INSTRUCTIONS:  4.18.  Vehemently Oppose Improper Exam Procedures and ALL Assessments

"The collection of any taxes which are not absolutely required, which do not beyond reasonable doubt contribute to the public welfare, is only a species of legalized larceny." -- President Calvin Coolidge

As per 26 U.S.C. §6201(a)(1), only the taxpayer may make an assessment of tax liability on himself.  The Secretary of the Treasury may not make assessments on the liability of individuals under Subtitles A through C personal income taxes.  It is quite common for IRS agents to “estimate” the liability of a taxpayer, especially as an intimidation mechanism during an exam or audit.  However, unless the taxpayer voluntarily signs the return forms presented by the agent authorizing the assessment or settlement, the assessment is not valid.  Without a valid assessment, collection activity cannot be commenced!

Furthermore, under 26 CFR §301.6211-1, either making no return or a return showing no tax amounts to a zero return.  Any amount imputed by the IRS to be owed above the amount on the return is referred to as a “deficiency” under that regulation.  However, 26 CFR 301.6211-1 is based on the repealed 1939 Internal Revenue Code that is no longer in effect!  If you look at the bottom of this regulation, it cites NO statutory authority and therefore is NOT a legislative regulation and cannot be enforced by the courts!  To confirm this conclusion, this regulation also does NOT appear in the Parallel Table of Authorities cross-referencing regulations to statutes.  See section Error! Reference source not found. for a look at the Parallel Table of Authorities.

26 U.S.C. § 6020 says the following about returns prepared by the Secretary of the Treasury:

Subtitle F - Procedure and Administration

CHAPTER 61 - INFORMATION AND RETURNS

Subchapter A - Returns and Records

PART II - TAX RETURNS OR STATEMENTS

Subpart D - Miscellaneous Provisions §6020 Returns prepared for or executed by Secretary

 

(a)  Preparation of return by Secretary

 

If any person shall fail to make a return required by this title or by regulations prescribed thereunder, but shall consent to disclose all information necessary for the preparation thereof, then, and in that case, the Secretary may prepare such return, which, being-signed by such person, may be received by the Secretary as the return of such person.

So you can see that once again, the IRS and the Secretary of Treasury rely on the taxpayer’s self-assessment in order to establish a tax liability.  Agents do not have delegated authority to prepare a tax form on behalf of the taxpayer without the signature of the taxpayer.  This is clearly shown on their Pocket Commission (see IRM section 1.16.4).  Their pocket commission must indicate that they have Enforcement commission (the last letter of the serial number of the pocket commission must be “E” in order to complete a 23C Assessment form, for instance, and none of the revenue officers associated with Subtitles A through C have such commissions.  Revenue officer must also have a Delegation Order showing their authority specifically to sign the IRS form 23C and/or the 1040.  No revenue officers who administer Subtitles A through C have such delegation orders and are acting outside their lawful authority to sign such forms.  You should demand a copy of their Delegation Order and their Pocket Commission if any agent tries to exceed their authority by signing a return for you or a 23C Assessment form.

If you argue with the revenue officer over their authority to assess you, they like to point to regulation 26 CFR 301.6201-1, which is the implementing regulation for 26 U.S.C. §6201.  They will try to say that this authorizes them to make an assessment, but this is simply false!  This regulation simply reiterates what was found in 26 U.S.C. §6201:

[Code of Federal Regulations]

[Title 26, Volume 17]

[Revised as of April 1, 2001]

From the U.S. Government Printing Office via GPO Access

[CITE: 26CFR301.6201-1]

Sec. 301.6201-1  Assessment authority.

(a) IN GENERAL.

The district director is authorized and required to make all inquiries necessary to the determination and assessment of all taxes imposed by the Internal Revenue Code of 1954 or any prior internal revenue law. The district director is further authorized and required, and the director of the regional service center is authorized, to make the determinations and the assessments of such taxes. However, certain inquiries and determinations are, by direction of the Commissioner, made by other officials, such as assistant regional commissioners. The term "taxes" includes interest, additional amounts, additions to the taxes, and assessable penalties. The authority of the district director and the director of the regional service center to make assessments includes the following:

(1) TAXES SHOWN ON RETURN. The district director or the director of the regional service center shall assess all taxes determined by the taxpayer or by the district director or the director of the regional service center and disclosed on a return or list.

 

(2) UNPAID TAXES PAYABLE BY STAMP.

(i) If without the use of the proper stamp:

(a) Any article upon which a tax is required to be paid by means of a stamp is sold or removed for sale or use by the manufacturer thereof, or

(b) Any transaction or act upon which a tax is required to be paid by means of a stamp occurs; The district director, upon such information as he can obtain, must estimate the amount of the tax which has not been paid and the district director or the director of the regional service center must make assessment therefor upon the person the district director determines to be liable for the tax. However, the district director or the director of the regional service center may not assess any tax which is payable by stamp unless the taxpayer fails to pay such tax at the time and in the manner provided by law or regulations.

(ii) If a taxpayer gives a check or money order as a payment for stamps but the check or money order is not paid upon presentment, then the district director or the director of the regional service center shall assess the amount of the check or money order against the taxpayer as if it were a tax due at the time the check or money order was received by the district director.

The section above clearly shows that the only thing the district director can do is make assessments of taxes collected by stamp under 26 CFR 301.6201-1(a)(2) but NOT personal income taxes coming under Subtitles A through C.  Notice that this regulation does NOT give the revenue officer authority to estimate tax nor sign a return or list on behalf of the taxpayer, or it would have said so.  Subtitles A through C personal income taxes must instead appear on a tax return, and the 1040, 2555, or 1040NR are the only things that qualify as legitimate returns upon which to base an assessment of Subtitle A through C personal income taxes.  26 CFR 301.6201-1(a)(1) says the taxes assessed by the district director MUST be “disclosed on a return or list”.  Even the title says that: “TAXES SHOWN ON RETURN”.  If the agent has no Delegation Order or delegated authority to prepare such a return, then he is acting outside his lawful delegated authority and can be prosecuted for violation of 26 U.S.C. §7214!

With these kinds of shenanigans going on, we need to ask ourselves:

“If the income tax isn’t voluntary, then why don’t they just assess us without our permission and send us a bill like they do with property taxes?  Why do they need us to snitch on ourselves and send in a’confession’ called a tax return if it’s a mandatory ‘tax’?

The answer, once again, is that it is and always has been a voluntary tax, which is why the IRS has no authority to assess you and why only you can assess yourself!  If all you ever put on your tax return is a zero, then you have no liability and no one other than a judge can determine otherwise.  The IRS will try to scare you by sending a bogus Notice and Demand for tax, but they can’t do this either, because the regulation they rely on, 26 CFR 301.6303-1, to send it is not the law so they are acting outside their authority in doing so.  This is confirmed by the absence of a reference at the bottom of the regulation pointing to an authorizing statute, which means the regulation is NOT a legislative regulation.  Don’t let the IRS scare you with a trick Notice and Demand for tax following an examination or with a bogus assessment, because they do not have the authority to issue either.  Instead, ask for a copy of the Delegation Order, their Pocket Commission, and the law that authorizes them to:

1.        Make as assessment.

2.        Issue a Notice and demand.  (26 CFR 301.6303 is NOT the law because its bogus, and you should remind them of that when you ask them for their authority to issue it).

Remind them when making the above request that according to the Supreme Court:

“Our system of taxation is based upon voluntary assessment and payment, not upon distraint.”

Flora v. U.S., 362 U.S. 145 (1959)

Tell them that if they apply any kind of penalties, coercion, institute collection actions, or try to assess you for any amount of tax above the amount you put on the return, then the payment of taxes ceases to be voluntary and shifts to being based on distraint and force and coercion.  At the point when coercion is applied, the "confessions" called tax returns cease to be useful as evidence in court because they were obtained illegally and under duress as per Weeks v. United States, 232 U.S. 383 (1914) mentioned in section 8.3.6.  They are akin to a coerced confession, which is not a confession at all.  All confessions must be voluntary, which is why only we can assess ourself and not the IRS!

A naked assessment is one that is not founded in evidence.  If proper procedures are followed by the tax examiner, then the Citizen being examined will have seen and hopefully gotten a copy of every piece of evidence that is being relied upon by the examiner in the determination of tax liability.  Proper procedures and rules of evidence must be followed in order to arrive at a valid assessment, and the assessment must be documented in an IRS form 23C.  Here are some of the more common mistakes made by IRS examiners that may work in the favor of the Citizen:

1.        23C form is not signed (for instance, because the revenue officer knows he has no delegation of authority to sign the form).

2.        Evidence is not available to support a specific conclusion found on the 23C Assessment form.

IRM section 5.18.2 specifically lists the only types of tax forms upon which a Substitute for Return (SFR) may be administered, and the form 1040 is not listed.  Only businesses may have an SFR done on them involuntarily, not natural persons.  This a direct result of the fact that Subtitle A income taxes are indirect excise taxes on corporations.  If the tax were on natural persons, it would be a direct tax, which clearly violates 1:2:3 and 1:9:4 of the Constitution.

Proper procedures for arriving at a valid assessment as part of a tax examination are documented in the Internal Revenue Manual [4.10] Section 7.4 et seq.  You should study these procedures to ensure that they are properly followed.  If they have not been followed, then you have a basis for redress in a court of law.  Before you attempt this, a letter to the IRS Commissioner, your Congressman, and the Treasury Secretary might be helpful in applying political pressure.

After taking the political approach, you should then elevate your case by requesting help from the Taxpayer Advocate.  You will need to fill out an IRS form 911 in order to start this process.

If the agent refuses to address your issues either during or after the tax examination and the issues you have are founded in law, then you can refer your case to District Headquarters for Technical Advice.   You also have legal recourse for damages against the agent, because he is obviously vexatiously litigating and harassing you without any demonstrated lawful authority.  18 U.S.C. §1589(3) indicates that it is considered involuntary servitude for you to be forced to respond to anyone in government by means of an abuse or threatened abuse of legal process, for instance in the case of “extortion under the color of law”.  18 U.S.C. §1593 mandates financial restitution for such abuse and the agent is personally liable for this abuse, along with the lost time, productivity and emotional distress.