two Acts:


          IRC Section         Alaska         Hawaii
          changed:            joins:         joins:
          -----------         ------         ------

          2202                  X              X
          3121(e)(1)            X              X
          3306(j)               X              X
          4221(d)(4)            X              X
          4233(b)               X              X
          4262(c)(1)            X              X
          4502(5)               X              X
          4774                  X              X
          7621(b)               X                  <-- Note
          7653(d)               X              X
          7701(a)(9)            X              X
          7701(a)(10)           X              X


     Section 7621(b)  sticks out  like  a  sore  thumb  when  the
changes are  arrayed in  this fashion.   The  Alaska Omnibus  Act
modified this  section of the IRC, but the Hawaii Omnibus Act did
not.   Let's take  a close  look at  this section  and see  if it
reveals any important clues:


     Sec. 7621.  Internal Revenue Districts.

     (a)  Establishment and  Alteration. --  The President  shall
     establish convenient  internal  revenue  districts  for  the
     purpose of  administering the  internal revenue  laws.   The
     President may from time to time alter such districts.

                                                 [26 USC 7621(a)]

Now witness  the chronology of amendments to IRC Section 7621(b),
entitled "Boundaries", as follows:


     Time 1:   Alaska is a U.S.** Territory.
     <1/3/59   Hawaii is a U.S.** Territory. ("<" means "before")

     7621(b):  Boundaries.  --   For  the  purpose  mentioned  in
               subsection (a),  the President  may subdivide  any
               State, Territory,  or the District of Columbia, or
               may unite  two or  more States or Territories into
               one district.





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     Time 2:   Alaska is a State of the Union.
     1/3/59    Hawaii is a U.S.** Territory.

     7621(b):  Boundaries.  --   For  the  purpose  mentioned  in
               subsection (a),  the President  may subdivide  any
               State, Territory,  or the District of Columbia, or
               may unite  into one District two or more States or
               a Territory and one or more States.


     Time 3:   Alaska is a State of the Union.
     2/1/77    Hawaii is a State of the Union.

     7621(b):  Boundaries.  --   For  the  purpose  mentioned  in
               subsection (a),  the President  may subdivide  any
               State or  the District  of Columbia,  or may unite
               into one district two or more States.


     The reason why the Hawaii Omnibus Act did not change section
7621(b) is  not apparent  from reading  the statute, nor has time
permitted the  research necessary  to determine  why this section
was changed  in 1977  and not  in 1959.   After Alaska joined the
Union, Hawaii was the only remaining Territory.  This may explain
why the  term "Territories"  was changed to "Territory" at Time 2
above.  However, this is a relatively minor matter, when compared
to the  constitutional issue  that is involved here.  There is an
absolute  constitutional   restriction  against   subdividing  or
joining any  of the  50 States, or any parts thereof, without the
consent of  Congress  and  of  the  Legislatures  of  the  States
affected.   This restriction  is very  much like  the restriction
against direct taxes within the 50 States without apportionment:


     New States  may be admitted by the Congress into this Union;
     but no  new State  shall be  formed or  erected  within  the
     Jurisdiction of any other State;  nor any State be formed by
     the Junction  of two  or more  States, or  Parts of  States,
     without the  Consent  of  the  Legislatures  of  the  States
     concerned as well as of the Congress.

                  [Constitution for the United States of America]
                                 [Article 4, Section 3, Clause 1]


     This point  about new  States caught  the keen eye of author
and scholar  Eustace Mullins.   In  his controversial  and heart-
breaking book  entitled A  Writ for  Martyrs, Mullins establishes
the all-important  link between  the Internal Revenue Service and
the Federal Reserve System, and does so by charging that Internal
Revenue Districts  are "new  states" which  have been established
within the jurisdiction of legal States of the Union, as follows:




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     The income  tax amendment  and the  Federal Reserve Act were
     passed in  the same  year, 1913, because they function as an
     essential team,  and were  planned to  do so.   The  Federal
     Reserve districts  and the  Internal Revenue  Districts  are
     "new  states,"   which  have  been  established  within  the
     jurisdiction of legal states of the Union.
          
                    [see Appendix "I", page I-12, emphasis added]

     Remember, the  federal zone  is the  area of land over which
the Congress  exercises an  unrestricted,  exclusive  legislative
jurisdiction.  The Congress does not have unrestricted, exclusive
legislative jurisdiction  over any of the 50 States.  It is bound
by the  chains of  the Constitution.    This  point  is  so  very
important, it  bears repeating  throughout the remaining chapters
of this  book.  As in the apportionment rule for direct taxes and
the uniformity  rule for  indirect taxes, Congress cannot join or
divide any  of the 50 States without the explicit approval of the
Legislatures of  the State(s) involved.  This means that Congress
cannot unilaterally  delegate such  a  power  to  the  President.
Congress cannot lawfully exercise (nor delegate) a power which it
simply does not have.

     How, then,  is  it  possible  for  section  7621(b)  of  the
Internal Revenue  Code to  give this power to the President?  The
answer is  simple:  the territorial scope of the Internal Revenue
Code is the federal zone.  Title 26 only applies to the land that
is internal  to that  zone.  If the territorial scope of Title 26
were the  50 States of the Union, then section 7621(b) would, all
by  itself,   render  the  entire  statute  unconstitutional  for
violating clause 4:3:1 of the Constitution (see above).  Numerous
other  constitutional   violations  would   also  occur   if  the
territorial scope  of Title  26 were  the 50 States.  A clear and
unambiguous definition of "State" must be known before status and
jurisdiction can be decided with certainty.

     Two final definitions prove, without any doubt, that the IRC
can also define the terms "State" and "United States" to mean the
50 States as well as the other federal states. The very existence
of multiple definitions provides convincing proof that the IRC is
intentionally vague,  particularly in  the section  dedicated  to
general definitions  (IRC 7701(a)).   The following definition is
taken from  Subtitle D, Miscellaneous Excise Taxes, Subchapter A,
Tax on Petroleum (which we all pay taxes at the pump to use):


     (A)  In General.  -- The  term "United  States" means the 50
          States, the  District of  Columbia, the Commonwealth of
          Puerto Rico,  any possession  of the United States, the
          Commonwealth of  the Northern  Mariana Islands, and the
          Trust Territory of the Pacific Islands.

                                        [26 U.S.C. 4612(a)(4)(A)]
                                                 [emphasis added]


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     Notice that  this definition  uses the term "means".  Why is
this  definition  so  clear,  in  stark  contrast  to  other  IRC
definitions of  the "United  States"?   Author Ralph  Whittington
provides the simple answer:


     The preceding  is a  true Import  Tax,  as  allowed  by  the
     Constitution;  it contains all the indicia of being Uniform,
     and therefore  passes the  Constitutionality  test  and  can
     operate within  the 50  Sovereign States.   The  language of
     this Revenue  Act is simple, specific and definitive, and it
     would be  impossible  to  attach  the  "Void  for  Vagueness
     Doctrine" to it.
                                           [The Omnibus, page 83]
                                                 [emphasis added]

     The following  definition of  "State" is  required only  for
those Code  sections that  deal with  the sharing  of tax  return
information between  the federal  government and the 50 States of
the Union.   In  this case,  the 50 States need to be included in
the definition.   So,  the lawmakers  can do it when they need to
(and not  do it,  in order  to put the rest of us into a state of
confusion):


     (5)  State  --  The term "State" means --               [!!]

          (A)  any of  the 50  States, the  District of Columbia,
               the  Commonwealth   of  Puerto  Rico,  the  Virgin
               Islands, the Canal Zone, Guam, American Samoa, and
               the Commonwealth of the Northern Mariana Islands.

                                              [26 USC 6103(b)(5)]
                                                 [emphasis added]
                                                                 
It is  noteworthy [!!] that this section of the IRC also utilizes
the term "means" instead of the terms "includes" and "including",
and instead of the phrase "shall be construed to include".  It is
certainly not  impossible to  be clear.  If it were impossible to
be clear,  then just  laws would  not be possible at all, and the
Constitution could  never have  come into  existence anywhere  on
this planet.   Authors  like The  Informer (as  he calls himself)
consider the  very existence  of multiple  definitions of "State"
and "United States" to be highly significant proof of fluctuating
statutory intent, even though a definition of "intent" is nowhere
to be  found in  the statute itself.  Together with evidence from
the Omnibus  Acts,  these  fluctuating  definitions  also  expose
perhaps the  greatest fiscal fraud that has ever been perpetrated
upon any people at any time in the history of the world.


     Having researched  all facets  of the  law in depth for more
than ten full years, The Informer summarizes what we have learned
thus far with a precision that was unique for its time:


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     The term  "States" in  26 USC 7701(a)(9) is referring to the
     federal states of Guam, Virgin Islands, Etc., and NOT the 50
     States of  the Union.  Congress cannot write a municipal law
     to apply  to the individual nonresident alien inhabiting the
     States of the Union.  Yes, the IRS can go into the States of
     the Union  by Treasury  Decision Order,  to seek  out  those
     "taxpayers" who  are subject  to the tax, be they a class of
     individuals that  are United  States** citizens, or resident
     aliens.   They also can go after nonresident aliens that are
     under the  regulatory corporate  jurisdiction of  the United
     States**, when  they are  effectively connected with a trade
     or business  with the  United States**  or have  made income
     from a source within the United States** ....

                      [Which One Are You?, The Informer, page 98]
                                                 [emphasis added]


     The astute  reader will  notice a basic disagreement between
authors Lori  Jacques and  The Informer.   Lori Jacques concludes
that the term "State" now includes only the District of Columbia,
a conclusion that is supported by IRC 7701(a)(10).  The Informer,
on the other hand, concludes that the term "States" refers to the
federal  states   of  Guam,  Virgin  Islands,  etc.    These  two
conclusions are  obviously  incompatible,  because  singular  and
plural must,  by law,  refer to the same things.  It is important
to realize  that both conclusions were reached by people who have
invested a  great deal  of earnest  time and  energy studying the
relevant law,  regulations, and court decisions.  If these honest
Americans can  come to  such diametrically  opposed  conclusions,
after competent  and sincere  efforts to  find the truth, this is
all the  more reason why the law should be declared null and void
for vagueness.   Actually,  this is  all the  more reason  why we
should all  be pounding  nails into  its coffin,  by every lawful
method available  to boycott  this octopus.   The First Amendment
guarantees our fundamental right to boycott arbitrary government,
by our words and by our deeds.

     Moreover, the "void for vagueness" doctrine is deeply rooted
in our  right to  due process (under the Fifth Amendment) and our
right to  know the  nature and cause of any accusation (under the
Sixth Amendment).   The latter right goes far beyond the contents
of any  criminal indictment.   The  right to  know the nature and
cause of any accusation starts with the statute which a defendant
is accused of violating.  A statute must be sufficiently specific
and unambiguous  in all  its terms,  in order  to define and give
adequate notice  of the  kind of conduct which it forbids.  If it
fails to indicate with reasonable certainty just what conduct the
legislature  prohibits,   a  statute   is  necessarily  void  for
uncertainty, or  "void for  vagueness" as the doctrine is called.
Any prosecution  which is  based upon  a vague  statute must fail
together with  the statute  itself.   A vague criminal statute is
unconstitutional for  violating the  5th and 6th Amendments.  The
U.S. Supreme Court has unequivocally agreed:


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     That the  terms of  a penal  statute creating  a new offense
     must be  sufficiently  explicit  to  inform  those  who  are
     subject to  it what  conduct on  their part will render them
     liable to  its penalties,  is a well-recognized requirement,
     consonant alike  with ordinary  notions of fair play and the
     settled rules of law.  And a statute which either forbids or
     requires the  doing of  an act in terms so vague that men of
     common intelligence  must necessarily  guess at  its meaning
     and  differ  as  to  its  application,  violates  the  first
     essential of due process of law.

                    [Connally et al. vs General Construction Co.]
                                        [269 U.S 385, 391 (1926)]

     The Informer's  conclusions appear to require definitions of
"includes" and  "including" which are expansive, not restrictive.
The matter  could be  easily decided  if the  IRC  would  instead
exhibit sound principles of statutory construction, state clearly
and directly that "includes" and "including" are meant to be used
in the  expansive  sense,  and  itemize  those  things  that  are
"otherwise within  the meaning  of the  terms defined".   If  the
terms "includes"  and "including" must be used in the restrictive
sense, the  IRC should  state, clearly  and  directly,  that  the
expressions "includes only" and "including only" must be used.

     Alternatively, the  IRC could  exhibit sound  principles  of
statutory construction  by  stating  clearly  and  directly  that
"includes" and  "including" are  always meant  to be  used in the
restrictive sense.    Better  yet,  abandon  the  word  "include"
entirely, together  with all  of its  grammatical variations, and
use instead  the word  "means" (which does not suffer from a long
history of  semantic confusion).  It would also help a lot if the
50 States  were consistently  capitalized and  the federal states
were not.   These, again, are excellent grounds for deciding that
the IRC  is vague and therefore null and void.  Of course, if the
real intent  is to  expand the federal zone in order to subjugate
the 50 states under the dominion of Federal States (defined along
something like  ZIP code boundaries) and to replace the sovereign
Republics with  a monolithic  socialist dictatorship,  carved  up
into  arbitrary   administrative  "districts",  that  is  another
problem altogether.

     The absurd  results which  obtain from  expanding  the  term
"State" to  mean the  50 States, however, are problems which will
not go  away, no  matter how  much we  clarify the definitions of
"includes" and  "including" in  the IRC.  There are 49 other U.S.
Codes which  have the  same problem.   Moreover,  the mountain of
evidence  impugning   the  ratification  of  the  so-called  16th
Amendment should  leave no  doubt in anybody's mind that Congress
must still apportion all direct taxes levied inside the sovereign
borders of the 50 States.  Likewise, Congress is not empowered to
delegate unilateral authority to the President to subdivide or to
join any  of the  50 States.  There are many other constitutional
violations which  result from  expanding the term "State" to mean


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the 50  States of  the Union.   In this context, the mandates and
prohibitions found in the Bill of Rights are immediately obvious,
particularly as they apply to State Citizens.

     Clarifying the  definitions of "includes" and "including" in
Title 26  is one thing;  clarifying the exact extent of sovereign
jurisdiction is  quite another.   Congress  is just not sovereign
within the borders of the 50 States.  Sorry, all you Senators and
Representatives.   When you took office, you did not take an oath
to uphold  and defend  the Ten Commandments.  You did not take an
oath to  uphold and  defend the Uniform Commercial Code.  You did
not take  an oath  to uphold  and defend the Communist Manifesto.
You did  take an  oath to  uphold and defend the Constitution for
the United States of America.

     It should  be obvious,  at this  point, that capable authors
like Lori Jacques and The Informer do agree that the 50 States do
not belong in the standard definition of "State" because they are
in a  class that  is different  from the class of federal states.
Within the borders of the 50 States, the "geographical" extent of
exclusive  federal   jurisdiction  is  confined  to  the  federal
enclaves;  this   extent  does   not  encompass   the  50  States
themselves.   We cannot blame the average American for failing to
appreciate this  subtlety.   The confusion  that results from the
vagueness we  observe is  inherent in  the statute  and evidently
intentional, which  raises some very serious questions concerning
the real  intent of that statute in the first place.  Could money
have anything to do with it?  The question answers itself.




                             #  #  #























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Reader's Notes:























































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