sc300tt said:how would you stop the payroll company from deducting taxes that they already take from your paychecks?
"The essence of the income tax as it is administered is fraud, pure and simple. It is what is known as "constructive fraud", meaning that while it may not be possible to readily identify a smoking gun of overt, unambiguous offense, what is nonetheless accomplished by the scheme is a victim's loss and a beneficiary's gain. All the same, the perpetrators of the scheme retain defensive deniability because the law contains the truth about the voluntary character of the tax— anyone who goes to the trouble can read it for themselves. But, being the cheap con that it is, the scheme introduces itself to most of its victims under circumstances in which they are least likely to go to that trouble, understand the legal implications of their own acts or the limitations to which the government is subject, or insist on being dealt with lawfully. Furthermore, this introduction is actually carried out through the offices of a third party- a private business- which typically has itself been suckered or intimidated into being the scheme's foil. Consequently, legal liability falls on that third party, rather than the principle actors in the scheme. We'll discuss this more in the next section. The first taste of the "income" tax scheme comes to most people at a tender age and while in a vulnerable state, as a little innocent-looking form called a W-4, presented to them as a prerequisite to satisfying the powerful desire to secure their first real job. Not only is everything related to that process new and mysterious, but only a truly rare 16- or 18-year-old kid would think or dare to question the matter-of-factly delivered instructions to fill out this form, titled the "Employee's Withholding Allowance Certificate", in order to start work. Those few that would even take the trouble to read what they were signing would find this carefully selected language accompanying the form, explaining that,
Purpose. Complete Form W-4 so that your employer can withhold the correct Federal income tax from your pay. Because your tax situation may change, you may want to refigure your withholding each year.
and,
Privacy Act and Paperwork Reduction Act Notice. We
ask for the information on this form to carry out the
Internal Revenue laws of the United States. The
Internal Revenue Code requires this information under
sections 3402(f)(2)(A) and 6109 and their regulations.
Failure to provide a properly completed form will result
in your being treated as a single person who claims no
withholding allowances; providing fraudulent
information may also subject you to penalties.
Somehow, the language of section 3402(f)(2)(A) and 6109 are left off the form. We looked at 6109 in detail in the last two sections; here is the language of 3402(f)(2)(A):
Sec. 3402. - Income tax collected at source
(f)...
(2) Exemption certificates
(A) On commencement of employment
On or before the date of the commencement of employment
with an employer, the employee shall furnish the employer with a
signed withholding exemption certificate relating to the number of
withholding exemptions which he claims, which shall in no event
exceed the number to which he is entitled.
Recall once again the definitions of the key terms in this section (discussed in detail in 'Withholding The Truth'):
(c) Employee
For purposes of this chapter, the term "employee" includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing.
The term "employee" also includes an officer of a corporation.
(d) Employer
For purposes of this chapter, the term "employer" means the person for whom an individual performs or performed any service, of whatever nature, as the employee of such person...
It is obvious that in the case of this form, as in so much else associated with the "income" tax, any requirement of execution, and adverse consequences of declining to do so, are restricted in their application to federal and "State" government workers exclusively.
Nonetheless, I think it is safe to say that most teenagers raising this point with the Human Resources dept where they've just been offered their first job are likely to find themselves labeled a troublemaker and out pounding the pavement again. That's unless they are successfully browbeaten with an impatient, "Look, kid, you're signing on to be an employee, right? You're going to be paid wages, right? The law says all employees getting paid wages have to fill out one of these forms. Whaddayamean you're not an "employee"! Lemme see that! Oh,... I see why you're confused. You didn't notice that it says includes officers and employees, etc., etc.. That means that it includes anybody else who's an employee, too, and anybody who works for anybody is an EM-PLOY-EE! Understand? Trust me. Fill out the form. And stop talking to those tax-protestor nutcases."
With most of the "income" tax forms of this type, what has been said so far would cover the subject well enough, at least as regards the applicability of the instrument to privatesector workers, and I could keep this part of the book short. The W-4 is a bit more complicated, however, perhaps in the interest of pacifying the rare, legally knowledgeable cat's-paw business upon which the scheme is so reliant. As such a business might otherwise fear the legal consequences of unlawfully demanding the form as a condition for fulfilling the obligations of the contract into which it has entered with a worker, or be cognizant of the consequences of pretending to be a federal official (the only entity in connection with which a W-4 could be required), the law regarding the W-4 is equipped with what appears to be a "safe harbor" element. That element is subparagraph (p)(3)(B) of section 3402. Here it is (with emphasis added):
Sec. 3402. - Income tax collected at source
(p) Voluntary withholding agreements
(3) Authority for other voluntary withholding
The Secretary is authorized by regulations to provide for withholding
(A) from remuneration for services performed by an
employee for the employee's employer which (without
regard to this paragraph) does not constitute wages,
and
(B) from any other type of payment with respect to
which the Secretary finds that withholding would be
appropriate under the provisions of this chapter, if the
employer and employee, or the person making and the person receiving such other type of payment, agree to such withholding. Such agreement shall be in such form and manner as the Secretary may by regulations prescribe. For purposes of this chapter (and so much of subtitle F as relates to this chapter), remuneration or other payments with respect to which such agreement is made shall be treated as if they were wages paid by an employer to an employee to the extent that such remuneration is paid or other payments are made during the period for which the agreement is in effect. (I'm confident that we can all easily think of dozens of 'other types of payments' regarding which we would be grateful for the benefits of this provision of the law, right?)
By virtue of this provision, a nervous private-sector company might still cooperate with the scheme, presuming that it can claim it just thought it was agreeing to an optional request to withhold when accepting that W-4 and handing over to a third party money owed to a worker.
However, despite the language of 3402(p)(3)(B), the Secretary of the Treasury has promulgated no regulations providing for any particular "form or manner" of agreement between a "person" and another "person" (although he has provided several pages of such regulations for voluntary withholding agreements between "employees" and "employers" pursuant to 3402(p)(3)(A)). Therefore, the characterization of payments made to a worker as being subject to withholding is - wishful thinking to the contrary notwithstanding - entirely the doing, and the risk, of the business doing the withholding. The poorly constructed language of the statute only provides for the possibility of this extra-curricular withholding pursuant to a regulatory structure- lacking such, it is a mere will-o'-the-wisp. Though perhaps a bit disingenuously, a worker could and would easily and credibly maintain, in the course of suing or prosecuting a business over what is no more or less than theft-by-conversion, that in addition to responding to the coercion and false claims of authority by which she was induced to execute the form, she at bottom complied because of the reasonable presumption that the W-4 would only become an active instrument if and when the business's affairs contrived to cause her pay to be effectively connected with a taxable activity. That the business instead withheld from her private-sector, untaxable receipts is entirely its own responsibility. Needless to say, and despite 3402(p)(3)(B), treating payments as though they were "wages" paid to an "employee" does not transform them into "income", if they are actually paid to a private-sector worker. Chapter 24 imposes no tax at all (nor does subtitle F)-- it simply provides for withholding. The amounts withheld under its provisions are credited against any liability for "income" tax which might be found to exist under the provisions of subtitle A— in regard to which, as we know, remuneration for private-sector work is explicitly excluded. (We'll explore this area in detail later when we look at what the law says about refunds.)
* * * * *
Possible rationales for its completion and submission do not change the fact that a W-4 becomes a piece of evidence amounting to a signed declaration of "wage"-paid-"employee" status. Through this form, the company for whom the victim works is provided not simply a justification to withhold and divert part of the money it owes to that victim (otherwise illegal if objected to-- absent a court order); but also a justification for issuing a related W-2 at the end of the year. This in turn supplies the IRS with an excuse to presume that the individual in question is a government "employee", whose pay is therefore "income" upon which taxes can lawfully be demanded.
Anyone currently working for others who has been forced or fooled into improperly submitting a W-4 might wish to withdraw the authority to withhold that the form represents, by filing an appropriately worded instrument with their personnel department, such as this: TERMINATION OF AUTHORITY TO WITHHOLD
(Company's Name) is notified hereby that I, (Worker's
Name) am declaring ended and withdrawn as of this
date, (Today's Date) , any and all authorization and/or
agreement for the withholding of any portion of compensation
owed me for services rendered howsoever such authorization
and/or agreement may have been conveyed, executed, or
implied at any time. {signed & dated} Because an agreement between a non-"employee" and a non-"employer" regarding withholding is neither regulated nor required, one can end it at any time by simply withdrawing any implied or explicit permission. (Those being coerced into filing at a new workplace should consider a disclaimer similar to the sample provided at www.losthorizons.com/appendix.htm. Simply filing "Exempt" is not a proper strategy, by the way, nor legal— ALL the provisions of law relating to W-4's apply only to "employees", including that one. 'Exempt' does not mean "under no obligation", it means "conditionally released or excepted from obligation".)"
-from Cracking the Code by Hendrickson |
