Lock in Letter and Social Security Levy

Lock-in letter, Points and Authorities has been updated. 04/09/2014

In trying to summarize the several articles that I have put together, the one thing to keep in mind is that the information gathered and the conclusions drawn are my own.  They should not be taken as “gospel” and all references should be checked for accuracy.  There are many plans out there on how to take on the adversary, however, I have found some of them to be difficult for me to use.  Not saying they are wrong, but each one needs to find the vehicle most suitable for them.  The bottom line is that the bureaucracy, which makes up the government are fed bits and pieces from the legal departments they work under and can see only a part of the puzzle.  For the most part those outside the control of the legal profession have access to the information and are capable of constructing a picture of American government and how it is to preform.

Education plays a great part in understanding America and its history.  former Governor Huckabee and others see this and are trying to address the issue in their own way.  The formal educational units supported by government have failed or are deliberately skipping over the events and issues addressed way back when.  Possibly considering them “out-dated” and not applicable to present day conditions.  “The information is out there, all we need to do is let it in.”  We are currently led by a small but powerful group of individuals who feel that the people need masters.  That the masses are not capable of thinking, reasoning and deciding on their own.  That Common Law is out-dated and the Civil Law is paramount for our needs.  Admiralty has come on to our land and taken control.  It is the jurisdiction that Thomas Jefferson saw that is “foreign to our Constitution”.

The words penned by Thomas Jefferson over two hundred years ago are as true today as they were during his era. “The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute tyranny over these states. To prove this, let facts be submitted to a candid world.”  And he goes on to outline the abuses.  Let each of you read that sacred document and determine for yourselves if such is now not the case. The “facts” are out there, let them in.

Turning to the issue which is most pressing, the IRS “lock-in letter” and the levy on Social Security benefits, these practices by the government are not only unlawful, but most assuredly illegal.  (Unlawful being a Common Law term and illegal being a Civil Law term).  Notwithstanding all of the writing and discussions on the subject it boils down to quite simply, “jurisdiction”.  The framers of this Nation founded a government made up of three divisions to be a watch dog for the people in securing the rights of the people.  Looking at the current day formulation of the executive branch and the actions of not only our current President Obama, but also of past presidents and even those who are vying to unseat Obama, the executive department has assumed the duties of not only the enforcement of law, but also the writing of laws (regulations) and judicial decisions regarding those laws (regulations).   Currently President Obama is pushing HIS jobs legislation, when it is ONLY HIS duty to enforce the laws as passed by the legislative branch.  Then if and when the laws are passed by the legislature, it is the duty of the executive department to write the “implementing” regulation for the statute, however, as in the case of the “lock-in letter” and the levy action, they write regulations contrary to the words of the law.  Now in their capacity as officers in the “judicial” branch, the executive branch make judicial decision and then puts back on their executive cloths and enforces them, as in the case of the “lock-in letter” and the levy actions.  The “separation of powers” doctrine is no longer a part of American government.  The jurisdiction of the three departments are combined into one under the leadership of the President.

The jurisdiction and sovereignty of the States has been under attack for a long time and only now are the States awakening up the this loss of sovereignty.  The people, who were really the only “sovereigns” have lost their citizenship by selling their “birth right” for a mess of pottage.  Once again, “the information is out there, we just have to let it in”.  As one writer put it, “it is hard to stay awake on a full stomach”, and those who are now at the mercy of government hand outs are fearful of losing those benefits and keep voting for more at the expense of the rest.  Our benevolent government has created a nation of subjects who are tied to the hand of government’s blessings and whims.

As I have brought out in other articles, the answers to these issues are simple.  Again, jurisdiction, and in this as others it deals with the principle fact of “delegation of authority”.  Ask the question, ‘where do you get your authority?’  Do the genealogy and you will find that it comes from you as a sovereign citizen of America, if you can lawfully do it, you can lawfully delegate that authority to your representative.  However, it you cannot lawfully do it, it cannot be delegated to another.

One of the problems with Social Security is that the program is NOT an insurance program, we have NO vested interest in it.  Under the divine leadership of FDR and the blessing of the Supreme Court we were forced to join the program and we were compelled to pay the premiums.  The sad part was the people cheered as part of their sovereignty was taken away.

The issues involving the “lock-in” letter and Social Security benefits are closely related.  The “lock-in” letter; we are looking at one statute and one regulation.  The regulation is 26 CFR §31.3402(f)(2)-1(g)(5)(ii) thru (vii), in part:

(ii) The Internal Revenue Service may find that a copy of a withholding exemption certificate submitted contains a materially incorrect statement or it may determine, after written request to the employee for verification of the statements on the certificate, that it lacks sufficient information to determine if the certificate is correct. If the Internal Revenue Service so finds or determines and notifies the employer in writing that the certificate is defective, the employer shall then consider the certificate to be defective for purposes of computing amounts of withholding. . . .

(vii). . . . The employer shall continue to disregard that new certificate and shall continue to withhold amounts from the employee on the basis of the maximum number specified in the written notice received from the Service unless and until the Internal Revenue Service by written notice (under paragraph (g)(5)(iii) of this section) advises the employer to withhold on the basis of that new certificate and revokes its earlier written notice.

(68A Stat. 731 (26 U.S.C. 6001); 68A Stat. 732 (26 U.S.C. 6011); 68A Stat. 917 (26 U.S.C. 7805))

It should be noted that a statute does not exist that contains either the direction or language authorizing the IRS to implement the “lock-in” letter to an employer.  In United States v. Mersky, 361 US 431, 437, 438 (1959); the court pointed out that;  “… [N]either the statute nor the regulations are complete without the other, and only together do they have any force.  In effect, therefore, the construction of one necessarily involves the construction of the other.”

The listed authorities for the regulation are 26 U.S.C. §§6001, 6011 and 7805.  Now section 7805 delegates to the Secretary the authority to write the regulations to implement the applicable Code sections.  The other two sections, 6001; “regulations requiring records, statements, …; Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe. Whenever in the judgment of the Secretary it is necessary, he may require any person, by notice served upon such person or by regulations, to make such returns, render such statements, or keep such records, as the Secretary deems sufficient to show whether or not such person is liable for tax under this title. The only records which an employer shall be required to keep under this section in connection with charged tips shall be charge receipts, records necessary to comply with section 6053(c), and copies of statements furnished by employees under section 6053(a).”; and 6011; “requirement of return, statement, or list;  (a) General rule

When required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title, or with respect to the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary. Every person required to make a return or statement shall include therein the information required by such forms or regulations.

(b) Identification of taxpayer

The Secretary is authorized to require such information with respect to persons subject to the taxes imposed by chapter 21 or chapter 24 as is necessary or helpful in securing proper identification of such persons. . . .”

The rest of the lengthy section deals with “(c) Returns, etc., of DISCS and former DISCS and FSC’s and former FSC’s . . .(d) Authority to require information concerning section 912 allowances . . .   (e) Regulations requiring returns on magnetic media, etc. . . . (f) Promotion of electronic filing . . . (g) Income, estate, and gift taxes . . . ”

Neither of these two sections discuss withholding at the source, or employment taxes.

According to the published information in the Document Drafting Handbook by the National Archives and Record Administration, “Each document classified as a rule or proposed rule must contain a citation of the legal authority under which the agency issues the document. As specified in 1 CFR part 21, subpart B, the citation should include – Any statutory general rulemaking authority;

.Any specific rulemaking authority delegated by statute; and

.Any Executive delegations that link the statutory authority to the issuing agency.

Federal Register, Vol. 70, No. 71 of Thursday April 14, 2005 also cites the authority for the withholding exemption certificates and identifies two (2) statutes under which the regulation was written.  They are 26 U.S.C. 7805 and 3402 (i) and (m).  26 U.S.C. 7805 is the general authority Congress gives to the Secretary to write the regulations (enabling statute).  The other 26 U.S.C. §3402(i) which reads:

(i) Changes in withholding

(1) In general

The Secretary may by regulations provide for increases in the amount of withholding otherwise required under this section in cases where the employee requests such changes. (Emphasis added)

(2) Treatment as tax

Any increased withholding under paragraph (1) shall for all purposes be considered tax required to be deducted and withheld under this chapter. (Emphasis added)

Part (i) of 3402 allows the increase in withholding ONLY if the “employee requests such change.” Part (m) reads:

(m) Withholding allowances

Under regulations prescribed by the Secretary, an employee shall be entitled to additional withholding allowances or additional reductions in withholding under this subsection.  In determining the number of additional withholding allowances or the amount of additional reductions in withholding under this subsection, the employee may take into account (to the extent and in the manner provided by such regulations) –

(1) estimated itemized deductions allowable under chapter 1 (other than the deductions referred to in section 151 and other than the deductions required to be taken into account in determining adjusted gross income under section 62(a) (other than paragraph (10) thereof)),

(2) estimated tax credits allowable under chapter 1, and

(3) such additional deductions (including the additional standard deduction under section 63(c)(3) for the aged and blind) and other items as may be specified by the Secretary in regulations. (Emphasis added)

Again, no language to support the “Lock-in” letter.

The controlling Statute that prohibits the Lock-in” letter is found at 26 USC §3402(n) [Regulation;  26 CDFR Sec. 31.3402(n)-1]; Employees incurring no income tax liability.

“(n) Employees incurring no income tax liability Notwithstanding any other provision of this section, an employer shall not be required to deduct and withhold any tax under this chapter upon a payment of wages to an employee if there is in effect with respect to such payment a withholding exemption certificate (in such form and containing such other information as the Secretary may prescribe) furnished to the employer by the employee certifying that the employee –

(1) incurred no liability for income tax imposed under subtitle A for his preceding taxable year, and

(2) anticipates that he will incur no liability for income tax imposed under subtitle A for his current taxable year.”

As a comparison it is noted that the language of both the statute and its regulation are the same.  There is no guess work, which is true of the “Lock-in” letter regulation, 26 CFR §31.3402(f)(2)-1(g)(5)(ii) thru (vii).

The authorities for 26 CFR §31.3402(f)(2)-1(g)(5)(ii) thru (vii), 6001 and 6011 of Title 26 USC, are requiring record and statements of those liable for the particular tax.  If for some reason the records and statements submitted by those liable are wrong or indicate a fraud on the part of the submitter, the proper recourse for the IRS is found in Section 7207. Fraudulent returns, statements, or other documents. “Any person who willfully delivers or discloses to the Secretary any list, return, account, statement, or other document, known by him to be fraudulent or to be false as to any material matter, shall be fined …, or imprisoned …, or both….”

26 CFR §31.3402(f)(2)-1(g)(5)(ii) thru (vii), is simply an effort on the part of the IRS to write legislation outside their jurisdiction.

The United States District Court of Pennsylvania (U.S. v. Malinowski, 347 F. Supp. 347[1992]) District Court Judge Huyett in addressing the W-4 withholding stated in part;  “The effectiveness of this system as a tax collection device obviously depends upon the honesty of the withholding exemptions claims submitted by the employee. The employer is not authorized to alter the form or to dishonor the employee’s claim.  The certificate goes into effect automatically in accordance with certain standards enumerated in §3402(f)(3).

The purpose of §7205 (now 7207) is to protect the integrity of the tax withholding system. … The information required from an employee is that information which appears on the Form W-4.  Any other knowledge or suspicions of employers or government officials are irrelevant to the purpose because it is only the information on the certificate which effects tax withholding.” (emphasis added)  This should be enough to settle the issue.

I direct your attention now to the phrase used in the statute section 3402(n) “notwithstanding any other provision of this section . . . “.  This was addressed by the Department of Justice’s legal division, the Office of Legal counsel in Volume 34 by Daniel L. Koffsky  Applicability of Tax Levies Under 26 U.S.C. §6334 to TSP Accounts Memorandum Opinion For the Chief Counsel Internal Revenue Service (May 3, 2010) (In part)

In the opinion he addresses two elements that have interested me, the terms “notwithstanding” and “express reference”.  For this examination, we are interested in the “notwithstanding” term.  In addressing § 6334, Mr. Koffsky comments, “Although the TSP provisions may appear absolute if read in isolation, section 6334(c)’s ‘notwithstanding’ clause indicates by its terms that all ‘”other law[s] of the United States, . . ., are ineffective to bar a federal tax levy, except as provided by the express exceptions in section 6334(a).   As a general rule “the use of such a ‘notwithstanding’ clause clearly signals the drafter’s intention that the provisions of the ‘notwithstanding’ section override conflicting provisions of any other section.” Cisneros v. Alpine Ridge Group, 508 U.S. 10, 18 (1993); see also, e.g., IIRIRA Opinion at 7 (observing that a prefatory “notwithstanding” clause ‘does reflect a congressional intention to displace inconsistent law”) [See also, Shomberg v. United States, 348 U.S. 540, 547-548 (1955), ” In using the “notwithstanding” language in these sections, Congress clearly manifested its intent that certain policies should override the otherwise broad and pervasive principle of the savings clause.”].  Indeed, some courts have observed that ‘”a clearer statement”‘ of congressional intent to supersede  all other laws ‘”is difficult to imagine,'” see Cisneros, 508 U.S. at 18 (quoting Liberty Maritime Corp. v. United States, 928 F. 3d 413, 416 (1991) . . . and the Supreme Court has described the “notwithstanding” clause in section 6334 as “direct[ing]” that “[t]he enumeration [of exceptions] contained in §6334(a) . . . is exclusive.” Drye v. United States, 528 U.S. 49, 56 (1991); see also In re Beam (Beam vs. IRS), 192 F. 3d 941, 944 (9th Cir. 1999) (describing section 6334 as “unambiguous” in indicating “that Congress clearly intended to exclude from IRS levy only those 13 categories  of property specifically-exempted in section 6334(a))”

For our purposes, there is no conflict between either two statutes or two regulations.  The language of the statute is clear.

“(n) Employees incurring no income tax liability Notwithstanding any other provision of this section, an employer shall not be required to deduct and withhold any tax under this chapter upon a payment of wages to an employee if there is in effect with respect to such payment a withholding exemption certificate (in such form and containing such other information as the Secretary may prescribe) furnished to the employer by the employee certifying that the employee –

(1) incurred no liability for income tax imposed under subtitle A for his preceding taxable year, and

(2) anticipates that he will incur no liability for income tax imposed under subtitle A for his current taxable year.”

Social Security is in the same boat, I include again my remarks to the Acting Commissioner Ms. Ziporkin on this issue:

I am not sure how many of your officers in the Social Security Administration are aware of Title 42 of the United States Code at section 407.  By reading the SSR 79-4 it is evident that this individual is not.  In composing the language of this ruling, the individual quotes only part of Section 207 of the Social Security Act:

“The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.”

Here they are quoting only part (a) of section 207, and then goes on to make the false conclusion:

“However, section 6331 of the Internal Revenue Code of 1954 (26 U.S.C. 6331) which was enacted into law on August 16, 1954, after the enactment of section 207, gives the Secretary of the Treasury the right to levy or seize for collection of delinquent Federal taxes, property, rights to property, whether real or personal, tangible, or intangible and the right to make successive levies and seizures until the amount due, together with all expenses, is fully paid. . . .

Therefore, since section 6334 of the Internal Revenue Code of 1954 does not specifically exempt Social Security benefits from levy, such benefit checks may be levied upon by the Secretary of the Treasury under section 6331 of the Internal Revenue Code of 1954.

A couple of problems with this ruling.  The compiler of this information for dissemination to the employees of the Administration failed to take in account the language of part (b) of section 207:

(b) Amendment of section

No other provision of law, enacted before, on, or after April 20, 1983, may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section.

The language of part (b), “No other provision of law, enacted before, on, or after April 20, 1983, may be construed to limit, supersede, or otherwise modify the provisions of this section . . .”, makes the conclusion; “However, section 6331 of the Internal Revenue Code of 1954 (26 U.S.C. 6331) which was enacted into law on August 16, 1954, after the enactment of section 207, gives the Secretary of the Treasury the right to levy or seize for collection of delinquent Federal taxes, . . .”, a moot point.  The passing of the various section and the sequence of their passage has no bearing on the issue.  Section 207 on the Social Security Act follows the language of the Statute 42 United States Code section 407.

Secondly, the qualifying language of Section 207 (407) is clear that; ” No other provision of law, enacted before, on, or after April 20, 1983, may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section.  Please note the clear language, “by express reference to this (section 407) section.”continuing the opinion of Daniel L. Koffsky, his next approach is to examine the phrase “by express reference” as that term is used in the Social Security Act.

“As one indication of section 6334(c)’s breadth, Congress amended that provision in 1984 expressly to include section 207 of the Social Security Act, 42 U.S.C. § 407 (2006), which provides that “[the right of any person to any future payment under this subchapter shall not be . . . ” Id. § 407(a).  This provision itself had recently been amended to provide that “[n]o other provision of law, enacted before, on, or after . . . , may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section.” . . . . The ‘express reference’ requirement of section 207 show’s, if anything, a stronger congressional intent to preclude levies than the relevant language of FERSA, which includes no such ‘express reference’ requirement broadening its scope.  Accordingly, as the en banc Ninth Circuit recently observed in an analysis of provisions similar to those at issue here, ‘[i]t would . . . be anomalous to interpret’ section 6334(c) ‘as abandoning the protection of Social Security benefits but not of retirement plans’ covered by other provisions that do not even have a comparable ‘express reference’ requirement.  Novak, 476 F. 3d at 1948.”

To the point addressed by Mr. Koffsky concerning ‘express reference’, I would add the key word in part (b) of section 407 is “by express reference”.  I looked up in Black’s Law Dictionary the word “express” and in very clear language; “Express:  Clear; definite; explicit; plain; direct; unmistakable; not dubious or ambiguous. … Directly and distinctly stated.  Made known distinctly and explicitly, and not left to inference. …  The word is usually contrasted with “implied.”

In the conflict addressed in our issue, (§6334 vs. §§207, 407) there is the use of the “notwithstanding” clause in both section 6334(c) of the statute and sections 207, 407.  Mr. Koffsky addressed that issue when he concluded, “. . . The ‘express reference’ requirement of section 207 show’s, if anything, a stronger congressional intent to preclude levies than the relevant language of FERSA, which includes no such ‘express reference’ requirement broadening its scope.  Accordingly, as the en banc Ninth Circuit recently observed in an analysis of provisions similar to those at issue here, ‘[i]t would . . . be anomalous to interpret’ section 6334(c) ‘as abandoning the protection of Social Security benefits but not of retirement plans’ covered by other provisions that do not even have a comparable ‘express reference’ requirement.  Novak, 476 F. 3d at 1948.” [emphasis added]

Your people reading the Ruling (79-4) are given a directive which is inconsistent with the law.  This violation of the law is what effects my Social Security benefits.  Both your agency and the Financial Management Service want to “pass the buck” to the IRS.  The IRS has its problems, but the recognition of the unlawful levy put on my benefits by the IRS and the language of section 207(b) is what is in question. This is your agency’s problem to resolve with me.  The continued reliance on SSR 79-4 leaves the actions of the Social Security Administration and the FMS open to inquiry.

Your comments or additional insights are welcomed.

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Gallery | This entry was posted in admiralty jurisdiction, an enemy hath done this, civil law, Constitution, Delegation of Authority, Federal Jurisdiction, General, government authority, IRS lock-in Letter, levy on social security benefits, Obamacare, Socialism, Sovereignty, Withholding information and tagged , , , , , , , . Bookmark the permalink.

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