Tax Return History-Citizenship

The history of tax returns and their relationship to citizenship is a fascinating one. Here is a chronological history.

The withholding was itself important for controlling inflation. See The True Nature of IRS Form 1040: It is a Loan to the Government.

Overview

Because the war effort resulted in increased production and employment, which caused a sudden large influx of money into circulation, the Federal Government and Federal Reserve System had to find a method of "mopping up excess purchasing power" thereby control inflation and obtain immediate funds for the Treasury. Several plans were put forth before the House ways and Means Committee and the Senate Committee on Finance to accomplish this purpose.

The following points were made by the Senators and those testifying before the committee:

I. The overall purpose was to obtain immediate money for the war effort to control inflation and to get the income tax on a current basis instead of being one year behind.

2. To accomplish this goal, it was recognized that a scheme was needed to reach the largest number of people.

3. That the scheme, regardless of whether it was a "coupon," "stamp" or "withholding of income tax at source," would constitute a "forced loan" [page 101] to the Federal Government and it would apply to taxpayers and nontaxpayers alike. [page 104].

4. Where an individual had money withheld and ultimately no tax liability, the individual would file an income tax return and that income tax return would constitute an automatic claim for refund [page 141].

5. The proposed plan was an emergency war time measure.

Below was the new measure in response to the above report:

IRC Section 31 (a) Wage withholding for income tax purposes
(1) In general
The amount withheld as tax under chapter 24 shall be allowed to the recipient of the income as a credit against the tax imposed by this subtitle.
(2) Year of credit
The amount so withheld during any calendar year shall be allowed as a credit for the taxable year beginning in such calendar year. If more than one taxable year begins in a calendar year, such amount shall be allowed as a credit for the last taxable year so beginning.

The above W-2 wage withholdings are a credit with no time limit against the tax liability for the SAME tax year. You cannot collect a refund for overpayment past three years from the due date of the return, however. But if no return has been filed, such credit remains available forever as a means of reducing the tax liability for that tax year.

The 3rd party reporting using the SSN was the black magic that would enable them to PRESUME a tax liability even if the taxpayer were to refuse to file a return; and THAT would permit them to KEEP most of the money collected under the withholding provisions. The LAYERS to this SCAM are what has made it so difficult to figure out. The SSN--the U.S. person presumption that creates, and just understanding what THAT means. People like Pete Hendrickson (Form #08.003) still refuse to recognize these quasi-CONTRACTUAL mechanisms.

# Year Description
1 1864 Note the jurat on page 4 of the 1864 1040 form uses the phrase "subject to the Income Tax under the EXCISE laws of the United States"
2 1913

1913 form does not list any year, as this form was used for 1913-1915. Had Brushaber filed a return, this would have been the form he would have used. 1913 instructions:

1. This return shall be made by every citizen of the United States, whether residing at home or abroad, and by every person residing in the United States, though not a citizen thereof, having a net income of $3,000 or over for the taxable year, and also by every nonresident alien deriving income from property owned and business, trade, or profession carried on in the United States by him.

3 1916

Brushaber v. Union Pacific R.R., 240 U.S. 1 (1916) case was issued. Frank Brushaber was the litigant in this case who is referred to as a nonresident alien in Treasury Decision 2313, and subject to tax on his stock profits from a federally domestic stock corporation. The point being that 1040 was the only tax form for individuals back then, so they mentioned nonresident aliens in the instructions for 1913 and 1916, but suddenly removed all mention of nonresident aliens on the 1917-1919 forms.

Since Brushaber did not file a return, the decision is notable only because of T.D. 2313 that indicated this American litigant in the Brushaber case was a nonresident alien. It held that there was no Constitutional barrier to the taxation of Brushaber's stock profits. Union Pacific Railroad was a federal corporation at the time, so the income tax was a kickback from profits of a federal corporation franchise. This was consistent with the later holding of Bowers. v. Kerbaugh-Empire Col, 271 U.S. 170 (1928) ruling on the definition of "income", which was earnings in connection with federal corporations.

4 1916

The 1916 return instructions mention nonresident aliens. This form came out before the Brushaber opinion from SCOTUS was issued. T.D. 2313 was issued March 21, 1916---so this was most likely BEFORE the 1916 tax return would have been produced. Form 1916 instructions:

1. This return shall be made by every citizen of the United States, whether residing at home or abroad, and by every person residing in the United States, though not a citizen thereof, having a net income of $3,000 or over, including dividends, for the taxable year, although the tax has been paid at the source and the return shows no tax liability.

2. This return shall be made by every nonresident alien receiving any net income from sources in the United States. A nonresident alien individual may receive the benefit of the personal exemption only by filing or causing to be filed with the Collector of Internal Revenue a true and accurate return of his total income, received from all sources, corporate or otherwise, in the United States.

5 1917

The 1917 return nonetheless shows clearly that, given another year to think about it, Treasury ADAPTED to the Brushaber opinion and T.D. 2313 and saw the need to OBSCURE the existence of the term "nonresident alien" from the public by removing any mention of nonresident alien on the 1040 form and instructions. 1917 form instructions: WHOOPS what happened to "nonresident aliens"?

1. Persons Required to Make a Return of Net Income.

Every citizen of the United States, whether residing at home or abroad, and every person residing in the United States, though not a citizen thereof, whose net income for the calendar year 1917 (see Item O, page 4) amounted to $1,000 if the individual is single or does not live with wife (or husband) or $2,000 if he is married and lives with wife (or husband), is required to make a return.

If the combined income of husband and wife, living together, and dependent children equaled or exceed $2,000, all such income must be reported, either on one return or on separate returns. Husband and wife should make separate returns if either is subject to surtax (see instruction 6).

Executors and administrators of the estates of deceased persons must make returns covering the part of the taxable year during which such persons were alive, and also returns for the estates during the period of settlement. If the income of a trust estate was distributed, the fiduciary should get a copy of Form 1041 and comply with the instructions thereon. If the income from a trust estate was not distributed, the fiduciary must make a return for the estate on this form.

Guardians must make returns for their wards. Duly authorized agents may make returns for persons who by reason of sickness or other disability or absence from the United States are unable to make their own returns

6 1918

In 1918, they no longer talk about who is required to file--it is just an unspecified "you". Of course by 1917, U.S. was involved in first World War.

1918 also does not mention nonresident aliens. As if trying to avoid the whole subject, they just use the vague "you" and "your" rather than use ANY terms to describe who is required to do what.

I. HOW TO DECIDE WHETHER TO MAKE A RETURN.

1. Calculate your net income by filling in page 2 of the work sheet according to page 2 of the instructions.
2. Add the net income of your wife (or .husband) and dependent minor children, if any, except as provided in paragraph 5.
3. The total family income, calculated in accordance with paragraphs 1 and 2, must be reported, either in your return or in a separate return by wife(or husband), if it equaled or exceeded—
(a) $2,000 if you were married and lived with your wife (or husband).
(b) $1,000 if you were not married or did not live with your wife (or husband).
4. In any case, you must make a return if your net income equalled or exceeded the amount of your personal exemption, not including any additional exemption allowed you as head of family or on account of dependents.
5. Income of a minor or incompetent, if derived from a separate estate under control of a guardian, trustee, or other fiduciary, must be reported by his guardian or other legal representative.
6. If your wife (or husband) had any separate income, she (or he) should make a separate return.

So you could definitely say they tried to obscure the existence of "nonresident alien" status from the American public after Brushaber and T.D. 2313

7 1919

1919 instructions Again, NO mention of nonresident aliens. This is the last year before they start asking on 1040 (from 1920 on) if the filer is a citizen or a resident of the United States.

GENERAL INSTRUCTIONS—INDIVIDUAL RETURN
I. PERSONS REQUIRED TO MAKE A RETURN OF INCOME.

1. Return of net income must be filed by every citizen of the United States whether residing at home or abroad, and every person residing in the United States, though not a citizen thereof, whose net income for the taxable year 1919 amount to—
(a) $1,000 if single or if married and not living with wife (or husband).
(b) $2,000 if married and living with wife (or husband).

2. Under any of these circumstances a return must be made even though the amount of net income is not sufficient to incur tax liability. Note especially credits for personal exemption and dependents under Instruction VI on this page.

3. If the combined income of husband, wife and dependent minor children equaled or exceeded $2,000, all such income must be reported either on a joint return or on separate returns of husband and wife. If single and the income, including that of dependent having a net income of $1,000 or $2,000, according to the marital status, must file a return, as such person is not considered a dependent.

4. In the case of husband and wife whose combined net income exceeds $5,000, separate returns must be made on Form 1040, showing the respective amounts of income.

5. Income of a minor or incompetent, if derived from a separate estate under control of a guardian, trustee or other fiduciary, must be reported by his guardian or other legal representative.

8 1920

First time they ask on the return if the filer is citizen, if not a resident. Also, nonresident aliens are not mentioned on the 1920 form. They are not mentioned in the 1040 instructions again until 1938. So that is over 20 years where they tried to flush the idea of "nonresident aliens" down the memory hole. By the time it is mentioned again, the public is conditioned to think of themselves in international terms as "citizens of the United States". NOBODY called themselves that in Brushaber's day. He petitioned the Supreme Court as a Citizen of the State of New York.

Again, the term "nonresident alien" was no longer mentioned in the 1040 instructions, so most Americans would be unaware that this term even EXISTED. Thus, they would believe the only possible choices are "citizen" or "resident", assuming this to mean "American" or "non-American who lives in America". So after a few years of that, it probably starts to seem strange that the 1040 asks Americans every year to say whether they are Americans or non-Americans. This should not be necessary---it is only necessary because the filer is being DUPED into a contract each tax year by answering that question (REGARDLESS OF HOW HE ANSWERS IT!). How many people would know they could just IGNORE the question?

9 1924

Landmark Cook v. Tait ruling issued by United States Supreme Court. It made the income tax INTERNATIONAL in scope. All STATUTORY "U.S. citizens" abroad held to owe income tax. BEING a STATUTORY "U.S. citizen", however, was held NOT to be related to EITHER nationality OR domiciled. Hence it was a franchise office you had to volunteer for. Read Federal Jurisdiction, Form #05.018, Section 4.4 for complete discussion of Cook v. Tait, 265 U.S. 47 (1924). Former President Taft was the chief justice at the time, who was also the guy that got the 14th Amendment fraudulently ratified by Philander Knox. See Great IRS Hoax, section 6.7.1 for details on this SCAM.

6 years after Brushaber, George Cook in Cook v Tait called himself a "citizen of the United States" in his petition but probably because he had been living in Mexico for 30 years and wanted to make it clear he was not a MEXICAN citizen. And of course Cook was DUPED into calling himself a "citizen" on the 1921 1040.

10 1938

First return called a "UNITED STATES individual income tax return". Before that, it was just "Individual Income Tax Return". From 1938 1040 instructions

B. WHO MUST USE FORM 1040.—Form 1040 must be used by all individuals (except nonresident aliens), who are required to make returns and (1) whose net income is more than $5,000, or (2) whose income, regardless of amount, includes any item other than salaries or other compensation received from others for personal services, dividends, interest, and taxable income from annuities, or (3) whose return is made on an accrual basis, or (4) whose return is made for a fiscal year. All other individuals, except nonresident aliens, required to make returns shall use Form 1040A. Nonresident aliens are required to use Form 1040B or Form 1040NB

To their credit, they DO mention there is a different form for nonresident aliens, which is more than they do NOW in the 1040 instructions

We think they decided they needed something not so "on the nose" as this question (to say whether they are Americans or non-Americans) they had been putting on the 1040 since 1920. So they decided to roll out a separate return form for "nonresident aliens" in 1938, and since Americans were already used to the 1040 Individual forms--they would not notice too much if it was suddenly called a "U.S. Individual" return.

They created that status of "U.S. Individual" FIRST in 1938 then made everybody start using SSN on such return by 1945 in order to create a reasonable basis for "generally identifying" an SSN in IRS records as "belonging to a citizen of the United States". See 26 C.F.R. §301.6109-1(g)(1)(i). They need this in order to be able to do default assessments based on information returns like W-2 once some of the sheep woke up and realized that duping American into filing a 1040 is a SCAM designed as a workaround of Constitutional restrictions using "implied contract". Naturally anyone waking up to this would begin by refusing to file a return. It is the simplest first step for not going along with the scam.

11 1940

Check out the 1940 "income and DEFENSE tax" return. They were ramping up to get U.S into WWII and in 1940 they did not yet have the wage withholding program that would help alleviate inflation during the massive borrowing that would be required

So 1940 return seems like an attempt to get patriotic Americans to file to pay for "defense" from the Japs who were possibly plotting to invade California etc. Or attack U.S. positions in the South Pacific.

1940 instructions make no mention of income that is "wholly exempt from tax"---but from 1941-1945 they DO, just so you can't say they didn't TELL you about it

12 1942

First year they ask for a SSN on the return

13 1943

Last "United States Individual" return

14 1944

1944 1040 is the first time we see the form called a "U.S. Individual Income Tax Return" rather than a "United States Individual Income Tax Return"

The 1944 1040 form instructions say you can exclude items that are "wholly exempt from tax" and refers the reader to the provision of the Code that mentions income excluded by statute or fundamental law. Below is a snapshot of the instructions for this form:

 

15 1945

These instructions say you can exclude items that are "wholly exempt from tax" and refers the reader to the provision of the Code that mentions income excluded by statute or fundamental law.

Click here for the 1945 instructions.
16 1967

1967 is the first 1040NR form---it asks for SSN "if any"

17 1972

By 1972, 1040NR requires an "identifying number"

18 1980

First use of "national of the U.S." on the 1040NR return. As late as 1979, they do not have U.S. national on the 1040NR but refer to "resident of American Samoa". Why change that, if a U.S. national means ONLY an American Samoan? Why would an American Samoan have the right to avoid personal jurisdiction by claiming nonresident alien status, but no other American would have that right? Brushaber was NOT an American Samoan, yet Treasury decision 2313 referred to him as a nonresident alien!

Obviously he had American nationality. This makes him a "U.S. national"--which is the term THEY chose to use on their 1040NR form to describe an American who does not choose the "citizen" (American electing to be treated as a resident alien for tax purposes) implied contract. "Nonresident alien individual" is thus a CONTRACT term, especially for American nationals--since it is entirely their choice whether or not to enter into this "citizen" contract each tax year. For a foreign national, there may be other factors such as substantial presence test that would qualify such person as a resident alien, so they cannot lawfully choose nonresident alien status if they were present 183 days or more in the U.S. for example. But the substantial presence test is IRRELEVANT to an American national, as his presence in U.S. is by RIGHT and is never a federal privilege as it is with a foreign national.

19 1984-2018 "U.S. national" replaces "national of the U.S." on the 1040NR return
20 2019 "U.S. national" removed from 1040NR return.