A trip to the "Pink Rock Candy Mountain"

Dear friends,

This is my "Federal Employees Recognition Week" (Observed the first full week of March) present for all of you. It is gift wrapped in three magical words; "trust fund taxes", and it will take you on a trip to the "Pink Rock Candy Mountain", and show you the truth. The present is a very special section of the IRC that just does the most magical things, like make you smaller if you use it one way and bigger if you use it another. Right out of Alice's Adventures in Wonderland.

This is your gift.
§7501(a): Whenever any person is required to collect or withhold any internal revenue tax from any other person and to pay over such tax to the United States, the amount so collected or withheld shall be held to be a special fund in trust for the United States. The amount of such fund shall be assessed, collected, and paid in the same manner and subject to the same provisions and limitations (including penalties) as are applicable with respect to the taxes from which such fund arose.


Central Bank v. United States
345 U.S. 639 (1953) ( when 7501 was 3661 under the 1939 code)
It arose from the conversion of the withheld taxes which Graham held as trustee for the United States
( I'll bet he shocked to learn he was a trustee as I'll bet there are few employers that know they are a trustee for the United States. )
pursuant to § 3661 of the code.7
7. '§ 3661. Enforcement of liability for taxes collected.

'Whenever any person is required to collect or withhold any internal- revenue tax from any other person and to pay such tax over to the United States, the amount of tax so collected or withheld shall be held to be a special fund in trust for the United States. The amount of such fund shall be assessed, collected, and paid in the same manner and subject to the same provisions and limitations (including penalties) as are applicable with respect to the taxes from which such fund arose.
(they haven't changed a word since then)

Slodov v. U. S.
436 U.S. 238 (1978) :
This section was enacted in 1934. Act of May 10, 1934, ch. 277, § 607, 48 Stat. 768, 26 U.S.C. § 3661 (1952 ed.). The provision was added to H.R. 7835, 73d Cong., 2d Sess., by the Senate Finance Committee, which explained:

"Under existing law the liability of the person collecting and withholding the taxes to pay over the amount is merely a debt, and he cannot be treated as a trustee or proceeded against by distrait. Section [607] of the bill as reported impresses the amount of taxes withheld or collected with a trust and makes applicable for the enforcement of the Government's claim the administrative provisions (Such as a Notice of Levy, and distrait. ) for assessment and collection of taxes." S.Rep. No. 558, 73d Cong., 2d Sess., 53 (1934).

Since the very reason for adding § 7501 was, as the Senate Report states, that "the liability of the person collecting and withholding the taxes . . . is merely a debt" (emphasis added), § 6672, whose predecessor section was enacted in 1919 while the debt concept prevailed, hardly could have been intended to impose a trust on after-acquired cash.

We further reject the argument that § 7501, whose trust concept may be viewed as having modified the duty imposed under § 6672,18 can be construed as establishing a fiduciary

Compare with:
Begier v. I.R.S.496 U.S. 53 (1990)
Justice SCALIA, concurring in the judgment.
If the Court had applied to the text of the statute the standard tools of legal reasoning, instead of scouring the legislative history for some scrap that is on point (and therefore ipso facto relevant, no matter how unlikely a source of congressional reliance or attention), it would have reached the same result it does today, as follows: Section 7501 obviously intends to give the United States the advantages of a trust beneficiary with respect to collected and withheld taxes. Unfortunately, it does not always succeed in doing so. A trust without a res can no more be created by legislative decree than can a pink rock-candy mountain. In the nature of things no trust exists until a res is identified. Ordinarily the res is identified by the settler of the trust; in the case of § 7501 it is initially identified (if at all) by the statute, subject ( as I shall discuss) to later reidentification by the taxpayer. Where the taxes subject to the trust-fund provision of § 7501 are collected taxes, the statute plainly identifies the res: it is the collections. There may be difficulty in tracing them, but there is no doubt that they exist. Where, however, the [71]

taxes subject to the trust-fund provision are withheld taxes, the statute provides no clear identification. When I pay a worker $90 there is no clearly identifiable locus of the $10 in withheld taxes that I do not pay him. Indeed, if my total assets at the time of the payment are $90 there is no conceivable locus.

We may have to grapple at some later date (you got that right) with the question whether the lack of immediate identification means that no trust arises, or rather that § 7501 creates some hitherto unheard-of floating trust in an unidentified portion of the taxpayer's current or later-acquired assets.
Well there it is! What you say? Go back and read it again. You are dealing with "TRUST LAW" folks. The IRS is the "SETTLER" with powerful administrative trust law to use against you, the EMPLOYER is the "TRUSTEE" and the United States is the "BENEFICIARY" and also a "DONOR" on the excise taxes. You my friends have been duped in the most cunning legal torture of the law ever devised. The collector / bearer / and now settler / administrator of a trust? No wonder we haven't stood a chance, at least till now. I have been spending the last year studying trust law (Perry on Trusts mostly) and case law. You may have noticed that many of my posts have had trusts mentioned in them, and that is why I have pushed so hard on "EQUITY" as it is needed knowledge in trust law. Oh; I'll bet that is why they don't teach it to attorneys any more! How stupid of me to have missed that.

I will be posting on this subject more as the new year progresses. I would suggest that each of you go to FIND LAW and type in the words "trust fund taxes" in the Supreme Court section for word searches and you will find the magical words used 43 times in the 4 mentioned cases below! It wouldn't hurt you to get a copy of Perry on Trusts and Trustees.

Begier v. I.R.S.
496 U.S. 53 (1990) : 20 times

U.S. v. Energy Resources Co., Inc.
495 U.S. 545 (1990) : 10 times

U. S. v. Sotelo
436 U.S. 268 (1978): 3 times

Slodov v. U. S.
436 U.S. 238 (1978) : 10 times

Not bad for words that one can not find in Words and Phrases, Webster's, Bouvier's, Ballentine's, Blacks, or any other source one might conger up. Remember they said Social Security taxes are held in trust? They sure do go to a trust but not for you. Now you know why you couldn't find it. Well this is it. If you can't deal with trusts, then you can't deal with the IRS!

The main reason for this is the fatal mistake of not understanding sequestration; trust law; (the 7501 "trust fund taxes"); equity jurisprudence; garnishment; the administrative levy, foreign attachment; in rem vs. quasi in rem jurisdiction; breach of contract; and the infamous "NOTICE OF LEVY"; and the lack of federal equity courts. They are all in the same gunship that holds the explosive shell, those so called income tax "LAWS", in the turret pointed right at you, and ready to fire the moment you don't comply. Go back and read both cases completely, not just what I posted. If you don't start with the concept of trusts under 7501 you will miss your target.
GUARANTEED!

Trust law is trust law; PERIOD. You are dealing with a trust under 7501, so use the trust law! These cases just overturned old feudal trust law [traditional notions of fair play and substantial justice can be as readily offended by the perpetuation of ancient forms that are no longer justified] that we have been complaining of as unconstitutional law since day one, and that was the only reason for this post, not that wages are property.

I think we should have a prosperous New Year with this new knowledge.

[weishaupt1776]

Hey my mainline Florida compadre'.

Great stuff, It's a trust fund for the ATF who is under the Attorney General at the DOJ now. Is that the Puerto Rico or Guam Trust?

http://forum.suijuris.net/showthread.php?t=2169
That research is in it's raw forum as I post as I surf at the same time and mull it over w/everybody.

Also check 28 CFR .130 & The New 26 USC 7801
I have the FR references available

All the ATF/Treasury systems are now ATF/DOJ systems because of Homeland Insecurity. Imagine that, get an armed agency to oversee records of everybody who thinks that there is an IRS agency maintaining tax records.

You're almost there... WAZUP MY FRIEND!!!!!!!!

[weishaupt1776]

I know, I feel like the Fox goin' for the grapes that are just out of reach.
Any more hints?


I've been pondering it more concerning the veiled reason as to WHY the tax enforcement stuff is ATF/DOJ.

The Atty Gen can declare someone to be a "domestic terrorist" if he wakes up on the wrong side of bed, and magically all the Patriot Act provisions can be applied to the man who is associated with the PERSON in the system of records under the control of the DOJ.

[weishaupt1776]

This one's a hoot. This is Bureau of Public Debt Computer Records System. Note my emphasis:

• 
  Treasury/BPD .007
  
  System Name:
  Gifts to Reduce the Public Debt-Treasury/BPD.
  
  System Location:
  Bureau of the Public Debt, 200 Third Street, Parkersburg, WV.
  
  Categories Of Individuals Covered By The System:
  Donors of gifts to reduce the public debt.
  
  Categories Of Records In The System:
  Correspondence; copies of checks, money orders, or other payments;
  copies of wills and other legal documents; and other material related
  to gifts to reduce the public debt, received on or after October 1,
  1984, by the Bureau of the Public Debt either directly from the donor
  or through the donor's Congressional or other representative.
  
  Note: This system does not cover gifts to reduce the public debt
  received prior to October 1, 1984, when this function was handled by
  the Financial Management Service. This system of records does not
  cover gifts sent to other agencies, such as gifts sent with one's
  Federal income tax return to the Internal Revenue Service. This
  system does not include any other gifts to the United States.
  
  
  Authority For Maintenance Of The System:
  31 U.S.C. 3113.

So it appears that we are giving gifts to a DOJ/ATF managed trust.
This is why W-2 & 1099 are in Tax class 5 Gift Taxes

Howz about Trust Fund 2 & 62?

And who first donates to that trust?

• 
  Treasury/IRS 26.013
  
  System name:
  Trust Fund Recovery Cases/One Hundred Percent Penalty Cases-
  Treasury/IRS.
  
  System location:
  Area Offices, Internal Revenue Service Centers. (See IRS appendix A
  for addresses.)
  
  Categories of individuals covered by the system:
  Individuals against whom Federal tax assessments have been made or
  are being considered as a result of their being deemed responsible for
  payment of unpaid corporation withholding taxes and social security
  contributions.
  
  Categories of records in the system:
  Taxpayer name, address, taxpayer identification number, information
  about basis of assessment, including class of tax, period, dollar
  figures, waiver extending the period for asserting the 100-percent
  penalty/Trust Fund Recovery penalty (if any) and correspondence.
  
  Authority for maintenance of the system:
  5 U.S.C. 301; 26 U.S.C. 7801 and 7802.
  
  Purpose(s):
  This system provides a record of all Trust Fund Recovery Penalty
  cases made under 26 U.S.C. 6672.

You're "Employer".

I think I see why partly the IRS tries to make the withholding tax a trust issue, and this observation has relevance to the STRAWMAN issue.

The game is called "flog the fiduciary". Through withholding, the employee grants assets to the trust, the employer is nominated (lucky guy!) the fiduciary, and some swarm of agents act on behalf of the instititutional beneficiary. If the employer as trustee does not perform his assigned duties, he is held liable for breach of fiduciary duty. Isn't this what Mr. Simkanin was flogged for?

I had also been given thought to the STRAWMAN as a constructive trust. The United States of America fiction would be the fiduciary (lucky us), the STRAWMAN the trust, and the flesh and blood the beneficiary. What shocked me was in thinking that the flesh and blood also acts as the assets of the trust, but going back to this country's bankruptcy, that would stand to reason. The fudiciary is just trying to preserve corpus by keeping the flesh and blood as the sole asset bottled up in the trust like I Dream of Genie.

What made me realize this was the issue of wage earnings. The fiduciary is trying to collect his professional fees and obligations of the trust. We flesh and blood are trying to retain enough earnings to pass from the trust in order for us to survive. As long as flesh and blood isn't diminished, corpus is preserved even if the capacity of corpus to earn is diminished. But what if.... if ..... because of the nature of wage earnings, all the income from the STRAWMAN were exempt from taxation, wouldn't that make all the so-called income from the STRAWMAN a distribution of non-taxable income? If nearly all the income distributed is non-taxable, then the STRAWMAN does not meet minimum filing requirements, at least those proposed by the form 1040 instructions for special 1040 STRAWMAN trusts?