Who and What is the IRS?

Historical Note

History & New Evidence that it is a foreign agency.

By Dan Meador

April 1, 2000

"Evan" (Internet name) forwarded the following article by Bill Cooper, published in the September 1995 issue of Veritas Magazine. As I understand it, Wayne Bentson of Arizona was largely responsible for research referenced in the article.

Since I'm suffering the fatigue of not getting home from Tulsa until the wee hours of the morning, and can't seem to get kick-started to do what I should be doing, I'm going to take the opportunity to provide context for the lengthy Cooper article, and add information gleaned from research since. For those who haven't seen it, the Cooper article should be enlightening. Additionally, evidence revealed in my portion of this compiled article is going to floor many readers. However, before disclosing new evidence, I'm going to present something of a history.

Gail and I had just finished what we called the "monster" tax index when someone sent the Cooper article via FAX shortly after it was published in September 1995. Our index went through the Internal Revenue Code section-by-section, listing regulations as they appear in the Parallel Table of Authorities and Rules, then we listed the regulation headings for the regulations. Because of our index, I was able to verify many of the references in the Cooper article without having to go to actual texts, and what I found was that many Cooper-Bentson conclusions were verified by the index. Of particular importance, we found that there are no implementing regulations for 26 U.S.C. Section 7621, which authorizes the President to establish revenue districts. Consequently, there are no revenue districts in States of the Union.

However, there was a significant gap in Cooper-Bentson research. At that point, they hadn't found origins of the Bureau of Internal Revenue, Puerto Rico. I documented it in late 1998 even though I knew where to look when I read the Downs v. Bidwell decision in 1997: The first civil governor of Puerto Rico established five bureaus in the Puerto Rico Dept. of Treasury on May 1, 1900. The five bureaus were eventually to become the Bureau of Internal Revenue, Puerto Rico, predecessor to the Internal Revenue Service. The name change of BIR to IRS was in 1953 in advance of implementing the Internal Revenue Code of 1954, based on Reorganization Plan 26 of 1950 and Reorganization Plan 1 of 1952. Early Puerto Rico legislation, beginning with the gubernatorial and executive committee acts of May 1900, are published in Senate Documents for the period, so it's just a matter of going through the publications to complete the merger history. Bentson and Cooper located origins of the Bureau of Internal Revenue, Philippines, and the Philippines special fund, in 1904 documents. The Philippines gained independence in 1946, leaving BIR, Puerto Rico as the only Bureau of Internal Revenue that was legislatively created, and not by Congress at that. The first Puerto Rico legislature in 1901 legislatively enacted executive acts of May 1900.

In 1934, Congress stipulated that the various special funds maintained by the Department of the Treasury would be known as trusts, i.e., Philippines Trusts ! & 2, and Puerto Rico Trust 62, all three of which are still in the books in Title 31 of the United States Code.

In his article, Cooper cites the Federal Register and the Internal Revenue Manual acknowledgment that Congress never created a Bureau of Internal Revenue. Someone else has since located a Supreme Court decision where justices of the Supreme Court affirm that Congress never created a Bureau of Internal Revenue or Internal Revenue Service. Consequently, IRS has no lawful authority to enforce anything in the Union as Congress is charged with responsibility for establishing any government department or agency that the Constitution itself does not establish.

At the tail end of this article, we're going to share disclosures attorneys in Illinois and Idaho have secured that constitute astounding revelations that should give everyone cause to rethink strategy relating to the Internal Revenue Service. Read on. I will continue the account of the research effort that lays the factual foundation.

In the historical account by the Commissioner of Internal Revenue published in the Federal Register and the Internal Revenue Manual, the Commissioner alleges that Congress clearly intended to create a Bureau of Internal Revenue in 1862 legislation that established the office of the Commissioner of Internal Revenue. But reading the 1862 legislation reveals that there was no need for a Bureau of Internal Revenue or Internal Revenue Service. Congress established the offices of assessors and collectors, with one of each to be appointed for each revenue district. These offices were on the order of current U.S. Attorneys appointments. They were political patronage positions. The offices continued to exist until implementation of Reorganization Plan 26 of 1950.

In order to understand what happened via the reorganization plans behind the current Internal Revenue Code, we need to review what happened with respect to prohibition.

In 1933, the Twenty-first Amendment repealed the Eighteenth. However, Federal enforcement people continued to enforce state laws relating to alcohol to the point of the Constantine decision in December 1935. In the decision, the Supreme Court said that once the Eighteenth Amendment was repealed, State and Federal enforcement ceased to have concurrent jurisdiction for enforcement of alcohol-related laws as the Eighteenth Amendment contained the grant of authority. Once it was repealed, concurrent jurisdiction was repealed.

Until summer 1935, the Feds had operated on the alcohol administration act of 1926. That was replaced by the Federal Alcohol Administration Act of 1935, enacted that summer several months in advance of the Constantine decision. In the wake of the Constantine decision, a director was appointed, but the Federal Alcohol Administration wasn't established to administer the Alcohol Administration Act. Via Reorganization Plan 3 of 1940 administration of the Federal Alcohol Administration Act was transferred to the Bureau of Internal Revenue, predecessor of the Internal Revenue Service.

As the Cooper article suggests, BIR, Puerto Rico and/or BIR, Philippines had already encroached into States of the Union via China Trade Act legislation, which implemented maritime (customs) laws relating to trade in opium, cocaine and citric wines. The first drug-related law was passed in 1914, then with the 1918 amendment, the Feds began to enforce drug laws in the several States.

The timing was ideal. There was significant political mobilization responsible for the Eighteenth Amendment and alcohol prohibition, so the Feds took advantage of empathy for purging any kind of intoxicating substance. In his letter supporting the 1940 Reorganization Plan, Roosevelt said that BIR had been enforcing provisions of the Federal Alcohol Administration Act, anyway, so the transfer of responsibility didn't effect significant change.

Some time before Cooper wrote his article, I read the 1992 New York v. United States decision. In the decision, the Supreme Court used the term "Cooperative Federalism".

My response was, "What the hell is Cooperative Federalism?"

The next time I saw published use of the term was in the title of an article in the 1992 edition of The Book of the States. In the meantime, I ran across the "Federalism" executive order Ronald Reagan put in place. The Reagan order, which technically preserves constitutional integrity, is the one Bill Clinton keeps trying to overhaul, but he is getting considerable resistance. This particular executive order is an executive policy statement, it doesn't meet standards of 3 U.S.C. Section 301 and the Federal Register Act. It is simply the prevailing policy statement that informally shapes relations between State and Federal governments.

Now we have two essential identifying terms: On the Federal side, "Federalism", and on the State side, "Cooperative Federalism".

Let's address the scheme of things through two constitutional questions: Have Article I  8, clauses 5 & 6 and Article I  10, paragraph one of the Constitution been repealed or amended? Has the Constitution been amended to effect prohibition against opium, cocaine, and other such substances?

We'll follow those questions with two more: Do we have gold and silver coin as our national currency? Do we have national prohibition against drugs?

In light of the first two questions, we can conclude that Congress has defaulted responsibility for providing a national currency of gold and silver coin, and our States of the Union are accommodating the fraud without a constitutional amendment; and in light of the second question, we can conclude that Federal government is exercising a power which is not enumerated in the Constitution, and our respective state governments are accommodating the usurpation of power.

Obviously, the Federal Reserve Act of 1913 was patently unconstitutional. At least it was if it applied to Union. But it might not be if it applied to United States Government itself, and territories and insular possessions of the United States. Likewise, the Federal drug laws would be legitimate if they applied to the District of Columbia and insular possessions of the United States. It is here that Congress has plenary or near-absolute power. And we can lengthen the list. The Federal Alcohol Administration Act is legitimate in Puerto Rico, but not Oklahoma. Likewise, the Social Security Act of 1935 is legitimate in Puerto Rico, the Virgin Islands, etc., but not in Kansas. Where the latter is concerned, we see proper geographical application in definitions of "State", "United States" and "citizen" at 26 CFR §31.3121(e)-6.

At the January 1937 general conference of the Council of State Governments, delegates from a majority of our state legislatures endorsed the Declaration of Intergovernmental Dependence. This formalized what was already a working arrangement. States of the Union formally went on the Federal dole system, and by setting up the infrastructure, provided a forum for general agreement among state governing bodies as to what Federal encroachment they would accommodate.

Here are more relevant questions: Does the executive branch have legislative authority? Can the President unilaterally repeal law once it has been formally enacted by Congress?

Via Reorganization Plan 3 of 1940, Roosevelt reassigned duties of the Federal Alcohol Administration to BIR, thereby abandoning the agency Congress established, then via Reorganization Plan 26 of 1950, Truman effectively terminated the offices of assessor and collector Congress established in 1862, In other words, after the Supreme Court determined that Federal enforcement agencies had no authority to enforce state alcohol law in the several States, administration of the Federal Alcohol Administration Act was moved under authority of the Bureau of Internal Revenue, Puerto Rico for administration in insular possessions of the United States. By law, BIR, Puerto Rico could not be exercised in the Union, but since State governments were willing to accommodate Federal encroachment in return for whatever financial incentives Federal government provided, the fraud was and has generally been accommodated. The scheme worked well enough that in 1950, Truman followed the Roosevelt lead by authorizing BIR, i.e., IRS administration of Federal income tax law. But the geographical application remains the same, limited to the District of Columbia and insular possessions of the United States.

Through their gross income "source" research, Tupper Sausie, Thurston Bell, Larken Rose and various others have documented that the American people in general are liable for Federal income tax, but are liable only on income from foreign sources and insular possessions of the United States. These conclusions reinforce and are consistent with my research and research by Bentson and Cooper. With enactment of the Internal Revenue Code of 1954, via Truman executive orders, the offices of assessor and collector of internal revenue were terminated, and administration of the Internal Revenue Code, by appearance, was turned over to the Internal Revenue Service, an agency of the Department of the Treasury, Puerto Rico.

We need to address one more entity, the "United States of America".

What is the United States of America? As it turns out, there are two entities called the "United States of America". The first and original, mentioned in the Preamble and Article II of the Constitution of the United States, was formally created in the Articles of Confederation. But some time after the Civil War, probably early in the twentieth century, a second "United States of America" came into being. The second is a political alliance or compact of the insular possessions of the United States.

Here I'm going to introduce evidence secured by John M. Ohman, an Idaho Falls, Idaho attorney. In the case styled Diversified Metal Products, Inc. v. T-Bow Company Trust, Internal Revenue Service, and Steve Morgan, case CV93-4117, filed in the District Court of the Seventh Judicial District of the State of Idaho, the Booneville County Magistrates Court, Ohman filed an impleader petition.

Diversified Metal was served a notice of levy for money owed to the T-Bow Trust. In order to determine rightful ownership, Ohman filed the interpleader action on behalf of Diversified Metal. In his complaint, he stipulated facts. His fact #4 is as follows: "Defendant Internal Revenue Service (IRS) is an agency of the United States government(tm)"

In her January 24, 2000 response, U.S. Attorney Betty H. Richardson made the following correction to Ohman's averment: "Denies that the Internal Revenue Service is an agency of the United States Government but admits that the United States of America would be a proper party to this action."

This is something I've tried to impress on people for most of two years, but few grasp the implications: The Constitution of the United States creates and vests authority in a governmental entity known as the "United States" or "United States Government." While it is "for" the United States of America, the Constitution vests absolutely no authority in the United States of America. Any time the United States prosecutes as case, whether civil or criminal, it must be in the name and by authority of the United States, not the United States of America. The only place the "United States of America" has any standing is in territorial courts in insular possessions of the United States, then the styling must be, "United States of America, ss, President of the United States". See title 48 of the United States Code for particulars relating to Puerto Rican and Virgin Islands courts.

If we read notes following the current 18 U.S.C. Section 1001, we find that the "United States of America" is currently defined as an agency of the United States. In the context of the Downes v. Bidwell decision, we find that these insular possessions, which are not incorporated in the constitutional scheme, are "foreign" to the United States, i.e., to the Union of States. Therefore, this political alliance or compact known as the United States of America, which first appeared in 1918 legislation, is a government foreign to the United States and the several States even though the member insular possessions belong to the United States.

The Richardson correction above verifies that the Internal Revenue Service is not an agency of United States Government, but the United States of America, clearly a distinct and different entity, would be a party of interest. It would be difficult to be any clearer on the subject, and the Rechardson correction tells us that people such as U.S. Attorneys, attorneys in the Department of Justice, and Federal judges are fully aware of the difference.

Michael Bufkin, a Dundee, Illinois attorney, undertook a delightful project. On December 18, 1998, he sent a Freedom of Information Act request to the Department of the Treasury asking for documentation of authority for the Department of Justice to defend Internal Revenue Service personnel in civil or criminal cases. In an August 2, 1999 response, Leslie Howard in the national IRS office responded with the following: "A search was performed with the Office of Tax Crimes (Criminal Investigation) and with the Assistant Chief Counsel (Disclosure Litigation) and we have no documents responsible to your request. However, you may forward a copy of your request to the U.S. Attorney General's Office within the Department of Justice."

Bufkin did just that. In response to his September 21, 1999 FOIA to the Attorney General, Thomas J. McIntrye informed Bufkin that, "We have conducted a search of the appropriate indices to Criminal Division records and did not locate any records responsive to your request."

We don't know who has lawful authority to defend IRS personnel, but the Department of Justice and U.S. Attorneys don't. Possibly the foreign "United States of America" that is principal of interest and benefits from IRS initiatives has a raft of attorneys ready to defend these foreign agents.

As chance would have it, one of the people in our group recently received certification of documents on IRS Austin Region stationary that is headed, "United States of America, Department of the Treasury, Internal Revenue Service". The certification letters are dated November 16, 1999.

What we are dealing with amounts to invasion of a foreign government accommodated by our respective State governments. However, thanks to the diligence of people approaching IRS tyranny from several directions, we about have the whole nut documented and broken down.

Dan Meador - Ponca City, Oklahoma