“Let nothing be done
through selfish ambition or conceit, but in lowliness of
mind let each esteem others better than himself. Let each of you
look out not only for his own interests, but also for the interests
[Philippians 12:3-4, Bible, NKJV]
“But the wisdom that is from above is first pure, peacable, gentle,
willing to yield, full of mercy and good fruits, without partiality
[James 3:17, Bible, NKJV]
“Do not go hastily to court; for what will you do in the end, when
your neighbor has put you to shame? Debate your case with your
neighbor, and do not disclose the secret to another; lest he who hears
it expose your shame, and your reputation be ruined.”
[Prov. 25:8-10, Bible, NKJV]
Before proceeding with this section, make sure
you read section 22.214.171.124, which talks about how to request a refund
from the IRS, and which also addresses many of the litigation issues.
It is very common for the IRS to delay, frustrate,
exasperate, and obfuscate providing refunds properly and legally requested
using the procedures on this website. That is why you need to act swiftly and decisively.
Suing for interest on the money they are illegally holding onto is a
way to increase your leverage. If the IRS can charge massive penalties
and interest, then what is good for the goose is also good for the gander!
Treat them the same way to get them just as motivated as they want you
to be to settle!
Before you proceed to sue, you should be aware that your refund
suit can raise no more issues than those contained in your original
refund claim you sent to the IRS. That’s why we recommend
sending a copy of chapters 1 through 6 of this book with your Request
for Refund claim so you can use ANY of the arguments in this book
in your lawsuit!
Before we proceed to talk about how to sue, the
following is something you should be aware of, from the U.S. Constitution
Right to Sue the Government .--A right to sue the
Government on a contract is a privilege, not a property right protected
by the Constitution.
The right to sue for recovery of taxes paid may be conditioned upon
an appeal to the Commissioner and his refusal to refund.
There was no denial of due process when Congress took away the right
to sue for recovery of taxes, where the claim for recovery was without
substantial equity, having arisen from the mistake of administrative
officials in allowing the statute of limitations to run before collecting
a tax. The denial
to taxpayers of the right to sue for refund of processing and floor
stock taxes collected under a law subsequently held unconstitutional,
and the substitution of a new administrative procedure for the recovery
of such sums, was held valid.
Congress may cut off the right to recover taxes illegally collected
by ratifying the imposition and collection thereof, where it could lawfully
have authorized such exactions prior to their collection.
Also keep in mind the following critical information
about suing for refunds from Bouvier's Law Dictionary, Vol. II, Third
Revision, Eighth Edition, 1914, pp. 3230-3238:
In order to invoke the powers of a court of equity to restrain the collection
of illegal taxes, the case must be brought within the well recognized
foundations of equitable jurisdiction [* * *] and it must clearly appear
not only that the tax is illegal, but that the property owner has no
adequate remedy at law, and that there are special circumstances bringing
the case under some recognized head of equity jurisdiction…” [Cites
“Taxes become a lien on property only by statute…”
“Taxes illegally assessed and paid may always be recovered back,
if the collector understands from the payor that the taxes are regarded
as illegal and that suit will be instituted to compel the refunding
of them; Erskine v. Van Arsdale, 15 Wall. (U.S.) 75, 21 L.Ed. 63, a
case of internal revenue taxes.”
“Where a state official receives money for a tax paid under duress
with notice of its illegality, he has no right to it and the name of
the state does not protect him from suit; Atchison, T. & S. F. R. Co.
v. O'Connor, 223 U.S. 280, 32 Sup.Ct. 216, 56 L.Ed. 436, Ann.Cas. 1913C,
rule is firmly established that taxes voluntarily paid cannot be recovered
back, and payments with knowledge and without compulsion are voluntary;
when paid under protest or with notice of suit, a recovery may, on occasion,
be had, although, generally speaking, even protest or notice will not
avail if the payment be made voluntarily, with full knowledge, and without
any coercion by the actual or threatened exercise of power possessed,
or supposed to be possessed, over person or property, from which there
is no means of immediate relief than payment; Chesebrough v. United
States, 192 U.S. 253, 24 Sup.Ct. 262, 48 L.Ed. 432 (purchase of war
revenue stamps for deed without protest or notice)."
[Bouvier's Law Dictionary, Vol. II, Third Revision, Eighth Edition,
1914, pp. 3230-3238]
In suing the government you need to choose your
forum (that is court) carefully based on what you can afford and based
on where you are most likely to achieve success given your circumstances.
There are three places you can initiate a suit for the refund:
Tax Court, District Court, or the Court of Claims. We have prepared
a table summarizing the characteristics of each court below:
Table 9: Civil Tax Litigation Comparison of Courts
“Taxpayers” must pay before filing suit
Jury trial available
Appeal from adverse decision to which court
Courts of Appeals; based on taxpayer’s residence
Same as Tax Court
Court of Appeals
Circuit Ct. of
Appeals to which appeal lies; based on taxpayer’s residence
Same as Tax Court
Ct. of Appeals; former Ct of Claims
Established under Art. I or Art III of U.S. Const’n
Respondent (party against whom suit filed)
Government represented by attorneys from
of Office of Chief Counsel; District Counsel
U.S. dep’t of Justice
Same as U.S.
Any tax suit
1. Any suit
26 U.S.C. §7422 and 28 U.S.C. §1346(a)(1) for jurisdiction.
1. Refund suits only.
2. Relaxed evidentiary rules. Judges know
more about tax law than district courts because more specialized.
Aliens may sue for refund under 28 U.S.C. §2502.
3. No claims for refund allowed for penalties
under 26 U.S.C. §6700 or 6701.
26 U.S.C. §7422 and
28 U.S.C. §1346(a)(1) for jurisdiction.
15 year term
15 year term.
Can serve up to two terms.
Location to litigate
Based on Wash.,
throughout country holding trials.
Regional district court building.
Based on Wash.,
throughout country holding trials.
The only one of the three choices of forum (that
is, which "court") above that includes a jury trial is U.S. District
Court, which is what we therefore recommend. Tax court has the
advantage of being convenient and not requiring you to pay the taxes
before litigating, but the disadvantages far outweigh the advantages,
- You don’t have to pay the tax up front, but the flip side of
this is that the Tax Court can ADD to your assessment and increase
the amount you owe, whereas the District Courts cannot. It’s
- You forever surrender your right to trial by jury, both during
the the trial and during the appeal. The entire trial is decided
by a judge, who is most likely NOT going to rule against the government
or in your favor under any circumstances, even if everything you
have said is correct. Tax court is a kangaroo court.
- Because Tax Court is an Art. I court under the Constitution
and is a Creation of Congress, then it only has territorial jurisdiction
under Art. I, Section 8, Clause 17 of the Constitution, which means
it can only make rulings that apply within the federal zone.
Chances are good that you don’t live in the federal zone,
so technically, they have
no jurisdiction unless you are stupid enough to give it to them
by using this court. It’s assumed that if you file
suit in Tax Court, that you are volunteering to grant them jurisdiction
that they otherwise wouldn’t have. Don’t give them jurisdiction
they don’t otherwise have, and put your future at the mercy of an
ignorant person masquerading as a judge who isn’t even necessarily
a lawyer (with no jury) who is paid with money he extorts from you!
in the Court of Claims:
Do not sue in the Court of Claims if you are suing
individual agents for a tort. Here is why:
The sole question on appeal is whether the
Court of Federal Claims is correct in concluding that it does not
have subject matter jurisdiction over the Brown and Darnell complaints.
The trial court's decision to dismiss a complaint for lack of jurisdiction
is a question of law subject to complete and independent review
by this Court. Shearin v. United States, 992 F.2d 1195 (Fed. Cir.
Appellants assert that, because their income
taxes and penalties were wrongfully assessed and collected, they
are deserving of damages for Fourth Amendment violations and exemplary
damages. Appellants adamantly argue that they are suing for damages
and not for the recovery or refund of any income tax or penalty.
Because their claims are not for tax or penalty refunds, their claims
do not fall within the jurisdiction of the Court of Federal Claims
pursuant to 28 U.S.C. §§ 1346(a)(1) and 1491, the statutes that
give the Court of Federal Claims jurisdiction over claims for tax
refunds. Therefore, we address appellants' claims only as fraudulent
assessments and fraudulent taking complaints.
The Court of Federal Claims is a court of
limited jurisdiction. It lacks jurisdiction over tort actions against
the United States. 28 U.S.C. § 1491(a); Keene Corp. v. United States,
508 U.S. 200, 214 (1993). Because Brown and Darnell's complaints
for "fraudulent assessment[s]" are grounded upon fraud, which is
a tort, the court lacks jurisdiction over those claims. L'Enfant
Plaza Properties, Inc. v. United States, 645 F.2d 886, 892 (Ct.
Cl. 1981). In addition, the gravamen of their "Fourth Amendment
fraudulent taking" complaints is not in the taking, but in the fraudulent
nature of the alleged taking. Since the "Fourth Amendment fraudulent
taking" complaints, like the "fraudulent assessment[s]" claims,
sound in tort, the Court of Federal Claims also lacks jurisdiction
over those claims. Id.
Appellants argue that their "Fourth Amendment
fraudulent taking" complaints are not grounded in tort, but are
founded in the Constitution. Assuming, arguendo, that the appellants'
argument has merit, the Court of Federal Claims would still lack
jurisdiction over such complaints. Courts have consistently held
that the jurisdiction of
the Court of Federal
Claims is limited to cases in which the Constitution or a federal
statute requires the payment of money damages as compensation for
their violation. E.g., United States v. Mitchell, 463 U.S. 206,
218 (1983); Murray v. United States, 817 F.2d 1580, 1582-83 (Fed.
Cir. 1987). In the consolidated cases at hand, appellants complain
of Fourth Amendment violations. The Fourth Amendment provides for
the security of people "in their persons, houses, papers, and effects,
against unreasonable searches and seizures." U.S. Const. amend.
IV. However, the Fourth Amendment does not mandate the payment of
money for its violation. Id. Because monetary damages are not available
for a Fourth Amendment violation, the Court of Federal Claims does
not have jurisdiction over a such a violation. See United States
v. Mitchell, 463 U.S. at 218; Murray v. United States, 817 F.2d
at 1582-83. Thus, even assuming Brown and Darnell's "Fourth Amendment
fraudulent taking" complaints are founded in the Constitution, the
claims are outside the jurisdiction of the Court of Federal Claims.
The exemplary damages demanded by appellants
via Bivens actions are also outside of the jurisdiction of the Court
of Federal Claims. In Bivens, the Supreme Court held that a party
may, under certain circumstances, bring an action for violations
of constitutional rights against Government officials in their individual
capacities. Bivens v. Six Unknown Named Agents of the Federal Bureau
of Narcotics, 403 U.S. 388 (1971). The
Tucker Act grants the Court of Federal Claims jurisdiction over
suits against the United States, not against individual federal
officials. 28 U.S.C. § 1491(a).Thus, the Bivens actions asserted
by appellants lie outside the jurisdiction of the Court of Federal
The remainder of appellants' demands, which
are for declaratory or injunctive relief, are also outside the jurisdiction
of the Court of Federal Claims. The Tucker Act does not provide
independent jurisdiction over such claims for equitable relief.
United States v. King, 395 U.S. 1, 2-3 (1969).
Because the Court of Federal Claims does
not have jurisdiction over the claims asserted by Brown and Darnell,
the trial judge properly dismissed their cases.
[Gerald Alan Brown and Charles Darnell v.
United States, No. 96-5107 (Federal Circuit, 1997)]
If you want to sue for a Bivens Action, you must
file the original action in a Circuit Court, under Supreme Court Rule
22, and ask for an Article III judge from the Supreme Court to hear
it. Some cases that provide instructional examples that we recommend:
- Gerald Alan Brown and Charles Darnell v. United States, No.
96-5107 (Federal Circuit, 1997)
- Charles Darnell v. United States, No. 95-412T (Federal Court
of Claims, 1996)
- Gerald Alan Brown v. United States, No. 95-367T (Federal
Court of Claims, 1996)
If you filed as or claim to be a “nonresident alien”, then
you are a nontaxpayer
and a citizen of a foreign state (as defined in
28 U.S.C. §1605
to the Internal Revenue Code.
"The revenue laws are a code or system in regulation
of tax assessment and collection. They relate to taxpayers,
and not to nontaxpayers. The latter are without their scope.
No procedure is prescribed for nontaxpayers, and no attempt
is made to annul any of their rights and remedies in due
course of law. With them Congress does not assume to deal,
and they are neither of the subject nor of the object of
the revenue laws..."
"The distinction between persons and things within the
scope of the revenue laws and those without is vital."
Long v. Rasmussen, 281 F. 236 @ 238(1922)
Because you are not subject to the Internal Revenue Code
and are not a “taxpayer” as a “nonresident alien”, then
have to pay any tax the IRS claims is due
you sue the government as shown in line 1 of the table above,
since the authority for requiring that comes from Title
26 and only applies to “taxpayers”! The IRS is also
not empowered to classify you as a "taxpayer" going into
the litigation as follows:
"A reasonable construction of the taxing statutes does
not include vesting any tax official with absolute power
of assessment against individuals not specified in the states
as a person liable for the tax without an opportunity for
judicial review of this status before the appellation of
'taxpayer' is bestowed upon them and their property is seized..."
Botta v. Scanlon, 288 F.2d. 504, 508 (1961)
For that reason, in order to preserve your Constitutional
rights, you must
base your claim on any part of the Internal Revenue Code
or Title 26, because by doing so, you are subjecting yourself
to its jurisdiction and must claim that you are a “taxpayer”
to claim the benefits of that title, which you don’t want
to do! Your claim must instead be based on what is
called “diversity of citizenship” as defined in Article
III, Section 2 TA \l "Article III, Section 2" \s "Article
III, Section 2" \c 7 of the Constitution. Do
NOT claim statutory
diversity of citizenship as described in
28 U.S.C. §1332 TA \s "28 U.S.C. §1332" , but rather
diversity of citizenship based on Article III, Section 2.
diversity of citizenship depends on the definition of “State”
found in 28 U.S.C. §1332(d)
TA \s "28 U.S.C. §1332(d)" , which means a federal territory
or possession, while
diversity depends on the definition of “State” used in the
Constitution, which means states of the Union and excludes
federal territories and possessions.. The two types
of diversity are therefore mutually exclusive and you should
avoid confusing these two, because such confusion will undermine
your sovereign immunity and grant the court jurisdiction
that it might not otherwise have. You must based your
claim on Constitutional rights and focus on the following
- Violation of due process.
- Any crime listed in Title 18 (refer to section 11.9
for claims to use in this vain).
- The Constitution of the United States of America.
28 U.S.C. §1331
If you don’t use
a “diversity of citizenship” claim based on Article III,
Section 2 of the Constitution and NOT 28 U.S.C. §1332, then
the court by default will assume that you are a U.S. citizen,
and as a U.S. citizen, you can kiss your rights goodbye
because the court will not allow you to use them in your
claim! You must also demand in your
pleading a jury
trial, or you are guaranteed to not get one even
though you are litigating in a District Court. The
only reason to quote any part of the Internal Revenue Code
is to substantiate your claim that you are a “nontaxpayer”
to the code and
in any way for any Internal Revenue Code tax found in Subtitle
A. When you file your claim, be sure to emphasize
with a notarized affidavit that you are
not a U.S. citizen,
but a nonresident
alien. You also might want to include a
certified copy of your birth certificate and get it admitted
into evidence along with the affidavit to make your case
is very important to remember that the IRS is under a lot of pressure
to control costs. The most expensive part of what they
do is litigation against Americans who won’t cooperate with their fraud
or “volunteer” to pay taxes for which they aren’t liable. Because
of this, the IRS is likely to be very judicious about who they pick
a fight with in court. They love picking fights with ignorant,
disorganized, unprepared, and poor citizens who can’t defend themselves.
That is why they will try to steal or levy or seize your property just
at the point when they think you will begin litigating, in violation
of your due process protections which you need to be very aware of.
They figure, if they empty your pockets before you begin your battle,
then your chances of winning are reduced because you won’t be able to
afford an expensive tax lawyer. They will avoid battles they know
they can’t win or which would cost more to litigate than the taxes that
are involved. They may make exceptions to the “cost-benefit” rule
if you are a high profile person or a freedom leader who they want to
make a “publicized example out of” to scare other citizens or followers
of yours into “volunteering”.
If you have taken the “offensive” position we describe
in this document, however, then they don’t have anything they
can use to blackmail or slander you or undermine you , and you will
be in an optimal position to get your money back through the courts.
You will also be seeking a large enough refund to make it worth the
while of an attorney to take on the case, if you decide to delegate
the litigation rather than hiring an attorney to do everything.
The key, throughout your litigation, is to make your case as “high maintenance”,
costly, and difficult for the IRS as you legally can. At the same
time, you want to avoid the label of “vexatious litigant” that the court
might try to slap on you, because this could cause an attorney fee award
against you by the court. It’s a delicate balancing act.
Throughout your litigation, remind yourself that
this is a war of attrition. The first party who runs out of energy
or money or time or motivation is the one who loses. Don’t be
the coward who gives up, because you will never get your freedom back
if you do! In this fight, the one who has the most “staying power”
is the one who can litigate the most effectively, inexpensively,
and efficiently, who knows the most, and who is the most organized and
motivated. The more of the litigation you can handle on your own,
the more staying power you will have because the less money it will
cost you. That’s why we emphasize getting you educated and functional
in the legal arena throughout this book. After having read this
book and the forms and procedures on our website, you will be much more
knowledgeable and better prepared than the vast majority of people who
are litigating against the IRS, and you will know more about the tax
laws than most IRS agents know! You will be much more discriminating
in choosing a tax attorney to act as your “coach” as well, because of
what you know. You will know what your rights are and how to protect
and defend them in court. In short, you’ll have a
big advantage that
will be difficult to overcome and the IRS will be much more likely to
back down and cave if you make sure they know this by every action you
take. Words aren’t as convincing to the IRS as consistent, disciplined,
knowledgeable application of the tax laws and the integrity to follow
through on everything
you said you would do the way you said you would do it.
7422 identifies the legal restrictions that apply to a civil suit
for refund of taxes paid. There are a lot of restrictions you
should be aware of deriving from this section, including:
- You cannot pursue a civil action for refund until you first
file a claim for refund.
- You cannot go after the government if you have a suit against
an individual employee for wrongdoing and that employee assumes
personal responsibility for the wrongdoing.
- An IRS credit is treated as payment in full for any liability
against the government. Other damages may apply, however,
but the statute does not identify whether those damages can include
the same kind of exorbitant penalties and interest the IRS commonly
charges citizens when they underpay their taxes. See
6673 for a guidance on what kinds of sanctions and costs the
courts can award in a civil suit against the IRS.
- If the citizen pursues litigation in the Tax Court, there is
a stay for any litigation in Federal District Court of the Court
- The suit must be against the United States and not against any
officer or employee of the United States.
Under 26 U.S.C.
6532, you cannot commence a civil suit for refund of overpaid tax
before 6 months as follows:
26 U.S.C. 6532: Periods of Limitation on Suits
(a) Suits by taxpayers for refunds
(1) General rule
“No suit or proceeding under section
7422(a) for the recovery of any internal revenue tax, penalty,
or other sum, shall be begun before the expiration of 6 months
from the date of filing the claim required under such section
unless the Secretary renders a decision thereon within that time,
nor after the expiration of 2 years from the date of mailing by
certified mail or registered mail by the Secretary to the taxpayer
of a notice of the disallowance of the part of the claim to which the
suit or proceeding relates”
Below is a table that summarizes the statute of
limitations for each of the forums you can choose:
Table 10: Statutes of Limitation
for Filing Suits
Type of Action
IRS assessment of
Generally 3 years
after due date of return (or date actually received by IRS,
Exceptions to normal
1. No return filed.
2. Fraudulent return
3. Substantial omission
from gross income.
Claim for refund
of overpaid tax
On or before later
of: 3 years after return filed or 2 years after tax paid.
If statute of limitations
was extended by consent: on or before 6 months after expiration
of extended period.
Filing suit for refund
of overpaid tax
6 months from date of filing refund claim (with no response
from IRS) or date of notice of disallowance.
2 years from date of notice of disallowance issued or 2 years
from date statutory notice of disallowance was waived.
If you pursue litigation in Tax Court, which we
don’t recommend, per
7452, the court cannot deny the counsel you choose, even if they
are not licensed to practice law. This is not true in Federal
If you are litigating to recover a refund, you
can also litigate to recover interest on the amount of overpayment from
the time that you requested the refund to the time that it was paid,
under 26 U.S.C.
we would strongly advise NOT taking the IRS into court for a refund
before you have filed at least one 1040NR form to establish with them
your nonresident alien status. By making such an election
gives the federal courts the same jurisdiction they have over residents
of the federal zone, which is the last place you want to be. Therefore,
you can opt out of such status by filing at least one 1040NR form and
a W-8 and expatriating as we suggest in section 126.96.36.199 will make you
much better positioned to avoid the jurisdiction of the federal government
and thereby avoid being lynched in court. We recognize that the
tax on nonresident aliens is 30%, but keep in mind that this rate
only applies to “U.S.
source income” listed under
26 U.S.C. §861,
and 26 CFR § 1.861-8(f) says that most people’s income from sources
inside the United States is not subject to tax anyway. It’s all
a big bluff. The only people with U.S. source income are usually
those who either work for or are retired from the federal government,
or who receive social security benefits.
Full Payment Rule:
There is no known statute requiring one to pay
the tax imputed by the IRS to be due before litigating for refund.
The regulations and statutes dealing with this subject are vague and
ambiguous. However, the U.S. Supreme Court ruled in the case of
Flora v. United States,
362 U.S. 145 (1960), after observing that
§1346(a)(1) was ambiguous and the legislative history unhelpful,
that full payment of the entire tax assessed was a jurisdictional prerequisite
to filing a refund suit in that case.
Notwithstanding the above, the full payment rule
may not apply if a person has not paid a tax, is not arguing the amount,
is a nonresident alien, and is arguing the underlying liability and
their status as a “taxpayer”. On the other hand, if the person
litigating for the refund claims to be a “taxpayer”, which as we said
in section 5.6.3 of the
Hoax means they are “liable” for the tax, then we have to assume
that it is best for them to pay the tax due before litigating for refund.
If you argue amount, you are a taxpayer, if you argue liability and
your status as a “taxpayer”, then you are a sovereign American with
due process rights that the courts will have to respect, which means
they cannot require you to pay the imputed tax due before litigating
for refund. This belief is justified by the following cite:
"The revenue laws are a code or system in regulation of tax
assessment and collection. They relate to taxpayers, and not to
nontaxpayers. The latter are without their scope. No procedure is
prescribed for nontaxpayers, and no attempt is made to annul any
of their rights and remedies in due course of law. With them Congress
does not assume to deal, and they are neither of the subject nor
of the object of the revenue laws..."
"The distinction between persons and things within the scope
of the revenue laws and those without is vital."
[Long v. Rasmussen, 281 F. 236 @ 238(1922)]
The above arguments are illustrated by the following
very funny joke:
A man walks into a bar and sits down next to a beautiful woman.
He buys her a drink and then says: “Mam, I'm very rich. Would
you consider going to bed with me if I gave you ten million dollars?"
The woman thinks real hard for a long time and says “I certainly
“Would you go to bed with me if I gave you $50?”. The woman slaps
him in the face and says “What do you think I am, some kind of whore?”
The man responds: “We’ve already established that you’re a
whore. We’re just negotiating price.”
Let’s face it, folks: A “taxpayer” under
Subtitle A is a voluntary
whore for the government! NEVER, EVER negotiate price! Emphasize
repeatedly that you are a person of principle who is a "nontaxpayer"
and a person not liable and the jury and judge will see that and side