|FORMS: 0.2b Notice of Default for Test for California State Tax Professionals|
|RIGHT click here for the Word 97 version of this document|
This affidavit is to be used in tandem with the Test for California State Tax Professionals. Whenever you send this Test to a state tax official in any of your correspondence, for instance, with an Request for Refund Affidavit, you should give them the allotted amount of time to respond, usually 45 days, and then mail them the Notice of Default below to inform them that they have admitted fact under the Uniform Commercial Code. It is a very effective tool and is based on UCC 1-205. We escaped $1,000 in frivolous return penalties by sending out this notice and shut the California Franchise Tax Board up immediately from making inflated claims of liability!
Former SSN (no longer active: <<SSN>>
<<CITY>>, <<STATE>> <<ZIP>>
Internal Revenue Service
<<CITY>>, <<STATE>> <<ZIP>>
VERIFIED AFFIDAVIT OF DEFAULT
STATE OF ____________ )
COUNTY OF ___________ )
Affiant, having first hand knowledge concerning the facts contained herein, provides this Verified Affidavit of Default to ____________________(agent name) of the California Franchise Tax Board. Affiant hereby deposes and states the facts as stated herein and attests that this Affidavit is true, correct, and complete.
1. That the affiant, ____________________(name), did mail to the Franchise Tax Board Affidavit(s), entitled “Test for California State Tax Professionals”, certified mail, dated ___________(date), at the above address, on __________(date). This affidavit included ___(number) enclosures and a claim of no tax liability.
2. Said Affidavit(s) by Agency as evidenced by Certified mail receipt number #_______________________________.
3. No response by the California Franchise Tax Board, or any other lawfully delegated representative of the said Agency and/or department has ever been received refuting the claims made in the aforesaid Affidavit.
4. The Franchise Tax Board was granted 45 days in which to respond to the facts stated in the Affidavit(s) and did not refute them during that time period, thereby “defaulting” on May 26, 2001.
Default having occurred, whereas the Franchise Tax Board employee(s) failed to respond to said Affidavit(s), the following facts are hereby established in accordance with the Uniform Commercial Code, section 1-205:
1. Divestiture, dispositive facts are established by the California Franchise Tax Board, respecting facts stated in said Affidavit(s), wherein they had the opportunity and “failed to plead,” and thereby have extinguished the right to proceed against Claimant in this matter.
2. The facts and claims are contained within the said Affidavit(s) are considered accurate, as they have not been rebutted, by counter-affidavit, by someone competent to know the law, within the forty five (45) days required. All matters not denied are affirmed.
3. Agency/Department failed to issue or maintain documents as required.
4. The California Franchise Tax Board, by defaulting to the said Affidavit(s) has been deemed to have waived all rights allegedly claimed against _____________________(your name) respecting unlawful assessment or collection of alleged taxes or penalties owed for said tax years and agrees to refund all taxes paid and waive right of collection for any back taxes.
The following is a by no means complete summary of the facts established by failure of the California Franchise Tax Board to respond to all the issues and claims made in said Affidavit:
1. Fiduciary Duty
1.1. Employees of the Franchise Tax Board have a fiduciary relationship with the citizens that they serve and are agents of a public trust.
1.2. This fiduciary relationship establishes an obligation to act in the best interests of the public at large, and for the general welfare of the citizens they serve and to put the interests of the public above their own private interests and the government agency that they work for..
1.3. It is in the best interests of the citizens that they serve for them to be well-informed about the legal basis justifying their tax liability so that it can be fully and promptly satisfied.
1.4. Said Affidavit fully and completely identified the responsibilities and liabilities of said citizen according to the years of research conducted by affiant and hundreds of other learned tax professionals, including CPA’s and at least three tax attorneys.
1.5. An opportunity to satisfy the burden of proof imposed on the California Franchise Tax Board as the moving party to demonstrate tax liability of affiant and the inaccuracies of his findings was afforded by said Affidavit to the FTB.
1.6. The FTB failed to refute the claims of the affiant and failed to respond to said Affidavit and legal notice, and thereby established and determined the extent of the legal tax liabilities of the affiant, which are thereby established as “not liable and due a full refund” for the years in question.
2.1. Affiant is not a "person" in the context of the Internal Revenue Code.
2.2. Affiant does not live in “the State of” or “this State” as defined in California Revenue and Taxation Code sections 6017 and 17018 or Internal Revenue Code Section 7701(a)(10). The definition of the “State” in which California income taxes apply is that found in the Buck Act, 4 U.S.C. §110(d).
2.3. Affiant does not live in the “United States” defined in 26 U.S.C. §7701(a)(9).
2.4. Subtitles A through C income taxes are considered indirect taxes according to the U.S. Supreme Court. Indirect taxes are taxes on other than natural persons.
2.5. Subtitles A through C income taxes are considered indirect taxes according to the California Franchise Tax Board. Indirect taxes are taxes on other than natural persons.
2.6. The California Franchise Tax Board has no authority to overrule the determinations of the U.S. Supreme Court’s definition of Subtitles A through C income taxes as indirect excise taxes.
2.7. The “United States” is defined in the Fourteenth Amendment as the territory over which the sovereignty of the “United States” extends, which includes only the District of Columbia, enclaves within the states, and other territories and possessions of the United States.
2.8. “U.S. citizen” status, which is one of the prerequisites of income tax liability found in section 1 of the Internal Revenue Code, means 14th Amendment citizenship and birth or naturalization in the federal United States (areas over which the federal government is sovereign).
2.9. The status of being a “U.S. national” rather than a “U.S. citizen” relieves persons from federal tax liability under “U.S. citizen” status.
2.10. The word “includes” as used throughout the Internal Revenue Code is a word of limitation and not enlargement. The purpose for using it is to restrict rather than enlarge the definition of a word to the terms it introduces. Any other interpretation of the word constitutes a violation of due process of law, an illegal and unconstitutional enlargement of federal jurisdiction, and a satisfaction of the Supreme Court’s “void vagueness” doctrine in the context of the Sixth Amendment to the U.S. Constitution.
3. Income Tax Liability
3.1. The California Revenue and Taxation Code “imposes” a tax in section 17041, but “imposing” the tax does not make a person liable or specify the situs under which a person is liable.
3.2. There is no code section anywhere in the California Revenue and Taxation code that makes a person liable for the payment of California personal income taxes.
3.3. Line 12 of the California form 540 starts with the word “State”. This is the same “State” defined in R&TC §§6017 and 17018.
3.4. State income taxes only apply to persons who reside in the “State” defined above in R&TC §§6017 and 17018.
3.5. Only federal and state corporations and natural persons residing (living) inside federal enclaves within California can be liable for the payment of state income taxes.
3.6. “Gross income” means income derived from whatever source derived.
3.7. The IRS and the FTB have no constitutional authority to define income as other than corporate profits, and no authority to define “income” at all. Only the U.S. Constitution can define income.
3.8. “Income” as properly defined by the U.S. Supreme Court means “corporate profit”.
3.9. Affiant is not a corporation and has no corporate profit.
3.10. 26 U.S.C. Section 863 provides a means of allocating gross income to specific sources that are taxable based on the location where they were derived. There is no other authority for allocating items of gross income to specific taxable sources.
3.11. 26 CFR §1.863-1 identifies how to determine taxable income from specific sources within or without the United States.
3.12. The legal authority for determining the taxability of a source of income (not an item of gross income, but a source or situs of income) is 26 CFR §1.861-8(f)
3.13. 26 CFR §1.861-8T(d)(2)(iii) defines income that is not considered tax exempt. This section does not list the income of most American Citizens. Therefore, affiant is exempt from federal income tax.
3.14. Affiant is not a “taxpayer” within the context of Subtitles A through C or the California Revenue and Taxation Code because no liability for the payment of such income taxes has been or can be demonstrated.
3.15. The IRS has no authority to exercise levy or distraint against American Citizens in connection with payment of Subtitles A through C federal income taxes. The enforcement codes found in Subtitle F do not have any implementing regulations that apply distraint for enforcement of Subtitles A through C income taxes.
3.16. IRS has no authority to assess an American with a Subtitle A through C income tax liability. Only the Citizen can assess himself with an income tax liability. That is why the U.S. Supreme Court said in the case of Flora v. U.S., 362 U.S. 145 that: “Our system of taxation is based upon voluntary assessment and payment, not upon distraint.” Voluntary assessment means self assessment in this case.
3.17. Neither the IRS or the California FTB have in their possession a valid assessment. All self-assessments have already been invalidated, which means that all monies paid in taxes for the years in question must be returned to the affiant.
3.18. The Franchise Tax Board has no evidence in their position that proves that the affiant is a “U.S. citizen”
3.19. The only place that the term “citizen of the United States” or “U.S. citizen” is defined anywhere in the Internal Revenue Code or 26 CFR is in 26 USC §31.3121(e).
3.20. The California Form 590, Withholding Exemption Certificate, states that residents of California are exempt from income tax withholding as per R&TC Section 18662.
3.21. Only nonresidents of California are liable for state income taxes.
3.22. Affiant is not a nonresident of California. Instead, he is a resident.
3.23. I have status 1, which means that I am a resident of California and a nonresident of the federal “United States”. This makes me liable for neither the federal income tax or the state income tax.
3.24. The only definition of the term “individual” found anywhere in the Internal Revenue Code or 26 CFR appears in 26 CFR §1.1441-1(c )(3).
3.25. A person who fills out a 1040 form by law must either be an alien or a nonresident alien under 26 CFR §1.1441-1(c )(3).
3.26. A person cannot be a “U.S. citizen” and an “individual” at the same time because they are mutually exclusive, based on the definition of “individual” found in 26 CFR §1.1441(c )(3).
3.27. Only “aliens” as defined in 26 CFR §1.1441-1(c )(3) are required to fill out and submit IRS form 1040. Nonresident aliens are supposed to use the IRS form 1040NR and not the 1040.
3.28. U.S. citizens are not required by law to complete or file any income tax form, including the 1040 or the 1040NR.
4.1. The only “persons” against whom penalties may be instituted under Subtitle F of the Internal Revenue Code are defined in 26 CFR 301.6671-1(b), which are defined as officers or employees of corporations or members or employees of partnerships.
4.2. Affiant is not the “person” against whom penalties can be levied under Subtitle F of the Internal Revenue Code.
4.3. There are no implementing regulations for the Internal Revenue Code Section 1 income tax that authorize the imposition of penalties against anyone for refusing to pay these taxes.
4.4. The only authority to impose civil penalties by the IRS is through filing suit in federal court. Liens and levies may not be used against American Citizens to collect penalties.
4.5. Our tax system is voluntary. Penalties can’t be applied for noncompliance because it is voluntary.
4.6. All documents submitted with tax returns constitute compelled testimony. Because the testimony is compelled and submitted under duress, it is not admissible as evidence in a court of law because it was illegally obtained as per the U.S. Supreme Court in the case of Weeks v. United States, 232 U.S. 383 (1914).
4.7. The imposition of penalties for refusing to communicate with the government on a tax return is a violation of the First Amendment right of free speech of the affiant.
4.8. The IRS and the FTB have no delegation of authority order authorizing them to compel the affiant to commit fraud on his tax return.
4.9. The Fourth Amendment right of privacy is unlawfully infringed by the tax laws, in that maintaining one’s privacy by not declaring deductions results in an additional tax assessment. Such an addition tax assessment amounts to a penalty for the exercise of Constitutionally guaranteed rights, which is unconstitutional.
5.1. Only elected or appointed officials of the United States government are the proper subject of an IRS levy.
5.2. Affiant is not a proper or lawful object of an IRS levy.
5.3. Seizure of property to satisfy tax debts can only lawfully occur if it is ordered by a neutral and disinterested magistrate.
5.4. The IRS and the FTB issues Notices of Levy without proper orders from a magistrate. Therefore, such notices cannot be a legal or lawful means of seizing or obtaining property in satisfaction of alleged tax debts. Only a court order provides legitimate authority to seize property under the Fourth Amendment. Use of such notices constitutes extortion under the color of office, fraud, and subjects the issuing person to personal criminal liability.
5.5. In the context of a Notice of Deficiency, there is not legal basis or delegated authority to establish a tax liability absent a valid self-assessment by the affected Citizen.
5.6. IRS and FTB have no lawful authority to send out a Notice of Deficiency absent a valid self-assessment.
5.7. IRS and FTB have no legal authority to call affiant a “taxpayer” because they have not demonstrated tax liability.
5.8. 26 CFR 301.6303-1 is not a legislative regulation, but a procedural regulation, and therefore may not be used to institute collection actions or distraint against American Citizens.
In accordance with 28 U.S.C. §1746(1), I do hereby attest and affirm, under the penalties of perjury from without the “United States”, under the laws of California that, to the best of my/our knowledge and belief, the above Affidavit is true, correct, and complete.
All Rights Reserved Without Prejudice, UCC 1-207