# Petition for Writ of Certiorari — Beresford v. Internal Revenue Service

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2001
- **Citation:** 534 U.S. 896

## Text

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In The

Supreme Court of the United States

INTERNAL REVENUE SERVICE,
US DEPARTMENT OF THE TREASURY
(UNITED STATES OF AMERICA)
Respondent

On Petition For A Writ Of Certiorari
To The Ninth Circuit Court Of Appeals

PETITION FOR WRIT OF CERTIORARI

Steven M. Beresford, Ph.D.
Petitioner in Propria Persona
18803 SE 18th Street
Vancouver, WA 98683

tek 360-449-3350

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QUESTIONS PRESENTED FOR REVIEW

1) The primary question is the resolution of a due
process conflict involving federal income taxation that
affects not only the Petitioner but the vast majority of
Americans, and is therefore a matter of national

importance.

On one hand, the IRS has published numerous
authoritative admissions that the federal income tax
system is based on voluntary compliance, specifically
stating in one admission that the payment of federal
income tax s voluntary. Nowhere in these
admissions are any exceptions or conditions applied to
the term ‘voluntary compliance’, nor is any special
meaning attached to the word ‘voluntary, which is
therefore construed according to its plain meaning.

On the other hand, the IRS routinely persecutes
individuals who choose not to volunteer, frequently
seizing property without a warrant and/or causing the
dissidents to be incarcerated.

The lower courts have failed to resolve the
matter. The District Court erroneously dismissed the
above-mentioned admissions as ‘frivolous’. The Ninth
Circuit Court of Appeals affirmed the District Court's

and declined Petitioner’s request to provide its
findings of fact and conclusions at law.

2) The lower courts have repeatedly disregarded
several important rulings by this Court on the subject
of federal income taxation. The secondary question is
whether the lower courts were justified in disregarding

these rulings.

ais

LIST OF PARTIES

All parties appear in the caption of the case on the
cover page.

TABLE OF CONTENTS
— [[ AAA ˙»- 1
Statement Of Juridictioo n 1
Constitutional & Statutory Provisions .............. 2
Statement Of The Case —*—ũ 2 555 3
Reasons For Granting The — ep eae 12
CE odcctnedhacsduearadevevn det w 15

INDEX TO APPENDICES

Appendix A: Decision of the District Court

Appendix B: Memorandum of the Ninth
Circuit Court of Appeals

Appendix C: Order of the Ninth
Circuit Court of Appeals

Appendix D: Supreme Court Cases

TABLE OF AUTHORITIES

a) CASES

Pollock X. Farmers Loan & Trust COO. 6

158 US. 601 (1895)

Treat x. White, 181 US. 264 (1901) ............. 4,15

Spreckels Sugar x. McClain, 192 US. 397 (1904) . . 14,15

Flint x. Stone Tracy Co. 220 US. 107 (1911) ...... 6,10
Independence v. Howbert,........... 6,10

231 US. 399 (1913)

Brushaber X. Union Pacific, 240 US. 1 (1916)...... 7,11
Stanton X. Baltic Mining Co. 240 US. 103 (1916) . . 7,11
Gould x. Gould, 245 US. 151 (1917) ............. 14,15
Southern Pacific Co, X. Lowe, 247 US. 330 (1918) . 7,10
Doyle x. Mitchell Bros. 247 U.S. 179 (1918) ....... 8,10

Peck & Co, X. Lowe, 247 US. 165 (1918) .......... 8,11
Eisner . Macomber, 252 US. 189 (1920) 8,9,10,11
Merchants Loan & Trust Co. v. Smietanka,...... 9,10
255 US. 509 (1921)
Bowers X. Kerbaugh-Empire, 271 US. 170 (1926) . . 9,10
Raley v. Ohio, 360 US. 423 (1959) .............. 13,15
Flora X. United States, 362 US. 179 (1960)........ 3,15
Cox v. Louisiana, 379 US. 559 (1965) ........... 13,15
United States . Bishop, 412 US. 346 (1973)...... 13,15
United States X. Mason, 412 US. 391 (1973) 15
. 13

411 US. 655 (1973)

TABLE OF AUTHORITIES (Continued)

b) STATUTES & REGULATIONS

ne eee 6
Corporate Excise Tax Act of 1009. 6,8,9,10
Rovenmn £00 GE THe sav ceccoccceséstcansset 6,8,9,11
PGI. GHEE . 3,13
Sec · W 3.13
Treasury Regula tion 60 L- Ibo. 3
Internal Revenue Manual 20123 ................. 3
Federal Register 39:62 (11572), 1974...........+.5.- 3

c) OTHER AUTHORITIES

Chambers English Dictionary (1988) .............. 4
American Heritage Dictionary (1992) ............. 5
Webster’s New International Dictionary (1993) ....5
Corpus Juris Secundum ( 1029, 1030, 1031) ....... 5
Testimony of Dwight E Ass. 4

In The
Supreme Court Of The United States

PETITION POR WRIT OF CERTIORARI

Petitioner hereby prays for a writ of certiorari
to review the judgments below.

LOWER COURT OPINIONS

The Ninth Circuit Court of Appeals affirmed the
District Court in 00-35650 in which the District Court in
CV-00-00293 granted the United States of America’s
motion to dismiss Petitioner’s suit for refund of taxes.
Both rulings are inchided in the Appendix. The ruling
of the Ninth Circuit Court of Appeals is unpublished.

STATEMENT OF JURISDICTION

The Ninth Circuit Court of Appeals decided
Petitioner's case on February 23rd, 2001 and denied
Petitioner's timely petition for rehearing en banc on
May 17th, 2001. Jurisdiction of this Court is invoked
under 28 USC. 1254 (1).

CONSTITUTIONAL PROVISIONS

The Constitution of the United States provides
in pertinent part:

Article 1, Section 2

“Representatives and direct taxes shall be
apportioned among the several States which may
included within this Union, according to their
respective numbers

Article 1, Section &

“The Congress shall have power to lay and
collect taxes, duties, imposts and excises, to pay the
delts and provide for the common defence and
general welfare of the United States, but all duties,
imposts and excises shall be uniform throughout the
United States.”

Article 1, Section 9

“No capitation or other direct tax shall be laid,
unless in proportion to the census or enumeration
herein before directed to be taken.”

Amendment XVL

“The Congress shall have power to lay and
collect taxes on incomes, from whatever source
derived, without apportionment among the several
States, and without regard to any census or
enumeration.”

STATEMENT OF THE CASE

The United States government has published
numerous authoritative admissions that the federal
income tax system is based on voluntary compliance,
and that the payment of federal income tax 8
voluntary. These admissions include (emphasis added):

i) “Taxpayers in the United States assess
their tax liabilities against themselves and pay them
voluntarily. This system of assessment and payment
is based on the principle of voluntary compliance.”
Internal Revenue Manual, 20123.

ii) “The purpose of publishing revenue
rulings and revenue procedures . . is to assist
taxpayers in attaining maximum voluntary
compliance.” 26 C.F.R. 601.601.

iii) “The tax system is based on voluntary
compliance. 26 C.F.R. 601.602.

iv) “Our income tax system is voluntary...”
Treasury Regulation 601.103.

v) “The mission of the Service is to
encourage and achieve the highest possible degree of
voluntary compliance with the tax laws and
regulations and to maintain the highest degree of
public confidence in the integrity and efficiency of the
Service.” Federal Register, Volume 39, 62 (11572), 1974.

vi) “Our system of taxation is based upon
voluntary assessment and payment, not upon
distraint.” Flora y. United States, 362 US. 179 (1960).

ee

vii) “Your income tax is 100 percent
voluntary tax,and your liquor tax is 100 percent
enforced tax. Now the situation is as different as day
and night.” Testimony of Dwight E. Avis, Head of the
Bureau of Internal Revenue Alcohol and Tobacco Tax
Division, before the House Ways and Means
Committee, 83rd Congress, 1953.

Based on these admissions, Petitioner chose not
to pay federal income taxes for 1987, 1988, and 1989.
The IRS filed a ‘notice of federal tax lien’ against him
in 1996, which it used to withhold $14,609.97 under |
protest from the sale of his home in 1999. Petitioner |
subsequently claimed a refund from the IRS pursuant
to 26 U.S.C. 7422{a). His claim was ignored.

The Meaning Of ‘Voluntary Compliance’

The United States government has not defined
‘voluntary compliance’, hence it is necessary to rely on
the semantic attributes of the term.

It is important to note that none of the above
admissions impose any conditions on or ascribe any
special meaning to the term ‘voluntary compliance’,
such as ‘in the sense that’ or ‘subject to the condition
that’ or ‘with the exception of. If the United States
government intended to make voluntary compliance
conditional, these admissions would have surely have
contained specific language to stipulate the conditions.
In fact, the word ‘voluntary always stands unmodified
and must therefore be construed in terms of its plain
meaning, which includes.

“Done without compulsion or legal obligation.”
Chambers English Dictionary (1988).

“Without legal obligation or consideration.”
American Heritage Dictionary (1992).

“Acting or done without any present legal
obligation to do the thing done, or any such obligation
that can accrue from the current state of affairs.
Voluntary implies freedom from any compulsion that
could constrain one’s choice.” Webster's Third New
International Dictionary (1993).

“Although for legal purposes the word
‘voluntary is considered to be so simple and in such
general use that it need not be defined, it has been
variously defined as meaning acting without
compulsion; the doing of something which a person is
free to do or not to do, as he so desires .. . without any
present legal obligation to do_the thing done.” Corpus
Juris Secundum (92: 1029, 1030, 1031).

Hence the term ‘voluntary compliance’ must be
construed according to its plain meaning, namely that
the assessment and payment of federal income tax is
without any compulsion or legal obligation.

Constitutional Considerations

The Constitution makes important distinctions
between direct and indirect taxes and sets up different
conditions for imposing them. Direct taxes are
imposed directly upon individuals and include taxes on
wages, salaries, and personal compensation. Direct
taxes must be apportioned among the various States,
according to the population of each State. Indirect
taxes are excises or tariffs imposed on things such as
commodities, corporate profits, and stock dividends,
and must be uniform throughout the United States.

5

Congress attempted to directly tax sources of
income such as wages, salaries, and compensation for
personal services through the Income Tax Act of 1894.
This Court thoroughly reviewed the Act in Pollock v.
Farmer’s Loan & Trust Company, 158 US. 601 (1895)
and ruled it unconstitutional because it failed to meet
the requirement of apportionment.

In 1909, Congress passed the Corporate Excise
Tax Act, which taxed corporate income. This act met
the requirement for uniformity, and because it was
an excise tax, no apportionment was required.

In 1913, Congress passed the 16th Amendment,
which abolished the apportionment requirement for
direct taxation of income, then passed the Revenue
Act of 1913. During those years, several cases came
before this Court to determine the exact meaning of
‘income’ and the scope of the 16th Amendment. The
following rulings are relevant to this case:

Flint x. Stone Tracy Co. 220 US. 107 (1911):

“The tax under consideration, as we have
construed the statute, may be described as an excise
upon the particular privilege of doing business in a
corporate capacity.”

, 231 US.
399 (19137 7

“The Corporation Excise Tax Act of 1909 was not
intended to be and is not, in any proper sense, an
income tax law. This Court has decided in the Pollock
case that the income tax law of 1894 amounted in
effect to a direct tax upon property, and was invalid
because not apportioned according to populations, as
prescribed by the Constitution.”

“The act of 1909 avoided this difficulty by
imposing not an income tax, but an excise tax upon
the conduct of business in a corporate capacity,
measuring, however, the tax by the income of the
corporation.“

Brushaber . Union Pacific, 240 US. 1 (1916):

“We are of the opinion that the confusion is not
inherent, but rather arises from the conclusion that
the 16th Amendment provides for a hitherto unknown
power of taxation; that is, a power to levy an income
tax which, although direct, should not be subject to
the regulation of apportionment applicable to all other
direct taxes. And the far-reaching effect of this
erroneous assumption. (emphasis added)

Stanton v. Baltic Mining Co., 240 US. 103 (1916):

“The provisions of the Sixteenth Amendment
conferred no new power of taxation but simply
prohibited the complete and plenary power of income
taxation possessed by Congress from the beginning
from being taken out of the category of indirect
taxation to which it inherently belonged .. .”

Southern Pacific Co. X. Lowe, 247 US. 330 (1918):

“We must reject in this case, as we have
rejected in cases arising under the Corporation Excise
Tax Act of 1909, the broad contention submitted on
behalf of the government that all receipts, everything
that comes in, are income within the proper definition
of the term gross income’. Certainly the term income
has no broader meaning in the Revenue Act of 1913
than in that of 1909, and for the present purpose we
assume there is no difference in its meaning as used in
the two acts.”

Doyle x. Mitchell Bros. 247 US. 179 (1918):

“An examination of these and other provisions
of the Act make it plain that the legislative purpose
was not to tax property as such, or the mere a
conversion of property, but to tax the conduct of the
business of corporations organized for profit upon the
gainful returns from their business operations.”

Peck & Co, v. Lowe, 247 US. 165 (1918);

“The Sixteenth Amendment, although referred
to in argument, has no real bearing and may be put
out of view. As pointed out in recent decisions, it does
not extend the taxing power to new or excepted
subjects.”

Eisner v. Macomber, 252 U.S. 189 (1920):

“The Sixteenth Amendment must be construed
in connection with the taxing clauses of the original
Constitution and the effect attributed to them before
the amendment was adopted.”

“Proper regard for its genesis as well as its very
clear language, requires also that this amendment
shall not be extended by loose construction, so as to
repeal or modify,.except as applied to income, those
provisions of the Constitution that require an
apportionment according to population for direct
taxes upon property, real and personal.”

“In order, therefore, that the clauses cited from
Article 1 of the Constitution may have proper force i
and effect, save only as modified by the amendment,
and that the latter also have proper effect, it becomes
essential to distinguish between what is and what is
not ‘income’ as the term is there used.”

a

“Income may be defined as the gain derived
from capital, from labor, or from both combined,
provided it be understood to include profit gained
through sale or conversion of capital assets.”

“The government, although basing its argument
upon the definition as quoted, placed chief emphasis
upon the word gain, which was extended to include a
variety of meanings; while the significance of the next
three words was either overlooked or misconceived:
derived from - capital: 'gain-derived-from-capital.”

“Here we have the essential matter, not a gain
accruing to capital; not a growth or increment of value
in the investment; but a gain, a profit, something of
exchangeable value, proceeding from the property,
severed from the capital, however invested or
employed, and coming in, being ‘derived’ - that is,
received or drawn by the recipient (the taxpayer) for
his separate use, benefit and disposal - that is income
derived from property.”

Merchant's Loan & Trust Co, X. Smietanka, 255

US. 509 (1921):

“There would seem to be no room to doult that
the word ‘income’ must be given the same meaning in
all of the Income Tax Acts of Congress that was given
to it in the Corporation Excise Tax Act, and what that

meaning is has now become definitely settled by
decisions of this Court.”

Bowers v. Kerbaugh-Empire, 271 US. 170 (1926):

“Income has been taken to mean the same thing
as used in the Corporation Excise Tax Act of 1909, in
the 16th Amendment, and in the various revenue acts

subsequently passed.”

ANALYSIS OF THESE RULINGS

These rulings state without ambiguity that the
‘income’ referred to in the 16th Amendment and the |
subsequent Revenue Acts is the same as the corporate |
income referred to in the Corporation Excise Tax Act

of 1909. (Southern Pacific, Merchants Loan, Bowers.)

These rulings also state without ambiguity that ö
income tax is an indirect, excise tax imposed on the
privilege of doing business in a corporate capacity,
measured by the amount of gain or profit resulting
from the business. (Flint, Stratton’s, Doyle, Ener.)

Nowhere do these rulings state or even suggest
that income tax is a direct per capita tax on wages,
salaries, or compensation for personal services. In
fact, Eisner precisely defines the word ‘income’ as the
gain or profit derived from capital, labor, or capital
assets. Let us consider each form of ‘income’ defined
by Eisner.

a) Gain Derived From Capital. Examples include
stock dividends and interest from banks and bonds.

b) Gain Derived From Labor. Examples include
profits resulting from the hiring of employees, such as
the use of employees to run a business, or contracting
employees to a third party.

c) Gain Derived From Capital & Labor Combined.
Examples include profits resulting from the purchase
of machinery and hiring employees to operate it, or
renting an office and hiring employees to run it.

d) Profit Gained From The Sale of Capital Assets.
Examples include profits resulting from the sale of
assets such as merchandise, stocks, and real estate.

10

7 a ee

e) Profit Gained From The Conversion of Capital
Assets. Examples inchide profits resulting from the
exchange of one piece of equipment for another, or
the exchange of one piece of real estate for another.

To clarify the situation, Eisner states that the
term ‘derived from’ separates income from its source.
An item of income is derived from the source but is
not the same as the source, just as wine is not the
same as grapes. The essence of the matter is that
the source cannot be taxed. Only income (gain or
profit) derived from the source can be taxed.

For example, the Revenue Act of 1913 stated
“The net income of a taxable person shall include
gains, profits, and income derived from salaries, wages,
and compensation for personal services

The language of the Act shows that Congress
intended salaries, wages, and compensation for
personal services to be classified as sources of income.

The rulings of this Court discussed above also
state that the 16th Amendment conferred no new
power of taxation, nor did it extend the taxing power
to new or excepted subjects, nor did it repeal any of
the taxing clauses of the Constitution, which therefore

remain intact. (Brushaber, Stanton, Peck. Eisner.)

Hence the direct per capita taxation without
apportionment of salaries, wages, and compensation
for personal services is lawful under the current
system only if it is voluntary. That is why the
admissions of the United States government discussed
previously concur in stating that the income tax
system is based on voluntary compliance and that the
payment of income tax by individuals is voluntary.

11

REASONS FOR GRANTING THE WRIT

The biggest mistake made by the lower courts
is their failure to consider or even acknowledge the
evidence -- the published admissions of the United
States government regarding voluntary compliance.

Similarly, the lower courts failed to consider or
even acknowledge the due process conflict caused by
the IRS, which publicly admits that the payment of
federal income tax is voluntary but persecutes those
who choose not to volunteer.

By affirming the District Court’s decision, the
Ninth Circuit Court of Appeals (henceforth referred to
as the ‘Panel’) commit or subscribe to the following
errors:

a) Misrepresentation Of Petitioner’s Argument

The District Court based its decision on the
statement: “Beresford'’s primary contention, that the
federal income tax system is based on voluntary
compliance, has been held to completely lacking in

legal merit and patently frivolous.”

The above statement is completely erroneous.
Petitioner has never contended that the federal
income tax system is based on voluntary compliance.
It is the United States government, not the Petitioner,
that contends that the federal income tax system is ;
based on voluntary compliance, through the published |
admissions referred to previously. Petitioner simply
relies on these admissions as being true and correct,
accepting them at their face value according to their
plain meaning.

12

Petitioner’s primary contention is that because
the United States government publicly admits that
the payment of income tax is voluntary, the IRS had
no legal cause of action to withhold money from the
sale of his home. This argument was ignored by the
lower courts.

b) Conflict With Statutory Regulations

The decisions of the lower courts are in direct
conflict with 26 C.F.R. 601.601 and 26 C.F.R. 601.602. As
previously noted, 26 C.F.R. 601.602 states: “The tax
system is based on voluntary compliance ...”

c) Conflict With Prior Decisions Of This Court

It is well settled that Supreme Court decisions
are binding on all lower courts, and that lower court
decisions that conflict wit: Supreme Court decisions
are erroneous. In this case, tie decisions of the District
Court and the Panel are in conflict with numerous
Supreme Court decisions for the following reasons:

i) This Court has repeatedly ruled that its
own decisions, government agency regulations, and
statements made by senior government officials
constitute reliable admissions. United States v. Bishop,
412 US. 346 (1973); United States X. Mason, 412 US. 391
(1973); Raley vy, Ohio, 360 US. 423 (1959); Cox _v.
Louisiana, 379 US. 559 (1965);

Ind. Chem. Corn. 411 U.S. 655 (1973).

By affirming the District Court's decision, the
Panel in effect denies the reliability of the admissions
referred to previously and is therefore in direct conflict
with the Supreme Court.

13

ii) This Court has repeatedly ruled that laws
must be interpreted in terms of their plain meaning
and that in cases of doubt or ambiguity, they must be
construed against the government and favor of the
individual

“There must be certainty as to the meaning and
scope of language imposing any tax, and doult in
respect to its meaning is to be resolved in favor of the
taxpayer.” Treat . White, 181 US. 264 (1901).

“The citizen is exempt from taxation unless the
same is imposed by clear and unequivocal language,
and that where construction of a tax law is doubt ful.
the doult is to be resolved in favor of those upon

whom the tax is sought to be laid.” Spreckels Sugar
Refining Co. X. McClain, 192 US. 397 (1904).

“In the interpretation of statutes levying taxes, it
is the established rule not to extend their provisions by
implication beyond the clear import of the language
used, or to enlarge their operation so as to embrace
matters not specifically pointed out. In case of doula
they are construed most strongly against the
government, and in favor of the citizen.” Gould x.
Gould, 245 US. 151 (1917).

— eR

As discussed above, a serious due process conflict
exists between the published admissions of the IRS
(which specifically states that the payment of income
tax is voluntary) and the actual behavior of the IRS
(which routinely persecutes those who choose not to
volunteer). By resolving this ambiguity in favor of the
IRS instead of the Petitioner, the lower courts are in
direct conflict with the Supreme Court.

14

CONCLUSION

Throughout these entire proceedings, the lower
courts have repeatedly refused to consider or even
acknowledge the main issues surrounding the matter,
namely:

a) The reliability and implications of the
published admissions of the United States government
regarding voluntary compliance.

b) The due process conflict imposed by the IRS
on the Petitioner.

c) Petitioner’s argument, which is that because
the income tax system is voluntary, the IRS had no
legal cause of action against him when it withheld
money from the sale of his home.

Sweeping these issues under the proverbial
carpet by labeling them ‘frivolous’ does not do justice
to the Petitioner nor to the substantial body of law
supporting his case.

This Court ruled in United States vy. Mason, 412
US. 391 (1973): “If the doctrine of stare decisis has any
meaning at all, it requires that people in their
everyday affairs must be able to rely on our decisions
and not be penalized by them.”

Petitioner has indeed relied on decisions of this
Court and has been penalized by them, first by the
IRS, then by the lower courts, which have repeatedly
disregarded the decisions of this Court in Treat,

Spreckels, Gould, Bishop, Mason. Raley, Cox. Flora, etc.

15

In closing, Petitioner points out that this case is
not about shirking his duty by refusing to pay his fair
share of taxes. Petitioner agrees that taxation is the
price we pay for a civilized society, and he is willing to
pay whatever taxes he is legally liable for. By the
same token, he is not willing to pay taxes for which
he is not legally liable.

Historically, this Court has always stood as the
supreme voice of logic, reason, and integrity, one of
whose major functions is to curb the unbridled greed
and lust for power shown by many government
officials, especially in the realm of taxation.

Petitioner therefore respectfully and prayerfully
calls on this Court to reassert its authority and provide
a fair and just resolution to this dilemma by granting
a writ of certiorari.

Steven M. Beresford, Ph.D.
Petitioner in Propria Persona

Datec 8/10/01

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_2319%3A1. Public record. Not legal advice.