The Truth About Frivolous Tax Arguments

http://www.quatloos.com/taxscams/taxprotestorbsexposed.pdf

THE TRUTH ABOUT FRIVOLOUS TAX ARGUMENTS

I. The Voluntary Nature of the Federal Income Tax System . . . . . . . . . . . . . . . . 3

A. Contention: The filing of a tax return is voluntary . . . . . . . . . . . . . . . . . . . . . . 3

B. Contention: Payment of tax is voluntary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

C. Contention: The IRS must prepare federal tax returns for a person who fails

to file . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

II. The Meaning of Income: Taxable Income and Gross Income . . . . . . . . . . . . 6

A. Contention: Wages, tips, and other compensation received for personal

services are not income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

B. Contention: Only foreign-source income is taxable . . . . . . . . . . . . . . . . . . . . 9

C. Contention: Federal Reserve Notes are not income . . . . . . . . . . . . . . . . . . 10

III. The Meaning of Certain Terms Used in the Internal Revenue Code . . . . . . 11

A. Contention: Taxpayer is not a “citizen” of the United States, thus not subject

to the federal income tax laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

B. Contention: The “United States” consists only of the District of Columbia,

federal territories, and federal enclaves . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

C. Contention: Taxpayer is not a “person” as defined by the Internal Revenue

Code, thus is not subject to the federal income tax laws

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

D. Contention: The only “employees” subject to federal income tax are

employees of the federal government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

IV. Constitutional Amendment Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

A. Contention: Federal income taxes constitute a “taking” of property without

due process of law, violating the Fifth Amendment . . . . . . . . . . . . . . . . . . . 16

B. Contention: Taxpayers do not have to file returns or provide financial

information because of the protection against self-incrimination found in the

Fifth Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

C. Contention: Compelled compliance with the federal income tax laws is a

form of servitude in violation of the Thirteenth Amendment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

D. Contention: The Sixteenth Amendment to the United States Constitution

was not properly ratified, thus the federal income tax laws are

unconstitutional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

E. Contention: The Sixteenth Amendment does not authorize a direct nonapportioned

federal income tax on United States citizens . . . . . . . . . . . . . 22

V. Fictional Legal Bases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

A. Contention: The Internal Revenue Service is not an agency of the United

States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

-2-

B. Contention: Taxpayers are not required to file a federal income tax return,

because the instructions and regulations associated with the Form 1040 do

not display an OMB control number as required by the Paperwork Reduction

Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

C. Contention: African Americans can claim a special tax credit as reparations

for slavery and other oppressive treatment . . . . . . . . . . . . . . . . . . . . . . . . . . 25

D. Contention: Taxpayers are entitled to a refund of the Social Security taxes

paid over their lifetime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

VI. “Untaxing” Packages or “Untaxing” Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

A. Contention: An “untaxing” package or trust provides a way of legally and

permanently avoiding the obligation to file federal income tax returns and pay

federal income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

PENALTIES FOR PURSUING FRIVOLOUS TAX ARGUMENTS . . . . . . . . . . . . . . . . 29

-3-

THE TRUTH ABOUT FRIVOLOUS TAX ARGUMENTS

This responds to some of the more common frivolous “legal” arguments made by individuals and groups who oppose compliance with the federal tax laws. These arguments are grouped under six general categories, with variations within each category.

Each contention is briefly explained, followed by a discussion of the legal authority that

rejects the contention. A final section explains the penalties that the courts may impose on

those who pursue tax cases on frivolous grounds.

I. The Voluntary Nature of the Federal Income Tax System

A. Contention: The filing of a tax return is voluntary.

Some assert that they are not required to file federal tax returns because the

filing of a tax return is voluntary. Proponents point to the fact that the IRS

itself tells taxpayers in the Form 1040 instruction book that the tax system is

voluntary. Additionally, the Supreme Court’s opinion in Flora v. United

States, 362 U.S. 145, 176 (1960), is often quoted for the proposition that

"[o]ur system of taxation is based upon voluntary assessment and payment,

not upon distraint."

The Law: The word “voluntary,” as used in Flora and in IRS publications,

refers to our system of allowing taxpayers to determine the correct amount of

tax and complete the appropriate returns, rather than have the government

determine tax for them. The requirement to file an income tax return is not

voluntary and is clearly set forth in Internal Revenue Code §§ 6011(a),

6012(a), et seq., and 6072(a). See also Treas. Reg. § 1.6011-1(a).

Any taxpayer who has received more than a statutorily determined amount of

gross income is obligated to file a return. Failure to file a tax return could

subject the noncomplying individual to criminal penalties, including fines and

imprisonment, as well as civil penalties. In United States v. Tedder, 787

F.2d 540, 542 (10th Cir. 1986), the court clearly states, “although Treasury

regulations establish voluntary compliance as the general method of income

tax collection, Congress gave the Secretary of the Treasury the power to

enforce the income tax laws through involuntary collection . . . . The IRS’

efforts to obtain compliance with the tax laws are entirely proper.”

Relevant Case Law:

Helvering v. Mitchell, 303 U.S. 391, 399 (1938) – the U.S. Supreme Court

stated that “[i]n assessing income taxes, the Government relies primarily

upon the disclosure by the taxpayer of the relevant facts . . . in his annual

-4-

return. To ensure full and honest disclosure, to discourage fraudulent

attempts to evade the tax, Congress imposes [either criminal or civil]

sanctions.”

United States v. Tedder, 787 F.2d 540, 542 (10th Cir. 1986) – the court

upheld a conviction for willfully failing to file a return, stating that the premise

“that the tax system is somehow ‘voluntary’ . . . is incorrect.”

United States v. Richards, 723 F.2d 646, 648 (8th Cir. 1983) – the court

upheld conviction and fines imposed for willfully failing to file tax returns,

stating that the claim that filing a tax return is voluntary “was rejected in

United States v. Drefke, 707 F.2d 978, 981 (8th Cir. 1983), wherein the court

described appellant’s argument as ‘an imaginative argument, but totally

without arguable merit.’”

Woods v. Commissioner, 91 T.C. 88, 90 (1988) – the court rejected the

claim that reporting income taxes is strictly voluntary, referring to it as a “‘tax

protester’ type” argument, and found Woods liable for the penalty for failure

to file a return.

Johnson v. Commissioner, T.C. Memo. 1999-312, 78 T.C.M. (CCH) 468,

471 (1999) – the court found Johnson liable for the failure to file penalty and

rejected his argument “that the tax system is voluntary so that he cannot be

forced to comply” as “frivolous.”

B. Contention: Payment of tax is voluntary.

In a similar vein, some argue that they are not required to pay federal taxes

because the payment of federal taxes is voluntary. Proponents of this

position argue that our system of taxation is based upon voluntary

assessment and payment.

The Law: The requirement to pay taxes is not voluntary and is clearly set

forth in section 1 of the Internal Revenue Code, which imposes a tax on the

taxable income of individuals, estates, and trusts as determined by the

tables set forth in that section. (Section 11 imposes a tax on the taxable

income of corporations.) Furthermore, the obligation to pay tax is described

in section 6151, which requires taxpayers to submit payment with their tax

returns. Failure to pay taxes could subject the noncomplying individual to

criminal penalties, including fines and imprisonment, as well as civil

penalties.

-5-

In discussing section 6151, the Eighth Circuit Court of Appeals stated that

“when a tax return is required to be filed, the person so required ‘shall’ pay

such taxes to the internal revenue officer with whom the return is filed at the

fixed time and place. The sections of the Internal Revenue Code imposed a

duty on Drefke to file tax returns and pay the . . . tax, a duty which he chose to

ignore.” United States v. Drefke, 707 F.2d 978, 981 (8th Cir. 1983).

Relevant Case Law:

United States v. Bressler, 772 F.2d 287, 291 (7th Cir. 1985) – the court

upheld Bressler’s conviction for tax evasion, noting, “[he] has refused to file

income tax returns and pay the amounts due not because he

misunderstands the law, but because he disagrees with it . . . . [O]ne who

refuses to file income tax returns and pay the tax owing is subject to

prosecution, even though the tax protester believes the laws requiring the

filing of income tax returns and the payment of income tax are

unconstitutional.”

Schiff v. United States, 919 F.2d 830, 833 (2d Cir. 1990), cert. denied, 501

U.S. 1238 (1991) – the court rejected Schiff’s arguments as meritless and

upheld imposition of the civil fraud penalty, stating “[t]he frivolous nature of

this appeal is perhaps best illustrated by our conclusion that Schiff is

precisely the sort of taxpayer upon whom a fraud penalty for failure to pay

income taxes should be imposed.”

Packard v. United States, 7 F. Supp. 2d 143, 145 (D. Conn. 1998) – the

court dismissed Packard’s refund suit for recovery of penalties for failure to

pay income tax and failure to pay estimated taxes where the taxpayer

contested the obligation to pay taxes on religious grounds, noting that “the

ability of the Government to function could be impaired if persons could

refuse to pay taxes because they disagreed with the Government’s use of

tax revenues.”

United States v. Gerads, 999 F.2d 1255, 1256 (8th Cir. 1993) – the court

stated that “[taxpayers’] claim that payment of federal income tax is voluntary

clearly lacks substance” and imposed sanctions in the amount of $1,500 “for

bringing this frivolous appeal based on discredited, tax-protestor

arguments.”

C. Contention: The IRS must prepare federal tax returns for a person

who fails to file.

Proponents of this argument contend that section 6020(b) obligates the IRS

to prepare a federal tax return for a person who does not file a return. Thus,

-6-

those who subscribe to this contention believe that they are not required to

file a return for themselves.

The Law: Section 6020(b) merely provides the IRS with a mechanism for

determining the tax liability of a taxpayer who has failed to file a return.

Section 6020(b) does not require the IRS to prepare tax returns for persons

who do not file and it does not excuse the taxpayer from civil penalties or

criminal liability for failure to file.

Relevant Case Law:

United States v. Lacy, 658 F.2d 396, 397 (5th Cir. 1981) – the court, in

upholding the taxpayer’s conviction for willfully and knowingly failing to file a

return, stated that “ . . . the purpose of section 6020(b)(1) is to provide the

Internal Revenue Service with a mechanism for assessing the civil liability of

a taxpayer who has failed to file a return, not to excuse that taxpayer from

criminal liability which results from that failure.”

Schiff v. United States, 919 F.2d 830, 832 (2nd Cir. 1990) – the court

rejected the taxpayer’s argument that the IRS must prepare a substitute

return pursuant to section 6020(b) prior to assessing deficient taxes, stating

“[t]here is no requirement that the IRS complete a substitute return.”

Moore v. Commissioner, 722 F.2d 193, 196 (5th Cir. 1984) – the court

stated that “section [6020(b)] provides the Secretary with some recourse

should a taxpayer fail to fulfill his statutory obligation to file a return, and does

not supplant the taxpayer’s original obligation to file established by 26

U.S.C. § 6012.”

II. The Meaning of Income: Taxable Income and Gross Income

A. Contention: Wages, tips, and other compensation received for

personal services are not income.

This argument asserts that wages, tips, and other compensation received for

personal services are not income, because there is allegedly no taxable gain

when a person “exchanges” labor for money. Under this theory, wages are

not taxable income because people have basis in their labor equal to the fair

market value of the wages they receive; thus, there is no gain to be taxed.

-7-

Some take a different approach and argue that the Sixteenth Amendment to

the United States Constitution did not authorize a tax on wages and salaries,

but only on gain or profit.

The Law: For federal income tax purposes, “gross income” means all

income from whatever source derived and includes compensation for

services. I.R.C. § 61. Any income, from whatever source, is presumed to be

income under section 61, unless the taxpayer can establish that it is

specifically exempted or excluded. In Reese v. United States, 24 F.3d 228,

231 (Fed. Cir. 1994), the court stated, “an abiding principle of federal tax law

is that, absent an enumerated exception, gross income means all income

from whatever source derived.”

The Sixteenth Amendment provides that Congress shall have the power to

lay and collect taxes on income, from whatever source derived, without

apportionment among the several states, and without regard to any census

or enumeration. U.S. Const. amend. XVI. Furthermore, the U.S. Supreme

Court upheld the constitutionality of the income tax laws enacted subsequent

to ratification of the Sixteenth Amendment in Brushaber v. Union Pacific

R.R., 240 U.S. 1 (1916). Since that time, the courts have consistently upheld

the constitutionality of the federal income tax. For a further discussion of the

constitutionality of the federal income tax laws, see section IV. of this outline.

All compensation for personal services, no matter what the form of payment,

must be included in gross income. This includes salary or wages paid in

cash, as well as the value of property and other economic benefits received

because of services performed, or to be performed in the future.

Furthermore, criminal and civil penalties have been imposed against

individuals relying upon this frivolous argument.

Relevant Case Law:

Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 429-30 (1955) –

referring to the statute’s words “income derived from any source whatever,”

the Supreme Court stated, “this language was used by Congress to exert in

this field ‘the full measure of its taxing power.’ . . . And the Court has given a

liberal construction to this broad phraseology in recognition of the intention of

Congress to tax all gains except those specifically exempted.”

Commissioner v. Kowalski, 434 U.S. 77 (1977) – the Supreme Court found

that payments are considered income where the payments are undeniably

accessions to wealth, clearly realized, and over which a taxpayer has

complete dominion.

-8-

United States v. Connor, 898 F.2d 942, 943-44 (3d Cir.), cert. denied, 497

U.S. 1029 (1990) – the court stated that “[e]very court which has ever

considered the issue has unequivocally rejected the argument that wages

are not income.”

Lonsdale v. Commissioner, 661 F.2d 71, 72 (5th Cir. 1981) – the court

rejected as “meritless” the taxpayer’s contention that the “exchange of

services for money is a zero-sum transaction . . . .”

McCoy v. United States, 88 A.F.T.R.2d (RIA) 7116, 2001 U.S. Dist. LEXIS

18986 (N.D. Tex. Nov. 16, 2001) – the court rejected the taxpayer’s

argument that wages received were not income and described this position

as meritless.

Cheek v. United States, 498 U.S. 192 (1991) – the Supreme Court reversed

and remanded Cheek’s conviction of willfully failing to file federal income tax

returns and willfully attempting to evade income taxes solely on the basis of

erroneous jury instructions. The Court noted, however, that Cheek’s

argument, that he should be acquitted because he believed in good faith that

the income tax law is unconstitutional, “is unsound, not because Cheek’s

constitutional arguments are not objectively reasonable or frivolous, which

they surely are, but because the [law regarding willfulness in criminal cases]

does not support such a position.” Id. (emphasis added). On remand,

Cheek was convicted on all counts and sentenced to jail for a year and a

day. Cheek v. United States, 3 F.3d 1057 (7th Cir. 1993), cert. denied, 510

U.S. 1112 (1994).

Reading v. Commissioner, 70 T.C. 730 (1978), aff’d, 614 F.2d 159 (8th Cir.

1980) – the court said the entire amount received from the sale of one’s

services constitutes income within the meaning of the Sixteenth Amendment.

United States v. Richards, 723 F.2d 646, 648 (8th Cir. 1983) – the court

upheld conviction and fines imposed for willfully failing to file tax returns,

stating that the taxpayer’s contention that wages and salaries are not income

within the meaning of the Sixteenth Amendment is “totally lacking in merit.”

United States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981) – the court

affirmed Romero’s conviction for willfully failing to file tax returns, finding, in

part, that “[t]he trial judge properly instructed the jury on the meaning of

[‘income’ and ‘person’]. Romero’s proclaimed belief that he was not a

‘person’ and that the wages he earned as a carpenter were not ‘income’ is

fatuous as well as obviously incorrect.”

-9-

Abrams v. Commissioner, 82 T.C. 403, 413 (1984) – the court rejected the

argument that wages are not income, sustained the failure to file penalty, and

awarded damages of $5,000 for pursuing a position that was “frivolous and

groundless . . . and maintained primarily for delay.”

Cullinane v. Commissioner, T.C. Memo. 1999-2, 77 T.C.M. (CCH) 1192,

1193 (1999) – noting that “[c]ourts have consistently held that compensation

for services rendered constitutes taxable income and that taxpayers have no

tax basis in their labor,” the court found Cullinane liable for the failure to file

penalty, stating that “[his] argument that he is not required to pay tax on

compensation for services does not constitute reasonable cause.”

B. Contention: Only foreign-source income is taxable.

Some maintain that there is no federal statute imposing a tax on income

derived from sources within the United States by citizens or residents of the

United States. They argue instead that federal income taxes are excise

taxes imposed only on nonresident aliens and foreign corporations for the

privilege of receiving income from sources within the United States. The

premise for this argument is a misreading of sections 861, et seq., and 911,

et seq., as well as the regulations under those sections.

The Law: As stated above, for federal income tax purposes, “gross

income” means all income from whatever source derived and includes

compensation for services. I.R.C. § 61. Further, Treasury Regulation § 1.1-

1(b) provides, “[i]n general, all citizens of the United States, wherever

resident, and all resident alien individuals are liable to the income taxes

imposed by the Code whether the income is received from sources within or

without the United States.” I.R.C. sections 861 and 911 define the sources

of income (U.S. versus non-U.S. source income) for such purposes as the

prevention of double taxation of income that is subject to tax by more than

one country. These sections neither specify whether income is taxable, nor

do they determine or define gross income. Further, these frivolous

assertions are clearly contrary to well-established legal precedent.

Relevant Case Law:

Great-West Life Assur. Co. v. United States, 678 F.2d 180, 183 (Ct. Cl.

1982) – the court stated that “[t]he determination of where income is derived

or ‘sourced’ is generally of no moment to either United States citizens or

United States corporations, for such persons are subject to tax under I.R.C. §

1 and I.R.C. § 11, respectively, on their worldwide income.”

-10-

Williams v. Commissioner, 114 T.C. 136, 138 (2000) – the court rejected the

taxpayer’s argument that his income was not from any of the sources listed in

Treas. Reg. § 1.861-8(a), characterizing it as “reminiscent of tax-protester

rhetoric that has been universally rejected by this and other courts.”

Corcoran v. Commissioner, T.C. Memo. 2002-18, 83 T.C.M. (CCH) 1108,

1110 (2002) – the court rejected the taxpayers’ argument that his income

was not from any of the sources in Treas. Reg. § 1.861-8(f), stating that the

“source rules [of sections 861 through 865] do not exclude from U.S. taxation

income earned by U.S. citizens from sources within the United States.” The

court further required the taxpayers to pay a $2,000 penalty under section

6673(a)(1) because “they . . . wasted limited judicial and administrative

resources.”

Aiello v. Commissioner, T.C. Memo. 1995-40, 69 T.C.M. (CCH) 1765

(1995) – the court rejected the taxpayer’s argument that the only sources of

income for purposes of section 61 are listed in section 861.

Madge v. Commissioner, T.C. Memo. 2000-370, 80 T.C.M. (CCH) 804

(2000) – the court labeled as “frivolous” the position that only foreign income

is taxable.

Solomon v. Commissioner, T.C. Memo. 1993-509, 66 T.C.M. (CCH) 1201,

1202 (1993) – the court rejected the taxpayer’s argument that his income

was exempt from tax by operation of sections 861 and 911, noting that he

had no foreign income and that section 861 provides that “compensation for

labor or personal services performed in the United States . . . are items of

gross income.”

C. Contention: Federal Reserve Notes are not income.

Some assert that Federal Reserve Notes currently used in the United States

are not valid currency and cannot be taxed, because Federal Reserve Notes

are not gold or silver and may not be exchanged for gold or silver. This

argument misinterprets Article I, Section 10 of the United States

Constitution.

The Law: Congress is empowered “[t]o coin Money, regulate the value

thereof, and of foreign coin, and fix the Standard of weights and measures.”

U.S. Const. Art. I, § 8, cl. 5. Article I, Section 10 of the Constitution prohibits

the states from declaring as legal tender anything other than gold or silver,

but does not limit Congress’ power to declare the form of legal tender. See

31 U.S.C. § 5103; 12 U.S.C. § 411. In United States v. Rifen, 577 F.2d

-11-

1111 (8th Cir. 1978), the court affirmed a conviction for willfully failing to file a

return, rejecting the argument that Federal Reserve Notes are not subject to

taxation. “Congress has declared federal reserve notes legal tender . . . and

federal reserve notes are taxable dollars.” Id. at 1112. The courts have

rejected this argument on numerous occasions.

Relevant Case Law:

United States v. Rickman, 638 F.2d 182, 184 (10th Cir. 1980) – the court

affirmed the conviction for willfully failing to file a return and rejected the

taxpayer’s argument that “the Federal Reserve Notes in which he was paid

were not lawful money within the meaning of Art. 1, § 8, United States

Constitution.”

United States v. Condo, 741 F.2d 238, 239 (9th Cir. 1984) – the court upheld

the taxpayer’s criminal conviction, rejecting as “frivolous” the argument that

Federal Reserve Notes are not valid currency, cannot be taxed, and are

merely “debts.”

United States v. Daly, 481 F.2d 28, 30 (8th Cir.), cert. denied, 414 U.S. 1064

(1973) – the court rejected as “clearly frivolous” the assertion “that the only

‘Legal Tender Dollars’ are those which contain a mixture of gold and silver

and that only those dollars may be constitutionally taxed” and affirmed Daly’s

conviction for willfully failing to file a return.

Jones v. Commissioner, 688 F.2d 17 (6th Cir. 1982) – the court found the

taxpayer’s claim that his wages were paid in “depreciated bank notes” as

clearly without merit and affirmed the Tax Court’s imposition of an addition to

tax for negligence or intentional disregard of rules and regulations.

III. The Meaning of Certain Terms Used in the Internal Revenue Code

A. Contention: Taxpayer is not a “citizen” of the United States, thus not

subject to the federal income tax laws.

Some individuals argue that they have rejected citizenship in the United

States in favor of state citizenship; therefore, they are relieved of their federal

income tax obligations. A variation of this argument is that a person is a free

born citizen of a particular state and thus was never a citizen of the United

States. The underlying theme of these arguments is the same: the person is

not a United States citizen and is not subject to federal tax laws because

only United States citizens are subject to these laws.

-12-

The Law: The Fourteenth Amendment to the United States Constitution

defines the basis for United States citizenship, stating that “[a]ll persons born

or naturalized in the United States, and subject to the jurisdiction thereof, are

citizens of the United States and of the State wherein they reside.” The

Fourteenth Amendment therefore establishes simultaneous state and federal

citizenship. Claims that individuals are not citizens of the United States but

are solely citizens of a sovereign state and not subject to federal taxation

have been uniformly rejected by the courts.

Relevant Case Law:

O'Driscoll v. I.R.S., 1991 U.S. Dist. LEXIS 9829, at *5-6 (E.D. Pa. 1991) –

the court stated, “despite [taxpayer’s] linguistic gymnastics, he is a citizen of

both the United States and Pennsylvania, and liable for federal taxes.”

United States v. Sloan, 939 F.2d 499, 500 (7th Cir. 1991), cert. denied, 502

U.S. 1060, reh’g denied, 503 U.S. 953 (1992) – the court affirmed a tax

evasion conviction and rejected Sloan’s argument that the federal tax laws

did not apply to him because he was a “freeborn, natural individual, a citizen

of the State of Indiana, and a ‘master’ – not ‘servant’ – of his government.”

United States v. Ward, 833 F.2d 1538, 1539 (11th Cir. 1987), cert. denied,

485 U.S. 1022 (1988) – the court found Ward’s contention that he was not an

“individual” located within the jurisdiction of the United States to be “utterly

without merit” and affirmed his conviction for tax evasion.

United States v. Sileven, 985 F.2d 962 (8th Cir. 1993) – the court rejected

the argument that the district court lacked jurisdiction because the taxpayer

was not a federal citizen as “plainly frivolous.”

United States v. Gerads, 999 F.2d 1255, 1256 (8th Cir. 1993) – the court

rejected the Gerads’ contention that they were “not citizens of the United

States, but rather ‘Free Citizens of the Republic of Minnesota’ and,

consequently, not subject to taxation” and imposed sanctions “for bringing

this frivolous appeal based on discredited, tax-protestor arguments.”

Solomon v. Commissioner, T.C. Memo. 1993-509, 66 T.C.M. (CCH) 1201,

1202-03 (1993) – the court rejected Solomon’s argument that as an Illinois

resident his income was from outside the United States, stating “[he]

attempts to argue an absurd proposition, essentially that the State of Illinois

is not part of the United States. His hope is that he will find some semantic

technicality which will render him exempt from Federal income tax, which

applies generally to all U.S. citizens and residents. [His] arguments are no

-13-

more than stale tax protester contentions long dismissed summarily by this

Court and all other courts which have heard such contentions.”

B. Contention: The “United States” consists only of the District of

Columbia, federal territories, and federal enclaves.

Some argue that the United States consists only of the District of Columbia,

federal territories (e.g., Puerto Rico, Guam, etc.), and federal enclaves (e.g.,

American Indian reservations, military bases, etc.) and does not include the

“sovereign” states. According to this argument, if a taxpayer does not live

within the “United States,” as so defined, he is not subject to the federal tax

laws.

The Law: The Internal Revenue Code imposes a federal income tax upon

all United States citizens and residents, not just those who reside in the

District of Columbia, federal territories, and federal enclaves. In United

States v. Collins, 920 F.2d 619, 629 (10th Cir. 1990), cert. denied, 500 U.S.

920 (1991), the court cited Brushaber v. Union Pac. R.R., 240 U.S. 1, 12-19

(1916), and noted the United States Supreme Court has recognized that the

“sixteenth amendment authorizes a direct nonapportioned tax upon United

States citizens throughout the nation, not just in federal enclaves.” This

frivolous contention has been uniformly rejected by the courts.

Relevant Case Law:

In re Becraft, 885 F.2d 547, 549-50 (9th Cir. 1989) – the court, observing that

Becraft’s claim that federal laws apply only to United States territories and

the District of Columbia “has no semblance of merit,” and noting that this

attorney had previously litigated cases in the federal appeals courts that had

“no reasonable possibility of success,” imposed monetary damages and

expressed the hope “that this assessment will deter Becraft from asking this

and other federal courts to expend more time and resources on patently

frivolous legal positions.”

United States v. Ward, 833 F.2d 1538, 1539 (11th Cir. 1987), cert. denied,

485 U.S. 1022 (1988) – the court rejected as a “twisted conclusion” the

contention “that the United States has jurisdiction over only Washington,

D.C., the federal enclaves within the states, and the territories and

possessions of the United States,” and affirmed a tax evasion conviction.

Barcroft v. Commissioner, T.C. Memo. 1997-5, 73 T.C.M. (CCH) 1666,

1667, appeal dismissed, 134 F.3d 369 (5th Cir. 1997) – noting that

Barcroft’s statements “contain protester-type contentions that have been

-14-

rejected by the courts as groundless,” the court sustained penalties for failure

to file returns and failure to pay estimated income taxes.

C. Contention: Taxpayer is not a “person” as defined by the Internal

Revenue Code, thus is not subject to the federal income tax laws.

Some maintain that they are not a “person” as defined by the Internal

Revenue Code, and thus not subject to the federal income tax laws. This

argument is based on a tortured misreading of the Code.

The Law: The Internal Revenue Code clearly defines “person” and sets

forth which persons are subject to federal taxes. Section 7701(a)(14)

defines “taxpayer” as any person subject to any internal revenue tax and

section 7701(a)(1) defines “person” to include an individual, trust, estate,

partnership, or corporation. Arguments that an individual is not a “person”

within the meaning of the Internal Revenue Code have been uniformly

rejected. A similar argument with respect to the term “individual” has also

been rejected.

Relevant Case Law:

United States v. Karlin, 785 F.2d 90, 91 (3d Cir. 1986), cert. denied, 480

U.S. 907 (1987) – the court affirmed Karlin’s conviction for failure to file

income tax returns and rejected his contention that he was “not a ‘person’

within meaning of 26 U.S.C. § 7203” as “frivolous and requir[ing] no

discussion.”

McCoy v. Internal Revenue Service, 88 A.F.T.R.2d (RIA) 5909, 2001 U.S.

Dist. LEXIS 15113, at *21, 22 (D. Col. Aug. 7, 2001) – the court dismissed

the taxpayer’s complaint, which asserted that McCoy was a nonresident

alien and not subject to tax, describing the taxpayer’s argument as “specious

and legally frivolous.”

United States v. Rhodes, 921 F. Supp. 261, 264 (M.D. Pa. 1996) – the court

stated that “[a]n individual is a person under the Internal Revenue Code.”

Biermann v. Commissioner, 769 F.2d 707, 708 (11th Cir.), reh’g denied, 775

F.2d 304 (11th Cir. 1985) – the court said the claim that Biermann was not “a

person liable for taxes” was “patently frivolous” and, given the Tax Court’s

warning to Biermann that his positions would never be sustained in any

court, awarded the government double costs, plus attorney’s fees.

-15-

Smith v. Commissioner, T.C. Memo. 2000-290, 80 T.C.M. (CCH) 377, 378-

89 (2000) – the court described the argument that Smith “is not a ‘person

liable’ for tax” as frivolous, sustained failure to file penalties, and imposed a

penalty for maintaining “frivolous and groundless positions.”

United States v. Studley, 783 F.2d 934, 937 n.3 (9th Cir. 1986) – the court

affirmed a failure to file conviction, rejecting the taxpayer’s contention that

she was not subject to federal tax laws because she was “an absolute,

freeborn, and natural individual” and went on to note that “this argument has

been consistently and thoroughly rejected by every branch of the government

for decades.”

D. Contention: The only “employees” subject to federal income tax are

employees of the federal government.

Some argue that the federal government can tax only employees of the

federal government; therefore, employees in the private sector are immune

from federal income tax liability. This argument is based on an apparent

misinterpretation of section 3401, which imposes responsibilities to withhold

tax from “wages.” That section establishes the general rule that “wages”

include all remuneration for services performed by an employee for his

employer. Section 3401(c) goes on to state that the term “employee”

includes “an officer, employee, or elected official of the United States, a

State, or any political subdivision thereof . . . .”

The Law: Section 3401(c) defines “employee” and states that the term

“includes an officer, employee or elected official of the United States . . . .”

This language does not address how other employees’ wages are subject to

withholding or taxation. Section 7701(c) states that the use of the word

“includes” “shall not be deemed to exclude other things otherwise within the

meaning of the term defined.” Thus, the word “includes” as used in the

definition of “employee” is a term of enlargement, not of limitation. It clearly

makes federal employees and officials a part of the definition of “employee,”

which generally includes private citizens.

Relevant Case Law:

United States v. Latham, 754 F.2d 747, 750 (7th Cir. 1985) – calling the

instructions Latham wanted given to the jury “inane,” the court said, “[the]

instruction which indicated that under 26 U.S.C. § 3401(c) the category of

‘employee’ does not include privately employed wage earners is a

preposterous reading of the statute. It is obvious within the context of [the

law] the word ‘includes’ is a term of enlargement not of limitation, and the

-16-

reference to certain entities or categories is not intended to exclude all

others. ”

Sullivan v. United States, 788 F.2d 813, 815 (1st Cir. 1986) – the court

rejected Sullivan’s attempt to recover a civil penalty for filing a frivolous

return, stating “to the extent [he] argues that he received no ‘wages’ . . .

because he was not an ‘employee’ within the meaning of 26 U.S.C.

§ 3401(c), that contention is meritless. . . . The statute does not purport to

limit withholding to the persons listed therein.” The court imposed sanctions

on Sullivan for bringing a frivolous appeal.

Peth v. Breitzmann, 611 F. Supp. 50, 53 (E.D. Wis. 1985) – the court

rejected the taxpayer’s argument “that he is not an ‘employee’ under I.R.C. §

3401(c) because he is not a federal officer, employee, elected official, or

corporate officer,” stating, “[he] mistakenly assumes that this definition of

‘employee’ excludes all other wage earners.”

Pabon v. Commissioner, T.C. Memo. 1994-476, 68 T.C.M. (CCH) 813, 816

(1994) – the court characterized Pabon’s position – including that she was

not subject to tax because she was not an employee of the federal or state

governments – as “nothing but tax protester rhetoric and legalistic gibberish.”

The court imposed a penalty of $2,500 on Pabon for bringing a frivolous

case, stating that she “regards this case as a vehicle to protest the tax laws

of this country and espouse her own misguided views.”

IV. Constitutional Amendment Claims

A. Contention: Federal income taxes constitute a “taking” of property

without due process of law, violating the Fifth Amendment.

Some assert that the collection of federal income taxes constitutes a “taking”

of property without due process of law, in violation of the Fifth Amendment.

Thus, any attempt by the Internal Revenue Service to collect federal income

taxes owed by a taxpayer is unconstitutional.

The Law: The Fifth Amendment to the United States Constitution provides

that a person shall not be “deprived of life, liberty, or property, without due

process of law . . . .” The U.S. Supreme Court stated in Brushaber v. Union

Pacific R.R., 240 U.S. 1, 24 (1916), that “it is . . . well settled that [the Fifth

Amendment] is not a limitation upon the taxing power conferred upon

Congress by the Constitution; in other words, that the Constitution does not

conflict with itself by conferring upon the one hand a taxing power, and taking

the same power away on the other by limitations of the due process clause.”

-17-

Further, the Supreme Court has upheld the constitutionality of the summary

administrative procedures contained in the Internal Revenue Code against

due process challenges, on the basis that a post-collection remedy (e.g., a

tax refund suit) exists and is sufficient to satisfy the requirements of

constitutional due process. Phillips v. Commissioner, 283 U.S. 589, 595-97

(1931).

The Internal Revenue Code provides methods to ensure due process to

taxpayers: (1) the “refund method,” set forth in section 7422(e) and 28

U.S.C. §§ 1341 and 1346(a), where a taxpayer must pay the full amount of

the tax and then sue in a federal district court or in the United States Court of

Federal Claims for a refund; and (2) the “deficiency method,” set forth in

section 6213(a), where a taxpayer may, without paying the contested tax,

petition the United States Tax Court to redetermine a tax deficiency asserted

by the IRS. Courts have found that both methods provide constitutional due

process.

In recent years, Congress passed new laws providing further protection for

taxpayers’ due process rights in collection matters. In the Internal Revenue

Service Restructuring and Reform Act of 1998, Pub. L. 105-206, § 3401,

112 Stat. 685, 746, Congress enacted new sections 6320 (pertaining to

liens) and 6330 (pertaining to levies) establishing collection due process

rights for taxpayers, effective for collection actions after January 19, 1999.

Generally, the IRS must provide taxpayers notice and an opportunity for an

administrative appeals hearing upon the filing of a notice of federal tax lien

(section 6320) and prior to levy (section 6330). Taxpayers also have the right

to seek judicial review of the IRS’s determination in these due process

proceedings. I.R.C. § 6330(d). These reviews can extend to the merits of

the underlying tax liability, if the taxpayer has not previously received the

opportunity for review of the merits, e.g., did not receive a notice of

deficiency. I.R.C. § 6330(c)(2)(B). However, the Tax Court has indicated

that it will impose sanctions pursuant to section 6673 against taxpayers who

seek judicial relief based upon frivolous or groundless positions.

Relevant Case Law:

Flora v. United States, 362 U.S. 145, 175 (1960) – the court held that a

taxpayer must pay the full tax assessment before being able to file a refund

suit in district court, noting that a person has the right to appeal an

assessment to the Tax Court “without paying a cent.”

-18-

Schiff v. United States, 919 F.2d 830 (2d Cir. 1990) – the court rejected a

due process claim where the taxpayer chose not to avail himself of the

opportunity to appeal a deficiency notice to the Tax Court.

Goza v. Commissioner, 114 T.C. 176 (2000) – the court rejected the

taxpayer’s attempt to use the judicial review process as a forum to contest

the underlying tax liability, since the taxpayer had an opportunity to dispute

that liability after receiving the statutory notice of deficiency.

Pierson v. Commissioner, 115 T.C. 576, 581 (2000) – the court considered

imposing sanctions against the taxpayer, but decided against doing so,

stating, “we regard this case as fair warning to those taxpayers who, in the

future, institute or maintain a lien or levy action primarily for delay or whose

position in such a proceeding is frivolous or groundless.”

Davis v. Commissioner, T.C. Memo. 2001-87, 81 T.C.M. (CCH) 1503

(2001) – the court imposed a $4,000 penalty for frivolous and groundless

arguments, after warning that the taxpayer could be penalized for presenting

them.

B. Contention: Taxpayers do not have to file returns or provide financial

information because of the protection against self-incrimination

found in the Fifth Amendment.

Some argue that taxpayers may refuse to file federal income tax returns, or

may submit tax returns on which they refuse to provide any financial

information, because they believe that their Fifth Amendment privilege

against self-incrimination will be violated.

The Law: There is no constitutional right to refuse to file an income tax

return on the ground that it violates the Fifth Amendment privilege against

self-incrimination. In United States v. Sullivan, 274 U.S. 259, 264 (1927), the

U.S. Supreme Court stated that the taxpayer “could not draw a conjurer’s

circle around the whole matter by his own declaration that to write any word

upon the government blank would bring him into danger of the law.” The

failure to comply with the filing and reporting requirements of the federal tax

laws will not be excused based upon blanket assertions of the constitutional

privilege against compelled self-incrimination under the Fifth Amendment.

Relevant Case Law:

United States v. Schiff, 612 F.2d 73, 83 (2d Cir. 1979) – the court said that

“the Fifth Amendment privilege does not immunize all witnesses from

-19-

testifying. Only those who assert as to each particular question that the

answer to that question would tend to incriminate them are protected . . . .

[T]he questions in the income tax return are neutral on their face . . . [h]ence

privilege may not be claimed against all disclosure on an income tax return.”

United States v. Brown, 600 F.2d 248, 252 (10th Cir. 1979) – noting that the

Supreme Court had established “that the self-incrimination privilege can be

employed to protect the taxpayer from revealing the information as to an

illegal source of income, but does not protect him from disclosing the amount

of his income,” the court said Brown made “an illegal effort to stretch the Fifth

Amendment to include a taxpayer who wishes to avoid filing a return.”

United States v. Neff, 615 F.2d 1235, 1241 (9th Cir.), cert. denied, 447 U.S.

925 (1980) – the court affirmed a failure to file conviction, noting that the

taxpayer “did not show that his response to the tax form questions would

have been self-incriminating. He cannot, therefore, prevail on his Fifth

Amendment claim.”

United States v. Daly, 481 F.2d 28, 30 (8th Cir.), cert. denied, 414 U.S. 1064

(1973) – the court affirmed a failure to file conviction, rejecting the taxpayer’s

Fifth Amendment claim because of his “error in . . . his blanket refusal to

answer any questions on the returns relating to his income or expenses.”

Sochia v. Commissioner, 23 F.3d 941 (5th Cir. 1994), cert. denied, 513 U.S.

1153 (1995) – the court affirmed tax assessments and penalties for failure to

file returns, failure to pay taxes, and filing a frivolous return. The court also

imposed sanctions for pursuing a frivolous case. The taxpayers had failed to

provide any information on their tax return about income and expenses,

instead claiming a Fifth Amendment privilege on each line calling for

financial information.

C. Contention: Compelled compliance with the federal income tax laws

is a form of servitude in violation of the Thirteenth Amendment.

This argument asserts that the compelled compliance with federal tax laws is

a form of servitude in violation of the Thirteenth Amendment.

The Law: The Thirteenth Amendment to the United States Constitution

prohibits slavery within the United States, as well as the imposition of

involuntary servitude, except as punishment for a crime of which a person

shall have been duly convicted. In Porth v. Brodrick, 214 F.2d 925, 926 (10th

Cir. 1954), the Court of Appeals stated that “if the requirements of the tax

laws were to be classed as servitude, they would not be the kind of

-20-

involuntary servitude referred to in the Thirteenth Amendment.” Courts have

consistently found arguments that taxation constitutes a form of involuntary

servitude to be frivolous.

Relevant Case Law:

Porth v. Brodrick, 214 F.2d 925, 926 (10th Cir. 1954) – the court described

the taxpayer’s Thirteenth and Sixteenth Amendment claims as “clearly

unsubstantial and without merit,” as well as “far-fetched and frivolous.”

United States v. Drefke, 707 F.2d 978, 983 (8th Cir. 1983) – the court

affirmed Drefke’s failure to file conviction, rejecting his claim that the

Thirteenth Amendment prohibited his imprisonment because that

amendment “is inapplicable where involuntary servitude is imposed as

punishment for a crime.”

Ginter v. Southern, 611 F.2d 1226 (8th Cir. 1979) – the court rejected the

taxpayer’s claim that the Internal Revenue Code results in involuntary

servitude in violation of the Thirteenth Amendment.

Kasey v. Commissioner, 457 F.2d 369 (9th Cir. 1972) – the court rejected as

without merit the argument that the requirements to keep records and to

prepare and file tax returns violated the Kaseys’ Fifth Amendment privilege

against self-incrimination and amount to involuntary servitude prohibited by

the Thirteenth Amendment.

Wilbert v. Internal Revenue Service (In re Wilbert), 262 B.R. 571, 578, 88

A.F.T.R.2d 6650 (Bankr. N.D. Ga. 2001) – the court rejected the taxpayer’s

argument that taxation is a form of involuntary servitude prohibited by the

Thirteenth Amendment, stating that “[i]t is well-settled American

jurisprudence that constitutional challenges to the IRS’ authority to collect

individual income taxes have no legal merit and are ‘patently frivolous.’”

D. Contention: The Sixteenth Amendment to the United States

Constitution was not properly ratified, thus the federal income tax

laws are unconstitutional.

This argument is based on the premise that all federal income tax laws are

unconstitutional because the Sixteenth Amendment was not officially ratified,

or because the State of Ohio was not properly a state at the time of

ratification. This argument has survived over time because proponents

mistakenly believe that the courts have refused to address this issue.

-21-

The Law: The Sixteenth Amendment provides that Congress shall have the

power to lay and collect taxes on income, from whatever source derived,

without apportionment among the several states, and without regard to any

census or enumeration. U.S. Const. amend. XVI. The Sixteenth

Amendment was ratified by forty states, including Ohio, and issued by

proclamation in 1913. Shortly thereafter, two other states also ratified the

Amendment. Under Article V of the Constitution, only three-fourths of the

states are needed to ratify an Amendment. There were enough states

ratifying the Sixteenth Amendment even without Ohio to complete the

number needed for ratification. Furthermore, the U.S. Supreme Court

upheld the constitutionality of the income tax laws enacted subsequent to

ratification of the Sixteenth Amendment in Brushaber v. Union Pacific R.R.,

240 U.S. 1 (1916). Since that time, the courts have consistently upheld the

constitutionality of the federal income tax.

Relevant Case Law:

Miller v. United States, 868 F.2d 236, 241 (7th Cir. 1989) (per curiam) – the

court stated, “We find it hard to understand why the long and unbroken line of

cases upholding the constitutionality of the sixteenth amendment generally,

Brushaber v. Union Pacific Railroad Company . . . and those specifically

rejecting the argument advanced in The Law That Never Was, have not

persuaded Miller and his compatriots to seek a more effective forum for

airing their attack on the federal income tax structure.” The court imposed

sanctions on them for having advanced a “patently frivolous” position.

United States v. Stahl, 792 F.2d 1438, 1441 (9th Cir. 1986), cert. denied,

479 U.S. 1036 (1987) – stating that “the Secretary of State’s certification

under authority of Congress that the sixteenth amendment has been ratified

by the requisite number of states and has become part of the Constitution is

conclusive upon the courts,” the court upheld Stahl’s conviction for failure to

file returns and for making a false statement.

Knoblauch v. Commissioner, 749 F.2d 200, 201 (5th Cir. 1984), cert. denied,

474 U.S. 830 (1986) – the court rejected the contention that the Sixteenth

Amendment was not constitutionally adopted as “totally without merit” and

imposed monetary sanctions against Knoblauch based on the frivolousness

of his appeal. “Every court that has considered this argument has rejected

it,” the court observed.

United States v. Foster, 789 F.2d 457 (7th Cir.), cert. denied, 479 U.S. 883

(1986) – the court affirmed Foster’s conviction for tax evasion, failing to file a

-22-

return, and filing a false W-4 statement, rejecting his claim that the Sixteenth

Amendment was never properly ratified.

E. Contention: The Sixteenth Amendment does not authorize a direct

non-apportioned federal income tax on United States citizens.

Some assert that the Sixteenth Amendment does not authorize a direct

non-apportioned income tax and thus, U.S. citizens and residents are not

subject to federal income tax laws.

The Law: The courts have both implicitly and explicitly recognized that the

Sixteenth Amendment authorizes a non-apportioned direct income tax on

United States citizens and that the federal tax laws as applied are valid. In

United States v. Collins, 920 F.2d 619, 629 (10th Cir. 1990), cert. denied,

500 U.S. 920 (1991), the court cited to Brushaber v. Union Pac. R.R., 240

U.S. 1, 12-19 (1916), and noted that the U.S. Supreme Court has

recognized that the “sixteenth amendment authorizes a direct

nonapportioned tax upon United States citizens throughout the nation.”

Relevant Case Law:

In re Becraft, 885 F.2d 547 (9th Cir. 1989) – the court affirmed a failure to file

conviction, rejecting the taxpayer’s frivolous position that the Sixteenth

Amendment does not authorize a direct non-apportioned income tax.

Lovell v. United States, 755 F.2d 517, 518 (7th Cir. 1984) – the court

rejected the argument that the Constitution prohibits imposition of a direct

tax without apportionment, and upheld the district court’s frivolous return

penalty assessment and the award of attorneys’ fees to the government

“because [the taxpayers’] legal position was patently frivolous.” The appeals

court imposed additional sanctions for pursuing “frivolous arguments in bad

faith.”

Broughton v. United States, 632 F.2d 706 (8th Cir. 1980) – the court rejected

a refund suit, stating that the Sixteenth Amendment authorizes imposition of

an income tax without apportionment among the states.

-23-

V. Fictional Legal Bases

A. Contention: The Internal Revenue Service is not an agency of the

United States.

Some argue that the Internal Revenue Service is not an agency of the United

States but rather a private corporation, because it was not created by

positive law (i.e., an act of Congress) and that, therefore, the IRS does not

have the authority to enforce the Internal Revenue Code.

The Law: There is a host of constitutional and statutory authority

establishing that the Internal Revenue Service is an agency of the United

States. The U.S. Supreme Court stated in Donaldson v. United States, 400

U.S. 517, 534 (1971), “[w]e bear in mind that the Internal Revenue Service is

organized to carry out the broad responsibilities of the Secretary of the

Treasury under § 7801(a) of the 1954 Code for the administration and

enforcement of the internal revenue laws.”

Pursuant to section 7801, the Secretary of Treasury has full authority to

administer and enforce the internal revenue laws and has the power to

create an agency to enforce such laws. Based upon this legislative grant,

the Internal Revenue Service was created. Thus, the Internal Revenue

Service is a body established by “positive law” because it was created

through a congressionally mandated power. Moreover, section 7803(a)

explicitly provides that there shall be a Commissioner of Internal Revenue

who shall administer and supervise the execution and application of the

internal revenue laws.

Relevant Case Law:

Salman v. Dept. of Treasury, 899 F. Supp. 471 (D. Nev. 1995) – the court

described Salman’s contention that the Internal Revenue Service is not a

government agency of the United States as wholly frivolous and dismissed

his claim with prejudice.

Young v. I.R.S., 596 F. Supp. 141 (N.D. Ind. 1984) – the court granted

summary judgment in favor of the government, rejecting Young’s claim that

the Internal Revenue Service is a private corporation, rather than a

government agency.

-24-

B. Contention: Taxpayers are not required to file a federal income tax

return, because the instructions and regulations associated with the

Form 1040 do not display an OMB control number as required by the

Paperwork Reduction Act.

Some argue that taxpayers are not required to file tax returns because of the

Paperwork Reduction Act of 1980, 44 U.S.C. § 3501, et seq. ("PRA"). The

PRA was enacted to limit federal agencies' information requests that burden

the public. The "public protection" provision of the PRA provides that no

person shall be subject to any penalty for failing to maintain or provide

information to any agency if the information collection request involved does

not display a current control number assigned by the Office of Management

and Budget [OMB] Director. 44 U.S.C. § 3512. Advocates of this

contention claim that they cannot be penalized for failing to file Form 1040,

because the instructions and regulations associated with the Form 1040 do

not display any OMB control number.

The Law: The courts have uniformly rejected this argument on different

grounds. Some courts have simply noted that the PRA applies to the forms

themselves, not to the instruction booklets, and because the Form 1040

does have a control number, there is no PRA violation.

Other courts have held that Congress created the duty to file returns in

section 6012(a) and "Congress did not enact the PRA’s public protection

provision to allow OMB to abrogate any duty imposed by Congress." United

States v. Neff, 954 F.2d 698, 699 (11th Cir. 1992).

Relevant Case Law:

United States v. Wunder, 919 F.2d 34 (6th Cir. 1990) – the court rejected

Wunder’s claim of a PRA violation, affirming his conviction for failing to file a

return.

Salberg v. United States, 969 F.2d 379 (7th Cir. 1992) – the court affirmed

Salberg’s conviction for tax evasion and failing to file a return, rejecting his

claims under the PRA.

United States v. Holden, 963 F.2d 1114 (8th Cir.), cert. denied, 506 U.S. 958

(1992) – the court affirmed Holden’s conviction for failing to file a return and

rejected his contention that he should have been acquitted because tax

instruction booklets fail to comply with the PRA.

-25-

United States v. Hicks, 947 F.2d 1356, 1359 (9th Cir. 1991) – the court

affirmed Hicks’ conviction for failing to file a return, finding that the

requirement to provide information is required by law, not by the IRS. “This

is a legislative command, not an administrative request. The PRA was not

meant to provide criminals with an all-purpose escape hatch.”

Lonsdale v. United States, 919 F.2d 1440, 1445 (10th Cir. 1990) – the court

found that the PRA “is inapplicable to ‘information collection request’ forms

issued during an investigation against an individual to determine his or her

tax liability.”

C. Contention: African Americans can claim a special tax credit as

reparations for slavery and other oppressive treatment.

Proponents of this contention assert that African Americans can claim a socalled

“Black Tax Credit” on their federal income tax returns as reparations

for slavery and other oppressive treatment suffered by African Americans. A

similar frivolous argument has been made that Native Americans are entitled

to a credit on their federal income tax returns as a form of reparations for

past oppressive treatment.

The Law: There is no provision in the Internal Revenue Code which allows

taxpayers to claim a “Black Tax Credit” or a credit for Native American

reparations. It is a well settled principle of law that deductions and credits

are a matter of legislative grace. See e.g., Wilson v. Commissioner, T.C.

Memo. 2001-139, 81 T.C.M. (CCH) 1745 (2001). Unless specifically

provided for in the Internal Revenue Code, no deduction or credit may be

allowed.

The IRS indicated in News Release IR-2002-08, 2002 I.R.B. LEXIS 30, that

it will crack down on promoters of “slavery reparation tax credit” and “Native

American reparations“ scams. See 2002 TNT 17-15 (January 24, 2002).

Further, according to the News Release, the IRS will implement a new policy

under which these reparation claims will be treated as a frivolous tax return

which could result in a potential $500 penalty. Id.

Furthermore, section 7408 provides a cause of action for injunctive relief to

the United States against a party suspected of violating the tax laws. On

March 6, 2002, the United States filed civil suits to enjoin two tax return

preparers (Andrew L. Wiley and Robert L. Foster) from preparing federal

income tax returns claiming refunds based on a non-existent tax credit for

slavery reparations. United States v. Wiley, No. 3:02-cv-209WS (S.D. Miss.

2002); United States v. Foster, No. 3:02-cv-133 (E.D. Va. 2002).

-26-

Relevant Case Law:

United States v. Bridges, 86 A.F.T.R.2d (RIA) 5280 (4th Cir. 2000) – the

court upheld Bridges’ conviction of aiding and assisting the preparation of

false tax returns, on which he claimed a non-existent “Black Tax Credit.”

D. Contention: Taxpayers are entitled to a refund of the Social Security

taxes paid over their lifetime.

Proponents of this contention encourage individuals to file claims for refund

of the Social Security taxes paid during their lifetime, on the basis that the

claimants have sought to waive all rights to their Social Security benefits.

Additionally, some advise taxpayers to claim a charitable contribution

deduction as a result of their “gift” of these benefits or of the Social Security

taxes to the United States.

The Law: There is no provision in the Internal Revenue Code, or any other

provision of law, which allows for a refund of Social Security taxes paid on

the grounds asserted above. In Crouch v. Commissioner, T.C. Memo. 1990-

309, 59 T.C.M. (CCH) 938 (1990), the Tax Court sustained an IRS

determination that a person may not claim a charitable contribution

deduction based upon the waiver of future Social Security benefits.

VI. “Untaxing” Packages or “Untaxing” Trusts

A. Contention: An “untaxing” package or trust provides a way of legally

and permanently avoiding the obligation to file federal income tax

returns and pay federal income taxes.

Advocates of this idea believe that an “untaxing” package or trust provides a

way of legally and permanently “untaxing” oneself so that a person would no

longer be required to file federal income tax returns and pay federal income

taxes. Promoters who sell such tax evasion plans and supposedly teach

individuals how to remove themselves from the federal tax system rely on

many of the above-described frivolous arguments, such as the claim that

payment of federal income taxes is voluntary, that there is no requirement for

a person to file federal income tax returns, and that there are legal ways not

to pay federal income taxes.

The Law: The underlying claims for these “untaxing” packages are

frivolous, as specified above. Promoters of these “untaxing” schemes as

well as willful taxpayers have been subjected to criminal penalties for their

-27-

actions. Taxpayers who have purchased and followed these “untaxing” plans

have also been subjected to civil penalties for failure to timely file a federal

income tax return and failure to pay federal income taxes.

Furthermore, section 7408 provides a cause of action for injunctive relief to

the United States against a party suspected of violating the tax laws. On

November 15, 2001, the United States filed complaints for permanent

injunctions pursuant to section 7408 against three individuals (David Bosset,

Thurston Bell, and Harold Hearn) for failing to sign tax returns, promoting

schemes that they knew were false or fraudulent, and engaging in the

preparation of documents that understate tax liability. United States v.

Bosset, No. 8:01-cv-2154-T-26TBM (M.D. Fla. 2001); United States v. Bell,

No. 1:CV-01-2159 (M.D. Penn. 2001); United States v. Hearn, No. 1:01-CV-

3058 (N.D. Ga. 2001).

On January 29, 2002, a consent order was entered in United States v. Hearn

in favor of the United States that permanently enjoined Mr. Hearn and his

representatives from, among other things, promoting or selling tax shelter

plans (including but not limited to the § 861 argument). In the order, Mr.

Hearn agreed that he relied upon the frivolous § 861 argument in making

false or fraudulent statements on federal income tax returns regarding the

excludibility of wages and other items from income.

Relevant Case Law:

United States v. Andra, 218 F.3d 1106 (9th Cir. 2000) – in affirming the

conviction of a promoter of an untaxing scheme for tax evasion and

conspiracy, the court found that it was proper to include the tax liabilities of

persons Andra recruited into a tax fraud conspiracy when calculating the

effect of his actions for sentencing.

United States v. Clark, 139 F.3d 485 (5th Cir.), cert. denied, 525 U.S. 899

(1998) – the court upheld convictions of defendants involved with The Pilot

Connection Society for conspiracy to defraud the United States and aiding

and abetting the filing of fraudulent Forms W-4.

Robinson v. Commissioner, T.C. Memo. 1995-102, 69 T.C.M. (CCH) 2061,

2062 (1995) – the court quoted language from Hanson v. Commissioner,

696 F.2d 1232, 1234 (9th Cir. 1983) that “[n]o reasonable person would have

trusted this scheme to work.”

King v. Commissioner, T.C. Memo. 1995-524, 70 T.C.M. (CCH) 1152

(1995) – the court found King, who had followed the Pilot Connection’s

-28-

“untaxing” techniques, liable for penalties for failure to file returns and for

failing to make sufficient estimated tax payments.

United States v. Raymond, 228 F.3d 804, 812 (7th Cir. 2000), cert. denied,

121 S. Ct. 2242 (2001) – the court affirmed a permanent injunction against

taxpayers who promoted a “De-Taxing America Program,” forbidding them

from engaging in certain activities that incited others to violate tax laws. The

court said, “[W]e conclude that the statements the appellants made in the

Just Say No advertisement were representations concerning the tax benefits

of purchasing and following the De-Taxing America Program that the

appellants reasonably should have known were false.”

United States v. Kaun, 827 F.2d 1144 (7th Cir. 1987) – the court affirmed the

district court’s injunction prohibiting the taxpayer from inciting others to

submit tax returns based on false income tax theories.

United States v. Krall, 835 F.2d 711 (8th Cir. 1987) – the court held that the

trusts used were shams. The defendant, an optometrist, exercised the same

dominion and control over the corpus and income of the trusts as he had

before the trusts were executed. The court further found the defendant

illegally attempted to assign his earned income to the various trusts.

United States v. Scott, 37 F.3d 1564 (10th Cir. 1994) – the court concluded

the true grantor of the trusts was in substance the purchaser, who was also

the trustee, as well as the beneficiary. It was as if there were no transfers at

all. Therefore the purchaser was subject to tax on all the income of the

various trusts. The defendants were the promoters of a multi-tiered trust

package marketed to purchasers as a device to eliminate tax liability without

losing control over their assets or income.

-29-

PENALTIES FOR PURSUING FRIVOLOUS TAX ARGUMENTS

Those who act on frivolous positions risk a variety of civil and criminal penalties. Those

who adopt these positions may face harsher consequences than those who merely

promote them. As the Seventh Circuit Court of Appeals noted in United States v. Sloan,

939 F.2d 499, 499-500 (7th Cir. 1991), “Like moths to a flame, some people find

themselves irresistibly drawn to the tax protestor movement’s illusory claim that there is no

legal requirement to pay federal income tax. And, like moths, these people sometimes get

burned.”

Taxpayers filing returns with frivolous positions may be subject to the accuracy-related

penalty under section 6662 (twenty percent of the underpayment attributable to negligence

or disregard of rules or regulations) or the civil fraud penalty under section 6663 (seventyfive

percent of the underpayment attributable to fraud). Tax preparers who submit returns

maintaining groundless positions may be subject to penalties in addition to those imposed

on their clients.

Moreover, section 6702 provides for the imposition of a $500 penalty against any

individual who files a frivolous income tax return. The legislative history underlying this

section states, “the Committee is concerned with the rapid growth of deliberate defiance of

the tax laws by tax protesters. The Committee believes that an immediately assessable

penalty on the filing of protest returns will help deter the filing of such returns.” S. Rep. No.

494, 97th Cong., 2d Sess. 277, reprinted in 1982 U.S.C.C.A.N. 781, 1023-24.

In the 1980s, Congress showed its concern about taxpayers misusing the courts and

obstructing the appeal rights of others when it enacted tougher sanctions for bringing

frivolous cases before the courts. Section 6673 allows the courts to impose a penalty of

up to $25,000 when they come to any of three conclusions:

- a taxpayer instituted a proceeding primarily for delay,

- a position is frivolous or groundless, or

- a taxpayer unreasonably failed to pursue administrative remedies.

An appeals court explained the rationale for the sanctions in Coleman v. Commissioner,

791 F.2d 68, 72 (7th Cir. 1986): “The purpose of § 6673 . . . is to induce litigants to

conform their behavior to the governing rules regardless of their subjective beliefs.

Groundless litigation diverts the time and energies of judges from more serious claims; it

imposes needless costs on other litigants. Once the legal system has resolved a claim,

judges and lawyers must move on to other things. They cannot endlessly rehear stale

arguments . . . . [T]here is no constitutional right to bring frivolous suits . . . . People who

wish to express displeasure with taxes must choose other forums, and there are many

available.”

-30-

Relevant Case Law:

Jones v. Commissioner, 688 F.2d 17 (6th Cir. 1982) – the court found the taxpayer’s claim

that his wages were paid in “depreciated bank notes” as clearly without merit and affirmed

the Tax Court’s imposition of an addition to tax for negligence or intentional disregard of

rules and regulations.

Baskin v. United States, 738 F.2d 975 (8th Cir. 1984) – the court found that the IRS’s

assessment of a frivolous return penalty without a judicial hearing was not a denial of due

process, since there was an adequate opportunity for a later judicial determination of legal

rights.

Holker v. United States, 737 F.2d 751, 752-53 (8th Cir. 1984) – the court upheld the

frivolous return penalty even though the taxpayer claimed the documents he filed to claim a

refund did not constitute a tax return. Noting that “[t]axpayers may not obtain refunds

without first filing returns,” the court then found that “[h]is unexplained designation of his W-

2 forms as ‘INCORRECT’ and his attempt to deduct his wages as the cost of labor on

Schedule C also establish the frivolousness and incorrectness of his position.”

Rowe v. United States, 583 F. Supp. 1516, 1520 (D. Del. 1984) – the court upheld section

6702 against various objections, including that it was unconstitutionally vague because it

does not define a “frivolous” return. “Frivolous is commonly understood to mean having no

basis in law or fact,” the court stated.

Monaghan v. Commissioner, T.C. Memo. 2002-16, 83 T.C.M. (CCH) 1102, 1104 (2002) –

the court rejected the taxpayer’s frivolous arguments and imposed sanctions in the amount

of $1,500, stating that “[h]e has caused this Court to waste its limited resources on his

erroneous views of the tax law which he should have known are completely without merit.”

Hart v. Commissioner, T.C. Memo. 2001-306, 82 T.C.M. (CCH) 934 (2001) – the court

imposed sanctions in the amount of $15,000 against the taxpayer, because his delaying

actions caused the Service and the court to needlessly spend time preparing for the trial

and writing the opinion.

Haines v. Commissioner, T.C. Memo. 2000-126, 79 T.C.M. (CCH) 1844, 1846 (2000) –

stating, “[p]etitioner knew or should have known that his position was groundless and

frivolous, yet he persisted in maintaining this proceeding primarily to impede the proper

workings of our judicial system and to delay the payment of his Federal income tax

liabilities,” the court imposed a $25,000 penalty.

Sigerseth v. Commissioner, T.C. Memo 2001-148, 81 T.C.M. (CCH) 1792, 1794 (2001) –

pointing out that this case involving the use of trusts to avoid taxes was “a waste of limited

-31-

judicial and administrative resources that could have been devoted to resolving bona fide

claims of other taxpayers,” the court imposed a $15,000 penalty.

MatrixInfoSys Trust v. Commissioner, T.C. Memo. 2001-133, 81 T.C.M. (CCH) 1726, 1729

(2001) – in claiming that his income belonged to his trust, the court stated that the taxpayer

had made “shopworn arguments characteristic of the tax-protester rhetoric that has been

universally rejected by this and other courts,” and imposed a $12,500 penalty.

The Nis Family Trust v. Commissioner, 115 T.C. 523, 545-46 (2000) – concluding that the

Nis chose “to pursue a strategy of noncooperation and delay, undertaken behind a

smokescreen of frivolous tax-protester arguments,” the court imposed a $25,000 penalty

against them, and also imposed sanctions of more than $10,600 against their attorney for

arguing frivolous positions in bad faith.

Madge v. Commissioner, T.C. Memo. 2000-370, 80 T.C.M. (CCH) 804 (2000) – after

having warned the taxpayer that continuing with his frivolous arguments – that he was not a

taxpayer, that his income was not taxable, and that only foreign income was taxable –

would likely result in a penalty, the court imposed the maximum $25,000 penalty.

Davis v. Commissioner, T.C. Memo. 2001-87, 81 T.C.M. (CCH) 1503 (2001) – after

warning that the taxpayer could be penalized for presenting frivolous and groundless

arguments, the court imposed a $4,000 penalty.

Gass v. United States, 2001 U.S. App. LEXIS 1513 (10th Cir., Feb. 2, 2001) – the court

imposed an $8,000 penalty for contending that taxes on income from real property are

unconstitutional. The court had earlier penalized the taxpayers $2,000 for advancing the

same arguments in another case.

Brashier v. Commissioner, 2001 U.S. App. LEXIS 6270 (10th Cir., Apr. 13, 2001) – the

court imposed $1,000 penalties on taxpayers who argued that filing sworn income tax

returns violated their Fifth Amendment privilege against self-incrimination, after the Tax

Court had warned them that their argument – rejected consistently for more than seventy

years – was frivolous.

McAfee v. United States, 2001 U.S. Dist. LEXIS 7131, at *4 (N.D. Ga., Apr. 4, 2001) –

after losing the argument that his wages were not income and receiving a $500 penalty,

the taxpayer returned to court to try to stop the government from collecting that penalty by

garnishing his wages. The court stated that “bringing this ill-considered, nonsensical

litigation before this court for yet a second time is nothing but contumacious foolishness

which wastes the time and energy of the court system,” and imposed a $1,000 penalty.

United States v. Rempel, 87 A.F.T.R.2d (RIA) 1810, 2001 U.S. Dist. LEXIS 8518, at *5 (D.

Ak. Feb. 14, 2001) – the court warned the taxpayers of sanctions and stated: “It is

-32-

apparent to the court from some of the papers filed by the Rempels that they have at least

had access to some of the publications of tax protester organizations. The publications of

these organizations have a bad habit of giving lots of advice without explaining the

consequences which can flow from the assertion of totally discredited legal positions

and/or meritless factual positions.”

Jan Helfeld interviewing Politicians/Is Taxation Voluntary? Harry Reid

http://janhelfeld.com/video/37/is-taxation-voluntary

The Bottom Line Interviews by Jan Helfeld · Is Taxation Voluntary?
Blog Buy Interview DVDs Reviews & Accolades About The Bottom Line Media See Videos
The Bottom Line Interviews by Jan Helfeld » video

Is Taxation Voluntary?
Jan Helfeld interviews Senator Harry Reid about government coercion. Reid maintains that taxation is voluntary despite all evidence to the contrary.

How does Harry Reid get into this bind? Well, by arguing that the government is not forcefully taking money from some citizens through taxes in order to provide goods and services for others. In his attempt to dispute this fact, he finds himself arguing that taxes are voluntary, which by the way, is preposterous.



posted on Aug 24, 11:09 PM by Kevin Rollins


--------------------------------------------------------------------------------

Yes, our tax system is
a voluntary system.
I voluntarily opt out of
prison by paying my
taxes.
Also, our criminal justice
system is voluntary also.
I voluntarily opt out of
lethal injection by not
strangling Senators.

— Will Blalock · Aug 26, 11:54 PM · #

Actually ‘voluntary’ is not far from the real truth. Most people have no idea what the IRS is and why they are legally required to pay them.

Research shows the ‘tax’ is really a voluntary contract between the IRS and an individual. 1099/W2 is your signature on the contract, and you must honor the terms of the contract (tax code).

— Sean D · Aug 28, 05:05 PM · #

Sean, there is no need to research anything. The signature is a coerced signature. You are not given the option to opt out of the system. Ergo, it is not voluntary.

And a contract has two obliged parties. When has government ever defined its part of the contract and lived up to it?

— Spirit of 73 · Sep 16, 10:58 PM · #

Commenting is closed for this article.

This article is not accepting comments. You can contact Jan Helfeld to respond.
See Videos
James Woolsey Doesn't Know What a Principle Is
George Stephanopoulis Clams Up When Questioned on Racism
Joe Biden's View on Human Nature and Ethics
Is Taxation Voluntary?
Piercing Questions to Charlie Rangel on Healthcare
Bill Richardson on Government and Rights
CIA Director James Woolsey Runs Away
Woolsey Evades Questions by Insulting Jan
Is it Wrong to Start Violence? Stealing the Tape
Pete Stark Blows Up Over National Debt
Pelosi's Double Standard on the Minimum Wage© Copyright 2009 by Jan Helfeld.

Textpattern development by John Stephens

Zaynab's Story: A Call To Boycott Israel

Part 1: http://www.youtube.com/watch?v=YN-YGoZK0i4&feature=player_embedded

Part 2: http://www.youtube.com/watch?v=dahkok0VuBs

Part 3: http://www.youtube.com/watch?v=Y8GMHUIm5F8

Part 4: http://www.youtube.com/watch?v=axmryqVamMM

ADPSR Katrina Task Force

http://www.adpsr.org/Initiatives/Katrina_Task_Force.htm

ADPSR Katrina Task Force

Statement of Principles


The human tragedy that hurricane Katrina left in its wake illuminates the callous disregard for the needs of the social poor and unprivileged citizens of our society. Government failed at all levels during and after Katrina struck. Many people who lacked the means to evacuate—mostly poor and African American—were simply abandoned. Disasters in the United States, like those that occur internationally, tend to have a disproportionate effect on disenfranchised populations who are typically bypassed in rebuilding efforts. This invariably reinforces their previous social isolation, lack of jobs and capital, and consequently sets them farther back in all the social capacities of life. The idea that poor people could be permanently displaced from their communities and not given a voice in its rebuilding, especially in New Orleans, in the name of “reconstruction” is unacceptable to responsible architects, designers, and planners. The current reconstruction effort is not a suitable response by our professions to the magnitude of these historic inequalities and new injustices. We must turn this opportunity for a new Reconstruction into a process that creates new social and economic opportunities by empowering local communities. ADPSR calls on our fellow professionals, and all others engaged in the process, for a Reconstruction that embraces the following principles:

1. Establish Community Participation and Control in the Reconstruction Process:

Establish the right to return for all displaced people as the first principle in all aspects of rebuilding.
Provide real transitional housing that enables as swift a return as possible through every means available, including filling empty rentals units in the city using Section 8 vouchers.
Establish the right of communities, through their chosen representatives, to participate in all planning processes affecting their current and future wellbeing, including resettlement strategies, temporary housing, reconstruction and redesign.

2. Preserve Communities

Preserve and rebuild injured communities in ways that celebrate their history, traditions and cultural diversity.
Consider communities as clients, and not just individuals, by recognizing a human ecology of social groups. Serve the public first, not just “Bricks and Mortar”.
Respect the historic value of the peoples’ culture, as well as that of New Orleans’ wealth of buildings typologies, in every aspect of reconstruction.

3. Reconstruct a More Equitable Economy and Grow Social Capital

Establish new, “green” industries that pay a living wage and solve environmental problems in areas such as energy, transportation, and housing.
Enhance and build the highest quality early childhood development centers that promote nutrition, provide quality day care, and enhance early childhood education. Make high-quality public education accessible and meaningful.
Promote locally-owned small business development, and encourage institutions that promote entrepreneurship and business building.
Create affordable housing that is developed, built and bought by local neighborhood residents, providing ownership, construction jobs and skills training in the community.
Enforce fair lending practices and support and establish local neighborhood banks that will help anchor communities.
Preserve and enhance local culture as an economic generator.
Strengthen healthcare systems and use them as opportunities for employment and developing skills.

4. Design for Long Term Ecological Stability

Reestablish coastal wetlands that create a buffer for storm surges
Rehabilitate the failing fishing industry, and preserve and rebuild land that supports the diverse indigenous cultures
Demand corporate responsibility for cleanup and upgrade of chemical plants and refineries as well as environment restoration of the surrounding ecology
Strongly promote sustainable and renewable energy programs at all government levels; establish green building standards and planning as the basis for all reconstruction; and adopt a green approach to infrastructure, transportation, and regional development.

5. Act as Public Advocates and Responsible Professionals

Protect public safety by following and exceeding local building codes, educating citizens, local builders and authorities on designs which reflect all the potential hazards of the region
Advocate for the full participation, benefit and empowerment of local communities in design, planning, and reconstruction processes.
Listen to the voices of the indigenous community. Act with respect to their demands for self-determination in shaping their own future, and reparations for historic injustices.

Cop Horse Whoopi-ng it up

http://www.nydailynews.com/archives/news/2006/08/20/2006-08-20_cop_horse_whoopi-ng_it_up.html

COP HORSE WHOOPI-NG IT UP
BY ALISON GENDAR DAILY NEWS POLICE BUREAU CHIEF

Sunday, August 20th 2006, 7:06AM


THE NYPD HORSE injured when he bolted into traffic had to give up police work, but he's now living large on a farm owned by actress Whoopi Goldberg.

Ferguson, a 14-year-old gelding, was one of two retired police horses the actress adopted.

A spokesman for Goldberg confirmed she's given two NYPD mounts a new home, but declined to discuss any details about her generous offer.

"Ferguson's living the good life as a lawn ornament - no work, just pure retirement," a police source said.

Ferguson was hit by two cars in February when he bolted into traffic near W. 24th St. and Ninth Ave. in Chelsea.

His handlers were puzzled by the sudden panic attack because he was known as a calm and steady presence ever since he joined the NYPD in 1999, cops said at the time.

But any animal can bolt when spooked, and Ferguson's regular rider was not at the reins that day.

He suffered a broken nose and a hairline jaw fracture, and had to put up with a tracheotomy tube to help him breathe while his nose healed.

After he recuperated, doctors and mounted officers decided it was best for him to retire.

In the past, retired police mounts have been sent to a farm upstate. That arrangement was scrapped once cops realized the farmer was reneging on part of the deal by making the retired beasts do some work to earn their keep.

Goldberg agreed to the terms that retired NYPD mounts are truly retired - and don't have to work.

Ferguson was treated at Mid-Atlantic Equine Medical Center in Ringoes, N.J., which treats injured steeds from across the country.

Against Intellectual Property

http://deoxy.org/aip.htm

There is a strong case for opposing intellectual property. Among other things, it often retards innovation and exploits Third World peoples. Most of the usual arguments for intellectual property do not hold up under scrutiny. In particular, the metaphor of the marketplace of ideas provides no justification for ownership of ideas. The alternative to intellectual property is that intellectual products not be owned, as in the case of everyday language. Strategies against intellectual property include civil disobedience, promotion of non-owned information, and fostering of a more cooperative society.
The original rationale for copyrights and patents was to foster artistic and practical creative work by giving a short-term monopoly over certain uses of the work. This monopoly was granted to an individual or corporation by government. The government's power to grant a monopoly is corrupting. The biggest owners of intellectual property have sought to expand it well beyond any sensible rationale.

There are several types of intellectual property or, in other words, ownership of information, including copyright, patents, trademarks, trade secrets, design rights and plant breeders' rights. Copyright covers the expression of ideas such as in writing, music and pictures. Patents cover inventions, such as new substances or articles and industrial processes. Trademarks are symbols associated with a good, service or company. Trade secrets cover confidential business information. Design rights cover different ways of presenting the outward appearance of things. Plant breeders' rights grant ownership of novel, distinct and stable plant varieties that are "invented."

The type of property that is familiar to most people is physical objects. People own clothes, cars, houses and land. But there has always been a big problem with owning ideas. Exclusive use or control of ideas or the way they are expressed doesn't make nearly as much sense as the ownership of physical objects.

Many physical objects can only be used by one person at a time. If one person wears a pair of shoes, no one else can wear them at the same time. (The person who wears them often owns them, but not always.) This is not true of intellectual property. Ideas can be copied over and over, but the person who had the original copy still has full use of it. Suppose you write a poem. Even if a million other people have copies and read the poem, you can still read the poem yourself. In other words, more than one person can use an idea—a poem, a mathematical formula, a tune, a letter—without reducing other people's use of the idea. Shoes and poems are fundamentally different in this respect.

Technological developments have made it cheaper and easier to make copies of information. Printing was a great advance: it eliminated the need for hand copying of documents. Photocopying and computers have made it even easier to make copies of written documents. Photography and sound recordings have done the same for visual and audio material. The ability to protect intellectual property is being undermined by technology, Yet there is a strong push to expand the scope of ownership of information.

This chapter outlines the case against intellectual property. I begin by mentioning some of the problems arising from ownership of information. Then I turn to weaknesses in its standard justifications. Next is an overview of problems with the socalled "marketplace of ideas," which has important links with intellectual property. Finally, I outline some alternatives to intellectual property and some possible strategies for moving towards them.

Problems with intellectual property
Since intellectual property can be sold, it is usually the rich and powerful who benefit. The rich and powerful, it should be noted, seldom contribute much intellectual labour to the creation of new ideas.
Governments generate large quantities of information. They produce statistics on population, figures on economic production and health, texts of laws and regulations, and vast numbers of reports. The generation of this information is paid for through taxation and, therefore, it might seem that it should be available to any member of the public. But in some countries. such as Britain and Australia, governments claim copyright in their own legislation and sometimes court decisions. Technically, citizens would need permission to copy their own laws. On the other hand, some government-generated information, especially in the US, is turned over to corporations that then sell it to whomever can pay. Publicly funded information is "privatised" and thus not freely available.1

Dorothy Nelkin, Science as Intellectual Property: Who Controls Research? (New York: Macmillan, 1984).

The idea behind patents is that the fundamentals of an invention are made public while the inventor for a limited time has the exclusive right to make, use or sell the invention. But there are quite a few cases in which patents have been used to suppress innovation.2 Companies may take out a patent, or buy someone else's patent, in order to inhibit others from applying the ideas. From its beginning in 1875, the US company AT&T collected patents in order to ensure its monopoly on telephones. It slowed down the introduction of radio for some 20 years. In a similar fashion, General Electric used control of patents to retard the introduction of fluorescent lights, which were a threat to its sales of incandescent lights. Trade secrets are another way to suppress technological development. Trade secrets are protected by law but, unlike patents, do not have to be published openly. They can be overcome legitimately by independent development or reverse engineering.


Richard Durford, "The suppression of technology as a strategy for controlling resource dependence," Administrative Science Quarterly, Vol. 32, 1987, pp. 512-525.

Biological information can now be claimed as intellectual property. US courts have ruled that genetic sequences can be patented, even when the sequences are found "in nature," so long as some artificial means are involved in isolating them. This has led companies to race to take out patents on numerous genetic codes. In some cases, patents have been granted covering all transgenic forms of an entire species, such as soybeans or cotton, causing enormous controversy and sometimes reversals on appeal. One consequence is a severe inhibition on research by non-patent holders. Another consequence is that transnational corporations are patenting genetic materials found in Third World plants and animals, so that some Third World peoples actually have to pay to use seeds and other genetic materials that have been freely available to them for centuries.

More generally, intellectual property is one more way for rich countries to extract wealth from poor countries. Given the enormous exploitation of poor peoples built into the world trade system, it would only seem fair for ideas produced in rich countries to be provided at no cost to poor countries. Yet in the GATT negotiations, representatives of rich countries, especially the US, have insisted on strengthening intellectual property rights.3 Surely there is no better indication that intellectual property is primarily of value to those who are already powerful and wealthy.

Peter Drahos, "Global property rights in information: the story of TRIPS at the GATT." Prometheus, Vol. 13, No. 1, June 1995, pp. 6-19 Surendra J. Patel. "Intellectual property rights in the Uruguay Round: a disaster for the South?" Economic and Political Weekly, Vol. 24, No. 18, 6 May 1989, pp. 978-993; Darrell A. Posey and Graham Dutfield, Beyond Intellectual Property: Toward Traditional Rights for Indigenous Peoples and Local Communities (Ottawa: International Development Research Centre. 1996).

The potential financial returns from intellectual property are said to provide an incentive for individuals to create. In practice, though, most creators do not actually gain much benefit from intellectual property. Independent inventors are frequently ignored or exploited. When employees of corporations and governments have an idea worth protecting, it is usually copyrighted or patented by the organisation, not the employee. Since intellectual property can be sold, it is usually the rich and powerful who benefit. The rich and powerful, it should be noted, seldom contribute much intellectual labour to the creation of new ideas.

These problems—privatisation of government information, suppression of patents, ownership of genetic information and information not owned by the true creator—are symptoms of a deeper problem with the whole idea of intellectual property. Unlike goods, there are no physical obstacles to providing an abundance of ideas. (Indeed, the bigger problem may be an oversupply of ideas.) Intellectual property is an attempt to create an artificial scarcity in order to give rewards to a few at the expense of the many. Intellectual property aggravates inequality. It fosters competitiveness over information and ideas, whereas cooperation makes much more sense. In the words of Peter Drahos, researcher on intellectual property, "Intellectual property is a form of private sovereignty over a primary good information."4


Peter Drahos, "Decentring communication: the dark side of intellectual property," in Tom Campbell and Wojciech Sadurski (eds.). Freedom of Communication (Aldershot Dartmouth, 1994). pp 249-279, at p. 274.

Here are some examples of the abuse of power that has resulted from the power to grant sovereignty over information.

The neem tree is used in India in the areas of medicine, toiletries, contraception, timber, fuel and agriculture. Its uses have been developed over many centuries but never patented. Since the mid 1980s, US and Japanese corporations have taken out over a dozen patents on neem-based materials. In this way, collective local knowleilge developed by Indian researchers and villagers has been expropriated by outsiders who have added very little to the process.5

Vandana Shiva and Radha Holla-Ehar, "Intellectual piracy and the neena tree," Ecologist, Vol. 23 No. 6, 1993, pp, 223-227.


Charles M. Gentile is a US photographer who for a decade had made and sold artistic posters of scenes in Cleveland, Ohio. In 1995 he made a poster of the I.M. Pei building, which housed the new Rock and Roll Hall of Fame and Museum. This time he got into trouble. The museum sued him for infringing the trademark that it had taken out on its own image. If buildings can be registered as trademarks, then every painter, photographer and film-maker might have to seek permission and pay fees before using the images in their art work. This is obviously contrary to the original justification for intellectual property, which is to encourage the production of artistic works.

Prominent designer Victor Papanek writes: "... there is something basically wrong with the whole concept of patents and copyrights. If I design a toy that provides therapeutic exercise for handicapped children, then I think it is unjust to delay the release of the design by a year and a half, going through a patent application. I feel that ideas are plentiful and cheap, and it is wrong to make money from the needs of others. I have been very lucky in persuading many of my students to accept this view. Much of what you will find as design examples throughout this book has never been patented. In fact, quite the opposite strategy prevails: in many cases students and I have made measured drawings of, say, a play environment for blind children, written a description of how to build it simply, and then mimeographed drawings and all. If any agency, anywhere, will write in, my students will send them all the instructions free of charge.6

Victor Papanek, Design for the Real World: Human Ecology and Social Change (London: Thames and Hudson, 1985, 2nd edition), p. xi.


In 1980, a book entitled Documents on Australian Defence and Foreign Policy 1968-1975 was published by George Munster and Richard Walsh. It reproduced many secret government memos, briefings and other documents concerning Australian involvement in the Vietnam war, events leading up to the Indonesian invasion of East Timor, and other issues. Exposure of this material deeply embarrassed the Australian government. In an unprecedented move, the government issued an interim injunction, citing both the Crimes Act and the Copyright Act. The books, just put on sale, were impounded. Print runs of two major newspapers with extracts from the book were also seized.
The Australian High Court ruled that the Crimes Act did not apply, but that the material was protected by copyright held by the government. Thus copyright, set up to encourage artistic creation, was used to suppress dissemination of documents for whose production copyright was surely no incentive. Later, Munster and Walsh produced a book using summaries and short quotes in order to present the information.7


George Munster, Secrets of State: A Detailed Assessment of the Book They Banned (Australia: Walsh & Munster, 1982).


Scientology is a religion in which only certain members at advanced stages of enlightenment have access to special information, which is secret to others. Scientology has long been controversial, with critics maintaining that it exploits members. Some critics, including former Scientologists, have put secret documents from advanced stages on the Internet. In response, church officials invoked copyright. Police have raided homes of critics, seizing computers, disks and other equipment. This is all rather curious, since the stated purpose of copyright is not to bide information but rather to stimulate production of new ideas.8

Wendy M. Grossman, "alt.scientology.war," Wired, Vol. 3, No. 12, December 1995, pp, 172-177, 248-252.

The following examples show that the uncertainty of intellectual property law encourages ambit claims that seem to be somewhat plausible. Some targets of such claims give in for economic reasons.


Ashleigh Brilliant is a "professional epigrammatist." He creates and copyrights thousands of short sayings, such as "Fundamentally, there may be no basis for anything." When he finds someone who has "used" one of his epigrams, he contacts them demanding a payment for breach of copyright. Television journalist David Brinkley wrote a book, Everyone is Entitled to My Opinion, the title of which he attributed to a friend of his daughter. Brilliant contacted Brinkley about copyright violation. Random House, Brinkley's publisher, paid Brilliant $1000 without contesting the issue, perhaps because it would have cost more than this to contest it.9

David D. Kirkpatrick,"Brilliant minds may think alike, but Brilliant lines can cost you," Wall Street Journal, 27 January 1997, p. B1.


Lawyer Robert Kunstadt has proposed that athletes could patent their sporting innovations, such as the "Fosbury flop" invented by high jumper Dick Fosbury. This might make a lot of money for a few stars. It would also cause enormous disputes. Athletes already have a tremendous incentive to innovate if it helps their performance. Patenting of basketball moves or choreography steps would serve mainly to limit the uptake of innovations and would mainly penalise those with fewer resources to pay royalties.

The US National Basketball Association has sued in court for the exclusive right to transmit the scores of games as they are in progress. It had one success but lost on appeal.10

Lance Rose, "Technical foul: the NBA double dribbles on intellectual property," Wired, Vol. 5, No. 1, January 1997, p. 96.


A Scottish newspaper, The Shetland Times, went to court to stop an online news service from making a hypertext link to its web site. If hypertext links made without permission were made illegal, this would undermine the World Wide Web.11

Rob Edwards, "Scottish court case could unravel the Web," New Scientist, 16 November 1996, p. 5.

These examples show that intellectual property has become a means for exerting power in ways quite divorced from its original aim—promoting the creation and use of new ideas.

Critique of standard justifications
Intellectual property is built around a fundamental tension: ideas are public but creators want private returns. To overcome this tension, a distinction developed between ideas and their expression. Ideas could not be copyrighted but their expression could. This peculiar distinction was tied to the romantic notion of the autonomous creator who somehow contributes to the common pool of ideas without drawing from it. This package of concepts apparently justified authors in claiming residual rights—namely copyright—in their ideas after leaving their hands, while not giving manual workers any rationale for claiming residual rights in their creations.
Edwin C. Hettinger has provided an insightful critique of the main arguments used to justify intellectual property, so it is worthwhile summarising his analysis.12 He begins by noting the obvious argument against intellectual property, namely that sharing intellectual objects still allows the original possessor to use them. Therefore, the burden of proof should lie on those who argue for intellectual property.

Edwin C. Hettinger, "Justifying intellectual property," Philosophy and Public Affairs, Vol. 18, No. 1, Winter 1989, pp. 31-52, quotes at pp. 39 and 42. See also David Vaver, "Intellectual property today: of myths and paradoxes," Canadian Bar Review, Vol. 69, No. 1, March 1990, pp. 98-128.

The first argument for intellectual property is that people are entitled to the results of their labour. Hettinger's response is that not all the value of intellectual products is due to labour. Nor is the value of intellectual products due to the work of a single labourer, or any small group. Intellectual products are social products.

Suppose you have written an essay or made an invention. Your intellectual work does not exist in a social vacuum. It would not have been possible without lots of earlier work both intellectual and nonintellectual—by many other people. This includes your teachers and parents. It includes the earlier authors and inventors who provided the foundation for your contribution. It also includes the many people who discussed and used ideas and techniques, at both theoretical and practical levels, and provided a cultural foundation for your contribution. It includes the people who built printing presses, laid telephone cables, built roads and buildings and in many other ways contributed to the "construction" of society. Many other people could be mentioned. The point is that any piece of intellectual work is always built on and is inconceivable without the prior work of numerous people.

Hettinger points out that the earlier contributors to the development of ideas are not present. Today's contributor therefore cannot validly claim full credit.

Is the market value of a piece of an intellectual product a reasonable indicator of a person's contribution? Certainly not. As noted by Hettinger and as will be discussed in the next section, markets only work once property rights have been established, so it is circular to argue that the market can be used to measure intellectual contributions. Hettinger summarises this point in this fashion: "The notion that a laborer is naturally entitled as a matter of right to receive the market value of her product is a myth. To what extent individual laborers should be allowed to receive the market value of their products is a question of social policy."

A related argument is that people have a right to possess and personally use what they develop. Hettinger's response is that this doesn't show that they deserve market values, nor that they should have a right to prevent others from using the invention.

A second major argument for intellectual property is that people deserve property rights because of their labour. This brings up the general issue of what people deserve, a topic that has been analysed by philosophers. Their usual conclusions go against what many people think is "common sense." Hettinger says that a fitting reward for labour should be proportionate to the person's effort, the risk taken and moral considerations. This sounds all right—but it is not proportionate to the value of the results of the labour, whether assessed through markets or by other criteria. This is because the value of intellectual work is affected by things not controlled by the worker, including luck and natural talent. Hettinger says "A person who is born with extraordinary natural talents, or who is extremely lucky, deserves nothing on the basis of these characteristics."

A musical genius like Mozart may make enormous contributions to society. But being born with enormous musical talents does not provide a justification for owning rights to musical compositions or performances. Likewise, the labour of developing a toy like Teenage Mutant Ninja Turtles that becomes incredibly popular does not provide a justification for owning rights to all possible uses of turtle symbols.

What about a situation where one person works hard at a task and a second person with equal talent works less had? Doesn't the first worker deserve more reward? Perhaps so, but property rights do not provide a suitable mechanism for allocating rewards. The market can give great rewards to the person who successfully claims property rights for a discovery, with little or nothing for the person who just missed out.

A third argument for intellectual property is that private property is a means for promoting privacy and a means for personal autonomy. Hettinger responds that privacy is protected by not revealing information, not by owning it. Trade secrets cannot be defended on the grounds of privacy, because corporations are not individuals. As for personal autonomy, copyrights and patents aren't required for this.

A fourth argument is that rights in intellectual property are needed to promote the creation of more ideas. The idea is that intellectual property gives financial incentives to produce ideas. Hettinger thinks that this is the only decent argument for intellectual property. He is still somewhat sceptical, though. He notes that the whole argument is built on a contradiction, namely that in order to promote the development of ideas, it is necessary to reduce people's freedom to use them. Copyrights and patents may encourage new ideas and innovations, but they also restrict others from using them freely.

This argument for intellectual property cannot be resolved without further investigation. Hettinger says that there needs to be an investigation of how long patents and copyrights should be granted, to determine an optimum period for promoting intellectual work.

For the purposes of technological innovation, information becomes more valuable when augmented by new information: innovation is a collective process. If firms in an industry share information by tacit cooperation or open collaboration, this speeds innovation and reduces costs. Patents, which put information into the market and raise information costs, actually slow the innovative process.13


Thomas Mandeville, Understanding Novelty: Information, Technological Change, and the Patent System (Norwood, NJ: Ablex, 1996).

It should be noted that although the scale and pace of intellectual work has increased over the past few centuries, the duration of protection of intellectual property has not been reduced, as might be expected, but greatly increased. The US government did not recognise foreign copyrights for much of the 1800s. Where once copyrights were only for a period of a few decades, they now may be for the life of the author plus 70 years. In many countries, chemicals and pharmaceuticals were not patentable until recently. This suggests that even if intellectual property can be justified on the basis of fostering new ideas, this is not the driving force behind the present system of copyrights and patents. After all, few writers feel a greater incentive to write and publish just because their works are copyrighted for 70 years after they die, rather than just until they die.

Of various types of intellectual property, copyright is especially open for exploitation. Unlike patents, copyright is granted without an application and lasts far longer. Originally designed to encourage literary and artistic work, it now applies to every memo and doodle and is more relevant to business than art. There is no need to encourage production of business correspondence, so why is copyright applied to it?14


David Vaver, "Rejuvenating copyright," Canadian Bar Review, Vol. 75, March 1996, pp. 69-80.

Intellectual property is built around a fundamental tension: ideas are public but creators want private returns. To overcome this tension, a distinction developed between ideas and their expression. Ideas could not be copyrighted but their expression could. This peculiar distinction was tied to the romantic notion of the autonomous creator who somehow contributes to the common pool of ideas without drawing from it. This package of concepts apparently justified authors in claiming residual rights—namely copyright—in their ideas after leaving their hands, while not giving manual workers any rationale for claiming residual rights in their creations.15 In practice, though, the idea-expression distinction is dubious and few of the major owners of intellectual property have the faintest resemblance to romantic creators.


Junes Boyle, Shamans, Software, and Spleens: Law and the Social Construction of the Information Economy (Cambridge, MA: Harvard University Press, 1996).
The marketplace of ideas
"If you talk about the whole subject with the word "property" you're prejudging the most basic question in the whole area which is, "how do we treat this thing or that thing or the other thing?" The most basic question would include alternatives such as making it somebody's property, and maybe various other alternatives. But if you call the whole subject "property" you've prejudged that." Richard Stallman on the concept of "Intellectual Property"
The idea of intellectual property has a number of connections with the concept of the marketplace of ideas, a metaphor that is widely used in discussions of free speech. To delve a bit more deeply into the claim that intellectual property promotes development of new ideas, it is therefore helpful to scrutinise the concept of the marketplace of ideas.
The image conveyed by the marketplace of ideas is that ideas compete for acceptance in a market. As long as the competition is fair—which means that all ideas and contributors are permitted access to the marketplace—then good ideas will win out over bad ones. Why? Because people will recognise the truth and value of good ideas. On the other hand, if the market is constrained, for example by some groups being excluded, then certain ideas cannot be tested and examined and successful ideas may not be the best ideas.

Logically, there is no reason why a marketplace of ideas has to be a marketplace of owned ideas: intellectual property cannot be strictly justified by the marketplace of ideas. But because the marketplace metaphor is an economic one, there is a strong tendency to link intellectual property with the marketplace of ideas. As discussed later, there is a link between these two concepts, but not in the way their defenders usually imagine.

There are plenty of practical examples of the failure of the marketplace of ideas. Groups that are stigmatised or that lack power seldom have their viewpoints presented. This includes ethnic minorities, prisoners, the unemployed, manual workers and radical critics of the status quo, among many others. Even when such groups organise themselves to promote their ideas, their views are often ignored while the media focus on their protests, as in the case of peace movement rallies and marches.

Demonstrably, good ideas do not always win out in the marketplace of ideas. To take one example, the point of view of workers is frequently just as worthy as that of employers. Yet there is an enormous imbalance in the presentation of their respective viewpoints in the media. One result is that quite a few ideas that happen to serve the interests of employers at the expense of workers—such as that the reason people don't have jobs is because they aren't trying hard enough to find them—are widely accepted although they are rejected by virtually all informed analysts.

There is a simple and fundamental reason for the failure of the marketplace of ideas: inequality, especially economic inequality.16 Perhaps in a group of people sitting in a room discussing an issue, there is some prospect of a measured assessment of different ideas. But if these same people are isolated in front of their television sets, and one of them owns the television station, it is obvious that there is little basis for testing of ideas. The reality is that powerful and rich groups can promote their ideas with little chance of rebuttal from those with different perspectives. As described in chapter 2, the mass media are powerful enterprises that promote their own interests as well as those of governments and corporations.


C. Edwin Baker, Human Liberty and Freedom of Speech (New York: Oxford University Press, 1989).
In circumstances where participants are approximate equals, such as intellectual discussion among peers in an academic discipline, then the metaphor of competition of ideas has some value. But ownership of media or ideas is hardly a prerequisite for such discussion. It is the equality of power that is essential. To take one of many possible examples, when employees in corporations lack the freedom to speak openly without penalty they cannot be equal participants in discussions (see chapter 5).

Some ideas are good—in the sense of being valuable to society—but are unwelcome. Some are unwelcome to powerful groups, such as that governments and corporations commit horrific crimes or that there is a massive trade in technologies of torture and repression that needs to be stopped. Others are challenging to much of the population, such as that imprisonment does not reduce the crime rate or that financial rewards for good work on the job or grades for good schoolwork are counterproductive.17 (Needless to say, individuals might disagree with the examples used here. The case does not rest on the examples themselves, but on the existence of some socially valuable ideas that are unwelcome and marginalised.)


On these points, see respectively Jeffrey Ian Ross (ed.), Controlling State Crime: An Introduction (New York: Garland, 1995); Steve Wright, "The new technologies of political repression: a case for arms control?" Philosophy and Social Action, Vol. 17, Nos. 3-4, July-December 1991, pp. 31-62; Nils Christie, Crime Control as Industry: towards Gulags, Western Style (London: Routledge, 1994, 2nd edition); Alfie Kohn, Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and other Bribes (Boston: Houghton Mifflin, 1993).

The marketplace of ideas simply does not work to treat such unwelcome ideas with the seriousness they deserve. The mass media try to gain audiences by pleasing them, not by confronting them with challenging ideas.18


Robert M. Entman, Democracy without Citizens: Media and the Decay of American Politics (New York: Oxford University Press, 1989).

The marketplace of ideas is often used to justify free speech. The argument is that free speech is necessary in order for the marketplace of ideas to operate: if some types of speech are curtailed, certain ideas will not be available on the marketplace and thus the best ideas will not succeed. This sounds plausible. But it is possible to reject the marketplace of ideas while still defending free speech on the grounds that it is essential to human liberty.

If the marketplace of ideas doesn't work, what is the solution? The usual view is that governments should intervene to ensure that all groups have fair access to the media. But this approach, based on promoting equality of opportunity, ignores the fundamental problem of economic inequality. Even if minority groups have some limited chance to present their views in the mass media, this can hardly compensate for the massive power of governments and corporations to promote their views. In addition, it retains the role of the mass media as the central mechanism for disseminating ideas. So-called reform proposals either retain the status quo or introduce government censorship.

Underlying the market model is the idea of self-regulation: the "free market" is supposed to operate without outside intervention and, indeed, to operate best when outside intervention is minimised. In practice, even markets in goods do not operate autonomously: the state is intimately involved in even the freest of markets. In the case of the marketplace of ideas, the state is involved both in shaping the market and in making it possible, for example by promoting and regulating the mass media. The world's most powerful state, the US, has been the driving force behind the establishment of a highly protectionist system of intellectual property, using power politics at GATT, the General Agreement on Tariffs and Trade.

Courts may use the rhetoric of the marketplace of ideas but actually interpret the law to support the status quo. For example, speech is treated as free until it might actually have some consequences. Then it is curtailed when it allegedly presents a "clear and present danger," such as when peace activists expose information supposedly threatening to "national security". But speech without action is pointless. True liberty requires freedom to promote one's views in practice.19 Powerful groups have the ability to do this. Courts only intervene when others try to do the same.


Baker (see note 16).
As in the case of trade generally, a property-based "free market" serves the interests of powerful producers. In the case of ideas, this includes governments and corporations plus intellectuals and professionals linked with universities, entertainment, journalism and the arts. Against such an array of intellectual opinion, it is very difficult for other groups, such as manual workers, to compete.20 The marketplace of ideas is a biased and artificial market that mostly serves to fine-tune relations between elites and provide them with legitimacy.21


Benjamin Ginsberg, The Captive Public: How Mass Media Promotes State Power (New York: Basic Books, 1986).
Stanley Ingber, "The marketplace of ideas: a legitimizing myth," Duke Law Journal, Vol. 1984, No. 1, February 1984, pp. 1-91.

The implication of this analysis is that intellectual property cannot be justified on the basis of the marketplace of ideas. The utilitarian argument for intellectual property is that ownership is necessary to stimulate production of new ideas, because of the financial incentive. This financial incentive is supposed to come from the market, whose justification is the marketplace of ideas. If, as critics argue, the marketplace of ideas is flawed by the presence of economic inequality and, more fundamentally, is an artificial creation that serves powerful producers of ideas and legitimates the role of elites, then the case for intellectual property is unfounded. Intellectual property can only serve to aggravate the inequality on which it is built.





The alternative
The alternative to intellectual property is straightforward: intellectual products should not be owned. That means not owned by individuals, corporations, governments, or the community as common property. It means that ideas are available to be used by anyone who wants to.
The alternative to intellectual property is straightforward: intellectual products should not be owned. That means not owned by individuals, corporations, governments, or the community as common property. It means that ideas are available to be used by anyone who wants to.
One example of how this might operate is language, including the words, sounds and meaning systems with which we communicate every day. Spoken language is free for everyone to use. (Actually, corporations do control bits of language through trademarks and slogans.)

Another example is scientific knowledge. Scientists do research and then publish their results. A large proportion of scientific knowledge is public knowledge. There are some areas of science that are not public, such as classified military research. It is usually argued that the most dynamic parts of science are those with the least secrecy. Open ideas can be examined, challenged, modified and improved. To turn scientific knowledge into a commodity on the market, as is happening with genetic engineering, arguably inhibits science.

Few scientists complain that they do not own the knowledge they produce. Indeed, they are much more likely to complain when corporations or governments try to control dissemination of ideas. Most scientists receive a salary from a government, corporation or university. Their livelihoods do not depend on royalties from published work.

University scientists have the greatest freedom. The main reasons they do research are for the intrinsic satisfaction of investigation and discovery—a key motivation for many of the world's great scientists—and for recognition by their peers. To turn scientific knowledge into intellectual property would dampen the enthusiasm of many scientists for their work. However, as governments reduce their funding of universities, scientists and university administrations increasingly turn to patents as a source of income.

Language and scientific knowledge are not ideal; indeed, they are often used for harmful purposes. It is difficult to imagine, though, how turning them into property could make them better.

The case of science shows that vigorous intellectual activity is quite possible without intellectual property, and in fact that it may be vigorous precisely because information is not owned. But there are lots of areas that, unlike science, have long operated with intellectual property as a fact of life. What would happen without ownership of information? Many objections spring to mind.

Plagiarism
Many intellectual workers fear being plagiarised and many of them think that intellectual property provides protection against this. After all, without copyright, why couldn't someone put their name on your essay and publish it? Actually, copyright provides very little protection against plagiarism.22 So-called "moral rights" of authors to be credited are backed by law in many countries but are an extremely cumbersome way of dealing with plagiarism.

Laurie Stearns, "Copy wrong: plagiarism, process, property, and the law," California Law Review, Vol. 80, No. 2, March 1992, pp. 513-553.

Plagiarism means using the ideas of others without adequate acknowledgment. There are several types of plagiarism. One is plagiarism of ideas: someone takes your original idea and, using different expression, presents it as their own. Copyright provides no protection at all against this form of plagiarism. Another type of plagiarism is word-for-word plagiarism, where someone takes the words you've written—a book, an essay, a few paragraphs or even just a sentence—and, with or without minor modifications, presents them as their own. This sort of plagiarism is covered by copyright—assuming that you hold the copyright. In many cases, copyright is held by the publisher, not the author.

In practice, plagiarism goes on all the time, in various ways and degrees,23 and copyright law is hardly ever used against it. The most effective challenge to plagiarism is not legal action but publicity. At least among authors, plagiarism is widely condemned. For this reason, and because they seek to give credit where it's due, most writers do take care to avoid plagiarising.


Thomas Mallon, Stolen Words: Forays into the Origins and Ravages of Plagiarism (New York: Ticknor and Fields, 1989); Ari Posner, "The culture of plagiarism," The New Republic, 18 April 1988, pp, 19-24.

There is an even more fundamental reason why copyright provides no protection against plagiarism: the most common sort of plagiarism is built into social hierarchies. Government and corporate reports are released under the names of top bureaucrats who did not write them; politicians and corporate executives give speeches written by underlings. These are examples of a pervasive misrepresentation of authorship in which powerful figures gain credit for the work of subordinates.24 Copyright, if it has any effect at all, reinforces rather than challenges this sort of institutionalised plagiarism.


Bran Marim, "Plagiarism: a misplaced emphasis," Journal of Information Ethics, Vol. 3, No. 2, Fall 1994, pp. 36-47.

Royalties
What about all the writers, inventors and others who depend for their livelihood on royalties? First, it should be mentioned that only a very few individuals make enough money from royalties to live on. For example, there are probably only a few hundred self-employed writers in the US.25 Most of the rewards from intellectual property go to a few big companies. But the question is still a serious one for those intellectual workers who depend on royalties and other payments related to intellectual property.

Vaver, 1990 (see note 12).

The alternative in this case is some reorganisation of the economic system. Those few currently dependent on royalties could instead receive a salary, grant or bursary, just as most scientists do.

Getting rid of intellectual property would reduce the incomes of a few highly successful creative individuals, such as author Agatha Christie, composer Andrew Lloyd Webber and filmmaker Steven Spielberg. Publishers could reprint Christie's novels without permission, theatre companies could put on Webber's operas whenever they wished and Spielberg's films could be copied and screened anywhere. Jurassic Park and Lost World T-shirts, toys and trinkets could be produced at will. This would reduce the income of and, to some extent, the opportunities for artistic expression by these individuals. But there would be economic resources released: there would be more money available for other creators. Christie, Webber and Spielberg might be just as popular without intellectual property to channel money to them and their family enterprises.

The typical creative intellectual is actually worse off due to intellectual property. Consider an author who brings in a few hundred or even a few thousand dollars of royalty income per year. This is a tangible income, which creators value for its monetary and symbolic value. But this should be weighed against payments of royalties and monopoly profits when buying books, magazines, CDs and computer software.

Many of these costs are invisible. How many consumers, for example, realise how much they are paying for intellectual property when buying prescription medicines, paying for schools (through fees or taxes), buying groceries or listening to a piece of music on the radio? Yet in these and many other situations, costs are substantially increased due to intellectual property. Most of the extra costs go not to creators but to corporations and to bureaucratic overheads—such as patent offices and law firms—that are necessary to keep the system of intellectual property going.

Stimulating creativity
What about the incentive to create? Without the possibility of wealth and fame, what would stimulate creative individuals to produce works of genius? Actually, most creators and innovators are motivated by their own intrinsic interest, not by rewards. There is a large body of evidence showing, contrary to popular opinion, that rewards actually reduce the quality of work.26 If the goal is better and more creative work, paying creators on a piecework basis, such as through royalties, is counterproductive.

Kohn (see note 17).
In a society without intellectual property, creativity is likely to thrive. Most of the problems that are imagined to occur if there is no intellectual property—such as the exploitation of a small publisher that renounces copyright—are due to economic arrangements that maintain inequality. The soundest foundation for a society without intellectual property is greater economic and political equality. This means not just equality of opportunity, but equality of outcomes. This does not mean uniformity and does not mean levelling imposed from the top: it means freedom and diversity and a situation where people can get what they need but are not able to gain great power or wealth by exploiting the work of others. This is a big issue. Suffice it to say here that there are strong social and psychological arguments in favour of equality.27


John Baker, Arguing for Equality (London: Verso, 1987); Morton Deutsch, Distributive Justice: A Social-psychological Perspective (New Haven: Yale University Press, 1985): William Rvan, Equality, (New York: Pantheon, 1981).

Strategies for change
Intellectual property is supported by many powerful groups: the most powerful governments and the largest corporations. The mass media seem fully behind intellectual property, partly because media monopolies would be undercut if information were more freely copied and partly because the most influential journalists depend on syndication rights for their stories.
Perhaps just as important is the support for intellectual property from many small intellectual producers, including academics and freelance writers. Although the monetary returns to these intellectuals are seldom significant, they have been persuaded that they both need and deserve their small royalties. This is similar to the way that small owners of goods and land, such as homeowners, strongly defend the system of private property, whose main beneficiaries are the very wealthy who own vast enterprises based on many other people's labour. Intellectuals are enormous consumers as well as producers of intellectual work. A majority would probably be better off financially without intellectual property, since they wouldn't have to pay as much for other people's work.

Another problem in developing strategies is that it makes little sense to challenge intellectual property in isolation. If we simply imagine intellectual property being abolished but the rest of the economic system unchanged, then many objections can be made. Challenging intellectual property must involve the development of methods to support creative individuals.

Change thinking
Talking about "intellectual property" implies an association with physical property. Instead, it is better to talk about monopolies granted by governments, for example "monopoly privilege." This gives a better idea of what's going on and so helps undermine the legitimacy of the process. Associated with this could be an appeal to free market principles, challenging the barriers to trade in ideas imposed by monopolies granted to copyright and patent holders.
As well, a connection should be forged with ideals of free speech. Rather than talk of intellectual property in terms of property and trade, it should be talked about in terms of speech and its impediments. Controls over genetic information should be talked about in terms of public health and social welfare rather than property.

The way that an issue is framed makes an enormous difference to the legitimacy of different positions. Once intellectual property is undermined in the minds of many citizens, it will become far easier to topple its institutional supports.

Expose the costs
It can cost a lot to set up and operate a system of intellectual property. This includes patent offices, legislation, court cases, agencies to collect fees and much else. There is a need for research to calculate and expose these costs as well as the transfer of money between different groups and countries. A middle-ranking country from the First World, such as Australia, pays far more for intellectual property—mostly to the US—than it receives. Once the figures are available and understood, this will aid in reducing the legitimacy of the world intellectual property System.28

These two strategies are proposed by Peter Drahos, "Thinking strategically about intellectual property rights," paper prepared for the Forum of Parliamentarians on Intellectual Property and the National Working Group on Patent Laws, 1996.

Reproduce protected works
From the point of view of intellectual property. this is called "piracy." (This is a revealing term, considering that such language is seldom used when, for example, a boss takes credit for a subordinate's work or when a Third World intellectual is recruited to a First World position. In each case, investments in intellectual work made by an individual or society are exploited by a different individual or society with more power.) This happens every day when people photocopy copyrighted articles, tape copyrighted music, or duplicate copyrighted software. It is precisely because illegal copying is so easy and so common that big governments and corporations have mounted offensives to promote intellectual property rights.
Unfortunately, illegal copying is not a very good strategy against intellectual property, any more than stealing goods is a way to challenge ownership of physical property. Theft of any sort implicitly accepts the existing system of ownership. By trying to hide the copying and avoiding penalties, the copiers appear to accept the legitimacy of the system.

Openly refuse to cooperate with intellectual property
This is far more powerful than illicit copying. The methods of nonviolent action can be used here, including noncooperation, boycotts and setting up alternative institutions. By being open about the challenge, there is a much greater chance of focussing attention on the issues at stake and creating a dialogue. By being principled in opposition, and being willing to accept penalties for civil disobedience to laws on intellectual property, there is a much greater chance of winning over third parties. If harsh penalties are applied to those who challenge intellectual property, this could produce a backlash of sympathy. Once mass civil disobedience to intellectual property laws occurs, it will be impossible to stop.
Something like that is already occurring. Because photocopying of copyrighted works is so common, there is seldom any attempt to enforce the law against small violators—to do so would alienate too many people. Copyright authorities therefore seek other means of collecting revenues from intellectual property, such as payments by institutions based on library copies.

Already there is mass discontent in India over the impact of the world intellectual property regime and patenting of genetic materials, with rallies of hundreds of thousands of farmers.29 If this scale of protest could be combined with other actions that undermine the legitimacy of intellectual property, the entire system could be challenged.


The magazine Third World Resurgence has regular reports on this issue. See for example Martin Khor, "A worldwide fight against biopiracy and patents on life," Third World Resurgence, No. 63, November 1995, pp. 9-11, and the special issues on patenting of life: No. 57, May 1995 and No. 84, August 1997.

Promote non-owned information
A good example is public domain software, which is computer software that is made available free to anyone who wants it. The developers of "freeware" gain satisfaction out of their intellectual work and out of providing a service to others. The Free Software Foundation has spearheaded the development and promotion of freeware. It "is dedicated to eliminating restrictions on people's right to use, copy, modify and redistribute computer programs" by encouraging people to develop and use free software.
A suitable alternative to copyright is shareright. A piece of freeware might be accompanied by the notice, "You may reproduce this material if your recipients may also reproduce it." This encourages copiers but refuses any of them copyright.

The Free Software Foundation has come up with another approach, called "copyleft". The Foundation states, "The simplest way to make a program free is to put it in the public domain, uncopyrighted. But this permits proprietary modified versions, which deny others the freedom to redistribute and modify; such versions undermine the goal of giving freedom to all users. To prevent this, 'copyleft' uses copyright in a novel manner. Typically copyrights take away freedoms; copyleft preserves them. It is a legal instrument that requires those who pass on a program to include the rights to use, modify, and redistribute the code; the code and the freedoms become legally inseperable.30 Until Copyright is eliminated or obsolete, innovations such as copyleft are necessary to avoid exploitation of those who want to make their work available to others.


GNU's Bulletin, January 1995 (Free Software Foundation, 59 Temple Place, Suite 330, Boston MA 02111-1307, USA; gnu@prep.ai.mit.edu). See http://www.gnu.org/ for the latest description.
Develop principles to deal with credit for intellectual work
This is important even if credit is not rewarded financially. This would include guidelines for not misrepresenting another person's work. Intellectual property gives the appearance of stopping unfair appropriation of ideas although the reality is quite different. If intellectual property is to be challenged, people need to be reassured that misappropriation of ideas will not become a big problem.
More fundamentally, it needs to be recognised that intellectual work is inevitably a collective process. No one has totally original ideas: ideas are always built on the earlier contributions of others. (That's especially true of this chapter!) Furthermore, culture—which makes ideas possible—is built not just on intellectual contributions but also on practical and material contributions, including the rearing of families and construction of buildings. Intellectual property is theft, sometimes in part from an individual creator but always from society as a whole.

In a more cooperative society, credit for ideas would not be such a contentious matter. Today, there are vicious disputes between scientists over who should gain credit for a discovery. This is because scientists' careers and, more importantly, their reputations, depend on credit for ideas. In a society with less hierarchy and greater equality, intrinsic motivation and satisfaction would be the main returns from contributing to intellectual developments. This is quite compatible with everything that is known about human nature. The system of ownership encourages groups to put special interests above general interests. Sharing information is undoubtedly the most efficient way to allocate productive resources. The less there is to gain from credit for ideas, the more likely people are to share ideas rather than worry about who deserves credit for them.


Alfie Kohn, The Brighter Side of Human Nature: Altruism and Empathy in Everyday Life (New York: Basic Books, 1990).

For most book publishers, publishing an argument against intellectual property raises a dilemma. If the work is copyrighted as usual, this clashes with the argument against copyright. On the other hand, if the work is not copyrighted, then unrestrained copying might undermine sales. It's worth reflecting on this dilemma as it applies to this book.

It is important to keep in mind the wider goal of challenging the corruptions of information power. Governments and large corporations are particularly susceptible to these corruptions. They should be the first targets in developing a strategy against intellectual property.

Freedom Press is not a typical publisher. It has been publishing anarchist writings since 1886, including books, magazines. pamphlets and leaflets, Remarkably, neither authors nor editors have ever been paid for their work. Freedom Press is concerned with social issues and social change, not with material returns to anyone involved in the enterprise.

Because it is a small publisher, Freedom Press would be hard pressed to enforce its claims to copyright even if it wanted to. Those who sympathise with the aims of Freedom Press and who would like to reproduce some of its publications therefore should consider practical rather than legal issues. Would the copying be on such a scale as to undermine Freedom Press's limited sales? Does the copying give sufficient credit to Freedom Press so as to encourage further sales? Is the copying for commercial or noncommercial purposes?

In answering such questions, it makes sense to ask Freedom Press. This applies whether the work is copyright or not. If asking is not feasible, or the copying is of limited scale, then good judgement should be used. In my opinion, using one chapter—especially this chapter!—for nonprofit purposes should normally be okay.

So in the case of Freedom Press, the approach should be to negotiate in good faith and to use good judgement in minor or urgent cases. Negotiation and good judgement of this sort will be necessary in any society that moves beyond intellectual property.


Chapter 3 of Information Liberation, Challenging the corruptions of information power by Brian Martin, London: Freedom Press, 1998. The entire book is available online.

top ^ thoughtcrime > deoxy.org



deoxy.org > forum > chatter news · off · window
Tiger attack on Elephant, first time ever footage! : Watched
New : Video : Psychonauts documentary w/ English subtitles (2006)News : Perl CPAN Forum » [Net-Appliance-Session] Timeout during command execution

and all is quiet...
helppastcastlogincloudonline

Disorders resulting from MAO Dysfunction

http://en.wikipedia.org/wiki/Monoamine_oxidase

Disorders resulting from MAO dysfunction
Because of the vital role that MAOs play in the inactivation of neurotransmitters, MAO dysfunction (too much or too little MAO activity) is thought to be responsible for a number of neurological disorders. For example, unusually high or low levels of MAOs in the body have been associated with depression, substance abuse, attention deficit disorder, migraines, and irregular sexual maturation. Monoamine oxidase inhibitors are one of the major classes of drug prescribed for the treatment of depression, although they are last line treatment due to risk of the drug's interaction with diet or other drugs. Excessive levels of catecholamines (epinephrine, norepinephrine, and dopamine) may lead to a hypertensive crisis, and excessive levels of serotonin may lead to serotonin syndrome.

PET research has shown that MAO is also heavily depleted by use of tobacco cigarettes.[2]