did we fall for an internet scam?

the irs website clearly states "the sixteenth amendment authorizes a non-apportioned direct income tax"

yes, we did fall for an internet scam. just not the one you’re thinking.

i’m about to show you that the internet scam we all fell for was the one on the irs’ website.

see here where that sub-head is a direct quote.

but as i have shown, and will show again below, the opposite is true - the sixteenth amendment does not authorize a non-apportioned direct tax.

below i will break down for you every sentence of the “frivolous argument” linked above to show you exactly how the irs is scamming you.

we’ve already caught them lying about their “frivolous return penalty” so this is just one more example.

Contention: The Sixteenth Amendment does not authorize a direct non-apportioned federal income tax on United States citizens.

although the irs is misleading here by calling it a “contention” and then allegedly debunking it with “the law” and “relevant case law,” the supreme court agrees with this “contention” in several rulings, the first and most important being brushaber:

"[T]axation on income [is] in its nature an excise, entitled to be enforced as such..."

A unanimous Supreme Court in Brushaber v. Union Pacific R. Co., 240 U.S. 1 (1916), re-iterating its conclusion in Pollock v. Farmer's Loan & Trust, 158 U.S. 601 (1895). {emphasis added}

brushaber is from 1916, three years after the passage of the 16th amendment, and here the supreme court is affirming the income tax is still an excise, otherwise known as an indirect tax.

at a bit over a dozen pages, it’s definitely worth the time to read it, from the section that begins, “MR. CHIEF JUSTICE WHITE delivered the opinion of the court.”

[and check out my post where i translate the opinion into plain english: dawnfrench.substack.com/p/can-we-see-that-in-plain-english]

here are a few other important quotes, that if you read the entire opinion you will see are most definitely NOT taken out of context as our cpa alleges:

“We are of opinion, however, that the confusion is not inherent, but rather arises from the conclusion that the Sixteenth Amendment provides for a hitherto unknown power of taxation, that is, a power to levy an income tax which although direct should not be subject to the regulation of apportionment applicable to all other direct taxes. And the far- reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it …” {emphasis added}

after listing out “the many contentions,” the opinion continues:

“But it clearly results that the proposition and the contentions under it, if acceded to, would cause one provision of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned … This result, instead of simplifying the situation and making clear the limitations on the taxing power, which obviously the Amendment must have been intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion.” {emphasis added}

notice the obvious intent of the 16th amendment was to make clear the limitations on the taxing power of congress. and the proposition that the amendment exempted a direct tax from apportionment, “would create radical and destructive changes in our constitutional system and multiply confusion.”

here’s where they just come right out and say it:

“[T]he contention that the Amendment treats a tax on income as a direct tax although it is relieved from apportionment and is necessarily therefore not subject to the rule of uniformity as such rule only applies to taxes which are not direct, thus destroying the two great classifications which have been recognized and enforced from the beginning, is also wholly without foundation …” {emphasis added}

that’s pretty clear language that completely falsifies the irs’ claim that, “the sixteenth amendment authorizes a non-apportioned direct income tax,” as it is wholly without foundation.

and here they lay out the purpose of the amendment:

“ … the purpose was not to change the existing interpretation except to the extent necessary to accomplish the result intended, that is, the prevention of the resort to the sources from which a taxed income was derived in order to cause a direct tax on the income to be a direct tax on the source itself and thereby to take an income tax out of the class of excises, duties and imposts and place it in the class of direct taxes.” {emphasis added}

here the supremes pretty clearly state the purpose of the 16th amendment was to clarify the source argument and NOT to take the income tax out of the class of excises, duties and imposts (a.k.a. indirect taxes), as we already saw in my two previous posts on the 16th amendment here and here.

but, in case you’re still not convinced (or pretending not to be if you are a troll), here are a few more supreme court rulings that further prove the point:

“[B]y the [Brushaber] ruling, it was settled that the provisions of the Sixteenth Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged, and being placed in the category of direct taxation subject to apportionment by a consideration of the sources from which the income was derived -- that is, by testing the tax not by what it was, a tax on income, but by a mistaken theory deduced from the origin or source of the income taxed.”

U. S. Supreme Court, Stanton v. Baltic Mining Co., 240 U.S. 103 (1916) {emphasis added}

"The Sixteenth Amendment, although referred to in argument, has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects..."

U.S. Supreme Court, Peck v. Lowe, 247 U.S. 165 (1918) {emphasis added}

"[T]he settled doctrine is that the Sixteenth Amendment confers no power upon Congress to define and tax as income without apportionment something which theretofore could not have been properly regarded as income."

U.S. Supreme Court, Taft v. Bowers, 278 US 470, 481 (1929) {emphasis added}

“If the tax is a direct one, it shall be apportioned according to the census or enumeration. If it is a duty, impost, or excise, it shall be uniform throughout the United States. Together, these classes include every form of tax appropriate to sovereignty. Whether the tax is to be classified as an "excise" is in truth not of critical importance. If not that, it is an "impost", or a "duty". A capitation or other "direct" tax it certainly is not.”

U.S. Supreme Court, Steward Machine Co. v. Davis, 301 U.S. 548 (1937) {emphasis added, citations omitted}

the supremes are stating clearly and consistently that the contention the 16th authorizes a non-apportioned direct income tax is an ERRONEOUS ASSUMPTION that is WHOLLY WITHOUT FOUNDATION. so unless any of that “relevant case law” on the irs’ website includes the overturning of all of those supreme court cases, we’re done [spoiler alert - it doesn’t] - we’ve proved they’re lying again.

literally one sentence in and we could just wrap it up, but lets keep going so we can see just how long that rope is they hang themselves with.

the next sentence on the irs website:

Some individuals and groups 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.

yes, we assert the 16th amendment does not authorize a direct, non-apportioned income tax, just like the supreme court justices above. but that first clause does not automatically imply the second, bolded one. the “and, thus” clause is the irs misleading you again.

so, yes, us citizens and residents are subject to federal income tax laws, even though the 16th does not authorize a direct non-apportioned income tax, and we are not claiming otherwise. let’s keep going:

The Law:
The constitutionality of the Sixteenth Amendment has invariably been upheld when challenged.
Numerous 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 are valid as applied.
In Notice 2010-33, 2010-17 I.R.B. 609, the IRS warned taxpayers of the consequences of attempting to pursue a claim on these grounds.

each of those three sentences are technically correct, but you are still being misled.

the first sentence is a correct statement per the supreme court rulings we saw above - the constitutionality of the 16th has been upheld when challenged.

the third sentence is true that you have been warned.

but the second sentence, while again, technically true, is where we’ll spend the rest of this post as it gets to the heart of the scam.

“numerous courts” have both implicitly and explicitly stated that the 16th authorizes a non-apportioned direct income tax.

but those numerous court rulings completely contradict the supreme court rulings we saw above, which have not been overturned. so what’s going on here?

in order to see how these “numerous courts” are complicit in this scam, we just need to do a little reading into those cases and see exactly how they come to the opposite conclusion to the supremes, and what they base those rulings on. [spoiler alert - nothing but lies.]

the irs couldn’t be bothered to provide you with links so you can read these cases yourself, so i’ve done so below.

most of these are just a few pages long in total and the relevant sections that refer to the nature of the income tax and/or the 16th amendment are only a few short sentences. i recommend you read them yourself. i’ve only provided a brief summary of each below.

[i’ve also reordered the list so that newer cases are listed before older ones and added earlier cases referred to in later ones. jones and maxwell are excluded as I could not find these opinions online. the “other cases” are also excluded from this analysis.]

Young v. Commissioner, 551 F. App'x 229, 203 (8th Cir. 2014) – rejecting as "meritless" and "frivolous" Young's arguments that the income tax is an unconstitutional direct tax, the 8th Circuit imposed $8,000 in sanctions.

first thing to note is that the cite is incorrect. this is a fifth circuit, not an eighth circuit, opinion.

here’s the single relevant sentence:

“‘At this late date, it seems incredible that we would again be required to hold that the Constitution, as amended, empowers the Congress to levy an income tax against any source of income, without the need to apportion the tax equally among the states, or to classify it as an excise tax applicable to specific categories of activities.’ Parker v. Commissioner, 724 F.2d 469, 471-72 (5th Cir. 1984).”

that is a direct quote from an earlier case that directly contradicts the supreme court rulings above. so we’ll have to look at parker (added below) to see how they arrived at that conclusion.

Taliaferro v. Freeman, 595 F. App'x 961, 962–63 (11th Cir. 2014) – the Eleventh Circuit rejected as frivolous the taxpayer's argument that the Sixteenth Amendment authorizes the imposition of excise taxes but not income taxes, and ordered sanctions against him up to and including double the government's costs.

here is the single relevant sentence from taliaferro:

“‘[for nearly a century], the 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.’ United States v. Collins, 920 F.2d 619, 629 (10th Cir. 1990).”

well that blatant falsehood (the supreme court has affirmed “for nearly a century” the exact opposite) is also a nearly direct quote from an earlier case so we’ll also add collins to our list of cases to examine.

here’s the relevant section of collins:

“Dickstein's argument that the sixteenth amendment does not authorize a direct, non-apportioned tax on United States citizens similarly is devoid of any arguable basis in law. Indeed, the Ninth Circuit recently noted "the patent absurdity and frivolity of such a proposition." In re Becraft, 885 F.2d 547, 548 (9th Cir. 1989). For seventy- five years, the 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, see Brushaber v. Union Pac. R.R., 240 U.S. 1, 12- 19, 36 S.Ct. 236, 239-42, 60 L.Ed. 493 (1916)”

here we see that same blatant falsehood where the court pretty closely quotes becraft (see below), but they also cite brushaber and we already know that is the exact opposite of what brushaber really says.

In re Becraft, 885 F.2d 547, 548–49 (9th Cir. 1989) – the Ninth Circuit, rejecting the taxpayer's frivolous position that the Sixteenth Amendment does not authorize a direct non-apportioned income tax, affirmed the failure to file conviction.

here’s the relevant section of becraft:

“[Becraft's] position can fairly be reduced to one elemental proposition: The Sixteenth Amendment does not authorize a direct non-apportioned income tax on resident United States citizens and thus such citizens are not subject to the federal income tax laws. We hardly need comment on the patent absurdity and frivolity of such a proposition. For over 75 years, the Supreme Court and the lower federal courts have both implicitly and explicitly recognized the Sixteenth Amendment's authorization of a non-apportioned direct income tax on United States citizens residing in the United States and thus the validity of the federal income tax laws as applied to such citizens. See, e.g., Brushaber v. Union Pacific Railroad Co., 240 U.S. 1, 12-19, 36 S.Ct. 236, 239-42, 60 L.Ed. 493 (1916); Ward, 833 F.2d at 1539; Lovell v. United States, 755 F.2d 517, 519 (7th *549 Cir. 1984); Parker v. Commissioner, 724 F.2d 469, 471 (5th Cir. 1984); United States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981).”

objection, your honor, misleading.

the 16th “does not authorize a direct non-apportioned income tax” on anyone, not just resident u.s. citizens, but that doesn’t mean they aren’t subject to the federal income tax laws. it’s the “and thus” part that is absurd and frivolous.

and we see the same blatant falsehood about what brushaber actually says.

lovell and parker are below.

[neither the ward nor the romero opinions i found comment on the nature of the income tax (direct or indirect) or mention the 16th amendment at all so there’s no commentary to include here on these.]

Lovell v. United States, 755 F.2d 517, 518–20 (7th Cir. 1984) – the Seventh Circuit rejected the argument that the Constitution prohibits imposition of a direct tax without apportionment, upheld assessment of the frivolous return penalty, and imposed sanctions for pursuing "frivolous arguments in bad faith" on top of the lower court's award of attorneys' fees to the government.

here’s the one relevant section of lovell:

“Plaintiffs also contend that the Constitution prohibits imposition of a direct tax without apportionment. They are wrong; it does not. U.S. Const. amend. XVI; Parker v. Commissioner, 724 F.2d 469, 471 (5th Cir. 1984).”

uh, yes it does, and the 16th amendment did not change that, per brushaber. and here we see the parker cite again.

there are a few relevant sections in parker we will address. first, here’s the direct quote we saw in young above:

“At this late date, it seems incredible that we would again be required to hold that the Constitution, as amended, empowers the Congress to levy an income tax against any source of income, without the need to apportion the tax equally among the states, or to classify it as an excise tax applicable to specific categories of activities.”

incorrect. the constitution as amended does NOT empower congress to levy an income tax without the need to apportion it or classify it as an excise, per the supreme court shown above. there is no cite for that specific comment so this statement either relies upon earlier cites in the parker opinion or it’s just made up entirely.

then there’s this:

“The Supreme Court promptly determined in Brushaber v. Union Pacific Ry. Co., 240 U.S. 1, 36 S.Ct. 236, 60 L.Ed. 493 (1916), that the sixteenth amendment provided the needed constitutional basis for the imposition of a direct non-apportioned income tax.”

parker also completely misrepresents what brushaber actually says.

and this:

“The sixteenth amendment merely eliminates the requirement that the direct income tax be apportioned among the states. The immediate recognition of the validity of the sixteenth amendment continues in an unbroken line. See e.g. United States v. McCarty, 665 F.2d 596 (5 Cir. 1982); Lonsdale v. CIR.”

again, incorrect. the 16th does NOT eliminate the requirement for any direct tax to be apportioned, as we saw in the supreme court rulings above. “the immediate recognition of the validity of the [16th] continues in an unbroken line,” but that “unbroken line” as shown above supports the opposite conclusion.

and this:

“Parker maintains that "the IRS and the government in general, including the judiciary, mistakenly interpret the sixteenth amendment as allowing a direct tax on property (wages, salaries, commissions, etc.) without apportionment." As we observed in Lonsdale v. CIR, 661 F.2d 71 (5th Cir. 1981), the sixteenth amendment was enacted for the express purpose of providing for a direct income tax.”

the 16th was NOT enacted for the express purpose of providing for a direct income tax, again as the supreme court has made clear above - that is, as they put it, “wholly without foundation.”

and now we have two more cases to add below: mccarty and lonsdale.

here’s the relevant section:

“[McCarty claims] he was not subject to any federal income tax since the Sixteenth Amendment did not really change the former constitutional requirement that direct taxation be apportioned according to population. This latter argument is made in the face of the express language of the Amendment, its undoubted express intention, and an unbroken line of jurisprudence to the contrary. See, e. g., Lonsdale v. C.I.R., 661 F.2d 71, 72 (5th Cir. 1981).”

while it is true the 16th did not change the requirement that direct taxes be apportioned, adding the word “former” makes the statement false.

the “undoubted express intention” of the amendment i already showed you above - the obvious intent of the 16th amendment was to make clear the limitations on the taxing power of congress.

and the “unbroken line of jurisprudence” i also showed you above where multiple supreme court rulings support the opposite.

and mccarty also cites lonsdale.

and finally, the single relevant section from this barely-over-one-page-long opinion:

“Appellants next seem to argue, in reliance on Pollock v. Farmers Loan Trust Co., 157 U.S. 429, 15 S.Ct. 673, 39 L.Ed. 759 (1895), and other authority, that, so understood, the income tax is a direct one that must be apportioned among the several states. U.S. Const. art. I, sec. 2. This requirement was eliminated by the sixteenth amendment.”

the argument the income tax is direct per pollock is not correct. the pollock court stated the source of the income is what caused the inherently indirect income tax to be considered direct, which then must be apportioned.

the apportionment requirement for direct taxes was NOT eliminated by the 16th amendment as the supremes have made abundantly clear.

lonsdale provides NO CITATIONS for that blatantly false statement.

where’s the support for that “unbroken line of jurisprudence to the contrary” mentioned in mccarty?

---

so with respect to the statement on the irs’ website that “numerous courts” have both implicitly and explicitly recognized that the Sixteenth Amendment authorizes a non-apportioned direct income tax on United States citizens, we have found:

• young (5th cir. 2014) directly quotes parker (5th cir. 1984);

• taliaferro (11th cir. 2014) directly quotes collins (10th cir. 1990);

• collins pretty closely quotes becraft (9th cir. 1989), and completely mischaracterizes brushaber;

• becraft (9th cir. 1989) also completely mischaracterizes brushaber, and cites lovell (7th cir. 1984) and parker (5th cir. 1984);

• lovell (7th cir. 1984) cites parker (5th cir. 1984);

• parker (5th cir. 1984) completely misrepresents what brushaber actually says, and cites mccarty (5th cir. 1982) and lonsdale (5th cir. 1981);

• mccarty (5th cir. 1982) cites lonsdale (5th cir. 1981); and

• lonsdale (5th cir. 1981) cites … NOTHING

so the entire argument relies on repeated lies about what brushaber actually says and nothing else. THEY JUST MADE IT UP.

all this nonsense originated out of the fifth circuit in the 1980s and was repeated ad nauseam by the seventh, ninth, tenth, and eleventh circuits (and probably others too, but my research here is not exhaustive, just illustrative).

the lies above do not change what brushaber actually says or its supremacy as settled law. the lies simply demonstrate and emphasize that any agent who attempts to administer the income tax as a non-apportioned direct tax does so without any actual authority and in defiance of what the law actually says.

just like “safe and effective” we see there is no basis for the bullshit we’re being sold. i’m just not buying it anymore, are you?

and what does our licensed cpa have to say about all this? join us in the comments.