The Constitutional Federal Foreign Jurisdiction



     The Constitution, of course, gives the federal government a limited, lawful jurisdiction.  Under Article 1, Section 8, Clauses 3 and 4, the federal government is given complete authority over all foreign affairs and foreign persons in America.  These sections grant powers to the federal government over all foreign affairs, including international foreign agreements with other nations, and over foreign persons in the United States;  and Article I, Section 10, Clauses 1, 2 and 3 of the Constitution prohibit all of the States from enacting any agreements with foreign entities.   This absolute federal jurisdiction over all foreign affairs, together with the powers to tax indirectly, granted under Article I, Section 8, Clause 1, is the basis for the legal authority allowing for the passage of a tariff act authorizing the collection of an income tax tariff (impost) from foreign, non-resident “persons”. 


     However, under the Constitution, each of the governments of the fifty states retains the sovereign power and lawful jurisdiction over its own lands, and its legislature alone enacts law for the people of that State regarding internal affairs. 


     Additionally, Article 1, Section  8, Clause 3 of the Constitution gives the federal government jurisdiction and authority over foreign commerce and over all interstate commerce between the states, thus establishing the complete jurisdictional authority of the federal government, which is an authority around the states and between the states, but not over the land of the fifty states.  This is why the Supreme Court has rejected the federal government’s attempts to exercise police powers in the fifty states, that could not be reasonably related to interstate commerce, as recently as 1998 in the U.S. v Lopez decision.


     The federal government does not possess the territorial jurisdiction necessary to tax sales in the fifty states.  That authority and jurisdiction belong exclusively to the governments of the States themselves.  Under the Interstate Commerce clause the federal government may only tax the first sale at the wholesale level after interstate transport has occurred.  The State alone may tax the retail level of sales within a particular State.  All these politicians talking about a national sales tax or a flat tax to replace the income tax only demonstrate that they are unfit for office because they don’t understand the constitutional limitations imposed on the authority of the federal government, to tax, and to write legislation for the fifty states, only of limited scope and operation as specifically granted authority to do so in the Constitution.


     To see that the 1913 Subtitle A income tax actually created by the tariff act is only imposed by law within this lawful foreign jurisdiction that the federal government actually does possess over all foreign matters, and is not actually imposed domestically beyond that foreign jurisdiction on citizens and residents within America, one only need examine the difference in the treatment under the law between non-resident aliens and resident aliens in regards to the withholding of tax at the source.  


     From the legal definition of the Withholding Agent provided in Title 26 USC Section 7701(a)(16) we clearly see that non-resident aliens are subject to the withholding of income tax under Section 1441.  However, as soon as a non-resident alien becomes a resident alien, then he/she is no longer subject to the withholding of income tax at the source by the Withholding Agent because he/she is no longer part of the definition of the Withholding Agent’s authority over subject persons.   The statutory definition of the Withholding Agent, from Title 26 U.S.C. Section 7701(a)(16), only specified that withholding was required under Sections 1441, 1442, 1443 and 1461.  However, once the non-resident alien becomes a resident alien he/she is no longer the subject of the tax, and it is no longer authorized to be withheld from them because they are no longer within its jurisdictional reach because as a resident of one of the fifty states the aliens’ activity is now recognized by the law as being domestic and not foreign (even though it is conducted by a foreign person), and therefore outside the federal territorial and subject matter jurisdictions over foreign affairs.. 


     The resident alien’s economic activity is no longer within the foreign jurisdictional authority of the federal government because they are now under the territorial jurisdictional authority of the State government that they are resident within.  Tariffs are imposed on foreign activity, not domestic.  As soon as the non-resident alien becomes a resident (“resident” is defined in the law) his activity is recognized by the law as being removed from the “foreign” category that is subject to a tariff, and is placed into the “domestic” category, which is outside the subjectivity to any tariff, and the withholding of tax from their payments terminates.  Domestic activity is not subject to any tariff because a tariff is a foreign tax.  Even when the activity is conducted by a foreign person who has become a resident in the U.S. (but who is still foreign) the tax is not withheld at the source because the resident is not subject to the payment of a tariff, because a resident’s activity is not considered foreign, but domestic, and is therefore not lawfully subject to payment of a tariff on foreign activity.   If resident aliens aren’t even subject to the income tax it is of course absurd to even suggest that American citizens are, or ever were the proper subjects of this income tax in the form of a foreign tariff – that is all government mythical fiction and propaganda, as we will expose.


     The indirect collection scheme of the income tax, which is collected at the source by withholding from subject persons, and which is paid by the third party Withholding Agent who is made liable, and is not paid by the actual subject of the tax (the foreigner), has never changed in 94 years.  The rate of tax to be ultimately owed under Section 1, and the percentage of earnings to be withheld under Sections 1441 and 1442 have all been adjusted both up and down at different times through the years, and the language of the statutes establishing the amounts of the allowable deductions, credits and expenses has been continuously altered as well, but the fundamental scheme of the income tax laws under Subtitle A has never changed in 94 years.  It is now, and has always been, a tax that is collected at the source from subject persons by a third party, by withholding at the source from payments to persons subject by statute to withholding.   


     The subject persons are all foreign, of course, because the tax is clearly, from a simple and straight forward reading of the law, nothing more than an indirect tariff on the income derived from the economic activity of foreigners under the federal jurisdiction, it is not a direct tax on the domestic activity or income of any American citizens under the territorial jurisdiction of the fifty states.   Liability has nothing to do with the collection of the tax from the taxpayer – it is just taken from foreign persons by the Withholding Agents, who are then made liable for turning over the collected tax to the Treasury.   Note that Section 1461 indemnifies the Withholding Agent from any claims made by the foreign taxpayer regarding the taking (withholding) of the tax.  If no tax is collected by withholding when it should have been, then Sections 1461 and 1463 clearly and simply state that it is the Withholding Agent who is liable for the uncollected tax, penalties and interest, not the (foreign) taxpayer receiving payments.  Under the actual laws the IRS should never approach a citizen directly to collect any uncollected tax because that would constitute direct taxation, only the Withholding Agents or the payors may be approached according to the law – that keeps it all indirect and constitutional.


     And that is the entire extent of the proper legal domestic application of the income tax (in America) under the law.  There are no other provisions anywhere in all of Subtitle A - Income Taxes, authorizing the withholding of this tax from any other persons, foreign or otherwise, or stating that any other person other than the Withholding Agent is liable, or is made liable, for either the payment of the income tax, or for the payment of any penalties or interest incurred as a result of a failure to pay.


     The income tax is an indirect foreign tax in the form of a tariff that is collected at the source by withholding from subject persons - who are all foreign and properly subjected to the payment of a tariff.  But, tariffs do not apply to domestic economic activity, and the scheme of the income tax - withholding at the source from subject persons, has never changed in 94 years.  The same provisions exist in the law now as did in 1913, when the Supreme Court ruled (of course) that the whole thing is certainly Constitutional under Article 1, Section 8, Clause 1 authorizing the government to lay taxes: imposts, duties and excises.


     This understanding, based on these legal facts presented here regarding the withholding of income tax from subject persons under Subtitle A, represents what is still in the law today in subtitle A – the Income Tax.  The income tax does not apply to domestic economic activity, because domestic activity cannot be lawfully made the subject of any tariff act or tariff tax.