FORMS: 5.4 SERVICE CONTRACT WITH FINANCIAL INSTITUTION TO ASSURE SECURITY OF ACCOUNT FROM UNLAWFUL LIEN, LEVY, OR SEIZURE
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It’s no secret that most financial institutions and the less educated people working at them simply don’t know what the federal laws say about the authority of the Internal Revenue Service to lien and levy and seize property.  When the institutions receive a “Notice of levy” from the IRS, it is very common that financial institutions won’t question the authority of the IRS to levy assets under law.  Instead, they will blindly surrender over to the government whatever proceeds are asked for, often without the consent or approval of the account holder.

With the above in mind, it’s very important that you choose financial institutions to park your assets in that are very familiar with the legal authority of the IRS and state taxation authorities to lien, levy, and seize property in satisfaction of a tax debt.  Even if the bank or financial institution isn’t familiar with the law, you can often win them over by taking the time to educate both them and their legal counsel on the authority of the IRS to seize, lien, and levy property. 

Following the education process of the financial institution, it is necessary to put your foot down by telling them that you with certainty withdraw your money, close your account, and and abandon them if they will not sign the below form stating that they understand the law on liens, levies and seizures with respect to the IRS and will comply with that law, starting with only allowing liens, levies, and seizures of property belonging to “elected or appointed governmental federal political officials” and in connection with the Bureau of Alcohol, Tobacco, and Firearms.  Refer to Section 8.2.3.4 entitled “Educate and Screen Your Financial Institutions and County Recorder”.


SERVICE CONTRACT BETWEEN CLIENT AND FINANCIAL INSTITUTION

1.        This agreement between ___________________(your name), hereinafter referred to as “Client” and _____________________ (financial institution name), hereinafter referred to as “Institution”, is undertaken voluntarily to guarantee the following mutually agreeable results for the parties.

2.        Benefit to Institution:  Receipt of benefits associated with financial account of Client.

3.        Consideration to Client:

3.1.               Guarantee of a defined level of customer service by Institution.

3.2.               Safety of assets in financial account from lien, levy, or seizure by federal or state income tax authorities.

3.3.               Maintenance of personal privacy of accountholder.

4.        Obligations of Financial Institution:

I, ___________________________(name) acting as an agent and principle for Institution do hereby voluntarily state the following:

4.1.               That I recognize the existence of a fiduciary relationship with Client to protect and not give away or allow to be “illegally stolen” assets in the Account of Client to third parties without all of the following happening beforehand:

4.1.1.          Advanced notification of Client at least 72 hours beforehand.

4.1.2.          Receipt of a lien, levy, or seizure notice signed by a magistrate or judge of either the California Superior Court or a U.S. District Court

4.1.3.          That I will NOT accept or honor a “Notice of Levy” issued and signed by ONLY an agent of the IRS or California Franchise Tax Board Agent.

4.2.               That  I or agents of my Institution read and understand the laws pertaining to lien, levy, and seizure and will honor those laws to the best of my ability, including 26 U.S.C. Section 6331.

4.3.               That 26 U.S.C. Section 6331 defines and constrains the authority of the Secretary of the Treasury to lien, levy, and seize property in satisfaction of a tax lien related ONLY to activities of the Bureau of Alcohol, Tobacco, and Firearms under Title 27, Chapter I, Subchapter F, Part 70 of the U.S. Code as shown in the parallel table of authorities published by the U.S. Government Printing Office and found at:

I further understand and agree that this section DOES NOT authorize liens, levies, or seizures against financial accounts or property instituted by the IRS against accounts owned by Client at this institution based on his current employment.

4.4.               That 26 U.S.C. Section 6331 allows levy, lien, and seizure to be instituted ONLY against “employees” or elected or appointed political officials of the United States government as defined below:

26 U.S.C. Section 3401(c )

Employee

For purposes of this chapter, the term ''employee'' includes [is limited to] an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term ''employee'' also includes an officer of a corporation.

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6 U.S.C. Section 2105.  DEFINITIONS

(a) For the purpose of this title, ''employee'', except as otherwise provided by this section
     or when specifically modified, means an officer and an individual who is -
  (1) appointed in the civil service by one of the following acting in an official capacity -
     (A) the President;
     (B) a Member or Members of Congress, or the Congress;
     (C) a member of a uniformed service;
     (D) an individual who is an employee under this section;
     (E) the head of a Government controlled corporation; or
     (F) an adjutant general designated by the Secretary concerned under section 709(c) of
       title 32;
  (2) engaged in the performance of a Federal function under authority of law or an
       Executive act; and
  (3) subject to the supervision of an individual named by paragraph (1) of this subsection
       while engaged in the performance of the duties of his position.

[....skipped a few entries since irrelevant...]

(d) A Reserve of the armed forces who is not on active duty or who is on active duty for training is deemed not an employee or an individual holding an office of trust or profit or discharging an official function under or in connection with the United States because of his appointment, oath, or status, or any duties or functions performed or pay or allowances received in that capacity.

4.5.               That Client is a private Citizen of the 50 states who is does not meet the above definition of persons authorized by law against whom the IRS may subject to distraint for payment of an income tax liability.

4.6.               That I will ask any agent of the IRS or the Franchise Tax Board for a copy of his/her delegation of authority orders and NOT honor the lien, levy, or seizure without both receiving these orders and providing a copy of same to Client as part of the notification of receipt of lien, levy, or seizure papers.

4.7.               Institution agrees to be held liable for reimbursing Client within 15 days after any I have given any monies or assets in his/her accounts to the IRS or any state income tax authorities in satisfaction of a “Notice of Levy” or lien that was provided without compliance to any part of this agreement.

4.8.               Institution recognizes that it is not within the power of the government to impose a mandatory tax on the exercise of an occupation of common right, or natural right, or on the receipt and/or realization of the earnings received from the exercise of such a right.  The Income Tax is an excise tax.  To be legally required to pay an excise tax, an individual must be involved in the exercise of a taxable privilege*.  Client is exercising no privileges upon which an excise tax could be imposed by law within the context of his occupation.

*Privilege:  “A particular benefit or advantage enjoyed by a person, company, or class beyond the common advantages of their citizens…”  (Black’s Law Dictionary–6th Edition) “…An advantage possessed by an individual or a class of persons, which is not possessed by others which exists by operation of law or by virtue of a license, franchise, grant or other permission…”  (Ballentine’s Law Dictionary).

“That the right to…accept employment as a laborer for hire is a fundamental right, is inherent in every free citizen, and is indisputable…”  United States v. Morris, 125 F.Rept. 325, 331.

“The conclusion reached in the Pollock case…recognized the fact that taxation on income was, in its nature, an excise…”  Brushaber v. Union Pacific Railroad Co., 240 U.S. 1, 15-17

EXCISES:  “Excises are taxes laid upon…licenses to pursue certain [regulated] occupations and upon corporate privileges; the requirement to pay such taxes involves the exercise of privilege…Conceding the power of Congress to tax the business activities of private corporations.. the tax must be measured by some standard…It is, therefore, well settled by the decisions of this court that when the sovereign authority has exercised the right to tax a legitimate subject of taxation as an exercise of a franchise or privilege, it is no objection that the measure of taxation is income…”  Flint v. Stone Tracy Co., 220 U.S. 107, at pg 154, 165

“The obligation to pay an excise is based upon the voluntary action of the person taxed in performing the act, enjoying the privilege, or engaging in the occupation which is the subject of the excise, and the element of absolute and unavoidable demand is lacking.”  People ex rel. Atty Gen. V. Naglee, 1 Cal. 232, Bank of Commerce & T. Co. v. Senter, 149 Tenn. 441, 381 SW 144

“The individual, unlike the corporation, cannot be taxed for the mere privilege of existing.  The corporation is an artificial entity which owes its existence and charter power to the State, but the individual’s right to live and own property are natural rights for the enjoyment of which an excise cannot be imposed.”  Redfield v. Fisher, 292 Oregon 814, 817

Legislaturecannot name something to be a taxable privilege unless it is first a privilege.”  [Taxation West Key 43]…”The Right to receive income or earnings is a right belonging to every person and realization and receipt of income is therefore not a ‘privilege’, that can be taxed.”  [Taxation West Key 933]-Jack Cole Co. v. MacFarland, 337 S.E. 2d 453, Tenn.

The term excise tax’ is synonymous with privilege tax’, and the two have been used interchangeably.”  Foster & C. Co. v. Graham, 154 Tenn. 412, 285 S.W. 570, 47 ALR 971.  “Whether a tax is characterized in the statute imposing it, as a privilege tax or an excise tax is merely a choice of synonymous words.  An excise tax is a privilege tax.”  Bank of Commerce & T. Co. v. Senter, 149 Tenn. 569, 260 SW 144, American Airways v. Wallace, 57 F.2d, 877, 8880.

“An excise is…a duty levied upon licenses to pursue certain trades or deal in certain commodities, upon official privileges, [i.e. a government job as an elected or appointed political official but NOT an occupation of common right] etc.”  Black v. State, 113 Wis. 205, 89 NW 522

New Neighborhoods v. W. VA. Workers Comp. Fund, 886 F.2d 714 (4th Cir. 1989): “Excise tax is one not directly imposed upon persons or property.

Also:  Sims v. Ahrens, 167 Ark. 557, 271 SW 720; Diefendorf v. Gallet, 51 Idaho 619, 10 P2d 307; Miles v. Department of Treasury, 209 Ind 172, 199 NE 372, 97 ALR 1474, 101 ALR 1359, app. Dismd 298 U.S. 640, 80 Led 1372,56 S.Ct. 750

4.9.               That the income tax most Americans pay is based on the following

26 U.S.C. 871(b)(2)-GRADUATED RATE OF TAX

“…(2) DETERMINATION OF TAXABLE INCOME. –In determining taxable income…gross income includes ONLY gross income which is effectively connected with the conduct of a’ trade or business,’ within the United States.”

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26 U.S.C. 7701(a)(26) TRADE OR BUSINESS.—“Includes [only] the performance of functions of a public office.”

Following is the definition of Public Office, pursuant to Black’s Law Dictionary, Abridged 6th Edition, means:

  “Essential characteristics of a ‘public office’ are: (1) authority conferred by law, (2) fixed tenure of office, and (3) power to exercise some of the sovereign functions of government; key element of such test is that ‘officer is carrying out sovereign function’.  Essential elements to establish public position as ‘public office’ are: Position must be created by Constitution, legislature, or through authority conferred by legislation, portion of sovereign power of government must be delegated to position, duties and powers must be defined, directly or implied, by legislature or through legislative authority, duties must be performed independently without control of superior power other than law, and position must have some permanency.”

4.10.            Therefore, to be involved in a “trade or business” and thereby be liable for the graduated income tax as defined for the purposes of the Internal Revenue Code, an American must hold a public office, and Client has assured me that he does NOT do so.

5.        Obligations and Affidavit of Client:

I, ___________________________(name), Client, do hereby voluntarily state the following absent any duress, and that these facts are provided under penalty of perjury:

5.1.               That I am classified as a nonresident alien for the purposes of the tax code.

5.2.               Nonresident aliens are NOT required, as per 26 CFR 301.6109-1(g), to have or to provide an identifying number such as a Taxpayer ID Number (T.I.N.) or Social Security Number (S.S.N.).

5.3.               That my current occupation is: _____________________________________

5.4.               That my current employer is NOT the United States Government, or if it is, that I do not meet the definition of “employee” found in this agreement and am not an elected or appointed political official of the United States or California government in receipt of privileges that might make me liable for the payment of any kind of income taxes.

5.5.               That I am practicing an occupation of common right not subject to income taxation under Subtitle A or  withholding under Subtitle C of the Internal Revenue Code (26 U.S.C.) as follows:

Simms v. Ahrens, 271 SW 720

"An income tax is neither a property tax nor a tax on occupations of common right, but is an EXCISE tax...The legislature may declare as 'privileged' and tax as such for state revenue, those pursuits not matters of common right, but it has no power to declare as a 'privilege' and tax for revenue purposes, occupations that are of common right."

What does "occupations that are of common right" mean?  They include any profession you can choose to do or undertake in private industry or for the government in any field or trade and which do not depend on the authority or privileges granted you as part of a political office or by operation of law giving you the authority of that office.  Occupations that are not of common right are things you can only do as an officer or politician working for a government agency by virtue of the rights and privileges and delegated authority granted to you as a consequence of your election or appointment to that political office.  That is why the definition of "employee" in 5 U.S.C. Section 2105 quoted above is so very restrictive:  because it has to define "occupations that are not of common right and which depend on the privileges associated with government service alone". 

5.6.             Client wishes to notify Institution that if they have any questions or concerns about the content of this document, they may visit the website at http://familyguardian.tzo.com and download a free book entitled The Great IRS Hoax: Why We Don't Owe Income Tax, which clearly and more completely explains every fact or legal assertion made in this service contract.

Wherefore, it is agreed that this Service Contract shall remain in effect so long as Client maintains any active financial accounts at Institution, and shall apply to all such accounts at Institution.

Client Signature                                Date

Institution Representative                                Date

Witness                                Date