Understanding the Internal Revenue Code is a near impossibility. Senator Nun on the Senate committee on Economic Growth and Tax Reform (1995) stated; “We have a tax code so complex that the employees of the Internal Revenue Service don’t even understand it.” That it can be complicated is self evident to those who have ventured to open the Code book, yet in determining whether the Code applies to you can be simple. Before you get into the “cryptic 1 language of the code” it would be beneficial to understand some basic fundamentals.
Like climbing a ladder, you take one step at a time. In understanding if a liability exist for the particular tax law, the first rung on the ladder concerns ones status or their position as a “sovereign” in their relationship with government.
What is a “sovereign”? Under a socialist government the sovereign always has been the government or the king. Those over which the government presides are “subjects”. Rights do not exist, only privileges, which are bestowed upon the subjects at the prerogative of the government.
From the legal books a “sovereign” is defined as; “A person, body, or state in which independent and supreme authority is vested; a chief ruler with supreme power; a king or other ruler in a monarchy.” Sovereignty is “[t]he supreme, absolute, and uncontrollable power by which any independent state is governed; supreme political authority; the supreme will;…” 2
The King was considered to be God’s emissary on earth taking the position of sovereign over the people thus the doctrine that the king can do no wrong and since the king is the source of law he is immune, … the doctrine of “sovereign immunity”. These archaic doctrines have found their way into our common law system of government largely by the influx of immigrants who have ingrained in them these doctrines from these socialist countries.
“This belief in the sovereign power of political machinery is not born with men; they are taught it. And how are they taught it? Evidently by these preachers of universal legislative superintendence — by the pretensions of statesmen themselves — and by having seen from their childhood, all kinds of functions undertaken by government officials.” 3
Under the system of government established by the Constitution, the government has no inherent sovereign powers. This was expressed by former Justice Wilson of the Supreme Court when he stated; “… For, in an instrument well drawn, as in a poem well composed, silence is sometimes most expressive. To the Constitution of the United States the term sovereignty, is totally unknown.” 4
Under certain circumstances a relationship of sovereign and subject can and does exist under the common law. In America, the powers of sovereignty are divided between the government of the Union, and those of the states. They are each sovereign, with respect to the objects committed to it, and neither sovereign, with respect to the objects committed to the other. 5
In this relationship that exists between the individual and government who is sovereign? Is the government the sovereign or the individual? It was former Chief Justice John Marshall (1819) who stated that; “[T]he sovereignty of a state extends to everything which exists by its own authority, or is introduced by its permission;…” 6
What is it that elevates the government to a status of a sovereign over me? (1) Is my existence here in the state or in this nation a result of any government’s authority or permission? (2) Is there any benefit or privilege that I receive from either the state or federal government?
A lot of the uncertainty in these questions comes from the fact that the object or the subject of the tax is unclear. For example, the title of the taxing statute is income tax and the presumption that people are led to believe is that the tax is on income. However, there is ample authority that one’s income us only the measure of the tax. That the tax, being an excise tax, must therefore be laid either upon an activity, a person, or property. Which one? Is hard to say, even the courts are divided on fundamental tax questions.
Once we can determine what the tax is levied upon, it is easy enough to discover if the object, whether it be an activity, people, or property, falls within the “sovereign” umbrella of government authority.
One thing to understand is that the sovereign came first and that over which the sovereign has authority came after. That sounds easy enough! Who came first? The people or the government? As I recall from scripture, it was God that created man and as the human family grew in numbers the people created a society. As the population continued to grow and the area over which the society expanded it became essential to make laws to govern society. While the community was small, the laws governing society were not necessary, but as it grew in land area and population, laws were a necessary addition.
These laws were called “common laws” because they were common to all of the sovereign people. Remember that a sovereign is the creator of law, and as the people are subject to the laws of nature and nature’s God, the people are only subject to those laws established by God; thou shall not kill, steal, etc. (Ten commandments). In Blackstone’s commentary he observes that law “is that rule of action, which is prescribed by some superior, and which the inferior is bound to obey.” He uses as examples, the laws of motion, gravitation, optics, mechanics, and nature. 7 In this instance God being the superior and man being the inferior.
The people in their sovereign capacity could only make laws which effect those things created by them or allowed to exist by their permission.
Since no person has any authority over another any law passed by the people or their representative cannot infringe that individual’s right to life, liberty, or property. President Ezra Taft Benson in a speech for the bicentennial anniversary of the founding of this nation explained this principle clearly.
“The individual citizens delegate to the (government) their unquestionable right to (lawful defence). (Government) now does for them only what they had a right to do for themselves — nothing more….
In all governments of constitutional limitations “sovereign power” manifests itself in but three ways. By exercising the right of taxation; by the right of eminent domain; and through its police powers. U.S. vs. Douglas-Willan Sartoris Co., 22 P. 92 96, 3 Wyo. 287
What is Sovereignty?
“On this subject the errors and the mazes are endless and inexplicable….
In one sense, the term “sovereign” has for its correlative “subject”. In this sense, the term can receive no application; for it has no object in the Constitution of the United States. Under that Constitution there are citizens, but no subjects. The term “subject” occurs, indeed, once in the instrument; but to mark the contrast strongly the epithet “foreign” is prefixed.
In another sense, according to some writters, every state which governs itself without any dependence on another power is a sovereign state. There is a third sense in which the term “sovereign” is frequently used. In this sense sovereignty is derived from a feudal source, and like many other parts of that system, so degrading to man, still retains its influence over our sentiments and conduct, though the cause by which that influence was produced never extended to the American states. …
…; for all jurisdiction implies superiority of power.”
Chisholm v. State of Geogia, 2 U.S. 419, 455
In using the term “sovereign” there also is implied that a “subject” exists. In this country there are NO subjects. The Constitution makes no mention of a sovereign.
Concerning the sovereignty in our Republic, in a decision handed down by the Supreme Court in the early years of our Republic, Justice Wilson stated; “… For, in an instrument well drawn, as in a poem well composed, silence is sometimes most expressive.
To the Constitution of the United States the term sovereignty, is totally unknown. There is but one place where it could have been used with propriety, but, even in that place it would not, perhaps, have comported with the delicacy of those, who ordained and established that Constitution. They might have announced themselves ‘sovereign’ people of the United States; but serenely conscious of the fact, they avoided the ostentatious declaration….
Man, fearfully and wonderfully made, is the workmanship of his all perfect creator; a state; useful and valuable as the contrivance is, is the inferior contrivance of man; and from his native dignity derives all its acquired importance….
Let a state be considered as subordinate to the people; but let every thing else be subordinate to the state….
…. A state I cheerfully admit, is the noblest work of man; but man himself, free and honest, is, I speak as to this world, the noblest work of God.”
Chief Justice Jay, in the same opinion; “… It is remarkable that in establishing it, the people exercised their own rights, and their own proper sovereignty, and conscious of the plenitude of it, they declared with becoming dignity, ‘We the people of the United States, do ordain and establish this Constitution.’” 8
Question: Is the federal government or the state government superior to the people or the individual? The creation cannot exceed the creator!
It is the right to govern…
The government does not govern, the people govern. “Government” is not “sovereign.” Government is the machinery for expressing the will of the sovereign power (people) over objects entrusted to them collectively. City of Bisbee v. Cochise County, 78 P. 2d 982, 986, 52 Ariz. 1
The term “sovereign power” of a state is often used without any definite idea of its meaning, and it is often misapplied. Prior to the formation of the federal Constitution, the states were sovereign in the absolute sense of the term…. The people of the states, by the adoption of the federal Constitution, imposed certain limitations in the exercise of their powers which appertain to sovereignty. … The sovereignty of a state does not reside in the persons who fill the different departments of its government, but in the people, from whom the government emanated; …. Sovereignty, then, in this country, abides with the constituency, and not with the agent; and this remark is true, both in reference to the federal and state governments. Spooner v. McConnell, 22 Fed. Cas. 939, 943
The extent of sovereign powers
“There is no such thing in the theory of our national government as unlimited power of taxation in Congress. There are limitations of its powers arising out of the essential nature of all free government; there are reservations of individual rights, without which society could not exist, and which are respected by every government. The right of taxation is subject to these limitations.” 9
The concept of “sovereign powers” has been turned around over the past few decades. The concept that the government is one of “limited” powers and that only those powers exist which are delegated to it by the Constitution, has made an about face by the wording of the courts. What we have now is a government of “unlimited” power unless restricted by the constitution.
This has been expressed in several ways; “Sovereighty of a State” embraces the power to execute its laws and the right to exercise supreme dominion and authority except as limited by the fundamental law. [People ex rel. Attorney General v. Tool, 86 P. 224, 226, 35 Colo. 225, 6 L.R.A., N.S., 822, 117 Am. St. Rep. 198]
In actual fact, the powers of government are limited to those which are “delegated” to it. The government, by itself, has no inherent sovereign powers. To repeat the words of former Supreme Court Chief Justice John Marshall; “[T]he sovereignty of a state extends to everything which exists by its own authority, or is introduced by its permission;…” 10
President Benson then uses the example; “Suppose (individual) ‘A’ wants another horse for his wagon. He doesn’t have the money to buy one, but since (individual) ‘B’ has an extra horse, he decides that he is entitled to share in his good fortune. Is he entitled to take his neighbor’s horse? Obviously not! If his neighbor wishes to give it or lend it, that is another question. But so long as (individual) ‘B’ wishes to keep his property, (individual) ‘A’ has no claim to it.
If ‘A’ has no power to take ‘B’s property, can he delegate any such power to the (government)? No! Even if everyone in the community desires that ‘B’ give his extra horse to ‘A’, they have no right individually or collectively to force him to do it. They cannot delegate a power they themselves do not have. This important principle was clearly understood and explained by John Lock nearly 300 years ago.”
“… The proper function of government, then, is limited to those spheres of activity within which the individual citizen has the right to act. … It cannot claim the power to redistribute money or property nor force reluctant citizens to perform acts of charity against their will. … No individual possesses the power to take another’s wealth or to force others to do good, so no government has the right to do such things either. The creature cannot exceed the creator.” 11
Laws passed by a legislature are not generic in nature but are territorial. “Legislation is presumptively territorial, and confined to geographical limits within the jurisdiction of the law-making power. Sandberg v. McDonald, 248 U.S. 185, 39 S. Ct. 84, 86 (63 L. Ed. 200)….
“All legislation is prima facie territorial.’ American Banana Co. v. United Fruit Co., 213 U.S. 347, 356, ….” 12 They are enforceable only within the respective jurisdiction of the legislature. For example, if you will note in Article I, section 8, cl. 17 of the U.S. Constitution (as you know, this article gives Congress its powers), you will find the extent of the legislative jurisdiction of Congress. Notwithstanding any other action of Congress, any attempt to extend their authority outside of these constitutional limits by bureaucrats is an usurpation of power. “While the Federal Government is a government of limited powers, it is supreme within its sphere of action, having within the limits of its emunerated powers full attributes of sovereignty.” 13
“There is no such thing in the theory of our national government as unlimited power of taxation in Congress. There are limitations of its powers arising out of the essential nature of all free government; there are reservations of individual rights, without which society could not exist, and which are respected by every government. The right of taxation is subject to these limitations.” 14 (emphasis added) Bear in mind that this limitation also applies to the states. That the state may exercise its sovereign power to tax is true, but that power is restrained by the fundamental rights of the people. Without a respect for these rights we cannot have a free country.
Justice O’Connor expressed a like opinion when deciding the extent of Congressional authority under the commerce clause saying: “Congress exercises its conferred powers subject to the limitations contained in the Constitution. Thus, for example, under the Commerce Clause Congress may regulate publishers engaged in interstate commerce, but Congress is constrained in the exercise of that power by the First Amendment.” 15
“Hath not the potter power over the clay,…” Romans 9:21
Let each look within their own heart and decide whether they are the subject or whether they are the sovereign.
“If the time shall ever arrive when, for an object appealing, however strongly, to our sympathies, the dignity of the States shall bow to the dictation of Congress by conforming their legislation thereto, when the power and majesty and honor of those who created shall become subordinate to the thing of their creation, I but feebly utter my apprehensions when I express my firm conviction that we shall see ‘the beginning of the end.” 16
1. Cryptic, 1: secret, … 2: having or seeming to have a hidden or ambiguous meaning, … Webster’s Collegiate Dictionary, 10 ed.
2. Black’s Law Dictionary, 6th ed.
3. Moses Thacher on Civil Government
4. “Oswald vs the State of New York,” 2 Dallas 415
5. Mc’Cullock vs. Maryland, 17 U.S. 316, 410
6. Mc’Cullock vs. Maryland, 17 U.S. 316, 429
7. Blackstone’s Commentaries on the Laws of England, Vol. 1, chpt. 2
8. Oswald vs the State of New York, 2 Dallas 415
9. Loan Associates v. Topeka, 20 Wallace 655; Parkersburg v. Brown, 106 U.S. 487; United States v. Lopez, S. Ct., No. 93-1260
10. Mc’Cullock vs. Maryland, 17 U.S. 316, 429
11. Ezra Taft Benson, “The Constitution, A Heavenly Banner,” p. 9
12. New York Central R.Co. v. Chisholm, 268 U.S. 29 
13. 77 Am Jur 2d, United States §4 Extent of powers
14. Loan Associates v. Topeka, 20 Wallace 655; Parkersburg v. Brown, 106 U.S. 487; United States v. Lopez, S. Ct., No. 93-1260
15. New York v. United States, supra (emphasis added)
16. President Franklin Pierce in a veto message sent to the Senate May 3, 1854; Steward Mach. Co. v. Davis, 301 U.S. 548, 606 (1937)