IRS levies and Seizures: The Truth!

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LEVIES AND SEIZURES: THE TRUTH

Devvy Kidd March 12,2000

The following letter contains some very important information that Americans need to know and understand about how the IRS pulls off fraud with their seizures and levies. This is a lengthy piece but it well worth your time to read it - especially if you're looking at a "notice" of one sort or another from this rogue operation of thieves called the IRS. I guarantee you will find the information in this letter from Mr. Schlaback shocking and reveals the depths to which the IRS will go to as they lie and cheat Americans - sanctioned by Congress and don't you dare delude yourself otherwise.

John J. Schlaback Taxes - Accounting - Estate Planning Box 58 Colbert, Washington 99005

(509) 238-6147 Fax (509) 238-5697

William H. Wyttenbach, M.D.

Florida

October 9, 1998

Dear Dr. Wyttenbach,

At your request, the following is what I have gleaned from researching the Internal Revenue Code regarding Seizures and Levies. The main issues are: Does the IRS have authority without a court order? Does the property have to be turned over without a court order? Are the rights, as guaranteed by the United States Constitution, violated?

About my experience; I have been providing accounting services since 1984. I have been representing clients since 1985 in corporate, partnership, trusts, sole proprietorship and personal income taxes. I have represented clients before the IRS and assisted them in preparing for Tax Court trials.

The IRS frequently serves levy notices on third parties who may be holding your property. The IRS knows that all of the notices of levy that are sent to you or your employer are incorrect unless it is for property subject to levy upon which levy has been made.

In reading the information as stated in the notice of levy, a person is required to turn over property because a tax liability exists and the person named has refused to pay. I would strongly recommend that you not refuse to pay any taxes you are liable for.

The Code is clear that IRS agents should take their case to court just like any other agency* that wants to garnish property to allow you to be heard and to ensure your rights to due process will not be violated. This can be understood by reading IRC section 7608 wherein Congress clearly instructs and outlines the revenue agents/officers authority. And, indeed this explains what the IRS agents are supposed to do in every case. To enforce collection of a delinquent tax, the IRS must be authorized and you must have a liability.

Sending a Notice of Levy, is not sending a levy, and is not sufficient to reach private property, unless the property is already in the custody and control of the Secretary. The procedure to reach property in the private sector by suit is given in the Internal Revenue Code under Code sections 7401 and 7403, as follows:

SECTION 7401, Authorization.

No civil action for the collection or recovery of taxes, or of any fine, penalty, or forfeiture,

shall be commenced unless the Secretary authorizes or sanctions the proceedings and the Attorney General or his delegate directs that the action be commenced.

And section 7403, as follows:

SECTION 7403, Action to enforce lien or to subject property to Payment of tax.

(a) Filing - In any case where there has been a refusal or neglect to pay any tax, or to discharge any liability in respect thereof, whether or not levy has been made, the Attorney General or his delegate, at the request of the Secretary, may direct a civil action to be filed in a district court of the United States to enforce the lien of the United States under this title with respect to such a tax or liability or to subject any property, of whatever nature, of the delinquent, or in which he has any right, title, or interest, to the payment of such tax or liability. For purposes of the preceding sentence, any acceleration of payment under section 6166(g) shall be treated as a neglect to pay tax.

(b) Parties - All persons having liens upon or claiming any interest in the property involved in such action shall be made parties thereto.

(c) Adjudication and decree - The court shall, after the parties have been duly notified of the action, proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property, and, in all cases where a claim or interest of the United States therein is established, may decree a sale of such property, by the proper officer of the court, and a distribution of the proceeds of such sale according to the findings of the court in respect to the interests of the parties and of the United States. If the property is sold to satisfy a first lien held by the United States, the United States may bid at the sale such sum, not exceeding the amount of such lien with expenses of sale, as the Secretary directs.

This is the due process written into the Internal Revenue Code as mandated by the Fourth Amendment to the Constitution of the United States of America. If the IRS wants to enforce collection of a tax, they have to file suit in Federal District Court, obtain a judgment, and execute the judgment with a court order to lawfully enforce the collection of the delinquent tax. The only, obvious exception to this is when the Secretary already has possession of some property. In that case no court order is needed to reach the property since the property is already possessed.

There are two concepts to get across. It is important to discuss the difference between a "levy" and a "seizure." A "seizure" means the act of taking into custody or control something which before was not in custody or control. A "levy" is not a single act, but rather is the whole process by which the money needed to pay a tax is raised, either by exercising control over something already in custody and control of the government or by distraining and seizing property not already in custody of the government. The levy process includes the sale of levied property and the application of the proceeds to the unpaid tax.

Please note that a "Notice of Levy" is not a levy or seizure. The "Notice of Levy" has no legal effect in the private sector unless it is accompanied with a Judicial Court Order and a "Notice of Seizure." The following cites will demonstrate that a "Notice of Levy" carries no authority to "Levy" and that a "Levy" must be done through "seizure" of the property.

"A 'Levy' for delinquent taxes requires that property be brought into legal custody through seizure, actual or constructive, and is absolute appropriation of property levied on, and a mere NOTICE OF INTENT TO LEVY DOES NOT CONSTITUTE A LEVY" (Emphasis added). Freeman v. Mayer 152 F. Supp. 383, Affd 253 F.2d 295 (3rd Circuit 1958).

"A 'Levy' requires that the property be brought into legal custody through seizure, actual or constructive, and is absolute appropriation in law of property levied on, and MERE NOTICE OF INTENT TO LEVY IS INSUFFICIENT" (Emphasis added). United States v. O'Dell, 160 F.2d 304, 307 (6th Circuit 1947).

The IRS is to comply strictly to the conditions imposed by statute in the seizure and levy process. Goodwin v. United States, 935 F2d 1061, (9th Cir. 1991). A stickler for enforcing the statutory notice it is entitled to receive, the government should be no less punctilious with respect to the statutory notice it is required to give. Kulway v. United States, 917 F2d 729, 735 (2nd Cir. 1990).

"Notice of levy does not constitute levy, since, for there to be levy, property must be brought into legal custody through actual or constructive seizure." Callahan v. Haxton (184, MD Fla) 84-2 USTC.

There are specific procedures that must be followed for a garnishment to be lawful, unless one voluntarily consents. Please read section 6331, which the IRS agents use when they send a notice of levy. This section at (a) states that the Secretary may serve, on any person who refuses to pay a tax, a levy upon all property and rights to property of said person. Further, there must be a lien filed on such person for the payment of such tax. The section provides that a notice of levy may be served on the employer for the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia. Any other employer requires the IRS to proceed with a court action to take property belonging to a third party.

This should have covered the definitions of seizures and levies for you. Now I will use Title 26 U.S.C. to tell you the procedures the IRS must use. I will start with "seizures." The authority for "seizures" comes from Internal Revenue Code sections 7321 and 7608 as follows: As stated in Goodwin v. United States and Kulway v. United States, the IRS compliance with the Lien-seizure- levy process must be strict and literal.

SECTION 7321. Authority to seize property subject to forfeiture.

Any property subject to forfeiture to the United States under any provision of this title may be seized by the Secretary.

SECTION 7608. Authority of internal revenue enforcement officers.

(a) Enforcement of subtitle E and other laws pertaining to liquor, tobacco and firearms.*

[Ed. Note: Please remember jurisdiction here as it relates to international treaties- this is critical as it relates to ATF.

http://www.devvy.com/jurisdiction_20000110.html

http://www.devvy.com/jurisdiction_20000112.html

http://www.devvy.com/jurisdction_20000114.html

The second absolutely critical things to remember here is the irrefutable fact that the IRS was never created by an act of Congress and by the IRS' own admission, they are not an agency of the federal government: http://www.devvy.com/irs_20000208.html. By what authority then do these renegades have to seize or levy anyone's assets?]

Any investigator, agent, or other internal revenue officer by whatever term designated, whom the Secretary charges with the duty of enforcing any of the criminal, seizure, or forfeiture provisions of subtitle E or of any other law of the United States pertaining to the commodities subject to tax under such subtitle for the enforcement of which the Secretary is responsible may --

(1) carry firearms

(2) execute and serve search warrants and arrest warrants, and serve subpoenas and summonses issued under authority of the United States;

(3) in respect to the performance of such duty, make arrests without warrant for any offense against the United States committed in his presence, or for any felony cognizable under the laws of the United States if he has reasonable grounds to believe that the person to be arrested has committed, or is committing such felony; and

(4) in respect to the performance of such duty, make seizures of property subject to forfeiture of the United States.

(b) Enforcement of laws relating to internal revenue other than subtitle E

(1) Any criminal investigator of the Intelligence Division or of the Internal Security Division of the Internal Revenue Service whom the Secretary charges with the duty of enforcing any of the criminal provisions of law relating to internal revenue for the enforcement of which the Secretary is responsible, or any other law for which the Secretary has delegated investigatory authority to the Internal Revenue Service, is, in the performance of his duties, authorized to perform the functions described in paragraph (2).

(2) The functions authorized under this subsection to be performed by an officer referred to in paragraph (1) are --

(A) to execute and serve search warrants and arrest warrants, and serve subpoenas and summonses issued under the authority of the United States;

(B) to make arrests without warrant for any offense against the United States relating to the internal revenue laws committed in his presence, or for any felony cognizable under such laws if he has reasonable grounds to believe that the person to be arrested has committed or is committing any such felony; and

(C) to make seizures of property subject to forfeiture under the internal revenue laws.

As noted in these sections, Internal Revenue Enforcement Officers, when enforcing both Subtitle E taxes as defined in 76-8, are given authority to make seizures of "property subject to forfeiture." It becomes important to know at this point exactly what property comes within the meaning of "property subject to forfeiture" since, if the property is outside the scope of the meaning of "property subject to forfeiture," the Internal Revenue Enforcement Officer is not authorized to seize it.

The definitions of "property subject to forfeiture" are found in the Internal Revenue Code under Subchapter C - Forfeitures, part 1 at sections 7301 through 7304, as follows:

SECTION 7301. Property subject to tax:

(a) Taxable articles- Any property on which, or for or in respect whereof, any tax is imposed by this title which shall be found in the possession or custody or within the control of any person, for the purpose of being sold or removed by him in fraud of the internal revenue laws, or with design to avoid payment of such tax, or which is removed, deposited, or concealed, with intent to defraud the United States of such tax or any part thereof, may be seized, and shall be forfeited to the United States.

(b) Raw materials --All property to be found in the possession of any person intending to manufacture the same into property of a kind subject to tax for the purpose of selling such taxable property in fraud of the internal revenue laws, or with design to evade the payment of such tax, may also be seized, and shall be forfeited to the United States.

(c) Equipment --All property whatsoever, in the place or building, or any yard or enclosure, where the property described in subsection (a) or (b) is found, or which is intended to be used in the making of property described in subsection (a), with intent to defraud the United States or tax or any part thereof, on the property described in subsection (a) may also be seized, and shall be forfeited to the United States.

(d) Packages--All property used as a container for, or which shall have contained, property described in subsection (a) or (b) may also be seized, and shall be forfeited to the United States.

(e) Conveyances--Any property (including aircraft, vehicles or draft animals) used to transport or for the deposit or concealment of property described in subsection (a) or (b), or any property used to transport or for the deposit or concealment of property which is intended to be used in the making or packaging of property described in subsection (a), may also be seized, and shall be forfeited to the United States.

SECTION 7302. Property used in violation of internal revenue laws.

It shall be unlawful to have or possess any property intended for use in violating the provisions of the internal revenue laws, or regulations prescribed under such laws, or which has been so used, and no property rights shall exist in any such property. A search warrant may issue as provided in chapter 205 of title 18 of the United States Code and the Federal Rules of Criminal Procedure for the seizure of such property. Nothing in this section shall in any manner limit or affect any criminal or forfeiture under the provisions of this section and the disposition of such property subsequent to seizure and forfeiture, or the disposition of the proceeds from sale of such property, shall be in accordance with existing laws or those hereafter in existence relating to seizures, forfeitures, and disposition of property of proceeds, for violation of the internal revenue laws.

SECTION 7303. Other property subject to forfeiture.

There maybe seized and forfeited to the United States the following:

(1) Counterfeit stamps--Every stamp involved in the offense described in section 7208 (relating to counterfeit, reused, canceled, etc., stamps), and the vellum, parchment, document, paper, package or article upon which such stamp was placed or impressed in connection with such offense.

(2) False stamping of packages--Any container involved in the offense described in section 7271 (relating to disposal of stamped packages), and of the contents of such container.

(3) Fraudulent bonds, permits, and entries--All property to which any false or fraudulent instrument involved in the offense described in section 7207 relates.

SECTION 7304. Penalty for fraudulently claiming drawback.

Whenever any person fraudulently claims or seeks to obtain an allowance of drawback on goods, wares, or merchandise on which o internal tax shall have been paid, or fraudulently claims any greater allowance of drawback than the tax actually paid, he shall forfeit triple the amount wrongfully or fraudulently claimed or sought to be obtained, or the sun of $500.00, at the election of the Secretary.

These code sections give us the comprehensive list of property which Internal Revenue Enforcement Officers have authority to seize. If any property does not fall within the above descriptions it is not "property subject to forfeiture" and the Internal Revenue Enforcement Officers have no authority to seize it.

The levy process includes the power of seizure as authorized in section 7321 and 7608, which is evidenced by sections 7701(a)(21) and 6331(b) as follows:

SECTION 7701. Definitions(a)(21) Levy--The term "levy" includes the power of distraint and seizure by any means.

SECTION 6331(b) Seizure and sale of property--The term "levy" as used in this title includes the power of distraint and seizure by any means.

The word "distraint" basically means to retain possession of property, by force if necessary, once it is in the possession of the government. The phrase "by any means" applies to the seizures when and where authorized and to distraining the property once in the government's possession. Internal Revenue Officers are thus given very broad authority to carry out their legitimate functions.

The authority to "levy" comes from Internal Revenue Code Section 66331, as follows:

SECTION 6331. Levy and distraint.

(a) Authority of Secretary--If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States of the District of Columbia, by serving a notice of levy on the employer (as defined in section 3401(d) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provided in this section.

(b) Seizure and sale of property--The term "levy" as used in this title includes the power of distraint and seizure by any means. Except as otherwise provided in subsection (e), a levy shall extend only to property possessed and obligations existing at the time thereof. In any case in which the Secretary may levy upon property or rights to property, he may seize and sell such property or rights to property (whether real or personal, tangible or intangible).

(c) Successive seizures--Whenever any property or right to property upon which levy has been made by virtue of subsection (a) is not sufficient to satisfy the claim of the United States for which levy is made, the Secretary may, thereafter, and as often as may be necessary, proved to levy in like manner upon any other property liable to levy of the person against whom such claim exists, until the amount due from him, together with all expenses, is fully paid.

(d) Requirement and notice before levy

(1) In general--Levy may be made under subsection (a) upon the salary or wages or other property of any person with respect to any unpaid tax only after the Secretary has notified such person in writing of his intention to make such levy.

(2) 30-day requirement--The notice required under paragraph (1) shall be--

(A) given in person,

(B) left at the dwelling or usual place of business of such person, or

(C) sent by certified or registered mail to such person's last known address, no

no less than 30 days before the day of the levy.

(3) Jeopardy--Paragraph (1) shall not apply to a levy if the Secretary has made a finding under the last sentence of subsection (a) that the collection of tax is in jeopardy.

(4) Information included with notice--The notice required under paragraph (1) shall

include a brief statement which sets forth in simple and nontechnical terms--

(A) the provisions of this title relating to levy and sale of property,

(B) the procedures applicable to the levy and sale of property under this title,

(C) the administrative appeals available to the taxpayer with respect to such

levy and sale and the procedures relating to such appeals.

(D) the alternatives available to taxpayers which could prevent levy on the

property (including installment agreements under section 6159),

(E) the provisions of this title relating to exemption of property and release

of liens on property, and,

(F) the procedures applicable to the redemption of property and the release

of a lien on property under this title.

(e) Continuing levy on salary and wages--The effect of a levy on salary or wages payable to or received by a taxpayer shall be continuous from the date such levy is first made until such levy is released under section 6343.

(f) Uneconomical levy--No levy may be made on any property if the amount of the expenses which the Secretary estimates (at the time of levy) would be incurred by the Secretary with respect to the levy and sale of such property exceeds the fair market value of such property at the time of levy.

You can see that there are conditions that must be met before the Secretary is authorized to levy on property or rights to property. First, the person issuing such a levy must be authorized to perform that act. Second, you must be a person "liable" to pay a tax. Third, you must have been sent a "notice and demand" for payment of the tax. Fourth, you must have neglected or refused to pay the tax. And fifth, ten days must have elapsed after the notice and demand. (The ten day period does not apply in the case of a jeopardy determination). Also IRC section 7429(a) requires the Secretary to provide you with a written statement of how he determined that you owe a tax.

After a levy is authorized, the property upon which the levy extends is given in Section 6331(b), which says that the Secretary may levy "only to property possessed and obligations existing at the time thereof." If the property is not already possessed by the Secretary, the property may be brought into the Secretary's possession by seizure and distraint; but, remember, only property "subject to forfeiture" may be seized. Section 6331 embraces the power given under Sections 7321 and 7608, it does not expand upon it.

Section 6331(b) has given us a very important definition. It has given us the definition of "property subject to levy," a phrase which makes its appearance in certain key places in both the Internal Revenue Code and in the Treasury Regulations. "Property subject to levy" basically means property which is not exempt from levy under section 6334.

The term "Secretary" is defined in section 7701(a)(11):

SECTION 7701. Definitions(a)(11) Secretary of the Treasury and Secretary,--

(A) Secretary of the Treasury--The term "secretary of the Treasury" means the Secretary of

the Treasury, personally, and shall not include any delegate of his.

(B) Secretary--The term "Secretary" means the Secretary of the Treasury or his delegate.

Thus, "Secretary" means "The Secretary of the Treasury or his delegate." Basically, the only property the Secretary (or his delegate) would already have in his possession would be accrued salaries or wages of federal or District of Columbia employees which has not yet been paid out of the federal coffers. Such accrued salaries or wages would be the only property upon which the Secretary could levy, by issuing a notice of levy, without having to effectuate a seizure. And, this is confirmed within section 6331(a) itself:

Section 6331(a) states that a levy can be made on accrued salaries or wages by serving a "notice of levy" on the employer of an officer, employee, or elected official, of the United States, the District of Columbia, or an officer, employee, or elected official of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia. This confirms what was said before since the accrued salaries or wages of such officers, employees, or elected officials represents an obligation of the Secretary existing at the time the levy is made. Since these described individuals are paid from the Federal Treasury, the Secretary of the Treasury already has possession of the funds which would be used to pay the obligation and the "notice of levy" is simply the Secretary's notice that said funds are being applied to unpaid taxes instead of being paid to the officer, employee, or elected official. No seizure is necessary, and thus, no "notice of seizure" (explained later) is ever issued. The notice of levy is usually served on the head of the Federal (or District of Columbia) agency (or the agent designated by him who is charged with payroll duties).

When the IRS must bring property into the possession of the Secretary by seizure we have to refer to section 6335, as follows:

SECTION 6335, Sale of seized property.

(a) Notice of seizure--As soon as practicable after seizure of property, notice in writing shall be given by the Secretary to the owner of the property (or, in the case of personal property, the possessor thereof), or shall be left at his usual place of abode or business if he has such within the internal revenue district where the seizure is made. If the owner cannot be readily located, or has no dwelling or place of business within such district, the notice may be mailed to his last known address. Such notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property seized and, in the case of real property, a description with reasonable certainty of the property seized.

So, you see that whenever the IRS makes a seizure, they are required by law to issue a "Notice of Seizure" (Form 2433). This notice also has another effect. Remember, at the start of this letter I stated that a "levy" was not a single act, but rather the whole process by which money was raised and applied to an unpaid tax. The levy process includes seizure and sale of the property along with the actual application of the proceeds. However, a levy must be made within six years (see Section 6502(a) after the tax is assessed and there may come a time when a levy proceeding occurs near the end of the six year period. So, for the purpose of determining the exact point in time when the law would consider that the levy was made, section 6502(a) states:

SECTION 6502, Collection after assessment.

(b) Date when levy is considered made--The date on which a levy on property or rights to property is made shall be the date on which the notice of seizure provided in section 6335(a) is given.

The IRS levies on accrued salaries or wages by serving a "notice of levy" (Form 668-A or 668-W) on the employer of a Federal or District of Columbia officer, employee, or elected official. This is the only time the Internal Revenue Code states that the service of a "Notice of Levy" makes a levy. In other cases, section 6502(b) tells us that a levy is considered made only when the "Notice of Seizure" is given.

Now, after reading all this, it should occur to you that the IRS' power to levy must be strictly followed. Only property already possessed by the Secretary is subject to levy, and only property subject to forfeiture can be seized and brought into the possession of the Secretary if that property is not already possessed by the Secretary. So, to summarize, seizure is limited by statute to certain specific items. Sections 7321 and 7608(b)(2)(C) strictly limits seizure authority to "property subject to forfeiture." Such property is described in sections 7301 and 7304. Property not subject to forfeiture cannot be seized legally, and a levy on any other property must be made on items already in possession of the government. Section 6331(b) further states that a levy extends only to "property possessed."

There are only a few instances where a notice of levy may be used. Treasury Regulation 301.6331-1(a)(1), which states:

"Levy may be made by serving a notice of levy on any person in possession of, or obligation

with respect to, property or rights to property subject to levy, including receivables, bank

accounts, evidence of debt, securities, and salaries, wages and other compensation."

However, this regulation clearly outlines on whom a "notice of levy" may issue which states:

301.6331-1(a)(4) Certain Types of Compensation; "Levy may be made upon the salary or wages of any officer or employee (including members of the Armed Forces), or elected or appointed official, of the United States, the District of Columbia, or any agency or instrumentality of either, by serving a notice of levy on the employer of the delinquent taxpayer. As used in this subdivision, the term "employer" means (a) the officer or employer or employee of the United States, the District of Columbia, or of the agency or instrumentality of the United States or the District of Columbia, who has control of the payment of the wages, or (b) any other officer or employee designated by the head of the branch, department, agency, or instrumentality of the United States or of the District of Columbia as the party upon whom service of the notice of levy may be made. If the head of such branch, department, agency or instrumentality designates an officer or employee other than one who has control of the payment of the wages, as the party upon whom service of the notice of levy may be made, such head shall promptly notify the Commissioner of the name and address of each officer or employee so designated and the scope or extent of his authority as such designee."

This makes it very clear on what and on whom a notice of levy may be issued. A "Notice of Levy" can only be made on accrued salaries or wages when the "Notice of Levy" is served on the employer of federal or District of Columbia employees. In the case of any other property already possessed by the Secretary the "Notice of Levy" is served on the person who has such property. This is a proper procedure for the IRS to adopt since section 6331(b) provides for a levy on any other property already possessed, but does not specifically state how much levy is to be carried out. In the case of a seizure, section 6502(b) already told us that the levy is made when the "Notice of Seizure" is given.

Now, the average person reading this regulation doesn't know what "property subject to levy" is and, when the "Notice of Levy" is served on him, he is led to believe that the law requires him to turn over to the IRS any property he has which belongs to the delinquent taxpayer. The main reason for this is that the IRS is serving a "notice of levy" has deleted paragraph (a) of section 6331 in notifying the employer or bank.

This continues when the IRS cites Code 6332, as follows:

SECTION 6332, Surrender of property subject to levy.

(a) Requirement--Except as otherwise provided in this section, any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made shall, upon demand of the Secretary, surrender such property or rights (or discharge such obligation) to the Secretary, except such part of the property or rights as is, at the time of such demand, subject to an attachment or execution under any judicial process.

(b) (Not produced here. Deals only with life insurance and endowment contracts.)

(c) Special rule for banks--Any bank (as defined in section 408(n)) shall surrender (subject to an attachment or execution under judicial process) any deposits (including interest thereon) in such bank only after 21 days after service of levy.

(d) Enforcement of Levy

(1) Extent of personal liability--Any person who fails or refuses to surrender any property

Or rights to property, subject to levy, upon demand by the Secretary, shall be liable

in his own person and estate to the United States in a sum equal to the value of the

property or rights no so surrendered, but not exceeding the amount of taxes for the

collection of which such levy has been made, together with costs and interest on such

sum at the underpayment rate established under section 6621 from the date of such

levy (or, in the case of a levy described in section 6331(d)(3), from the date such

person would otherwise have been obligated to pay over such amounts to the taxpayer.)

Any amount (other than costs) recovered under this paragraph shall be credited

against the tax liability for the collection of such levy was made.

(2) Penalty for violation--In addition to the persona liability imposed by paragraph (1),

if any person required to surrender property or rights to property fails or refuses to

surrender such property or rights to property without reasonable cause, such person

shall be liable for a penalty equal to 50 percent of the amount recoverable under

paragraph (1). No part of such penalty shall be credited against the tax liability for the

collection of which such levy was made.

Again, we see that the law requires the surrender of "property subject to levy" upon which a levy "has been made." And again, the average person doesn't know exactly what all this means. You now know, from reading the above, that a levy "has been made" when a "Notice of Levy" is given to some other delegate of the Secretary of the Treasury who has such property in his possession (or, in the case of accrued salaries or wages, to the head (or designated payroll agent) of a Federal or District of Columbia agency or instrumentality). Now it becomes clear that this Code section was

directed to other Treasury Secretary Delegates or heads of Federal or District of Columbia agencies or instrumentalities who may have possession of property, rights to property, or accrued salaries or wages belonging to the delinquent taxpayer. And the law requires them to surrender such property when the "Notice of Levy" is served on them.

A "Notice of Levy" is not a "levy," you need to get this straight. Congress never authorized such an action and Congress never authorized an agent/officer with such authority over private citizens. Again read section 7608 and unless you fit in one of those categories there is no authority for the agents actions. The IRS agents/officers have been taking property without authority or judicial process for so long now that, now, nobody questions their actions.

Section 6332(d) also states there are penalties for failure to turn over property after a "Levy" has been served. In most cases the person is in possession of a "notice of levy" not a "levy." You now know that this penalty would only apply if you have "property subject to levy" and you fail to surrender it upon demand by the Secretary. This was all discussed earlier and, unless you're a person having such property in your possession or control, this penalty cannot apply. There are no penalties for asking questions. The IRS agent will get upset and probably threaten you, but this is their normal procedure. Please not that there would be penalties if you do not comply with a lawful levy that is issued by an authorized agent/officer.

Of course, the IRS likes to intimidate people into turning property over to them by serving "Notices of Levy" on them; as if this "makes" a levy and as if the person must surrender to the IRS any property he has belonging to the alleged delinquent taxpayer. This is not the case, but, as long as enough people fall to this fear tactic, the IRS is going to continue using this ploy since it is far less expensive and far more efficient than having to go to court.

So the question comes down to this: What to do if you are ever served with a "Notice of Levy?" Ask questions. We need not be intimidated by the IRS, even though you will be. Further, if you ask questions, you will no doubt be audited and harassed. This is the intimidation you, and all of us, face. When will we stand up for what is right? And, if the government wants to compel you to surrender any property belonging to the delinquent taxpayer, then go to court and get an order just like any other garnishment proceedings.

A person may think they can avoid being sued by complying with a "Notice of Levy" and turning over the property to the IRS. It is true that you would avoid being sued by the Department of Justice, but you would then expose yourself to being sued by the person whose property you turned over. His cause of action would be against the person taking the property since they turned the property over without a court order, without his consent or permission, and without being required to surrender the property under any statute. He would have a cause of action against the IRS for acting outside their Congressionally mandated authority and against you for turning over to the IRS without judicial process.

No protection is offered by section 6332(e), as follows:

SECTION 6332(e) Effect of honoring levy--Any person in possession of (or obligated with

respect to) property or rights to property subject to levy upon which a levy has been made

who, upon demand by the Secretary, surrenders such property or rights to property (or

discharges such obligation) to the Secretary (or who pays a liability under subsection(d)(1))

shall be discharged from any obligation or liability to the delinquent taxpayer and any other

person with respect to such property or rights to property arising from such surrender or

payment.

This section relies on 6331, and both sections require a levy on property, not a notice of levy. Because there is no judicial process and no levy has been made, the person taking property based on a "Notice of Levy" is not relieved from liability to the person owning the property. This section is what is referred to as the immunity section for turning over property. And it would provide immunity if the person followed the law, but did he? Did he receive a levy or a notice of levy? Lease note the title of this sub-section; it reads "effect of honoring levy." It does not say "effect of honoring a notice of levy."

The IRS will attempt to make you believe they have the authority pursuant to section 6331, however, the Federal Register proves them wrong. The Parallel Table of Authorities and Rules reads as follows: "Entries in the table are taken directly from the rule making authority citation provided by Federal agencies in their regulations." Regulations are binding on the agency, not on you. As a matter of law this section is to enforce taxes in CFR 27 Part 70.

27 CFR Part 70 is exclusively for the enforcement pf Alcohol, Tobacco and Firearms*. Unless you are providing services or are involved in this type of activity, the taking of money on a Notice of Levy is simply theft. I must again insist that you carefully read IRC sections 7321 and 7608 to determine if the person issuing the "notice of levy" or "levy" is authorized to perform such an act against a private citizen.

[*Ed note: This is a direct quote from Congressional documents I have in my possession and in fact, spoke with Dwight Avis, Jr (his father who made the following statement is now deceased) late last year.

"Let me point this out now. This is where the structure of the income tax and Alcohol, Tobacco and Firearms tax differs: Your income tax is 100% voluntary and your liquor tax is a 100% enforced tax. Now the situation is as different as night and day. Consequently, your same rules will not apply." February 3, 1953, pg. 13, Congressional Record, Statement of Dwight E. Avis, Director, Alcohol, Tobacco and Firearms, Investigation of the IRS and It's Laws in from of the House, Ways & Means Committee. Devvy)

When receiving a "Notice of Levy" ask questions. My suggestion would be to write a letter to the IRS agent who signed the notice and ask him the following questions:

1. Are you the agent authorized to issue the "notice of levy," "notice of seizure" or "levy?" As him/her about 7321 and 7608 and explain what these sections mean and whether they

are relative to the person on the notice.

2. What property is "subject to levy" as used in section 6332? And, is the property you are

demanding property "subject to levy upon which a levy has been made?" Please note that

I am aware of section 6502(b) which states that a levy is made on the date the section

6335(a) "Notice of Seizure" is given. Has the "Notice of Seizure" been issued?

3. Please explain the indemnification process under section 6332(d) if I turn the property

over to you and the owner of the property sues me.

4. Is this "Notice of Levy" the result of a judgment entered by a court? Since it does not

appear to be a court order, and does not have a case number or a judge's signature, what

will happen to me if I do not turn this property over to you?

5. Is a notice of levy the same thing as a levy? And, is section 6332(e) reliable when it

specifically states "effect of honoring levy," not "effect of honoring notice of levy."

All of these are legitimate questions which anyone would have about the whole levy procedure. Of course, the agent will tell you that you should turn the property over in order to avoid any penalties and court proceedings, and they will probably audit you. But when they answer question #4, they will be forced to tell you that they will simply have to go to court in order to reach the alleged "Levied" property. Also, ask the agent why he didn't include section (a) of 6331 which tells you who is required to respond to a "notice of levy."

This letter is a result of my research to date. I must agree we have allowed the IRS to bulldoze us for so long it is easier to just give them the property so we can avoid a confrontation with them. Our freedoms are disappearing fast because we do not hold the IRS in this case, to the law.

Please use the check sheet that I have attached to help you. If you receive a Notice of Levy, ask questions. Please check the Internal Revenue Code to see if my research is correct. Further, the courts have not been favorable in these cases because we have not given them the correct codes and regulations. And, of course, they are also subject to audit and intimidation. To this I, and many others, are attempting to get Congress to immunize judges from the IRS which will allow the judiciary to at least respond to the law without fear of retaliation. Please contact your Congress person. Do not be afraid to stand up for the truth.

I certify that the information contained in this research letter is true and correct to the best of my knowledge and belief and I stand ready to testify to the truthfulness of these statements.

Respectfully, John J. Schlaback

*End*

Well, did you get all that? How about this government our Congress has created? It sure sounds to me like Mr. Schlaback is some sort of right-wing, anti-government wacko!

Again, I draw your attention to Section 6331(a) several pages above and this excerpt from a piece in the IRS section and I encourage you to go and read this eye-opener if you haven't already:

http://www.devvy.com/abra_19991021.html

7. "The law itself does not require individuals to file a Form 1040. However, Section 6001 of the Code states that every person liable for a tax imposed by the Code shall make returns and comply with such rules and regulations as the Secretary of the Treasury may from time to time prescribe. Section 1.6012(a)(6) of the Income Tax Regulations states that Form 1040 is prescribed for general use in making the return required under Section 6012 of the Code."

There's no law that requires you to file a Form 1040. They just said so. However! Yo! Whoops! The code says that "every person liable shall make returns and that Form 1040 is prescribed for general use in making the return." Wait - didn't they just say the law doesn't require anyone to file a Form 1040 but now someplace else, this form is "prescribed for general use?" Hmm. I think this is more government lie-speak.

8. "Section 6331 of the Code states that if any person liable to pay tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the secretary to collect such tax by levy upon all property and rights to property belonging to such person. The levy may be made upon the accrued salary or wages of any officer, employee, or elected official of the United States, District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer of such officer, employee or elected official."

Wait just a minute, here! Let me get out my magnifying glass so I can type here exactly what Section 6331 says from Volume 2 of the Internal Revenue Code:

Subchapter D - Seizure of Property for Collection of Taxes

Section 6331 Levy and Distraint.

Section 6331(a) Authority of Secretary. - If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334 (9)) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. Levy may be made upon the accrued salary or wages of any officer, employee, or elected official of the United States, District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer of such officer, employee or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the secretary and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provided in this section.

Let me see if I have this straight: Levy shall be made upon any officer, employee or elected official of the United States, District of Columbia or any agency or instrumentality of the United States or District of Columbia by serving a notice of levy on the employer of such officer, employee or elected official. "Any officer, employee or elected official of the United States, District of Columbia or any agency or instrumentality of the United States...."

Now, does that mean that any government officer, employee or elected official or the United States, District of Columbia and so forth, are the only ones subject to a levy, and of course, those exempt under 6334? That's how it reads to me.

Or, does that cover the man down the street works for IBM or is a teller at the local bank? They certainly aren't officers, employees or elected officials of the U.S. or District of Criminals or any agency or instrumentality of the U.S., etc. They work for private industry, yet the IRS, through lies, deception and brute force, will levy their wages and steal their property. Do you see anywhere in that language that covers private sector employees, officers or elected officials? I don't. Perhaps it's more abracadabra! Perhaps it even has something to do with the 14th Amendment......

If you haven't taken the time to read the information on the non-ratification of the 14th Amendment on this web site, please do so. It will go a long way in clarifying the insidious and nefarious intent to strip you of your sovereign citizenship rights and rope you into the clutches of the federal criminals. When I say the people have been bamboozled, it isn't just some silly talk or murky conspiracy, the game plan schematics are laid right out in front of our faces if people just take the time to do the research. As for Section 6331(a) Authority of Secretary from the Internal Robbing Service's Code, I fall under no part of their qualifying definitions and intent to fight."

How much longer is Congress going to get away with allowing this thievery of the people to continue? Remember: In all but a hand full of states, you are only required to file a state personal income tax return if you're required to file a federal return. Think about it and then raise hell with your state legislator, state senator and governor. Tell them we've had it with this fraud.



-- ... (...@...com), May 11, 2000

Answers

Readers,

See my response to just one example of a category of mistake that "... (...@...com)" makes, in the thread More smoke and mirrors by the IRS! at http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0038Ec

BTW, that particular mistake is repeated in the posting above in the current thread.

>Now, does that mean that any government officer, employee or elected official or the United States, District of Columbia and so forth, are the only ones subject to a levy, and of course, those exempt under 6334?

No, it doesn't. "Only" appears only in "..."'s writing, not in the portion of Section 6331(a) to which he/she refers. See my response in the other thread for a fuller explanation.

>That's how it reads to me.

If so, it's careless reading. If not, it's deliberate deceit.

-- No Spam Please (nos_pam_please@hotmail.com), May 11, 2000.


If IRS Agent Joe Bannister claims the income tax is a scam, that's good enough for me. It is straight from the horses mouth. No spam has no clue and is only spouting off the mouth. Lucky he was not around during the Boston Tea Party. If he had, we'd still be paying tax to the queen of England!!!!

Put Joe bannister in your search engine and find out straight from the IRS Agent the truth about the income tax scam!

-- snuggy (snuggy@aol.com), May 11, 2000.


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