Reality check: Chapter 24 withholding is assumed liability for U.S. employers but is not required
By Patrick Vermeister
28 March 2016
The productive spirit of the American worker dies a little bit every time he looks at his pay stub and sees a healthy portion of his wage go down the black hole of Federal Income Tax withholding.
Yet millions of Americans are not aware that Chapter 24 withholding is not required by private-sector employers. With the proper declaration paperwork provided to an employer’s payroll department, there should be nothing taken out of an employee’s paycheck for Federal Income Tax.
The Internal Revenue Manual 5.14.10.2.2 (2004) states: “Private employers, states, and political subdivisions are not required to enter into payroll deduction agreements (meaning Form W-4). Taxpayers should determine whether their employers will accept and process executed agreements before agreements are submitted for approval or finalized.”
Shocking to many Americans is the existence of those who are lawful American nontaxpayers as stated by the Federal Appellate Court case in 1972: “They (the revenue laws) 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.” Thus, the IRM section only applies as a ‘procedure’ for those who are legal U.S. Taxpayers and does not apply to Americans who are lawful nontaxpayers.
For private-sector employers, withholding exemptions presented by employees must be accepted, according to 26 USC 3402(n) which explicitly states:
“Notwithstanding any other provision of this section, an employer shall not be required to deduct and withhold any tax under this chapter upon a payment of wages to an employee if there is in effect with respect to such payment a withholding exemption certificate (in such form and containing such other information as the Secretary may prescribe) furnished to the employer by the employee certifying that the employee:
(1) incurred no liability for income tax imposed under subtitle A for his preceding taxable year, and
(2) anticipates that he will incur no liability for income tax imposed under subtitle A for his current taxable year.”
The IRS Form 8233 is the mechanism to accomplish this exemption from withholding. It is filled out by the employee and must be accepted by a private-sector employer. The form is available for download here.
“Many people may gloss over this form since it mentions terms like ‘nonresident alien,’ ‘personal services,’ and ‘United States,’ ” says Adele Weiss, founder of Weiss+Associates, a European-based consultancy firm specializing in the Federal Income Tax. “Once people understand the definitions of these terms, they know that Form 8233 applies to them if they work in the private sector in the 50 states of the Union.”
The existence of this form, coupled with the fact that it is up to the private-sector employee to fill out and hand it to the private-sector employer, reinforces the fact that the Federal Income Tax is voluntary as do many other laws and federal documents. Additionally, the Social Security Administration clearly states that a Social Security Number is not required to work in the Constitutional Republic:
“The Social Security Act does not require a person to have a Social Security Number to live and work in the United States. … However, if someone works without a Social Security Number, we cannot properly credit the earnings for the work performer, and the worker may lose any potential entitlement to Social Security benefits.”
As Weiss aptly points out, Americans need to know the definitions of terms, especially ‘United States,’ which has two definitions. The first definition is the colloquial term used in The Constitution meaning the 50 states of the Union, and the second term is a legal, statutory expression meaning the corporate entity consisting of the District of Columbia and U.S. territories like Puerto Rico, Guam, and the U.S. Virgin Islands. When the IRS uses the term ‘United States,’ unless specifically defined otherwise, means only the statutory definition (Federal Zone).
“Once Americans realize this singular fact, then they also realize that there are two very different meanings of the term ‘U.S. Citizen,’ ” Weiss expounded. “The first is the constitutional U.S. Citizen — people born in the 50 states and protected by The Constitution and Bill of Rights — and the other is a statutory ‘U.S. Citizen,’ which describes people born in D.C. or its territories. These people do not possess constitutional rights and are essentially subjects of Congressional monarchy.”
Constitutional U.S. Citizens are termed by the National Government as ‘nonresident alien individuals,’ as they are nonresident to the District of Columbia/territories and are alien to its municipal rules.
‘Personal Services’ is a unique term and is addressed at IRC 861(a)(3): “…labor or services performed in the United States shall not be deemed to be income from sources within the United States if -- (C) the compensation is for labor or services performed as an employee of or under a contract with -- (i) a nonresident alien … not engaged in a trade or business within the United States.” The term ‘trade or business’ means “the performance of the functions of a public office” per IRC 7701(a)(26), which is another way of saying: one who works for the National Government.
Weiss adds: “Simply put, if any American does not work for the government, their labor or services performed in the 50 states of the Union are not taxable. This is fully supported by the 16th Amendment’s omission of the Rule of Apportionment.”
In putting this all together, it’s easy to see that Form 8233 is a tool for sovereign Americans living and working in the private sector in the 50 states to eliminate any Chapter 24 withholding for the Federal Income Tax.
“Unfortunately, a few employers are still very uninformed when it comes to the Federal Income Tax and their role in it,” remarked Weiss, who has over 25 years’ experience with the Federal Income Tax. “It’s up to the sovereign American National to educate their employer if they insist on withholding when withholding is not required. In this case, employers are actually breaking the law in what constitutes forced labor.”
Of course, a key element in clarifying an American’s true status is filing a Revocation of Election, a document Weiss’ firm provides to qualified clients to remove them from the U.S. Tax Club for the current tax year plus all future years.
The completed Revocation of Election, a legal process provided to all American Nationals by the U.S. Congress, provides the proof that the American National did not have any income tax liability for the preceding tax year, and that American National does not anticipate having an income tax liability for the current year. (See text at the top of this story regarding 26 USC 3402n [1] and [2])
For more information on the Revocation of Election process and the elimination of Chapter 24 withholding, interested parties can email bilateral@gmx.com.