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George shepherd
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COntRiButinG WRiteRs
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Cover by Ed Rother
PayPal, the on-line payment processing service founded by devout libertarian Peter Tiel,
announced that beginning in 2012 it will report all accounts with gross receipts exceeding
$20,000 and a total of 200 transactions to the IRS.
Ken Swab, PayPal’s senior federal government relations ofcer, says that the IRS will only
be provided a 1099 displaying the total payment volume of each reported client. Much discus-
sion has been logged about this matter in PayPal’s on-line forums and blogs.
Transactions will start being totaled in January 2011 for account holders, many of whom
chose PayPal for its discretion and the ability it provides to conduct barter-style transactions
as an alternative to using Federal Reserve Notes (FRNs).
Although he founded PayPal, Mr. Tiel no longer owns the company, which was acquired
by the on-line auction giant eBay on July 8, 2002. Nonetheless, the lack of spine on the part
of PayPal shows that even a business founded on libertarian principles is not immune to the
corruption and intimidation of a broke – and broken -- government.
Many PayPal users treat balances held within their accounts almost as “Monopoly” money
kept in escrow until used to buy something online. Although many PayPal customers use
their accounts exclusively for online transactions, the service has also become a major source
of revenue for businesses both small and large from which the bloated, over-spending federal
government wants to extract tribute.
If a purchase is made using PayPal in which the funds are never converted to FRNs but
remain credits with a value assigned by PayPal, and are used to acquire another product or
service at a later date, would that not be considered a “barter” transaction? Tis would involve
exchanging one thing of value for another, then trading the second item for another.
Since we are not taxed on the value of traded items, such as baseball cards or personal ser-
vices, what right does the federal government have in cataloging barter transactions made via
PayPal? Furthermore, PayPal “credits” converted into funds and transferred to a bank account
are reported by the bank to the IRS upon demand. Tis creates a mess of potential double
reporting, thereby opening PayPal users to intrusive examination by an agency with no consti-
tutional authority to do so.
Are we to believe that this attempt to monitor
buying and selling on the internet, often involv-
ing personal items such as antiques, is an efective
weapon to stop the funding of terrorism?
We all have heard of the “pork” being included
in measures rammed through Congress in a mat-
ter of days. It’s often hidden with enormous bills
that can have a table of contents consuming 15
pages all by itself. Te legislation expanding Fed-
eral scrutiny of online transactions was buried
deep within the pages of the Housing and Eco-
nomic Recovery Act of 2008. Like most legisla-
tion enacted in Washington, that monstrosity was
enacted by Congressmen who didn’t take the time
to read the measure, much less debate it on its
merits. And yet we continue to re-elect the same
rotten apples thinking that somehow their juice
will taste sweeter this time than the last.
A Fair Weather Friend
By George Shepherd
Digital Back Issues
Available Online at:
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04 PayPal: A Fair Weather Friend
By George Shepherd

06 Illegitimate Mortgages
The Ultimate Irony of the Meltdown
By Dave Wellington
08 The Rise and Fall of Empires
By George Shepherd
10 Top 10 Tips for Traffc Court
By Marc Stevens
12 CAFR: Trillions on The Books They
Don’t Want You To Know About
By Walter J. Burien, Jr.
14 The Government Hoax
By Marc Stevens
16 A Collusion of Power: Systematic
Destruction of Free Speech
By Bob Schulz
23 TSA: New X-Ray Scanner Discovery
Americans Have No Spines
By Mark Lerner
25 A Rogue Agency and The
Thunderous Roar of Revolution
By Larry Becraft
30 Republic Mini-Directory
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The Ultimate Irony Of The Real Estate Meltdown
By Dave Wellington
After supposedly generating unprecedented levels of
household wealth, the real estate market has collapsed in a
world-historic meltdown. According to the market research
company RealtyTrac, 2.8 million homeowners lost their
properties to foreclosure in 2009, with millions more fac-
ing the same prospect. Te Mortgage Bankers Association
reports that one of every four homeowners is “upside down,”
with more being owed on the home than the property is
worth. Tis is leading some people to exercise the “jingle
mail” option – that is, simply mailing the house keys to the
lender and walking away from the mortgage.
In many regions of the country, this combination of fac-
tors has resulted in even deeper depressions in real estate
prices. As bad as things have become, there is a much big-
ger problem that is just beginning to make itself felt, one
that strikes at the foundation of the entire real estate and
mortgage market: Where many, if not most, mortgages are
concerned, nobody really knows who owes what to whom.
I’ve long been amazed by how little attention people pay
to mortgages, even though it is the largest debt most people
will ever see in their lifetimes. Other than interest rates and
monthly payment amounts, most people don’t even give
them a second thought. Many also get on what I call the
“mortgage treadmill.” Tis is where people continuously get
new 30-year mortgages, either by refnancing or getting into
another property. Each time this happens, the borrower
starts over at the frst month of 360 months of payments.
When it’s all added up, instead of making 30 years of pay-
ments on an original loan, the borrower must make 40, 50, or
even 60 years of payments
on consecutive

Add to this the fact that for the frst several years of repay-
ment, about 80% of each monthly payment on a fxed interest
rate loan is pure interest, with only about 20% going to pay
down the principal. Tus if someone has a $1200 monthly
payment on a $200,000 loan at a 6% fxed rate, about $1000
of that is nothing but interest for the frst few years of repay-
ment. Te lenders love this -- wouldn’t you? But just who are
these lenders?
Most people are familiar with the consumer side of mort-
gages. You search for a lender, make your application, supply
reams of information once your application is accepted, then
sign and initial a blizzard of papers at closing, including a
loan/repayment note. Tough most people don’t realize it, this
note is the most important document of any they may have
signed. Whoever owns this note is the party actually entitled
to receive the payments on the loan. So what happens on the
other side of the transaction?
What many people don’t know is that within hours, or a
few days at most, the mortgage a home buyer takes out from
the broker (and in many cases banks or other institutional
lenders) is sold to someone else. Tat’s right -- sold. And the
secondary mortgage market is huge. (To see just how big, just
enter the search term “mortgage note” into any internet search
engine avalanche of results.) In most cases, the mortgage will
change hands several times before it settles down with a com-
pany that may want to keep it. For every mortgage sale that
occurs, the new mortgage owner is supposed to record a new/
amended trust deed (or lien) in the local property records.
Also, although the new owner is required by the federal Truth
In Lending Act to notify the mortgagor (one who owes the
payments) of the change in mortgage ownership, this usually
doesn’t happen. Tis understandably complicates the task of
identifying the actual owner of a given mortgage note.
But things get even a bit more complicated when mortgage
service companies are added into the mix. Most lenders use a
mortgage servicing company to collect payments and carry out
other administrative tasks. Ever wonder why the company you
make your payments to changes a few times, especially during
the frst 18 months? (I have wondered why more people don’t
even question this.) It’s usually because the mortgage was sold,
and the new owner uses a diferent servicing company. But in
recent years, determining the rightful mortgage “owner” has
become increasingly difcult, and sometimes impossible.
Illegitimate Mortgages:
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 6
The Ultimate Irony Of The Real Estate Meltdown
Te frst reason for this is a company called Mortgage Elec-
tronic Registration Systems (MERS). Tis is a Florida-based
company established by the major institutional lenders and
banks. Te main purpose of MERS is to allow its members
to use its name as a “nominee” mortgage owner in local prop-
erty records so any mortgage sales among the members won’t
require any new notations in those records to refect a change
in mortgage ownership. It saves a lot of recording hassles and
fees. At the same time, it also makes a mystery of an actual
mortgage owner.
Te second reason is that during the mid-2000s there was
more going on in the mortgage industry than a tidal wave of
loans issued to people with little more than a pulse and the
ability to sign their name. Mortgages were getting bundled
by the hundreds or thousands into blocks, which were
then sold to investors around the world as securities.
Investors could then buy an interest in one or more
of these “securitized” mortgage bundles. But in
the bundling process, an interesting thing hap-
pened: many of the mortgage notes were lost
or destroyed!
Few paid attention to what was going on
during the real estate bubble, when Gold-
man Sachs and other investment houses
were making huge profts selling mortgage-
backed securities, many of which con-
sisted of mortgage loans issued to entirely
unqualifed borrowers. Once the bubble
burst and foreclosures started to mount,
the question “who owns the note” took on
a sudden urgency. Over the last 2-3 years
some embattled homeowners have success-
fully used this issue in foreclosure proceed-
ings, thereby depriving lenders of the most
fearsome hammer in their arsenal.
Florida attorney Ray Garcia employed the
“Show me the note” tactic while representing Florida resident
Ana Fernandez in foreclosure proceedings. Chevy Chase Bank
claimed to have bought Fernandez’s loan from another insti-
tution. When he examined the paperwork, Garcia recalls,
it showed ownership of the loan had never been assigned
or transferred to Chevy Chase. “As we sit here today, they
haven’t produced a note,” Garcia said in a recent ofce inter-
view. “Tey’ve produced absolutely no record evidence that
Chevy Chase has a right to bring this action.”
Asking the bank “to produce the paperwork is just the
beginning,” points out April Charney, an attorney working
with Jacksonville Legal Services in Florida. “Lawyers who
take the time to study the mortgage notes and the secu-
ritization agreements will almost always fnd defciencies,
and sometimes fraud…. Tese loans are so tricked up by
the Ponzi scheme that became the world of securitization
and derivatives, that there is no owner to these loans.” Char-
ney has successfully stalled or completely stopped over 300
foreclosures in the Florida area, and has been working to
train more lawyers through seminars across the country.
Talcott Franklin, an attorney in Dallas and an expert on
securitized mortgages, doesn’t blame homeowners or their
lawyers for bringing the challenges. He’s more critical of
lenders and their attorneys for not doing a better job under-
standing securitized mortgages and for not taking care of
important legal matters before going to court to foreclose
on a home.
In some cases, it’s the judges who are beginning to ask
7 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
probing questions of plaintifs seeking foreclo-
sures. In California, federal bankruptcy judge
Samuel Buford has written about some of
the new issues courts must consider in fore-
closure cases. “One of the problems is [that]
I don’t seem to have the right parties before
the court,” he says. “I’ve taken testimony and
found out that the owner of the mortgage
is somebody else who has not shown up in
court at all.”
Te issue has even overfowed into dis-
putes between major lending institutions
themselves. In a suit fled in the southern
district of New York federal court in Novem-
ber 2009, Deutsche Bank (DB) sued Bank
of America (B of A). Te 44-page complaint
alleges B of A failed to “safeguard and secure
over $1.25 billion worth of cash and mort-
gage loans that it was contractually obligated
to secure on behalf of DB.” It goes on to state
B of A “failed to track and document properly
the purchase and sale of mortgages.” Some-
thing really ugly must be cooking when the
big boys start dragging each other into court.
What does all this mean to the average
mortgage debtor? Without some identifable
ownership of a mortgage note, exactly who
-- if anyone -- has the right even to receive
your mortgage payments, much less bring a
foreclosure action? If there is “no owner” for
many of the mortgage notes, as attorney April
Charney has said, then you might as well be
making your payments to your mail carrier,
dog catcher, or local street bum. (I will hap-
pily take them as well!) Tey have as much
right to receive payments as any other “non-
owner” of a note!
Tese circumstances will undoubtedly
have a serious impact not only on foreclo-
sures, but also on “underwater” properties and
mortgages in general. Isn’t it ironic that the
seeds for potentially ending the current real
estate calamity might be found in the very
instruments that signifcantly contributed to
it — mortgages?
Dave Wellington is an author and parale-
gal of 20 years. To fnd out more on this issue,
and learn how you can investigate the legiti-
macy of your mortgage, go to:
Some have long held that freedom of the press has an ironic downside: It forces
those who operate unjustly to plot their every move carefully, so as not to be discov-
ered -- thus creating what amounts to a grand conspiracy on the part of those who
wish to rule.
Te freedom of the individual to expose and condemn injustice without fear
of government retaliation is one of the most cherished protections provided by the
architects of the American system of liberty protected by law. But that guarantee
won’t protect our freedom unless we try to discover and defeat the secretive actions
of those who crave total power. What use is free- dom of speech if we’re
simply free to recite what our rulers tell us?
In recent years, we have been ordered by government agen-
cies and government-aligned corporations to report suspicious
activity. Tis, we are told, is our civic duty, and will help thwart
the next terrorist plot or conspiracy. However, we’re never
told why, if it is our duty to protect each other, a myriad of
alphabet soup agencies have been created and s o l d
to us as imperative to our security. Too many of
us are so busy looking at our fellow citizens with
suspicion that we don’t exercise the vigilant scrutiny
of government institutions that constitute the larg-
est and most acute threat to our freedoms.
Are we as lambs rejoicing because the wolves
are momentarily kept at bay while we are led care-
fully to the slaughterhouse? Is trading one predator
for another justifed because the lesser of evils greets
us with a smile?
As the beacon of hope for the free world slips qui-
etly into the embrace of a fascist despotism, will we also
soon face the Nazi-era Gestapo tactics of silencing the
voice of justice -- of the people? It’s worth remembering
that the USA, the purpoted Land of the Free, leads all nations
in the percentage of its population incarcerated for crimes that
have no victims. Is it really that difcult to believe that the govern-
ment responsible for that state of afairs may soon fll the prisons with
those jailed for purely political ofenses?
Te Paradox
In a free society the government fears the people, since we are the masters who
created it and gave it limited and revocable powers. Unfortuantely, we have allowed
the beast to grow wild and unruly. When an animal becomes rabid and unmana-
gable, the master has the sad but necessary duty to put it down -- not only to ease
the animal’s sufering, but also to protect others from harm.
Now, apply that principle to the controversy over the disclosure, by way
of the internet whistleblower group WikiLeaks, of a huge volume of docu-
ments detailing a limited number of the crimes and corrupt acts committed
The Rise and Fall of
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 8
I frmly believe that we have a duty to report the suspicious
activity of powerful people and groups. I frmly believe that “We
Te People” are responsible for our own safety and for providing
the charity necessary to help others of our own choosing. I frmly
believe that all conspiracies are eventually exposed to the light of
truth, and that only by working to uncover those machinations
can we regain and preserve our freedom.
If one swears an oath to protect and defend liberty and the
Constitution, then is he not guilty of perjury when he votes for
measures that would destroy the very thing he has sworn to pro-
tect? Who is accountable if our supposed represetatives are not?
It is We the People.
Te injustices we permit to be perpetrated in our name rot the
very core of honor and concience. If we wish to keep the voice of
truth, and the freedom to speak it, we must shoulder the respon-
sibility to defend it at any price.
When the voice of the people fails to be heard at the ballot
box, then it becomes the duty of the people to speak with the
same voice used by the Founders in their time. When the griev-
ances of the people fall on the deaf ears of indiferent rulers, the
inner voice of truth speaks in tongues of revolution.

Te Future
Immortality favors those who speak when others remain
silent. Only when a great many people become aware of their own
slavery and grow uncomfortable in their chains will liberty once
again be spoken on the lips of man. Tus has it been for many
thousands of years, as power and liberty have battled through the
rise and fall of empires. Just as the charlatans of change always
precede the yoke of servitude, the wisdom and honor of a nation
reborn are the children of tyranny.
Do not fear the inevitable battle cry of revolution. Ominous as
our times have become, this is a joyous era in which to be alive, one
in which men and women of honor will fnally have the opportu-
nity to repay the debt of freedom left by our ancestors and pass
the responsibility for its care to the next generation.
The Rise and Fall of By George Shepherd
by ofcials of the government ruling us. Tose
revelations provide a portrait of an imperial
government that is runing loose like a mad dog,
slaughtering innocent people by the thousands
and creating enemies by the hundreds of mil-
Clearly the government portrayed in those
leaks needs to be put on a leash and thrown into
a cage – or treated like a dog in the late stages of rabies. Yet the
government and its media allies insist that it is WikiLeaks founder
Julian Assange who is the real threat, that it is the whistleblower
who should be thrown into a cage or even summarily executed.
Alarmingly, many people who consider themselves conservatives or
constitutionalists agree with that assessment.
If an award-winning and praised “Free Speech” advocate such as
Julian Assange is pursued for exposing the secret crimes of a rogue
government, then what are we to expect when we discover and
expose ofcial corruption? Are our rulers simply hoping that we
will be content to perpetuate ofcial lies while its agents patiently
take down the names of potential troublemakers for future destruc-
We have the advantage ofered by the wisdom of great men and
women who came before us. One of the most persistent themes
in the writings and speeches of the Founders was this: Men can-
not be trusted with power, and the most lethal
threat to liberty is the government that
rules us. Are we so arrogant that we
cannot understand and act on the
advice of those who have already
been down this road? Is it not our
duty to protect the legacy left in the
crimson-stained ground on which our
liberties were won? Are we so pre-
sumptuous that we
no longer under-
stand that we are
not “entitled” to
equality, but
rather it must
be earned?
9 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
Next time you sufer the misfortune of getting a trafc ticket, keep the following tips in
mind. Applying them will radically improve your chances of getting the ticket thrown out.
1. Do not be argumentative.
2. Don’t expect to convince the judge on the basis of your own opinion or arguments.
3. Stick to the facts.
4. Repeat “I am not an attorney; I don’t understand.”
5. Don’t object to or press a particular point more than twice.
6. Stay on point.
7. Ask questions.
8. Only accept responsive answers to questions.
9. Get the judge and/or the prosecutor to commit to positions.
10. Use those positions/arguments against the judge or prosecutor.
1. Trafc courts are scams run by people only interested in taking money. Tey
are not designed or intended to administer justice. Tis must be understood up
front. Expecting justice to be administered in trafc court is to start of on the
wrong foot. After all, any trafc court judge interested in justice would throw
out the majority of trafc tickets minutes after they are fled, and mail an
apology to each defendant for the time stolen from them by police during
the trafc stop.
2. Trafc court judges don’t care what we think. We are considered
guilty the moment the cop decides to write the ticket. Just as the
cop’s account is taken as the self-ratifying truth, the judge is always
going to be perceived as correct, and you will always be in the
wrong. However, it is possible to get the judge to contradict
himself. If an argument or opinion is used, it is
best to get the judge to “argue” with himself.
3. Sticking to the facts is the fastest and
most efective way to demonstrate there is
no case. Just asking a couple of questions is
usually enough to have the only witness against
you declared incompetent, which requires his
testimony, including the ticket, to be stricken. Keep
in mind, however, that impeaching the only prosecution
witness does not mean a judge will always strike the testimony and throw the ticket out.
4. All non-lawyers are legally incapable of defending themselves, and it is unfair
to put someone on trial who does not understand the nature and cause of the
proceedings against him. Te more the judge explains about what is going on, the
likelier it becomes that he will contradict himself, thereby proving there is no case.
5. Tis is related to point number one: If I keep pressing a point the judge
rejects, he is only going to get angry -- and judges are notorious for having anger
management problems. Remember: trafc court judges do not care what your
think, and they’re not interested in the truth. Te only thing they care about
is making the robbery look good. Don’t help the judge make it look good.
6. Lawyers, whether or not they’re wearing fowing black robes, are mas-
ters of diversion. Never forget their goal is getting the money you worked hard
By Marc Stevens
10 Tips
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 10
11 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
to earn, rather than getting to the truth and
administering justice. If they get you of-point,
they’ll win; the real issues are cast aside, and
before you know it the proceeding is over.
7. One diversionary tactic frequently used
by judges, lawyers and bureaucrats is to accuse
people of “arguing.” Tis accusation wouldn’t
make sense if trafc court were actually an
adversarial proceeding intended to establish
the truth: Wouldn’t argument be expected
in such a proceeding? Of course, this tac-
tic is intended to make the defendant look
bad, as if he were the problem rather than
the charade called “trafc court.” However,
if we confne ourselves to questions, we can
point out that we’re not “arguing.” I’ve learned
from experience that this is very embarrass-
ing for the individual who accuses me of
arguing. Tis approach is also an incredibly
efective way to demonstrate that there is no
case -- provided of course, that we stay on
point and only accept responsive answers.
8. By insisting on responsive answers you
can keep things on point and, often, quickly
destroy the appearance of a case. However,
you must know in advance what constitutes a
responsive answer. Bureaucrats are carefully
trained in the art of persifage – that is, ofering
answers that sound authoritative but are not
responsive. For example: You may ask, “Factu-
ally, what is the Constitution?” and the bureau-
crat replies, “It’s the supreme law of the land.”
Tis sounds impressive, but it’s not responsive
to the question. A responsive answer would
be devastating to a bureaucrat’s case. I have
made several scripts available that describe
questions I have successfully used in court;
they can be found at www.marcstevens.net.
9. Trafc court judges do not care if you
think they have violated the Constitution or
the law; their main job is to make robbing
people look good. But because of their sensi-
tivity to the appearance of propriety – that is,
their vanity -- trafc court judges do not like
to be caught contradicting themselves. Get
the judge to commit to clearly defned posi-
tions by asking such questions as “Am I enti-
tled to be informed of the nature and cause
of the charges and proceedings?” and “Am I
entitled to a fair hearing?” Because the very
nature of trafc courts is unfair, it will be
easy to get the judge to contradict himself.
10. Te positions taken by the judge and
prosecutor can always be used to get them
to contradict themselves later. For example:
Once you have gotten the judge to admit
that you have a right to be informed about
the nature of the case and asked a few addi-
tional questions, a judge is likely to say: “I’m
not here to answer your questions.” Tis is an
obvious contradiction, since it’s impossible
for a defendant to be “informed” if the judge
refuses to answer questions. In similar fash-
ion, I’ve found that it’s possible for a judge to
declare a witness competent, incompetent,
and then competent once again within the
space of only a few minutes. Such contradic-
tions quickly destroy the pretense of fairness.
One of the most important things to know
about trafc court and related bureaucratic
attacks is this: A ticket or complaint is not
synonymous with a “case”; it is an accusation
that must be proven, and the government has
to overcome the defendant’s presumption of
innocence. Of course a trafc court judge is
interested only in “processing” the complaint
in order to take your money; he’s not there
to try the facts, but rather to collect revenue.
Remember, just because a cop writes a ticket
does not mean he has presented a case. No
court has the “legal” authority to proceed
against someone unless an actual case is pre-
sented against him; at my website, I ofer a
short list of the “authorities” to prove it.(1)
However, trafc court judges are interested
only in getting your money as quickly as
possible, and they have no use for trivial
impediments such as the “law.”
All of this is discussed this in detail in
my book Adventures in Legal Land, several
articles available at my website, the archives
of my radio show Te No State Project(2),
and in my new video series here about beat-
ing trafc tickets.(3)
1. http://www.marcstevens.net/articles/20-bureaucrats-never-have-a-case.html
2. http://www.marcstevens.net/nsp-commercial-free.html?layout=default
3. http://www.marcstevens.net/media/video/84-beating-civil-trafc-tickets.html
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 12
Analysts believe that trillions of dollars not
accounted for in ofcial government budget
reports are shown Government Comprehensive
Annual Financial Reports (CAFR). Over the
last ffty years, the domestic and international
investment assets of US Federal and Local Gov-
ernments as a whole have been sufcient to take
control over the Stock Market, as well as invest-
ment markets dealing in derivatives, insurance,
and bonds. Te cumulative assets and invest-
ments of the private sector are now insignifcant
when compared to what the US Government
owns by and through investment.
For obvious reasons, this subject is rarely, if
ever, discussed by elected ofcials from either
the Democratic or Republican Party at any level,
or in the government-aligned news media.
CAFR – the real accounting document for
every local government -- could be considered
history’s most signifcant example of double-
entry bookkeeping. Protected by an efective
60-year media blackout, the CAFR cover-up
should be regarded as the biggest fnancial con-
spiracy in the history of the United States – and,
quite possibly, the world.
A CAFR provides a complete accounting of
“Net Worth.” Trough the eforts of a private
group in Chicago called the Government Finan-
cial Ofcers Association (GFOA – http://
gfoa.org), CAFR was established in 1946 as a
complete accounting record for local
governments. In 1978, the Federal government
made it mandatory for all local governments to
compile CAFRs.
For the past 60 years, all public discussion
and ofcial debate over government fnances
has focused on Budget Reports. Tese typi-
cally outline planned expenditures and antici-
pated tax revenues for the coming Fiscal Year,
with fgures organized on an agency-by-agency
basis. A Budget Report may also provide some
statistical, statutory, and demographic data for
Te CAFR, on the other hand, is not a pro-
jection of one year’s expenditures from a select
grouping of agencies, but a complete cumulative
record of assets, investments, and gross income
from all agencies and all sources benefting or
held by that local government body.
Te CAFR could be considered the Bible of
asset accounting for any local government body.
It is also the counterpart to the Annual Finan-
cial Report (AFR) that publicly traded cor-
porations are required by law to produce each
year and provide to every share-holder. In many
cases, a CAFR may show two to three times
more income over what is shown in the cor-
responding Budget Report. Withholding AFR
data from shareholders is a very good way for a
publicly traded company to fnd itself in trouble
with the Securities and Exchange Commission.
So, why is CAFR subject to a decades-long
media blackout, and efectively covered up by
the entire political establishment?
A Google search for CAFR produces over
1,500,000 hits but a Google News search for
that term (as of December 11, 2010) yielded
only fve stories, none of them discussing the
subject in any depth or detail. A correspond-
ing news search in the decades-deep archives of
the New York Times, LA Times, Chicago Tri-
bune, and Wall Street Journal produced fewer
than seven stories on the subject. Clearly, this
isn’t a mere omission; the term “cover-up” seems
entirely justifed – especially when we consider
the aggregate amounts at issue.
In 1999, an examination of more than
84,000 CAFR reports produced by local gov-
ernments each year, in combination with Fed-
eral Government’s own investment holdings,
Comprehensive Annual Financial Report
Walter J.
Burien, Jr.
Trillions on the Books They Don’t Want You To Know About
13 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
revealed a cumulative sum of sixty tril-
lion dollars held by the Federal and local
governments. By way of illustration,
consider just one Government CAFR –
New York’s 2005 State Retirement Fund
CAFR(http://cafr1.com/NYSR.html ),
which disclosed $133 billion dollars in
investments held (including 44 million
shares in Microsoft).
Every state and local government
produces a CAFR, yet no local, county,
state, or federal politician discusses that
document in debate, refers to it in a con-
stituent newsletter, or links to it from
his ofcial website. Reporters for local
newspapers and television afliates who
cover budget debates never address the
issue. Yet the production of CAFRs is
accounted for in a line item in the “ofcial”
government budget, and the information
is available on-line (http://CAFR1.com/
While this is a complicated and chal-
lenging subject, there are plenty of tal-
ented and capable journalists who could
make it understandable to the public –
assuming that their editors would permit
them to do so. Yet this subject has been
avoided for decades.
Why would the political class and its
media allies want to prevent the public
from knowing about CAFR? Te tens
of trillions of dollars involved provide the
most obvious answer to that question.
Tose vast sums, which are nominally
the “people’s money,” are concealed from
public inspection, thereby ofering huge
illicit rewards to those who are on the
inside track.
Most Americans assume that gov-
ernment at every level survives from tax
revenue. Tose in the political class are
more than happy to abet that illusion by
restricting discussion of the issue to bud-
get reports. As we’ve seen, those reports
deal merely with planned expenditures
and tax revenues for a single year – and
thus provide only a small and highly
selective part of the whole picture.
Te CAFR, which reports gross
income, provides the complete fnancial
picture – taxes, investment, and enter-
prise revenue, not merely from the pres-
ent year but in the context of decades of
economic activity. In many cases, care-
ful inspection of the fgures in a CAFR
reveals that a local government is actually
bringing in more each year from invest-
ment income than tax income.
Once the true scope of government’s
investment holdings is understood, we
confront a shocking reality: Te collec-
tive government (local, state, and federal)
of the United States has realized the
Marxist objective of state ownership of
the economy to an extent far greater than
the Soviet Union ever did. Tis explains
the cover-up: Had the public been made
aware of what was going on, this would
have been stopped decades ago.
Here’s the other side of the coin: If
the public knew that the collective gov-
ernment’s investment and enterprise
revenues far out-strip tax revenues, there
would have been a revolt demanding
an end to taxation, or at least that it be
phased out. Tis is where a new invest-
ment vehicle called Tax Retirement
Funds (TRFs) would play a critical role.
Using existing revenues, TRF funds
could be established to pay any local
government’s expenses; taxation can be
phased out as those funds mature and
eventually be eliminated. Tis will not
be easy, given that this would require
transparency and accountability from a
deeply entrenched ruling elite that has
prospered in darkness.
For decades our rulers have keep the
public distracted while it has siphoned
away unfathomably huge pools of cash
while locking in the productivity value
of the next seven generations. Given our
current economic crisis, that scam may
at last be unraveling, thereby ofering an
overdue opportunity to set our country
on a legitimate fnancial foundation.
Search for your local or state CAFR
at: http://CAFR1.com/STATES/
the Stimulus
You Out
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Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 14
e n t i t y
c a l l e d
is probably the
oldest and most
pervasive hoax in human
history. For millennia, count-
less millions of people have been deluded
into believing that “government” is both legitimate and necessary.
Tose who reside in the portion of the North American continent
commonly called the “United States of America” generally assume
that government is indispensable for the protection of “Life, Lib-
erty, and the Pursuit of Happiness.” But this is nonsense, if only
because “government” has no duty to protect anyone, and typically
attracts into its service people hostile toward individual liberty
and property rights.
Tose who defend the fraudulent abstraction called “govern-
ment” often insist that it ofers “services” to the public, and pro-
vides “social goods” that otherwise wouldn’t be available. But this
claim is both a logical and moral impossibility, since no service or
product should be provided at the barrel of a gun. It’s that simple.
To maintain otherwise is to assume that individual human beings
have no rights. If this is the case, then “government” is not nec-
essary to “protect” something that doesn’t exist. If, on the other
hand, one believes that people have rights, then you must also rec-
ognize they cannot be “protected” without their freely given con-
sent. “Protection” is not submission to the violent, unaccountable
control of another, nor is violent domination a legitimate method
of doing business.
Would you hire people who don’t acknowledge you have
property, to protect your property? I wouldn’t. Yet the fundamen-
tal claim of those who presume to rule us is that we have no prop-
erty rights: “Te ultimate ownership of all property is in the State;
individual so-called `ownership’ is only by virtue of Government,
i.e., law, amounting to mere user; and that use must be in accor-
dance with law and subordinate to the necessities of the State.”(
Senate Resolution #62, April 1933.)
“Govern” is a synonym for “control,” not “protect”: “govern. To
direct and control; to regulate; to infuence; to restrain; to manage.
(State v Ream, 16 Neb 681, 683.” Ballentine’s Law Dictionary, page
530.) Signifcantly, the word “protect” is mysteriously absent from any
defnition of the verb “to govern.”
Once this is understood, the nature of this mystical quantity
called “government” becomes irresistibly clear: While there are vary-
ing degrees of severity, “government” consists of one man using actual
or threatened violence to control the life and property of another. In
some places this violent control is decreed to be for the beneft and
protection of those forced to submit, and apologists for this arrange-
ment routinely boast that it is the “best system in the world.” But that
proud claim rings hollow once it’s understood that violent control
over a man’s life and property is slavery. Not only is slavery a form of
“government,” in most cases, if not all, the term is synonymous with
Because the polities described as “states” or “nations” are likewise
based on violence rather than voluntary association, they, too, must be
considered illusory. Tis is true even of those systems called “democra-
cies” and “democratic republics,” in which slaves are given the supposed
privilege of choosing new masters. Te old plantations can be seen
as “political subdivisions” such as “cities,” only smaller: “nations” have
“presidents,” “states” have “governors,” “counties” have “commissioners,”
“cities” have “mayors” and plantations have masters.
“Government” is a group of men and women who supposedly pro-
tect “Life, Liberty and the Pursuit of Happiness” by plundering our
wealth and threatening us with lethal violence for the supposed pur-
pose of protecting us from the criminal violence of others. We have
no choice as to whether we will accept and pay for that wonderful “ser-
vice.” Tose who insist that society must be organized around insti-
tutionalized violence are “respectable,” while non-political libertarians
and voluntaryists – people who believe in commerce and cooperation,
rather than coercion -- are “extremists.”
Te essential nature of “government” can be understood very
quickly by comparing the following excerpts from the “law” – the holy
writ that’s worshipped, revered, and imposed by the priesthood of
public plunder.
Compare the following:
“tax. A forced burden, charge, exaction, imposition or contribu-
tion assessed in accordance with some reasonable rule of apportion-
ment by authority of a sovereign state upon the persons or property
within its jurisdiction to provide for public revenue for the support
By Marc Stevens
of the government, the administration of the law, or the payment of
public expenses. 51 AmJ1st Tax § 3.” Ballentine’s Law Dictionary,
page 1255.
“Te organized use of threats, coercion, intimidation, and vio-
lence to compel the payment for actual or alleged services of arbitrary
or excessive charges under the guise of membership dues, protection
fees, royalties, or service rates. United States v. McGlone (DC Pa)
19 F Supp 285, 286.” Ballentine’s Law Dictionary, page 1051.
Both of those legal defnitions refer to exactly the same conduct.
Both are accurate descriptions of how men and women pretending
to be “government” operate, although the frst is presented in “kinder,
gentler” language than the second. I like the second one because it’s
actually the defnition of the crime called “racketeering.”
Te hoax called “government” is no more legitimate and neces-
sary than any other criminal racket. If the service ofered by men
and women doing business as a pretended “state” is so valuable, then
people will voluntarily accept and pay for it. Te key to exposing
government as a hoax is this simple phrase: No service or product
should be provided at the barrel of a gun.
Some will dismiss this as a “simplistic” – not to mention “radical”
and “extremist” – notion, then indignantly demand to know: “What’s
the alternative to government?” Te answer is, or at least should be,
obvious: Anything done under the guise of consent can be done by
consent. Tis means that men and women pretending to be “govern-
ment” would only need to do one thing diferently: Provide their
services on a voluntary basis like everybody else.
15 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
Be forewarned that you are about to discover, in detail, the
darkest and most outrageous example of the three branches hav-
ing a secret share in a scheme to forbid the People from claiming
and exercising their First Amendment right to hold the govern-
ment accountable to the Constitu-
Since 1995, the People have
been attempting to hold the
Government accountable to
the Constitution by exercis-
ing the little-known, unalien-
able right guaranteed by the
last ten words of the First
Amendment: “…and to Petition
the Government
for a Redress
of Griev-
Tis right was placed in the First Amendment as the primary
means through which the power of the People to directly hold
the Government accountable could be exercised peaceably. How-
ever, in our modern-day world of materialism and apathy, public
largesse for votes, and routine usurpation of power by the Gov-
ernment, the “capstone Right” has been left dormant and all but
forgotten. Ask any attorney to cite the fve rights guaranteed by the
First Amendment and most will not mention the right to Petition
the Government for a Redress of Grievances.
In Petitioning for Redress, we were motivated by the knowl-
edge that a departure from the Constitution in one instance
becomes a precedent for a second, that second for a third, and so
on, until the People are reduced to helpless misery and sufering.
We knew that “Te time to guard against corruption and tyr-
anny is before they shall have gotten hold of us. It is better to keep
the wolf out of the fold than to trust to drawing his teeth and
talons after he shall have entered.” (Tomas Jeferson. Notes on
the State of Virginia, 1782.)
We knew that each violation of the Constitution has a ravag-
ing efect on America, Her People, economy, reputation and secu-
rity, and that the whole of the devastation would be greater than
the sum of the parts.
We knew that an act of tyranny anywhere is a threat to Free-
dom everywhere.
We Petitioned to Remedy the violations of the Constitution
arising from:
1. the $ 20 billion bailout of Mexico in 1995 without approval by
Congress; and
2. the bombing of Yugoslavia in 1999 after Congress refused to
authorize it; and
3. the direct, un-apportioned tax on labor; and
4. the withholding of earnings from the paychecks of workers;
5. the Federal Reserve System’s fat, debt-based currency; and
6. the decision to invade Iraq by the President, rather than Con-
gress; and
7. the USA PATRIOT Act; and
8. the federal gun control laws; and
9. the failure of Presidents to enforce the immigration laws; and
10. the movement toward a North American Union; and
A Collusion of Powers
The Systematic Destruction of Free Speech The Right of The People to Hold Government Accountable
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 16
17 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
11. the counting of votes in secret by machines; and
12. the eligibility to be President if both parents are not U.S.
citizens; and
13. the $85 billion bailout of AIG; and
14. the $700 billion TARP bailout.
Te result has always been the same; silence, no response.
However, under well-established U.S. law, silence is tantamount
to an admission of guilt when a public ofcial has a duty to
respond and chooses not to.
Te People decided to test the attitude of the Judiciary. On
July 19, 2004, the People fled a lawsuit asking a federal Court
to declare — for the frst time in history — the Constitutional
meaning of the last ten words of the First Amendment. Te
title of the case was We Te People v. United States.
Te Court was asked to answer two questions: 1) whether
the Government is obligated under the First Amendment to
respond to the People’s Petitions for Redress of violations of the
Constitution; and 2) whether the People possess the Right to
retain their money until those Grievances are redressed.
Obviously, the correct answer to the frst question is “yes” –
the Government is obligated to respond. To speculate otherwise
would be to call into question why the clause was included as
part of the First Amendment. It is noteworthy that the Petition
clause is the only part of the Amendment which articulates a
specifc and direct form and process of communication from the
People to the Government, thereby reiterating the potent prin-
ciple from the Declaration of Independence that defnes gov-
ernment as a servant of the People. Finally, in the words of the
Supreme Court of 1803, “It cannot be presumed that any clause
in the constitution is intended to be without efect” Marbury v.
Madison (5 U.S. 137, 174).
Te correct answer to the second question is also “yes” – the
People have a right of enforcement. It is well known in Ameri-
can jurisprudence that “with every right there is a remedy” and
“any right that is not enforceable is not a right.” Te Right to
withhold money as a peaceable means for the People to weigh in
on and Redress unconstitutional governmental acts arises from
the Founding Fathers and their sound reasoning as to how a
Republic must operate to ensure the rights of a Free People.
On October 6, 2006 oral arguments were heard by the
United States Court of Appeals. Traditionally, Appeals Courts
issue their decisions within 4-6 weeks following oral argu-
ments. However, the decision in the Right to Petition lawsuit
was issued more than seven months after oral arguments. Why
the delay?
We now know activities were quietly taking place within
the other two branches of the Government that appear to have
directed the verdict in our case.
Rather than work with the People’s concerns by responding
directly to our Petitions for Redress, the Government chose to
clamp down, through a (constitutionally abhorrent) tripartite
treaty – a tripartition, divided among the three branches, for the
purpose of (unlawfully) colluding to deny the People their First
Amendment Right to hold the government accountable to the
Constitution. Tese actions were taken in a manner to attract
the least attention possible.
First, in December, 2006, the 109th Congress passed the
“Tax Relief and Health Care Act of 2006” (H.R. 6111). Please
note the title. Tis Act was meant to retroactively extend tax
credits that had expired in 2005: Sounds good for the People
– but look again.
Tucked away in the Act was a provision (Title III — Health
Savings Accounts, Section 407) that authorized the (Executive
Branch) Treasury Department to make “law” (i.e., unconstitu-
tionally) – that is, to administratively prescribe a list of “speci-
fed frivolous positions,” and impose a penalty of $5,000 on any
person who uses a “specifed frivolous position” as a ground of
reasoning for retaining his money from the Government. Dis-
turbingly, there is no defnition of “frivolous” in the Act.
Ten, on March 15, 2007, the Treasury Department pub-
lished Notice 2007-30, a list of “Frivolous Positions,” again,
without defning “frivolous.” Included on the frivolous list,
among numerous other well-researched and proven positions, is
Government’s refusal to respond to First Amendment Petitions
for Redress of Grievances. (See paragraph (9)b of the Notice.)
Citizens who raise the issue of government’s failure to
respond to First Amendment Petitions for Redress as a ground
for retaining their money from the Government are subject to
a severe penalty.
In short, all the “positions” cited in the Treasury Notice
A Collusion of Powers
By Bob Schulz
The Systematic Destruction of Free Speech The Right of The People to Hold Government Accountable
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 18
(including the full exercise of the First Amendment Right to
Petition) are deemed “frivolous” simply because Government
says so.
Ten, on May 8, 2007, the U.S. Court of Appeals for the DC
Circuit fnally issued its decision in We Te People v. United
States (seven months after it heard oral arguments), ruling that
the Government is not obligated to respond to the People’s First
Amendment Petitions for Redress and, therefore, the People do
not have the Right to retain their money until the Government
Te Judiciary fell into line with the “verdict” directed by the
actions of the Legislative branch on December 9, 2006, and the
Executive branch on March 15, 2007. It did so in a ruling that
abused the judicial doctrine of stare decisis by relying on a prin-
ciple of law laid down in two irrelevant cases.
It is difcult to come to a conclusion other than that that
there has been collusion between the three branches of the cen-
tral government to actively thwart and quash any attempt by the
People to enforce their Right to hold the Government account-
able under the First Amendment.
Te People need to realize the full extent of the adverse
impact this collusion will have upon freedom in America.
A Petition for Certiorari (w/Appendix) was fled, but the
Supreme Court refused to hear the case which could have rec-
ognized the People’s Right to peaceably hold the Government
accountable to the Constitution, thereby shifting the ultimate
power in our society from the Government back to the People,
where it was meant to reside in the frst place.
A Scheme Well-Concealed
When it was originally introduced, the “Tax Relief and Health
Care Act of 2006” was – despite its formidable length -- widely
popular because it retroactively extended, for two years, hundreds
of tax credits that had expired in December 2005. However, as
introduced and passed both houses of Congress in three days in
December 2006 (with no record of who voted for or against the
bill), the measure actually included a provision authorizing the
Executive Branch to prescribe a list of “specifed frivolous posi-
tions” and to fne anyone $5,000 if they cite any of those positions
as a reason for retaining their money. Tis provision, carefully hid-
den within the vast bulk of a bill that has a table of contents that
consumes runs 25 pages, was the entire point of the bill.
Who among us knew that on March 15, 2007, the IRS pub-
lished Notice 2007-30 containing a list of “specifed frivolous posi-
tions,” and that the list included “the Right to Petition the Gov-
ernment for Redress of Grievances”, among many others and now
being used against citizens who are standing on the Law and act-
ing upon their beliefs?
Who among us was able to see the connection between the
acts of the Congress and Treasury and the May 8, 2007 decision
by the Court in We Te People v. United States, which declared
that the Government is not obligated to respond to the People’s
Petitions for Redress of constitutional torts and the People have
no Right to peaceably enforce their Rights?
What great discords and sufering might have been prevented,
especially now, in these days of great national distress and eco-
nomic turmoil, had a government founded of the People, by the
People, and for the People, been willing to openly answer the ques-
tions asked by the People in their Petitions for Redress.
It is clear that we, the People are up against unjust government
and laws. If we are to maintain the great American experiment, it
is essential for the leaders of every group of “Freedom Keepers” to
come together and meet face-to-face, with great haste, to develop
a “Liberty Matrix” and a peaceful course of action for the Free to
defend the greatest governing documents ever given to mankind
and with the recollection that the cause of America is still the cause
of the world.
If you agree, please encourage all leaders of Liberty loving
groups you know to make contact with us regarding the upcoming
Liberty Summit via info@givemeliberty.org. We welcome your
other comments on this article. Additional updates can be found
at: www.libertysummit.org.
Subscribe Today
Call: 866.437.6570
or Visit: www.RepublicMagazine.com
Publisher’s Note: We’ve taken the liberty of print-
ing these positions deemed “Frivolous” as referenced in
Notice 2007-30 described above for your review.
Frivolous Positions. Positions that are the same as or similar
to the following are frivolous.
(1) Compliance with the internal revenue laws is voluntary or
optional and not required by law, including arguments that:
a. Filing a Federal tax or information return or paying tax is purely
voluntary under the law, or similar arguments described as frivolous
in Rev. Rul. 2007-20, 2007-14 I.R.B. ___
b. Nothing in the Internal Revenue Code imposes a requirement
to fle a return or pay tax, or that a person is not required to fle a
tax return or pay a tax unless the Internal Revenue Service responds
to the person’s questions, correspondence, or a request to identify a
provision in the Code requiring the fling of a return or the payment
of tax.
c. Tere is no legal requirement to fle a Federal income tax return
because the instructions to Forms 1040, 1040A, or 1040EZ or the
Treasury regulations associated with the fling of the forms do not
display an OMB control number as required by the Paperwork
Reduction Act of 1980, 44 U.S.C. § 3501 et seq., or similar argu-
ments described as frivolous in Rev. Rul. 2006-21, 2006-15 I.R.B.
d. Because fling a tax return is not required by law, the Service
must prepare a return for a taxpayer who does not fle one in order to
assess and collect tax.
e. A taxpayer has an option under the law to fle a document or set
of documents in lieu of a return or elect to fle a tax return reporting
zero taxable income and zero tax liability even if the taxpayer received
taxable income during the taxable period for which the return is fled,
or similar arguments described as frivolous in Rev. Rul. 2004-34,
2004-1. C.B. 619.
f. An employer is not legally obligated to withhold income or
employment taxes on employees’ wages.
g. A taxpayer may “untax” himself or herself at any time or revoke
the consent to be taxed and thereafter not be subject to internal rev-
enue taxes.
h. Only persons who have contracted with the government by
applying for a governmental privilege or beneft, such as holding a
Social Security number, are subject to tax, and those who have con-
tracted with the government may choose to revoke the contract at
i. A taxpayer may lawfully decline to pay taxes if the taxpayer
disagrees with the government’s use of tax revenues, or similar argu-
ments described as frivolous in Rev. Rul. 2005-20, 2005-1 C.B. 821.
j. An administrative summons issued by the Service is per se
invalid and compliance with a summons is not legally required.
(2) Te Internal Revenue Code is not law (or “positive law”) or its
provisions are inefective or inoperative, including the sections impos-
ing an income tax or requiring the fling of tax returns, because the
19 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 20
provisions have not been implemented by regulations even though
the provisions in question either (a) do not expressly require the
Secretary to issue implementing regulations to become efective or
(b) expressly require implementing regulations which have been
(3) A taxpayer’s income is excluded from taxation when the
taxpayer rejects or renounces United States citizenship because the
taxpayer is a citizen exclusively of a State (sometimes character-
ized as a “natural-born citizen” of a “sovereign state”), that is claimed
to be a separate country or otherwise not subject to the laws of
the United States. Tis position includes the argument that the
United States does not include all or a part of the physical terri-
tory of the 50 States and instead consists of only places such as
the District of Columbia, Commonwealths and Territories (e.g.,
Puerto Rico), and Federal enclaves (e.g., Native American reser-
vations and military installations), or similar arguments described
as frivolous in Rev. Rul. 2004-28, 2004-1 C.B. 624, or Rev. Rul.
2007-22, 2007-14 I.R.B. ___.
(4) Wages, tips, and other compensation received for the per-
formance of personal services are not taxable income or are of-
set by an equivalent deduction for the personal services rendered,
including an argument that a taxpayer has a “claim of right” to
exclude the cost or value of the taxpayer’s labor from income or that
taxpayers have a basis in their labor equal to the fair market value
of the wages they receive, or similar arguments described as frivo-
lous in Rev. Rul. 2004-29, 2004-1 C.B. 627, or Rev. Rul. 2007-19,
2007-14 I.R.B. ___ .
(5) United States citizens and residents are not subject to tax
on their wages or other income derived from sources within the
United States, as only foreign based income or income received by
nonresident aliens and foreign corporations from sources within
the United States is taxable, and similar arguments described as
frivolous in Rev. Rul. 2004-30, 2004-1 C.B. 622.
(6) A taxpayer has been removed or redeemed from the Federal
tax system though the taxpayer remains a United States citizen or
resident, or similar arguments described as frivolous in Rev. Rul.
2004-31, 2004-1 C.B. 617.
(7) Only certain types of taxpayers are subject to income and
employment taxes, such as employees of the Federal government,
corporations, nonresident aliens, or residents of the District of
Columbia or the Federal territories, or similar arguments described
as frivolous in Rev. Rul. 2006-18, 2006-15 I.R.B. 743.
(8) Only certain types of income are taxable, for example,
income that results from the sale of alcohol, tobacco, or frearms
or from transactions or activities that take place in interstate com-
(9) Federal income taxes are unconstitutional or a taxpayer has
a constitutional right not to comply with the Federal tax laws for
one of the following reasons:
a. Te First Amendment permits a taxpayer to refuse to pay
taxes based on religious or moral beliefs.
b. A taxpayer may withhold payment of taxes or the fling of a tax
return until the Service or other government entity responds to a First
Amendment petition for redress of grievances.
c. Mandatory compliance with, or enforcement of, the tax laws
invades a taxpayer’s right to privacy under the Fourth Amendment.
d. Te requirement to fle a tax return is an unreasonable search
and seizure contrary to the Fourth Amendment.
e. Income taxation, tax withholding, or the assessment or collec-
tion of tax is a “taking” of property without due process of law or just
compensation in violation of the Fifth Amendment.
f. Te Fifth Amendment privilege against self-incrimination grants
taxpayers the right not to fle returns or the right to withhold all fnan-
cial information from the Service.
g. Mandatory or compelled compliance with the internal revenue
laws is a form of involuntary servitude prohibited by the Tirteenth
h. Individuals may not be taxed unless they are “citizens” within the
meaning of the Fourteenth Amendment.
i. Te Sixteenth Amendment was not ratifed, has no efect, con-
tradicts the Constitution as originally ratifed, lacks an enabling clause,
or does not authorize a non-apportioned, direct income tax.
j. Taxation of income attributed to a trust, which is a form of con-
tract, violates the constitutional prohibition against impairment of
k. Similar constitutional arguments described as frivolous in Rev.
Rul. 2005- 19, 2005-1 C.B. 819.
(10) A taxpayer is not a “person” within the meaning of section
7701(a)(14) or other provisions of the Internal Revenue Code, or sim-
ilar arguments described as frivolous in Rev. Rul. 2007-22, 2007-14
I.R.B. ___.
(11) Federal Reserve Notes are not taxable income when paid to a
taxpayer because they are not gold or silver and may not be redeemed
for gold or silver.
(12) In a transaction using gold and silver coins, the value of the
coins is excluded from income or the amount realized in the transac-
tion is the face value of the coins and not their fair market value for
purposes of determining taxable income.
(13) A taxpayer with a home-based business may deduct as busi-
ness expenses the costs of maintaining the taxpayer’s household along
with personal expenses, or similar arguments described as frivolous by
Rev. Rul. 2004-32, 2004-1 C.B. 621.
(14) A ”reparations” tax credit exists, including arguments that
African-American taxpayers may claim a tax credit on their Federal
income tax returns as reparations for slavery or other historical mis-
treatment, that Native Americans are entitled to an analogous credit
(or are exempt from Federal income tax on the basis of a treaty), or
similar arguments described as frivolous in Rev. Rul. 2004-33, 2004-1
C.B. 628, or Rev. Rul. 2006-20, 2006-15 I.R.B. 746.
(15) A Native American or other taxpayer who is not an employer
engaged in a trade or business may nevertheless claim (for example,
in an amount exceeding all reported income) the Indian Employment
Credit under section 45A, which explicitly requires, among other crite-
ria, that the taxpayer be an employer engaged in a trade or business to
claim the credit.
(16) A taxpayer’s wages are excluded from Social Security taxes if
the taxpayer waives the right to receive Social Security benefts, or a tax-
payer is entitled to a refund of, or may claim a charitable-contribution
deduction for, the Social Security taxes that the taxpayer has paid, or
similar arguments described as frivolous in Rev. Rul. 2005-17, 2005-1
C.B. 823.
(17) Taxpayers may reduce or eliminate their Federal tax liability by
altering a tax return, including striking out the penalty-of-perjury decla-
ration, or attaching documents to the return, such as a disclaimer of lia-
bility, or similar arguments described as frivolous in Rev. Rul. 2005-18,
2005-1 C.B. 817.
(18) A taxpayer is not obligated to pay income tax because the gov-
ernment has created an entity separate and distinct from the taxpay-
er—a “straw man”—that is distinguishable from the taxpayer by some
variation of the taxpayer’s name, and any tax obligations are exclusively
those of the “straw man,” or similar arguments described as frivolous in
Rev. Rul. 2005-21, 2005-1 C.B. 822.
(19) Inserting the phrase “nunc pro tunc” on a return or other docu-
ment fled with or submitted to the Service has a legal efect, such as
reducing a taxpayer’s tax liability, or similar arguments described as
frivolous in Rev. Rul. 2006-17, 2006-15 I.R.B. 748.
(20) A taxpayer may avoid tax on income by attributing the income
to a trust, including the argument that a taxpayer can put all of the
taxpayer’s assets into a trust to avoid income tax while still retaining
substantial powers of ownership and control over those assets or that a
taxpayer may claim an expense deduction for the income attributed to a
trust, or similar arguments described as frivolous in Rev. Rul. 2006-19,
2006-15 I.R.B. 749.
(21) A taxpayer may lawfully avoid income tax by sending income
ofshore, including depositing income into a foreign bank account.
(22) By purchasing equipment and services for an infated price
(which may or may not have been actually paid), a taxpayer can use the
section 44 Disabled Access Credit to reduce tax or generate a refund
irrespective of whether the taxpayer is a small business that purchased
the equipment or services to comply with the requirements of the
Americans with Disabilities Act.
(23) A taxpayer is allowed to buy or sell the right to claim a child as
a qualifying child for purposes of the Earned Income Tax Credit.
(24) An IRS Form 23C, Assessment Certifcate - Summary Record
of Assessment, is an invalid record of assessment for purposes of section
6203 and Treas. Reg. § 301.6203-1, the Form 23C must be personally
signed by the Secretary of the Treasury for an assessment to be valid, the
Service must provide a copy of the Form 23C to a taxpayer if requested
before taking collection action, or similar arguments described as frivo-
lous in Rev. Rul. 2007-21, 2007-14 I.R.B. ___.
(25) A tax assessment is invalid because the assessment was made
from a section 6020(b) substitute for return, which is not a valid
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(26) A statutory notice of defciency is invalid because the tax-
payer to whom the notice was sent did not fle an income tax return
reporting the defciency or because the statutory notice of defciency
was unsigned or not signed by the Secretary of the Treasury or by
someone with delegated authority.
(27) A Notice of Federal Tax Lien is invalid because it is not
signed by a particular ofcial (such as by the Secretary of the Trea-
sury), or because it was fled by someone without delegated author-
(28) Te form or content of a Notice of Federal Tax Lien is con-
trolled by or subject to a state or local law, and a Notice of Federal
Tax Lien that does not comply in form or content with a state or
local law is invalid.
(29) A collection due process notice under section 6320 or 6330
is invalid if it is not signed by the Secretary of the Treasury or other
particular ofcial, or if no certifcate of assessment is attached.
(30) Verifcation under section 6330 that the requirements
of any applicable law or administrative procedure have been met
may only be based on one or more particular forms or documents
(which must be in a certain format), such as a summary record of
assessment, or that the particular forms or documents or the ones
on which verifcation was actually determined must be provided to
a taxpayer at a collection due process hearing.
(31) A Notice and Demand is invalid because it was not signed,
was not on the correct form (e.g., a Form 17), or was not accompa-
nied by a certifcate of assessment when mailed.
(32) Te United States Tax Court is an illegitimate court or
does not, for any purported constitutional or other reason, have the
authority to hear and decide matters within its jurisdiction.
(33) Federal courts may not enforce the internal revenue laws
because their jurisdiction is limited to admiralty or maritime cases
or issues.
(34) Revenue Ofcers are not authorized to issue levies or
Notices of Federal Tax Lien or to seize property in satisfaction of
unpaid taxes.
(35) A Service employee lacks the authority to carry out the
employee’s duties because the employee does not possess a certain
type of identifcation or credential, for example, a pocket com-
mission or a badge, or it is not in the correct form or on the right
(36) A person may represent a taxpayer before the Service or
in court proceedings even if the person does not have a power of
attorney from the taxpayer, has not been enrolled to practice before
the Service, or has not been admitted to practice before the court.
(37) A civil action to collect unpaid taxes or penalties must
be personally authorized by the Secretary of the Treasury and the
Attorney General.
(38) A taxpayer’s income is not taxable if the taxpayer assigns
or attributes the income to a religious organization (a “corporation
sole” or ministerial trust) claimed to be tax-exempt under section
501(c)(3), or similar arguments described as frivolous in Rev. Rul.
2004-27, 2004-1 C.B. 625.
(39) Te Service is not an agency of the United States govern-
ment but rather a private-sector corporation or an agency of a State
or Territory without authority to administer the internal revenue
(40) Any position described as frivolous in any revenue ruling
or other published guidance in existence when the return adopting
the position is fled with or the specifed submission adopting the
position is submitted to the Service.
Returns or submissions that contain positions not listed above,
which on their face have no basis for validity in existing law, or which
have been deemed frivolous in a published opinion of the United
States Tax Court or other court of competent jurisdiction, may be
determined to refect a desire to delay or impede the administration
of Federal tax laws and thereby subject to the $5,000 penalty.
Te list of frivolous positions above will be periodically revised
as required by section 6702(c).
23 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
Shortly before Tanksgiving, the Transportation Security
Administration (TSA) announced that people choosing commer-
cial aviation would be given their choice of two degrading, invasive
searches at the airport checkpoints: Tey could submit to virtual
strip-search by way of the “backscatter” X-Ray machines, or endure
physical molestation at the latex-gloved hands of sweaty strangers in
TSA-issue blue uniforms.
For a brief and invigorating moment, it seemed as if the Ameri-
can public had rediscovered its long-missing moral gag refex. Pro-
tests erupted across the country, and for several days the media was
abuzz with citizen outrage over this most recent assault on the
embattled remnants of our personal dignity.
Not surprisingly, the TSA and the Depart-
ment of Homeland Security (DHS) didn’t
back down. Instead, the federal grope bri-
gade chose to double down by announc-
ing that airport-style security measures
would soon expand to include train and
bus stations. To compound insult with
outrage, the TSA and Wal-Mart rolled
out a propaganda message urging Christ-
mas shoppers to treat each other as poten-
tial threats and to report any “suspicious”
behavior to government authorities.
Te arrogant audacity displayed by the TSA
should surprise nobody. Why should the TSA back down,
given that since 9/11 Americans have submitted with docility to
every indignity inficted on us, rather than standing tall to protect our
rights, liberty and freedom? Perhaps Americans objected to the back-
scatter machines because the detailed X-Rays will reveal that many
of us no longer have spines. Many have become cowards who do not
appreciate the sacrifces made by those who have preceded us so that
we may enjoy the rights, liberty and freedom we once had.
Since 9/11 a great deal has been done to ensure the cockpits of
commercial airliners are “hardened.” Once the passengers on United
Airlines fight 93 knew that two other planes had been used as weap-
ons to ram buildings, the passengers on fight 93 made a decision to
bring down the plane themselves rather than allow terrorists to use it
as an instrument of mass murder. Te chances that terrorists today
are going to be able to take control of another aircraft and use that
aircraft as a weapon run from slim to none.
Perhaps terrorists could bring an explosive device on a plane and
use it to kill two or three hundred people. It’s also possible that terror-
ists could explode a device in an airline terminal before clearing secu-
rity and kill as many or more people than would perish in a mid-fight
bombing. Whether a plane is brought down because of an explosive
device, or a bomb is detonated in an airline terminal, the efect would
be the same: airline trafc would be brought to a halt, people would
die, and -- just as with 9/11 -- our economy would sufer dramati-
While I am not an advocate of profling, it’s clear that we must
apply some common sense to our counter-terrorism methods. We
have good men and women working in our intelligence and law
enforcement agencies. We must allow them to identify those who
are likely to present a threat. Tere is no shortage of ex-military
and law enforcement people who can provide the expertise needed
to safeguard our airports. Preference should be given to those with
experience. While there are good people who work for the TSA, the
simple fact is that they do not have the necessary expertise,
and they aren’t getting the appropriate training.
Many of the measures our government has
implemented since 9/11 make absolutely
no sense. Our government is busy col-
lecting personal information on each of
us, including our biometrics (that is,
fngerprints, digital facial image, retinal
scans, and even DNA). In addition to
being a wholesale violation of constitu-
tionally protected rights, this approach
amounts to expanding the size of the
proverbial haystack in which the needle
must be found.
Tis past summer the Washington Post
reported: “Te top-secret world the government created
in response to the terrorist attacks of Sept. 11, 2001 … has become
so large, so unwieldy and so secretive that no one knows how much
money it costs, how many people it employs, how many programs
exist within it or exactly how many agencies do the same work.”
Only an idiot would not question our government’s strategy of
collecting all of this information. A perfect example of the dangers
posed by this failed strategy was ofered by the “Christmas Day
Underwear Bomber.” Umar Abdulmutallab, the would-be bomber,
had a one-way ticket; he was fying in the winter to Detroit with no
jacket; his father warned the U.S. embassy that his son was hang-
ing out with Jihadists; the British government was preparing to
revoke his visa -- and yet he was allowed to board a plane headed to
the United States. And Abdulmutallab, just like the “shoe bomber”
years ago, was stopped by passengers on the plane, not the TSA,
DHS, FBI or any other government agency.
Immediately after 9/11, Democrats, Independents and Repub-
licans all acknowledged that the terrorists want to instill fear in
American citizens in order to change our way of life. President
George W. Bush paid lip service to the same principle, insisting:
“We will not allow this enemy to win the war by changing our
way of life or restricting our freedoms.” Yet, less than a decade later
innocent Americans are willing to endure a vulgar, degrading air-
New X-Ray Scanners Discover American
Citizens Do Not Have Spines... By Mark Lerner TSA:
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 24
port strip search more invasive than any-
thing imposed on accused criminals endur-
ing pre-trial detention.
News Flash: Terrorists defeat the
United States of America
Te Patriot Act, FISA (Foreign Intel-
ligence Surveillance Act) expansion, and
the Real ID Act are just a few of the laws
passed since 9/11 that threaten our nation’s
sovereignty, states’ rights and the rights of
citizens. Te National Security Agency
(NSA) and DHS have both been spying
on American citizens. Te presumption of
innocence no longer exists for American
citizens. Richard Tice, former NSA analyst-
turned-whistleblower, exposed the routine
but entirely illegal surveillance now directed
at American citizens, whose phone calls,
emails and fnancial transactions are subject
to open-ended scrutiny by the NSA.
and Strengthening America by Providing
Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001)
was signed into law on October 26, 2001.
Under the provisions of the Patriot Act, the
FBI is allowed to issue “National Security
Letters” (NSLs), which are akin to the “gen-
eral warrants” used by British military occu-
pation forces in the years leading up to the
American Revolution. NSLs are demands
for information made of corporations, small
businesses, and even libraries. Tey are not
subject to judicial oversight, and those who
receive them are forbidden, under penalty of
“law,” to inform the subject of the search of
the FBI’s interest in him.
Most citizens believed the PATRIOT
Act went too far. Yet in 2004 when mem-
bers of Congress who enacted the measure
were up for reelection, over 98% of the
incumbents were reelected. When are we
going to hold ourselves accountable when
we continue to re-elect the same people
while expecting diferent results?
Te foremost responsibility of all citi-
zens is to ensure we pass on to the children
of today and tomorrow the rights, liberty
and freedom we inherited at such great sac-
rifce of previous generations. We as a soci-
ety are failing miserably.
Our borders are not secure. Not one
state authenticates birth certifcates before
issuing state driver’s licenses. During the past
year I traveled our country extensively and met
with legislators from about half of the states.
I asked one lawmaker, what is to prevent any
person from entering our country illegally,
purchasing a counterfeit and/or fraudulent
birth certifcate and Social Security card, and
obtaining a state driver’s license? Te answer:
“Nothing -- but we will catch that person
Tere are those who mistakenly believe
that biometrics is the solution to the problems
created by the insecure nature of our identity
documents. But remember that a person’s
biometric identifers only come into play after
an applicant for a driver’s license has frst pre-
sented his birth certifcate and Social Security
card. At this point, including biometric data
would do nothing but legitimize a fraud.
Te WikiLeaks revelations, whatever one
thinks about the content of the stories or the
motives of the on-line whistleblower group,
underscore one of the most important dan-
gers posed by the government’s omnivorous
appetite for our personal data: Te govern-
ment that vacuums up all of that data is not
capable of protecting it. I cannot understand
why citizens are so willing to entrust their
personal and sensitive information in our
government’s hands.
“What information do governments
share?“ asks Julian Ashborn of the Interna-
tional Biometric Agency. “With whom is my
data shared, and why? All of these questions
need to be addressed by an agency with global
Have we gone mad? A global agency with
global powers is unacceptable in a sovereign
We are no safer today then we were the
day before 9/11. Perceived security is worse
than no security at all, since when our vulner-
ability is recognized measures can be taken to
provide real security.
When will the American people draw
the line and say “enough is enough”? Either
government controls the people or the people
control government. Incompetence in govern-
ment is nothing new. Incompetence or apathy
by citizens, however, can be fatal.
Romanian President Nicolae Ceausescu ruled that com-
munist country with an iron fst for decades until the people he
aficted fnally rose up in armed revolt. After being deposed by
the superior force of the people, the feeing dictator and his wife
were captured en route to Bucharest. Within three days they
were tried and sentenced to death, with the execution taking
place on Christmas Day, 1989.
As history shows, dangerous tyr-
annies are frequently destroyed by
“people power.” And just as often,
men like Spartacus are needed to
begin a revolution.
Our federal govern-
ment has exploited
the events of 9/11to
assume radically
expanded powers
-- not for the pur-
pose of protect-
ing the American
people, but chiefy to
serve the ends and interests
of the ruling elite. Te actions
of this behemoth suggest that
those presuming to rule us intend
to drag our country in one of two
undesirable directions.
Te frst possibility is that the rul-
ing elite will attempt to erect here a
form of socialism similar to that found
in some European countries. Tis vari-
ant of socialism rots the fabric of soci-
ety, a condition perfectly described by
John Stuart Mill in the last paragraph
of his essay On Liberty: “[A] State
which dwarfs its men, in order that
they may be more docile instruments
in its hands even for benefcial pur-
poses, will fnd that with small men
no great thing can really be accom-
plished; and that the perfection of
machinery to which it has sacrifced
everything, will in the end avail
it nothing, for want of the vital
power which, in order that the machine might work more
smoothly, it has preferred to banish.”
Te second possibility is even more sinister: Rather than
abetting mere rot, those in power may be bent on obtaining
brutish, totalitarian powers similar to those employed by
Stalin or exercised today by the Communist dynasty ruling
North Korea.
During the past decade, the Transportation Security
Administration (TSA) has served as a useful
barometer to measure the atmosphere
of ever-increasing tyranny that has
come to characterize the United
States. Mild in its infancy,
the TSA has consumed
larger and larger annual
budgets and, as a result,
has grown into the
neighborhood bully.
It has become one of
the largest employers
in the federal bureau-
cracy, the “employer of
last resort” for dubious,
marginal, or corrupt per-
For passenger screening
purposes and to accustom the peo-
ple to governmental molestation, the
TSA started with simple metal detec-
tors, which provoked little objection from
the traveling public. But in recent weeks the
agency has radically escalated its assault
with the grand unveiling of the “human
toaster”: Homeland Security Commis-
sarina Janet Napolitano, TSA’s ruling Tsar,
smiling like a Cheshire cat while cracking
her masculine knuckles, giddily rolled
out “the human the “backscatter X-Ray”
machine, which subjects air travelers to a
virtual strip-search.
When surrounded by the military
might of Hitler, confronted with utter
extinction, the inhabitants of Warsaw’s
Jewish ghetto must have surely found in
A Rogue Agency
By Larry Becraft
and the Thunderous Roar of Revolution
25 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 26
their tired souls an innate human trait: the desire to throw
of oppression and resist tyranny, even at the cost of life. Tis
same human trait asserted itself when Roma-
nia’s long-suppressed people violently ended
the reign of Ceausescu. Like the distant rumble
of an earthquake or the loud crack of thunder,
did we hear the same innate human trait getting
roused in the American populace just before
Tanksgiving and directed at Janet and her
“human toasters”?
Colonial Americans experienced stifing
oppression administered by the arrogant,
unaccountable agents of King George’s
distant government. Tey were particu-
larly aggrieved by the invasion of their
homes, property, and personal efects by
armed representatives of the King. Once
the American patriots had wrested their
independence from England, they memo-
rialized their hatred for such impositions
by erecting within the Bill of Rights a per-
manent barrier to such invasions: Te Fourth
Amendment, which forbids searches without a
legitimate warrant issued on the basis of prob-
able cause.
Not many years ago, the Supreme Court, in
Terry v. Ohio (392 U.S. 1 [1968]), addressed
the matter of police detaining and inspect-
ing citizens. In that case, the Court held
that police ofcers may only briefy detain
a person when they reasonably suspect that
such party is involved in some sort of crimi-
nal activity. It further ruled that police could
perform a limited search of a suspect’s outer
garments for weapons if they have a reason-
able and articulable suspicion that the person
detained may be “armed and dangerous.”
Yet today, without any probable cause or reason
to suspect that travelers are engaged in the com-
mission of some crime, they are “Terry-frisked”
and their personal items subjected, without con-
sent, to a warrantless search. Te TSA is delib-
erately violating the restrictions mandates of the
Fourth Amendment and “pushing the envelope”
to gauge the level of resistance of the American
people. Perhaps that low rumble we all heard
in mid-November is the stirring of resistance
in the minds and hearts of the people.
Te evasion of constitutional restraints is
the most obvious objection to the activities of
the TSA, but it is hardly the only one. By what authority does
the TSA send its minions into American airports, divide them
into secure and unsecured areas, and then force all
air travelers to stand in line, show identifcation,
disrobe, subject their personal items to warrant-
less searches, and then walk through machines
that emit radiation? Have these machines, obvi-
ously designed for human use, even met the stan-
dards of the FDA for radiologic devices? How
much irradiation do TSA employees and passen-
gers receive by working in or passing through
screening areas? What is the efect of these
machines on human fesh? Would a Geiger-
counter explode moments after starting when
placed in an airport screening area?
American courts have addressed the mat-
ter of the absolute necessity for government
agents and employees to possess statutory
authority to operate in the manner that
TSA does. During the Korean War, union
employees threatened to strike against steel
manufacturers, an event that President Truman
feared might harm the war efort. In April, 1952,
Truman issued an executive order directing the
Secretary of Commerce to seize and operate the
major steel companies. Steel company ofcials
responded by suing the Secretary of Com-
merce, and the case went to the Supremes
within a matter of weeks.
In the resulting decision, Youngstown
Sheet & Tube Co. v. Sawyer (343 U.S. 579
[1952]), the High Court concluded that the
President does not possess the inherent con-
stitutional authority to order the seizure of
the steel mills, and Truman’s executive order
was nullifed.
Te opinion in Youngstown is premised upon
the long-established legal principle that govern-
ment ofcials must have statutory authority. Tis
was established in cases like United States v. Lee
(106 U.S. 196 [1882]), which involved the estate of
America’s most respected General, Robert E. Lee.
During the War of Northern Aggression, Arling-
ton and the surrounding plantation was seized and
sold for taxes. Years later, Lee’s heirs challenged the
validity of that tax sale.
In holding for Lee’s heirs, the Court stated:
“No man in this country is so high that he is above
the law. No ofcer of the law may set that law at
defance with impunity. All the ofcers of the gov-
New TSA Body
Scanner Produces
Detailed Naked
Pictures Tat Are
Stored In Te
TSA Database
27 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
ernment, from the highest to the lowest, are
creatures of the law and are bound to obey
it. It is the only supreme power in our sys-
tem of government, and every man who by
accepting ofce participates in its functions
is only the more strongly bound to submit
to that supremacy, and to observe the limi-
tations which it imposes upon the exercise
of the authority which it gives” (106 U.S., at
“Shall it be said... that the courts can-
not give remedy when the citizen has been
deprived of his property by force, his estate
seized and converted to the use of the govern-
ment without any lawful authority, without
any process of law, and without any compen-
sation, because the president has ordered it
and his ofcers are in possession?” continued
the Court. “ If such be the law of this coun-
try, it sanctions a tyranny which has no exis-
tence in the monarchies of Europe, nor in
any other government which has a just claim
to well-regulated liberty and the protection
of personal rights” (Id, at 220-21).
Te same principle was recognized in
the federal court ruling Ramirez de Arellano
v. Weinberger (745 F.2d 1500, 1523 [D.C.
Cir. 1984]), which pointed out that “when
an ofcer acts wholly outside the scope of
the powers granted to him by statute or
constitutional provision, the ofcial’s actions
have been considered to be unauthorized.” It
is also reiterated in a string of similar deci-
sions by the Supreme Court running back
more than ffty years: “As an administrative
body, the Commission must fnd its pow-
ers within the compass of the authority
given it by Congress” (Regents of Univer-
sity System of Georgia v. Carroll (338 U.S.
586, 597, 598 [1950]); “… the Commission
may exercise only the powers granted it by
the Act” (F.T.C. v. National Lead Co., 352
U.S. 419, 428 [1957]); “the fact is that the
Board is entirely a creature of Congress
and the determinative question is not what
the Board thinks it should do but what
Congress has said it can do” (Civil Aero-
nautics Board v. Delta Air Lines, Inc., 367
U.S. 316, 322 [1961]).”
By what legal authority – a consti-
tutionally sound delegation of specifc
authority explicitly authorized by the
Republic Magazine • Issue 20 • www.republicmagazine.com Subscribe Online or Call: 866-437-6570 28
Constitution -- does the TSA occupy
airports in our country and then subject
Americans to the screening process with
dangerous, radiation-emitting machines?
More precisely, what law commands an
American air traveler to accept such treat-
ment? Must an American air traveler sur-
render constitutional rights just to board
a plane?
All of the relevant laws in this respect
are codifed in 49 U.S. Code, chapter
Te broad authority for establish-
ment of this screening process appears in
49 U.S.C. § 44901, which provides:
(a) In General. – Te Under Secre-
tary of Transportation for Security shall
provide for the screening of all passengers
and property, including United States
mail, cargo, carry-on and checked bag-
gage, and other articles, that will be car-
ried aboard a passenger aircraft operated
by an air carrier or foreign air carrier in air
transportation or intrastate air transpor-
tation. In the case of fights and fight seg-
ments originating in the United States, the
screening shall take place before board-
ing and shall be carried out by a Federal
Government employee (as defned in sec-
tion 2105 of title 5, United States Code),
except as otherwise provided in section
44919 or 44920 and except for identify-
ing passengers and baggage for screening
under the CAPPS and known shipper
programs and conducting positive bag-
match programs.1
A review of the provisions regarding
screening at airports reveals that all legal
commands are directed toward ofcials,
agents and employees of the government,
airport operators and air carriers. Notice-
ably absent in these laws is any statutory
provision imposing some duty or obliga-
tion on a passenger. While the Under Sec-
retary may establish screening programs,
what corresponding duty is imposed on a
traveler to subject himself to such, and at
what cost?
As noted above, Americans traveling
by air possess constitutional rights pro-
tected by the Fourth Amendment. But
furthermore, they possess the inalienable
right to travel in interstate commerce. More
than a century and a half ago, in its deci-
sion Crandall v. Nevada (73 U.S. [6 Wall.]
35, 49 [1868]) the U.S. Supreme Court
observed: “We are all citizens of the United
States, and as members of the same commu-
nity must have the right to pass and repass
through every part of it without interrup-
tion, as freely as in our own states.”
Once again, this right has been repeat-
edly recognized in subsequent decisions:
“Te right to travel is a part of the ‘liberty’ of
which the citizen cannot be deprived with-
out the due process of law under the Fifth
Amendment” (Kent v. Dulles, 357 U.S.
116, 125 [1958]); “Te constitutional right
to travel from one State to another, and
necessarily to use the highways and other
instrumentalities of interstate commerce
in doing so, occupies a position fundamen-
tal to the concept of our Federal Union”
(United States v. Guest, 383 U.S. 745, 757
[1966]); “Tis Court long ago recognized
that the nature of our Federal Union and
our constitutional concepts of personal lib-
erty unite to require that all citizens be free
to travel throughout the length and breadth
of our land uninhibited by statutes, rules, or
regulations which unreasonably burden or
restrict this movement” (Shapiro v. Tomp-
son, 394 U.S. 618, 629 [1969]); “Te right
of interstate travel has repeatedly been rec-
ognized as a basic constitutional freedom”
(Memorial Hospital v. Maricopa County,
415 U.S. 250, 254 [1974]).
Te reason that there is no statute
compelling a passenger to submit to TSA
screening is because it would be unconstitu-
tional on its face as a violation of the Fourth
Amendment, in addition to being a sub-
stantial abridgement of the constitutional
right to travel, as recognized in a series of
Supreme Court rulings extending back to
the Reconstruction period.
Rather than relying on constitutional
or statutory authority, the TSA claims
the power to enforce its institution will by
way of bureaucratic regulation. 49 C.F.R.
§ 1540, provides that “No individual may
enter a sterile area or board an aircraft with-
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29 Subscribe Online or Call: 866-437-6570 www.republicmagazine.com • Issue 20 • Republic Magazine
out submitting to the screening and inspection of his or her per-
son and accessible property in accordance with the procedures
being applied to control access to that area or aircraft under this
While this alleged duty has not been imposed by law, it does
appear in the relevant regulations – even though this regulatory
mandate lacks statutory authority. As such it would fall in the
category of spurious regulations defned by the Supreme Court in
its ruling in Commissioner v. Acker (361 U.S. 87, 93-94 [1959]):
“Te questioned regulation must therefore be regarded ‘as no more
than an attempted addition to the statute of something which is
not there.’” Moreover, and more importantly, this regulation – and
any other like it -- abridges the privacy rights protected by the
Fourth Amendment, as well as the right to travel.
Free societies do not cripple constitutional rights. Tyrannies
rejoice in doing so. Te events of 9/11 have become the excuse
for the expansion of federal power, and constitute the genesis
for the erection of at least a Nanny-State that would control the
lives of everyone. While Congress did not grant lawful authority
to TSA to abridge constitutional rights, TSA has arrogated the
power to do so, undoubtedly with the approval of Commissarina
Napolitano, and probably with a wink and nod of approval from
people like Nancy Pelosi. While Americans are properly enraged
against TSA, their wrath should be focused on a specifc regu-
lation: 49 C.F.R. § 1540. It is unlawful, and must be repealed
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