Meet Your 1040 Form

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January 30, 2007

This is the time of year when 150 million working Americans 'fess up to owing the FedGov several thousand dollars each, and many of us pick up a free copy of the 1040 Instruction Book at the government's nearest Post Office and try to minimize the total. This offers a short guide to two pages of that 100-page book which most people never read.

The other 98 are very boring, so that's a pity. These two are really informative, and I'm not kidding. Offhand, I can't think of any more useful government publication. Near the back of the book, they are:

- The Disclosure and Privacy Act Notice, in very small print and

- The revenue & expenditure pie charts.

Each is also online via the links above, so let me start with the Disclosure Notice. This is where the FedGov discloses, reluctantly, what it feels the public has to know about our legal obligations. It does that because of the handy-dandy Mission Statement on the inside front cover: to "provide America 's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all." That's what the IRS is said to be for.

Run the eye down three paragraphs, to where it says "Our legal right to ask for information [i.e., demand a tax return] is Internal Revenue Code Sections 6001, 6011 and 6012(a) and their regulations. They say that you must file a return or statement with us for any tax you are liable for." Apart from its terrible grammar (a preposition is something one should never end a sentence with), that last bit is perfectly true; that's what those Sections do say. Go check.

Sections numbered over 6000 come from 26 USC Subtitle F, which has to do with administering any Federal tax, hence the word "any" that's quoted. So if you or I are liable for a tax on firearms, we have to file an accounting. If liable for a tax on income, likewise. But someone who is not so liable, need not so file. Nobody ever asked me for a tax return on wagering, because only bookies are liable for that. So having read those sentences, we need to know only one thing before cranking up the calculator: Am I liable for an income tax?

Unfortunately, the nice folk whose mission is to "help us understand" won't say where that law is to be found. Nobody I know has ever found a law that makes anyone liable for an income tax. If any reader of this happens to know of it, please be sure to send me its Section number, and I'll broadcast the news far and wide. Failing that, we have a problem.

Then the very next paragraph begins, "You are not required to provide the information requested . . . unless the form displays a valid OMB control number." Funny thing: in May 2006 one Robert Lawrence, accused of failing to file a tax return, told the court through his attorney Oscar Stilley that the IRS 1040 Form has never had a valid OMB number, and the prosecution immediately withdrew the case "with prejudice," meaning they promised never to bring it again.

The rest of the Disclosure page is also interesting, for it says that whatever info we divulge on a 1040 Form can be shared with Uncle Tom Cobley and be used as evidence in prosecutions. Oops! That sounds to me very like a "Miranda" warning, under the Fifth Amendment--and one IRS Agent once admitted to me that yes, that's just what it is. So . . . can we be compelled to give evidence that can be used against us? Not in any Perry Mason episode I ever watched. And wouldn't that mean that . . . filing a 1040 is voluntary?

Yes, of course it would. But please beware: what the Legislative Branch cannot and did not enact into law, the Executive and Judicial Branches will enforce anyway, just as if it had, Amendment 5 notwithstanding. Don't expect government to honor the law, if doing so would keep it from your money.

Summary so far: that single "Disclosure" page has actually disclosed the enormously interesting fact that the grade-school civics tale about laws being made only by representatives elected by Us the People is so much hogwash. Not, of course, that laws, as one-sided "contracts," would be binding anyway even if they were.

Now let's go to the second interesting page, the R&E Pie Charts. These are always informative, showing where the Feds get their money and where they spend it, but this year (the figures are for 2005) they are especially readable.

In that year, Americans produced a GDP of $12.5 trillion and the FedGov stole and spent one-fifth of that, or $2.5 trillion--and the pie charts account for how. (States and cities stole a further $3 trillion or so, but that's off-topic here.) The first thing that may strike the eye is that the "income tax," while it is still the biggest single slice, accounts for only 38% of the whole. There are some who imagine it does the lot. Not at all; the Social Security tax (also accounted for via the 1040 Form) is 32% of the whole (making 70% surrendered via the 1040 in all) and the next biggest component is the deficit, at 13%. Corporate taxes, which are of course paid only by people, never by corporations (which act only as unpaid collectors) account for 11%. On the spending side, what struck me most is the military component: a massive 24%, so confirming the Bourne principle that "war is the health of the state." Interest on the debt (of over $8 trillion, owed to a wide variety of investors foolish and immoral enough to lend money to the government) is 7%, or $175 billion.

I happen to have retained a few of these "1040 Instruction" books from prior years, and have made this table to show how these components shifted over time.

Fiscal Years 1996-99 average 2004-05 average I-tax % of revenues 45.6 35.5 Military % of spend 18.7 23.5 Deficit % of revenues 2.3 15.5

Obvious conclusion: the Feds have moved strongly to a war footing, and are funding the cost by borrowing from future taxpayers rather then hitting current ones. No wonder the dollar is losing ground against other currencies, even those printed by more overtly socialist governments. This is of course grossly irresponsible; but that matters more to our friends who believe the fairy tale that government ever intended to be "responsible." To us who grasp something of its intrinsically evil nature, it's not really any surprise at all.

A last word, if I may, about the bottom line of the 1040. That's where we have to sign "under penalty of perjury" that everything we wrote on it is correct and complete to the best of our knowledge--and telling the truth has to do with one's personal integrity. The IRS will not accept a filing without that signature.

Now, having read this article, can you honestly sign that? I see some real problems here:

- We'd be swearing that stuff we received, like wages, is "income" in a legal sense; but that is by no means clear. Firstly the law (26 USC) doesn't define the term at all--a fact confirmed by the Ballard case as recently as 1976. Then, the Supreme Court said "income" actually consists of corporate profit in a case never since reversed. So at the very least, the matter is confused; how, then, can you or I swear that it means one thing or another?

- Then (by entering on the Form a non-zero tax-due line) we'd be swearing that we legally owe such a tax, whereas as shown above, we know there is no such liability named anywhere in the law.

- Lastly, even if there were such a definition and liability in law, as libertarians we know that no law is truly binding on anyone anyway, since laws are one-sided contracts; in true truth we own ourselves exclusively and owe nothing whatever except under the terms of voluntary, explicit agreements. When we pay properly-legalized sales or property taxes, we recognize those extractions as pure theft, and never consent to them as properly due; but here on the 1040 Form we are expected not just to pay the money but to agree under oath that it is owed.

Conversely if we don't sign it, or will not file the form at all, there's a serious risk of a free stay at Club Fed. So the choice is really between paying and lying, or telling the truth and perhaps winding up behind bars. Such is "American Freedom." Such is government.

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Jim Davies's picture
Columns on STR: 243

Jim Davies is a retired businessman in New Hampshire who led the development of an on-line school of liberty in 2006, and who wrote A Vision of Liberty" , "Transition to Liberty" and, in 2010, "Denial of Liberty" and "To FREEDOM from Fascism, America!" He started The Zero Government Blog in the same year.
In 2012 Jim launched http://TinyURL.com/QuitGov , to help lead government workers to an honest life.
In 2013 he wrote his fifth book, a concise and rational introduction to the Christian religion called "Which Church (if any)?"