












                           Appendix A
                                
                      Letter to John Knox:
                           1929 - 1992
                                
                                
                              -and-
                                
                                
                 Memorandum of Law by John Knox:
                                
                 edited in honor of his passing
                                
                       by Mitch Modeleski





























                        Page A - 1 of 26

                                                The Federal Zone:


Reader's Notes:























































                        Page A - 2 of 26

                                                       Appendix A


                                   c/o USPS P. O. Box 6189
                                   San Rafael, California
                                   Postal Code 94903-0189/TDC

                                   September 23, 1991
Mr. John Knox, Director
Texas Hill County Patriots
Kerrville, Texas Republic
Postal Code 78028/TDC

Dear John:

I am writing to thank you for the time you spent explaining to me
your in-depth understanding of federal jurisdiction at the recent
Denver Conference on tax and monetary reform.

By listening  to you  and Walt  Myers debate  the question in the
hotel lobby, I came to believe that you have done a great deal of
good research,  John.  I was very rewarded by my decision to stay
and pick your brains after Walt walked away.

I am also writing this letter to remind you of your offer to send
me copies  of the legal briefs you mentioned during our conversa-
tion.  Enclosed are 20 FRN's to this end.

I am  slowly collecting  substantive papers  on the  questions of
federal jurisdiction,  the definitions  of "United States", their
implications for  Congressional taxing  powers and  statutes, and
their implications for the American economy in general.

It is  most intriguing,  for example,  that Alaska became a State
when it  was admitted  to the  Union, and  yet the  United States
Codes had to be changed because Alaska was defined in those Codes
as a  "state" before  admission to the Union, but not afterwards.
This apparent  anomaly is  perfectly clear  once  the  legal  and
deliberately misleading definition of "state" is understood.

Even though  my own  research has  only scratched  the surface of
this question,  I now  have ample  reasons to  believe  that  the
fluctuating definitions  of  "United  States"  in  Title  26  are
likewise intentional  and may  constitute the essential core of a
system of  deliberate legal  deception that was fastened upon our
entire nation by the year 1913.

Notably, Mr. Brushaber was identified in his court documents as a
New York  Citizen.    The  Union  Pacific  Railroad  Company  was
incorporated by  Congress.   Accordingly, Brushaber  was a  State
Citizen identified as a nonresident alien and taxed upon unearned
income that derived from a domestic corporation.  He was alien to
the jurisdiction  of the corporate United States, and nonresident
within that  jurisdiction because  he  resided  within  New  York
State.   He derived  income from  a domestic corporation, because
the Union  Pacific Railroad Company was incorporated by Congress,
i.e., in the District of Columbia.


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If the  Union Pacific  Railroad Company had not been incorporated
by Congress,  it would  have been  a foreign  corporation  (i.e.,
foreign to  the federal,  corporate United States).  If Brushaber
had resided  in the District of Columbia or in some other federal
enclave or  possession under  exclusive jurisdiction of Congress,
he would  have been a resident alien.  If he had been born inside
this exclusive  jurisdiction, or  if he  had been naturalized, he
would have been a United States citizen, not an alien, regardless
of  where  he  resided.    Note  that  I  have  been  careful  to
distinguish a  "United States  citizen" from  a "Citizen  of  the
United States";  the former is a person under the jurisdiction of
Congress, while the latter is not.

It is  quite stunning  how the  carefully crafted  definitions of
"United States"  do appear  to unlock a horribly complex statute,
and also  expose perhaps  the greatest fiscal fraud that has ever
been perpetrated  upon any  people at  any time in the history of
the world.

I will anxiously look forward to receiving the legal papers which
we discussed in Denver.

Thanks very much, John, for your significant contributions to our
important and difficult search for the truth in this matter.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship


copies:  interested colleagues




















                        Page A - 4 of 26

                                                       Appendix A


John H. Knox
In Propria Persona
c/o 111 Stephanie Street
Kerrville, Texas Republic
Postal Code 78028/tdc



                UNITED STATES DISTRICT COURT FOR
                                
                  THE WESTERN DISTRICT OF TEXAS
                                
                       SAN ANTONIO, TEXAS
                                
                                
JOHN H. KNOX and LOIS C. KNOX  )
                               )
                 Plaintiffs,   )
                               )   Case No. SA-89-CA-1308
vs.                            )   (Consolidated with
                               )    SA-89-CA-0761)
THE UNITED STATES,             )
HERMAN SILGUERO and            )
DOROTHY SILGUERO,              )
                               )
                 Defendants    )



                MEMORANDUM IN SUPPORT OF REQUEST
                                
          FOR THE DISTRICT COURT TO CONSIDER THE T.R.O.
                                
             AND INJUNCTION DENIED BY THE MAGISTRATE
                                
                                
     Plaintiffs in  the above  entitled  action  are  NONRESIDENT
ALIENS with  respect to  the "United  States" as  those terms are
defined  in  26  U.S.C.,  and  have  had  no  income  effectively
connected to  a trade  or business  within the  "United  States".
They COME  NOW to  file this  their Memorandum  in Support  of  a
Request  for   the  District  Court  to  Consider  the  Temporary
Restraining Order  and the Motion for Injunction and, in support,
to show the Court as follows:

     1.   The issues  as to  whether there are different meanings
for the  term  "United  States",  and  whether  there  are  three
different "United  States" operating within the same geographical
area, and  one "United States" operating outside the Constitution
over its  own territory  (in which  it has  citizens belonging to
said "United  States"), were settled in 1901 by the Supreme Court
in the  cases of  De Lima  vs Bidwell,  182 U.S.  1 and Downes vs
Bidwell, 182 U.S. 244.  In Downes supra, Justice Harlan dissented
as follows:


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     The idea  prevails with  some -- indeed, it found expression
     in arguments  at the  bar --  that we  have in  this country
     substantially or practically two national governments;  one,
     to be  maintained  under  the  Constitution,  with  all  its
     restrictions;   the  other  to  be  maintained  by  Congress
     outside and  independently of that instrument, by exercising
     such powers  as other nations of the earth are accustomed to
     exercise.
                         [Downes supra, page 380, emphasis added]

He went on to say, on page 382:

     It will be an evil day for American liberty if the theory of
     a government  outside of  the supreme  law of the land finds
     lodgment in  our constitutional  jurisprudence.   No  higher
     duty rests  upon this court than to exert its full authority
     to  prevent   all  violation   of  the   principles  of  the
     Constitution.
                         [Downes supra, page 382, emphasis added]

     2.   This theory  of  a  government  operating  outside  the
Constitution over its own territory, with citizens of the "United
States" belonging  thereto under  Article 4,  Section 3, Clause 2
(4:3:2) of the Constitution, was further confirmed in 1922 by the
Supreme Court in Balzac vs Porto Rico, 258 U.S. 298 (EXHIBIT #4),
wherein that  Court affirmed,  at page 305, that the Constitution
does not  apply outside the limits of the 50 States of the Union,
quoting Downes  supra and  De Lima supra;  that, under 4:3:2, the
"United States"  was given  exclusive power  over the territories
and the citizens of the "United States" residing therein.

     3.   The issue  arose again in 1944, in the case of Hooven &
Allison Co.  vs Evatt,  Tax Commissioner  of Ohio,  324 U.S. 652,
wherein the  U.S. Supreme Court stated as follows at page 671-672
(EXHIBIT #8):

     The term  "United States"  may be used in any one of several
     senses.   [1]   It may  be merely  the name  of a  sovereign
     occupying the position analogous to that of other sovereigns
     in the  family of  nations.   [2]    It  may  designate  the
     territory over  which the  sovereignty of  the United States
     extends,   [3]   or it  may be  the collective  name of  the
     states which are united by and under the Constitution.1

                           [brackets, numbers and emphasis added]


____________________
1.   See Langdell,  "The  Status  of  our  New  Territories,"  12
     Harvard Law  Review 365,  371;   see also  Thayer, "Our  New
     Possessions," 12  Harvard Law  Review  464;    Thayer,  "The
     Insular Tariff  Cases in  the Supreme Court," 15 Harvard Law
     Review 164;   Littlefield,  "The Insular  Cases," 15 Harvard
     Law Review 169, 281.


                        Page A - 6 of 26

                                                       Appendix A


Quoting Fourteen  Diamond Rings  vs United  States, 183 U.S. 176;
cf. De Lima vs Bidwell, 182 U.S. 1;  Dooley vs United States, 182
U.S. 222;   Faber vs United States, 221 U.S. 649; cf. Huus vs New
York &  P.R.S.S. Co.,  182 U.S.  392;   Gonzales vs Williams, 192
U.S. 1;  West India Oil Co. vs Domenech, 311 U.S. 20.

The Court, in Hooven supra, indicated that this was the last time
it would address the issue;  it would just be judicially noticed.


     4.   The issue  arose in Brushaber vs Union Pacific Railroad
Company, 240  U.S. 1.  In that case, the high Court affirmed that
the "United  States"  could  levy  a  tax  on  the  income  of  a
nonresident alien  when that  income derived  from sources WITHIN
the "United States" (i.e. its territorial jurisdiction).


     5.   Based  upon   the  decision  in  Brushaber  supra,  the
Commissioner of  Internal  Revenue,  with  the  approval  of  the
Secretary of  the Treasury,  promulgated the  Court's decision as
Treasury Decision 2313 (see EXHIBIT #1).  T.D. 2313 declared that
Frank R.  Brushaber was  a NONRESIDENT  ALIEN with respect to the
"United States".   T.D. 2313 also declared that the Union Pacific
Railroad Company  was a  DOMESTIC CORPORATION with respect to the
"United States" (i.e. its territorial jurisdiction).


     6.   The Complaint (EXHIBIT #2) filed by Mr. Brushaber shows
that he  was a  nonresident  of  the  "United  States",  residing
instead in the State of New York, in the borough of Brooklyn, and
a Citizen  thereof, with  his principal  place of business in the
borough of  Manhattan.   He owned  stocks and bonds issued by the
Union Pacific  Railroad Company,  upon which  a cash dividend was
declared to  him by  said company,  a domestic corporation of the
"United States".   Union  Pacific was  chartered  by  an  Act  of
Congress for the territory of the federal state of Utah, in order
to build a railroad and telegraph line and other purposes.  It is
a matter of public record that the Union Pacific Railroad Company
was a  domestic "United States" corporation, of the federal state
of Utah, residing in the District of Columbia, with its principal
place of  business in  Manhattan, New York.  It was created by an
Act of  the "United  States" Senate  and House of Representatives
(under their exclusive authority, granted by the Constitution for
the United  States at  1:8:17)  on  July  1,  1862  by  the  37th
Congress, 2nd  Session, as  recorded in  the Statutes  At  Large,
December 5,  1859 to  March 3,  1863 at  Chapter  CXX,  page  489
(EXHIBIT  #3).     Considering  the  foregoing  evidence  of  the
diversity of citizenship of the two parties, it is clear that Mr.
Brushaber was  a "nonresident  alien with  respect to  the United
States", who had income from sources within said "United States".
His income  derived from  the Union  Pacific Railroad  Company, a
corporate citizen  created by  Congress and  residing WITHIN  the
"United States" (i.e. the District of Columbia). (See EXHIBIT #3)



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     ... [A]  domestic corporation  is an artificial person whose
     residence or domicile is fixed by law within the territorial
     jurisdiction of  the state which created it.  That residence
     cannot  be   changed  temporarily   or  permanently  by  the
     migrations of its officers or agents to other jurisdictions.
     So long  as it  is an  existing corporation  its  residence,
     citizenship, domicile, or place of abode is within the state
     which created  it.   It cannot  reside or  have its domicile
     elsewhere;   neither can it in legal contemplation be absent
     from the state of its creation.

               [Fowler vs Chillingworth, 113 So. 667, 669 (1927)]
                                                 [emphasis added]

     7.   Related cases  are Hylton  vs United  States, 3 U.S. (3
Dall.) 171  (1796):   Hylton was  a Congressman;   his salary was
income from  sources  WITHIN  the  "United  States".    See  also
Springer vs  U.S., 102  U.S. 586  (1881):   Springer, a  Virginia
Citizen,  operated   a  carriage  business  in  the  District  of
Columbia.

     8.   The  first   paragraph  of   the  Secretary's  Treasury
Decision (EXHIBIT #1) is quoted here as follows:

                           (T.D. 2313)
                           Income Tax
                                
     Taxability of  interest from bonds and dividends on stock of
     domestic2 corporations  owned by nonresident aliens, and the
     liabilities of nonresident aliens under Section 2 of the act
     of October 3, 1913.

     To collectors of internal revenue:

          Under the  decision of  the Supreme Court of the United
     States in  the case  of Brushaber  vs Union  Pacific Railway
     [sic] Co.,  decided January 24, 1916, it is hereby held that
     income  accruing  to  nonresident  aliens  in  the  form  of
     interest from  the bonds  and  dividends  on  the  stock  of
     domestic corporations  is subject  to the income tax imposed
     by the act of October 3, 1913.
                                    [footnote and emphasis added]

     9.   The above  decision by  the Secretary  of the  Treasury
determined that  a tax  on income  derived from  rents, sales  of
property, wages,  professions, or  a trade or business WITHIN the
"United States",  was applicable to such "income" when payable to
a nonresident alien, i.e. a Union State Citizen.

____________________
2.   "Domestic" in  the "United  States"  statutes  means  inside
     D.C., the  possessions, territories,   and  enclaves of  the
     "United States",  i.e. federal states of which there are 14.
     (EXHIBIT #5)


                        Page A - 8 of 26

                                                       Appendix A


     10.  All income  tax provisions  under 26 U.S.C., subtitle A
(an excise  tax on  "income"), are divided between sources WITHIN
and WITHOUT  the "United  States".   They are  imposed  upon  the
worldwide income  of citizens  of the  "United States" and aliens
residing therein,  and upon  nonresident aliens  (of  all  kinds)
receiving income  from sources  WITHIN said  "United States"  and
WITHIN the  other parts  of the American Empire which fall WITHIN
the exclusive  legislative jurisdiction  of the  Congress of  the
"United States", pursuant to 1:8:17 and 4:3:2.


          CONSTITUTIONAL AUTHORITY GRANTED TO CONGRESS
                                
     11.  The Constitution gives to Congress the power to act for
the 50  Union States as an international representative and to do
so without  (outside) the  boundaries of each of those 50 States.
These powers  are expressed  in Article  1, Section  8, Clauses 1
thru 16 (1:8:1-16).

     12.  The Constitution gave to Congress a seat of government,
known as  the District  of Columbia.  In time, Congress created a
government for  the "District",  and  this  "District"  became  a
federal state  by definition.  (For the other federal "states" of
the "United  States", see  EXHIBIT #5.)   However,  this  "state"
(D.C.) is  not "united"  by or  under the  Constitution  for  the
United States of America.  D.C. has never joined the Union.

     13.  Furthermore, the  Constitution granted  to Congress the
authority to  govern the  "District", just as the Legislatures of
each of  the several  States of  the Union  govern  their  States
within the  geographical limits  of those  States.   As  Congress
began to  legislate for the "District", under authority of 1:8:17
and 1:8:18, the difference between the citizens of the "District"
and the  Citizens3 of  the Union  became apparent,  in  that  the
citizens of  the "District" did not possess the right of suffrage
or other  rights (see  Balzac supra,  De Lima  supra, and  Downes
supra) and  therefore were  not  recognized  as  a  part  of  the
Sovereignty of  "We the People".  The Constitution for the United
States of  America provided  no means  of taxing these "District"
citizens of  the "United  States".  A method of forming municipal
governments and  of exercising  taxing power  over these citizens
within the  territories of the "United States" was decided by The
Insular Cases  (see the Bidwell cases, supra).  "The Constitution
was made  for States,  not territories,"  wrote  Daniel  Webster.
"... [T]he  Constitution of  the United  States as  such does not
extend beyond  the limits  of the  States which are united by and
under it  ....", wrote  author Langdell in "The Status of Our New
Territories", 12 Harvard Law Review 365, 371.


____________________
3.   Please  note  that  the  U.S.  Constitution  always  denoted
     Citizen  and  Person  in  capital  letters  until  the  14th
     Amendment, wherein citizen and person were not capitalized.


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                                                The Federal Zone:


     14.  The distinction between "citizens of the United States"
and "Union  State Citizens"  has been  fully  recognized  by  the
Congress and the Courts as follows:

     We have  in our  political system a government of the United
     States and a government of each of the several States.  Each
     one of  these governments  is distinct  from the others, and
     each has  citizens of  its own  who owe  it allegiance,  and
     whose rights, within its jurisdiction, it must protect.

           [United States vs Cruikshank, 92 U.S. 588, 590 (1875)]
                                                 [emphasis added]
                                                                 
     The Federal Government is a "state".

                 [Enright vs U.S., D.C.N.Y., 437 F.Supp 580, 581]
                                                                 
                                                                 
     Foreign State.   A  foreign country  or nation.  The several
     United States  are considered "foreign" to each other except
     as regards their relations as common members of the Union.

               [Black's Law Dictionary, Sixth Edition, page 1407]
                                                                 
                                                                 
     15.  Congress identifies these citizens of the "District" as
"individuals" or  citizens who  reside in the "United States" and
who are  subject to  the direct  control of Congress in its local
taxing and other municipal laws.

     16.  In De  Lima supra,  the U.S.  Attorney defined  federal
taxes with the following words, at page 99-108:

     Federal taxation  is either  general or  local.  Local taxes
     are levied  under Article  1, Section 8, Paragraph 1.  Local
     taxes are  for  the  support  of  territorial  or  non-state
     governments.

Congress imposed  a federal  excise tax  on the "income" of these
citizens or  "individuals" at  26 U.S.C.,  Section 1,  as a local
tax:

     Such taxes  are not  for the  common welfare  of the  United
     States, but  are to  defray the expense of the government of
     the locality,  and  in  the  dual  position  which  Congress
     occupies in  our system,  as Federal Government and as local
     government for  the territory of the United States not ceded
     into States  of the Union, it has the power to tax for local
     purposes.
                                         [De Lima supra, page 99]






                        Page A - 10 of 26

                                                       Appendix A


Hence the term "from sources WITHIN the United States".

     General taxes  are of  two kinds,  direct;   and  what,  for
     brevity may  be called  indirect,  meaning  thereby  duties,
     imposts, and  excises.  Direct taxes must be laid on all the
     States alike.
                                        [De Lima supra, page 100]


     17.  A Citizen of one of the 50 States, residing therein, is
a nonresident  alien with  respect to  this local taxing power of
Congress (see Brushaber supra).  Outside the geographical area of
the "United  States" (as  that  term  is  defined  at  26  C.F.R.
1.911-2(g)), Congress lacks power to support the local government
by imposing  a tax  on the  incomes of  nonresident aliens  (ones
outside the locality, i.e. Citizens of the 50 States) UNLESS they
reside within  that jurisdiction  by  residence,  or  UNLESS  the
source of  their income  is  situated  WITHIN  that  geographical
territory.   Any income  arising from  sources  therein  must  be
withheld at the source by the "withholding agent" (see T.D. 2313,
26 C.F.R.  871, and  26 U.S.C.  1461), unless  the  recipient  is
engaged in a trade or business therein.  For a full discussion of
this local  taxation, see  pages 55  and 99-108 of De Lima supra.
For confirmation  of the  domestic municipal  jurisdiction of the
"United States", see Downes supra at pages 383-388.

     18.  Congress has  control of  these "individuals",  whether
they  "reside"  WITHIN  the  "United  States"  (i.e.  territorial
states, see  EXHIBIT #5)  or WITHOUT  the "United States".  These
"individuals" (i.e.  born within  the jurisdiction  of  Congress,
such as  a citizen  born in the District of Columbia or in one of
the territories),  whether they  reside  within  "United  States"
territories,  without   the  "United   States"  in  the  "foreign
countries" (as  defined at  26 C.F.R. 1.911-2(h)), or abroad, are
still liable for the federal income tax unless they abrogate that
citizenship by  naturalization or  otherwise.    (See  26  C.F.R.
871-5, -6 and -12 and 1.932-1).  However, at 26 U.S.C. 911(a)(1),
Congress has  exempted from  taxation all "foreign earned income"
of these  citizen individuals,  except for  Puerto Ricans (see 26
C.F.R. 1.932-1(b), IRS Form 2555).

     19.  Another type  of nonresident  aliens are those citizens
of contiguous  countries such as Mexico, Canada and other foreign
countries.   These foreigners,  residents or nonresidents (as the
case may be), are subject to the tax on incomes received from any
place in the American Empire, i.e. in these united States and  in
the  "United   States".     A  Union  State  Citizen,  previously
nonresident, may  lose his  nonresident status by residing within
the territorial  sovereignty of  the "United States" for 183 days
(26 C.F.R.  1.871-7(d)(2)) and  thereby becomes  subject  to  the
local tax on incomes received from sources within and without the
"United States" (i.e. worldwide income).




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                                                The Federal Zone:


                  THE INCOME TAX IS A LOCAL TAX
                                
               IMPOSED WITHIN THE "UNITED STATES".
                                
           PLAINTIFFS ARE STRANGERS TO THIS LOCALITY.
                                
                                
                                
                  THE DEFINITIONS IN 26 U.S.C.:
                                
                    THE INTERNAL REVENUE CODE
                                
                                
     20.  The definitions  used in  26 U.S.C.  are very  clear in
defining "State"  and "United  States".  In every definition that
uses the  word "include", only the words that follow are defining
the term.  For example:

     21.  26 U.S.C.  3121(e)(1)    State.  --  The  term  "State"
includes the  District of  Columbia, the  Commonwealth of  Puerto
Rico, the Virgin Islands, Guam, and American Samoa.

     22.  26 U.S.C.  7701(a)(9)   United States.  --    The  term
"United States"  when used  in a geographical sense includes only
the States and the District of Columbia.

     23.  The  federal  government  has  used  these  definitions
correctly, but  IRS agents  seem to  assume that they mean the 50
States of the Union (America) when they look at the word "States"
in 26  U.S.C. 7701(a)(9).   You  cannot use  the common, everyday
meaning of  the terms  "United States"  or "State"  when  talking
about the tax laws and many other laws that are enacted under the
local, municipal authority of the "United States" government.

     24.  Another example  is the  Omnibus Acts at 86th Congress,
1st Session,  Volume 73,  1959, and 2nd Session, Volume 74, 1960,
Public Laws  86-70 and  86-624.  These Acts reveal the crafty way
in which  the federal  government uses  correct English  and  how
Congress  changes   the  meanings  of  words  by  using  its  own
definitions.  For example, all the United States Code definitions
had to be changed to allow Alaska and Hawaii to join the Union of
States united  under the  Constitution.   When Alaska  joined the
Union, Congress  added a  new definition of "States of the United
States".  This definition had never appeared before, to wit:


     Sec. 48.  Whenever the phrase "continental United States" is
     used in  any law of the United States enacted after the date
     of enactment of this Act, it shall mean the 49 States on the
     North American  Continent  and  the  District  of  Columbia,
     unless otherwise expressly provided.

                              [cf. 1 USCS 1, "Other provisions:"]
                                                 [emphasis added]


                        Page A - 12 of 26

                                                       Appendix A


Where is it otherwise expressly provided?  Answer:

     Sec. 22.   (a)  Section 2202 of the Internal Revenue Code of
     1954 (relating  to missionaries  in  foreign  service),  and
     sections 3121(e)(1),  3306(j), 4221(d)(4),  and  4233(b)  of
     such code (each relating to a special definition of "State")
     are amended by striking out "Alaska,".

     (b)  Section 4262(c)(1) of the Internal Revenue Code of 1954
     (definition of  "continental United  States") is  amended to
     read as  follows:   "(1) Continental  United States.  -- The
     term 'continental  United  States'  means  the  District  of
     Columbia and the States other than Alaska."

When Hawaii was admitted to the Union, Congress again changed the
above definition, to wit:

     Sec. 18.  (a)   Section 4262(c)(1)  of the  Internal Revenue
     Code of  1954 (relating  to the  definition of  "continental
     United States"  for purposes of the tax on transportation of
     persons) is  amended to  read as  follows:  "(1) Continental
     United States. -- The term 'continental United States' means
     the District  of Columbia  and the  States other than Alaska
     and Hawaii."


        WHAT ARE THE STATES OTHER THAN ALASKA AND HAWAII?
                                
     25.  They certainly  cannot be the other 48 States united by
and under the Constitution, because Alaska and Hawaii just joined
them, RIGHT?   The  same definitions apply to the Social Security
Acts.   So, what  is left?   Answer:   the  District of Columbia,
Puerto Rico,  Guam, Virgin Islands, etc.  These are the States OF
(i.e. belonging  to) the  "United States" and which are under its
sovereignty.   Do not confuse this term with States of the Union,
because the word "of" means "belonging to" in this context.

     26.  Congress can  also change  the  definition  of  "United
States" for  two sentences and then revert back to the definition
it used before these two sentences.  This is proven in Public Law
86-624, page  414, under School Operation Assistance in Federally
Affected Areas, section (d)(2):

     The  fourth  sentence  of  such  subsection  is  amended  by
     striking out  "in the  continental United  States (including
     Alaska)" and  inserting in  lieu thereof "(other than Puerto
     Rico, Wake  Island, Guam,  or the  Virgin Islands)"  and  by
     striking out  "continental United  States" in clause (ii) of
     such sentence  and inserting  in lieu thereof "United States
     (which for  purposes of  this sentence and the next sentence
     means the  fifty States and the District of Columbia)".  The
     fifth sentence of such subsection is amended by striking out
     "continental" before  "United States"  each time  it appears
     therein and by striking out "(including Alaska)".


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     27.  This one  section, all  by  itself,  contains  all  the
evidence you  need, by  words of  construction, to prove that the
term "United  States" on  either side  of these sentences did not
mean the 50 States united by and under the Constitution.  If that
is not conclusive to you, then see the following:


     26 C.F.R. 31.3121(e)-1  State, United States, and citizen.

     (a)  When used  in the regulations in this subpart, the term
     "State" includes  [in its  restrictive form] the District of
     Columbia,  the  Commonwealth  of  Puerto  Rico,  the  Virgin
     Islands, the  Territories of  Alaska and Hawaii before their
     admission as States, and (when used with respect to services
     performed after 1960) Guam and American Samoa.

     (b)  When used  in the regulations in this subpart, the term
     "United States",  when used  in a  geographical sense, means
     the several states, (including the Territories of Alaska and
     Hawaii before  their admission  as States),  the District of
     Columbia, the  Commonwealth of  Puerto Rico,  and the Virgin
     Islands.   When used in the regulations in this subpart with
     respect to  services performed  after 1960, the term "United
     States" also  includes [in  its  expansive  form]  Guam  and
     American Samoa  when the  term is  used  in  a  geographical
     sense.  The term "citizen of the United States" includes [in
     its restrictive  form] a  citizen  of  the  Commonwealth  of
     Puerto Rico or the Virgin Islands, and, effective January 1,
     1961, a citizen of Guam or American Samoa.

                                                 [emphasis added]
                                                                 
Please note  the bolded  terms.   In paragraph  (a),  Alaska  and
Hawaii only  fit the  definition of  "State" before  joining  the
Union.   That means  the definition of "State" was never meant to
be the 48 now 50 States of the Union unless distinctly expressed.
If paragraph (b) confuses you, the following is submitted:

     28.  The word "geographical" was never used in tax law until
Alaska and  Hawaii joined the Union, and it is not defined in the
Internal Revenue  Code.   So, we must use the definition found in
the Standard Random House Dictionary:


     ge.o.graph.i.cal   1.  of or pertaining to geography  2.  of
     or  pertaining   to  the   natural   features,   population,
     industries, etc., of a region or regions


     29.  Were you  born in the "United States"?  The preposition
"in" shows  that the "United States" in this question is a place,
a geographical place named "United States".  It is singular, even
though it  ends in  "s".  It also can be plural when referring to
the Union  States which  are places  which  exist  by  agreement.


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                                                       Appendix A


Every human  in a nation is a natural Citizen of a place called a
nation, if he was born in that nation.  Those same people must be
naturalized (born  again) if  they want  to become  a citizen  of
another nation.   Original  citizenship exists because of places,
not agreements.   This is jus soli, the law of the place of one's
birth (see Black's Law Dictionary, Sixth Edition).

     30.  Here are  two questions, your own answers to which will
solve the  dilemma.   In a geographical sense, where is the State
of Texas  located on  the continent?   In  a geographical  sense,
where is the "United States" (Congress) located on the continent?

     31.  Now, since  typewriters were  purchased from  the areas
that just  joined the  Union, namely Alaska and Hawaii, according
to Title  1, Congress  had to  use a term that is NOT used in the
Internal Revenue  Code, in order to buy the same typewriters from
the same geographical area:

     Sec. 45.   Title  I of the Independent Offices Appropriation
     Act, 1960,  is amended  by striking  out the  words "for the
     purchase within  the continental limits of the United States
     of any  typewriting machines"  and inserting in lieu thereof
     "for the  purchase within  the STATES  OF THE  UNION AND THE
     DISTRICT OF COLUMBIA OF ANY TYPEWRITING MACHINES".

                                                 [emphasis added]

And, for  declarations made  under the  penalties of perjury, the
statute at  28 U.S.C.  1746 separately  defines declarations made
WITHIN and WITHOUT the "United States" as follows:


     If executed  WITHOUT the United States:  I declare ... under
     the laws  of the United States of America that the foregoing
     is true and correct.

     If executed  WITHIN  the  United  States,  its  territories,
     possessions, or  commonwealths:   I  declare  ...  that  the
     foregoing is true and correct.
                                                 [emphasis added]

The latter  clause above  is the  penalty clause that is found on
IRS Form 1040 and similar IRS forms.

And, 28 U.S.C. 1603(a)(3) states as follows:


     (3)  which is  neither a  citizen of  a State  of the United
     States as  defined in  section 1332(c) and (d) of this title
     ....

     Section 1332(d). The word "States", as used in this section,
     includes the  Territories, the District of Columbia, and the
     Commonwealth of Puerto Rico.


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                   Examples of Two Definitions
            of the term "United States" in 26 U.S.C.
                                
                                
                        First Definition
                                
     32.  26 U.S.C. 7701(a)(9):

     (9)  United States. -- The term "United States" when used in
     a geographical  sense  includes  only  the  States  and  the
     District of Columbia.


                        Second Definition

     33.  26 U.S.C. 4612(a)(4)(A):

     (A)  In general.  -- The  term "United  States" means the 50
     States, the District of Columbia, the Commonwealth of Puerto
     Rico, any  possession of the United States, the Commonwealth
     of the  Northern Mariana Islands, and the Trust Territory of
     the Pacific Islands.
                                                 [emphasis added]


     34.  The Supreme Court stated in Hepburn & Dundas vs Ellsey,
6 U.S.  445, 2  Cranch 445,  2 L.Ed  332, that  the  District  of
Columbia is not a "State" within the meaning of the Constitution.
Therefore, it  is apparent  that the meaning of the term "States"
in the  first definition  above can only mean the territories and
possessions belonging  to the  "United States",  because  of  the
specific mention  of the  District of  Columbia and  the specific
absence of  the 50 States (inclusio unius est exclusio alterius).
The District  of Columbia  is not a "State" within the meaning of
the Constitution  (see Hepburn  supra).  Therefore, the 50 States
are specifically  excluded from this first definition of the term
"United States".


     35.  Congress has  no problem naming the "50 States" when it
is legislating for them, so, in the second definition of the term
"United States"  above, Congress  expressly  mentions  them,  and
there is no misunderstanding.  If a statute in 26 U.S.C. does not
have a  special "word  of art"  definition for  the term  "United
States", then the First Definition of the term "United States" is
always used  (see above)  because of  the general  nature of that
term as defined by Congress.


     36.  When citizens or residents of the first "United States"
are without  the geographical area of this first "United States",
their "compensation  for personal  services actually rendered" is
defined as  "foreign earned  income" in 26 U.S.C., Section 911(b)
and 911(d)(2), as follows:


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                                                       Appendix A


     911(b)  Foreign Earned Income. -- ...

     (d)(2)  Earned Income. --

     (A)  In general.  -- The  term "earned  income" means wages,
     salaries, or  professional fees,  and other amounts received
     as compensation for personal services actually rendered, but
     does not  include that  part of  the compensation derived by
     the taxpayer  for personal  services rendered  by him  to  a
     corporation which  represents a  distribution of earnings or
     profits rather  than a  reasonable allowance as compensation
     for the personal services actually rendered.

     37.  A citizen or resident of the first "United States" does
not pay a tax on his "compensation for personal services actually
rendered" while  residing outside  of the  first "United States",
because Congress has exempted all such compensation from taxation
under 26 U.S.C., Section 911(a)(1), which reads as follows:

     911(a)  Exclusion from Gross Income. -- ... [T]here shall be
     excluded from  the gross  income  of  such  individual,  and
     exempt from  taxation ...  (1) the  foreign earned income of
     such individual ....

     38.  When residing  without (outside)  this "United States",
the citizen  or resident  of this  "United States" pays no tax on
"foreign earned  income", but  is  required  to  file  a  return,
claiming the exemption (see IRS Form 2555).

     39.  26 C.F.R.,  Section 871-13(c)  allows this  citizen  to
abandon his  citizenship or  residence in  the "United States" by
residing elsewhere.

     40.  26 C.F.R.,  Section 1.911-2(g) defines the term "United
States" as follows:

     (g)  United States.  The term "United States" when used in a
     geographical  sense   includes  any   territory  under   the
     sovereignty of  the United States.  It includes the states4,
     [Puerto Rico,  Guam, Mariana  Islands, etc.] the District of
     Columbia, the  possessions and  territories  of  the  United
     States, the territorial waters of the United States, the air
     space over  the United States, and the seabed and subsoil of
     those submarine  areas which are adjacent to the territorial
     waters of the United States and over which the United States
     has exclusive  rights, in  accordance with international law
     ....

____________________
4.   This term  "state" evidently  does not embrace one of the 50
     States (where  I  am  a  free  inhabitant),  united  by  the
     Constitution,  because  they  are  separate  governments  or
     foreign states  with respect  to the  "United States"  (i.e.
     D.C., its territories, possessions and enclaves).


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None of  the 50  united States comes under the sovereignty of the
"United States",  and subsection (h) defines the 50 States united
by the Constitution as "foreign countries":


     (h)  Foreign country.   The term "foreign country" when used
     in a  geographical sense  includes any  territory under  the
     sovereignty of  a government  other than  that of the United
     States.
                                           [26 C.F.R. 1.911-2(h)]

All of  the 50  States are foreign with respect to each other and
are under  the  sovereignty  of  their  respective  Legislatures,
except where  a power  has been  expressly delegated to Congress.
The Citizens  of each  Union State are foreigners and aliens with
respect to another Union State, unless they establish a residence
therein under  the laws of that Union State.  Otherwise, they are
nonresident aliens with respect to all the other Union States.

     41.  The regulations  at 26  C.F.R., Section 1.1-1(a) state,
in pertinent part:


     (a)  General Rule.   (1)  Section 1  of the  Code imposes an
     income tax  on the  income of  every  individual  who  is  a
     citizen or  resident of the United States and, to the extent
     provided by  Section 871(b)  or 877(b),  on the  income of a
     nonresident alien individual.


26 U.S.C.,  Section 1  imposes  a  tax  on  "taxable  income"  as
follows, in pertinent part:


     There is  hereby imposed  on the taxable income of ... every
     married individual  ... who  makes a  single return  jointly
     with his spouse under section 6013 ....


     42.  The  regulations  promulgated  to  explain  26  U.S.C.,
Section 1  are found  in 26  C.F.R., Section  1.1-1, and state in
pertinent part:


     (a) General  Rule.   (1) Section  1 of  the Code  imposes an
     income tax  on the  income of  every  individual  who  is  a
     citizen or  resident of the United States and, to the extent
     provided by  Section 871(b)  or 877(b),  on the  income of a
     nonresident alien individual.


Please note that the term "taxable income" is not used as such in
the above  statute because  the  "income"  of  those  classes  of
individuals mentioned is taxable as "taxable income".


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                                                       Appendix A


     Section 1.871   Classification  and manner  of taxing  alien
     individuals

     (a)  Classes of  aliens.   For purposes  of the  income tax,
     alien individuals  are divided  generally into  two classes,
     namely, resident aliens and nonresident aliens. ...

     (b)  Classes of nonresident aliens. --

     (1)  In  general.     For   purposes  of   the  income  tax,
     nonresident alien individuals are divided into the following
     three classes:

     (i)  Nonresident alien individuals who at no time during the
          taxable year  are engaged in a trade or business in the
          United States,

     (ii) Nonresident alien  individuals who  at any  time during
          the taxable  year are,  or  are  deemed  under  Section
          1.871-9 to  be, engaged  in a  trade or business in the
          United States, and

     (iii) NOT APPLICABLE (concerns residents of Puerto Rico)


     43.  26 C.F.R., Section 871-13 states as follows:

     (a)  In general.   (1)   An  individual who  is a citizen or
     resident of  the United  States  at  the  beginning  of  the
     taxable year  but a  nonresident alien  at the  end  of  the
     taxable year, or a nonresident alien at the beginning of the
     taxable year  but a citizen or resident of the United States
     at the  end of the taxable year, is taxable for such year as
     though his  taxable year  were  comprised  of  two  separate
     periods, one  consisting of  the time  during which  he is a
     citizen or  resident of  the United  States  and  the  other
     consisting of  the time  during which he is not a citizen or
     resident of the United States.

It sounds complicated, doesn't it?


                        NONRESIDENT ALIEN
                                
                                
     44.  The federal  income tax  is a local tax for the "United
States" to  support local  government and,  in  order  to  become
liable to  this tax,  a State  Citizen must be a resident therein
(i.e. a  resident alien), or receive income from sources therein,
or be engaged in a trade or business therein.

     45.  In 26  U.S.C., Section  7701(b)(1)(A) &  (B),  Congress
defined the  statutory difference  between "resident  alien"  and
"nonresident alien" as follows:


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     (b)  Definitions of Resident Alien and Nonresident Alien. --

     (1)  In general. -- For purposes of this title ...

     (A)  Resident Alien. -- An alien individual shall be treated
          as a  resident of the United States with respect to any
          calendar year  if (and  only if)  such individual meets
          the requirements of clause (i), (ii), or (iii):

          (i)  Lawfully admitted for permanent residence. -- Such
               individual is  a lawful  permanent resident of the
               United States  at any  time during  such  calendar
               year.

          (ii) Substantial presence. -- Such individual meets the
               substantial presence test of paragraph (3).

          (iii) First year election. -- Such individual makes the
               election provided in subparagraph (4).

     (B)  Nonresident Alien.  -- An  individual is  a nonresident
          alien if  such individual  is neither  a citizen of the
          United States  nor a  resident  of  the  United  States
          (within the meaning of subparagraph (A)).

     46.  Plaintiffs are not "residents" (as that term is defined
in the  above statutes)  nor are  they citizens  of this  "United
States".   They are nonresident aliens as that term is defined in
subsections (B)  and (A)(i),  (ii), and  (iii), and they have the
same status as the Plaintiff in Brushaber supra.


         INDIVIDUALS REQUIRED TO MAKE RETURNS OF INCOME
                                
                                
     47.  The following  individuals are required to make returns
of income:

     26 C.F.R.,  Section 1.6012-1.   Individuals required to make
     returns of income.

     (a)  Individual citizen or resident. --

     (1)  In general.  ... an  income tax return must be filed by
          every individual ... if such individual is ...

          (i)  A citizen  of the  United States, whether residing
               at home or abroad,

          (ii) A resident  of the United States even though not a
               citizen thereof, or

          (iii) An alien bona fide resident of Puerto Rico during
               the entire taxable year.


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                                                       Appendix A


     48.  John and Lois Knox clearly are not defined in the above
statutes, but  they are  defined in the following statute as ones
who are not required to make a return.

     49.  26 C.F.R., Section 1.6013-1 states:

     (b)  Nonresident Alien.  A joint return shall not be made if
     either the  husband or  wife at  any time during the taxable
     year is a nonresident alien.


Mr. John  H. Knox  and Mrs.  Lois C.  Knox are nonresident aliens
with respect  to the "United States", with no income derived from
sources within  the "United  States", except  for John's Military
Retirement pay, which is exempt from taxation.

     50.  26 C.F.R.,  Section 871-7 states, in pertinent part, as
follows:

     Except  as   otherwise  provided   in  Section  1.871-12,  a
     nonresident alien individual to whom this section applies is
     not subject  to the  tax imposed  by section  1  or  section
     1201(b)5 but,  pursuant to  the provision of section 871(a),
     is liable  to a flat tax of 30 percent upon the aggregate of
     the amounts determined under paragraphs (b), (c), and (d) of
     this section which are received during the taxable year from
     sources within the United States.
                                                 [emphasis added]

     51.  Please note  26 C.F.R.,  Section 1.871-4(b),  Proof  of
residence of aliens, which establishes a key legal presumption:

     (b)  Nonresidence presumed.   An  alien by  reason  of  this
     alienage, is presumed to be a nonresident alien.


     52.  Further facts  are illustrated  by  the  definition  of
"withholding agent" at 26 U.S.C., Section 7701(a)(16):

     Withholding agent. -- The term "withholding agent" means any
     person required  to deduct  and withhold  any tax  under the
     provisions of section 1441, 1442, 1443, or 1461.


     53.  26 U.S.C.,  Section 1441  refers to  nonresident aliens
who receive  income from  sources within  the "United States", as
set forth  in Section 871(a)(1).  The other sections do not apply
to the Plaintiffs.

     54.  Your  attention   is  invited  to  26  C.F.R.,  Section
31.3401(a)(6)-1(b), which states as follows:

____________________
5.   Capital gains tax.


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     Remuneration  for  services  performed  outside  the  United
     States.  Remuneration paid to a nonresident alien individual
     ... for  services performed  outside the  United  States  is
     excepted from wages and hence is NOT SUBJECT TO WITHHOLDING.
     [emphasis added]


     55.  As a  rule, Military  Retirement Pay  of a  nonresident
alien individual  is exempted  from the  income tax at 26 C.F.R.,
Section 31.3401(a)-1(b)(1)(ii), with the following exception:

     Where such  retirement pay or disability annuity ... is paid
     to a  nonresident alien  individual, withholding is required
     only in the case of such amounts paid to a nonresident alien
     individual who is a resident of Puerto Rico.


and at 26 C.F.R., Section 935-1(a)(3):

     ... [F]or  special rules  for determining  the residence for
     tax purposes  of individuals under military or naval orders,
     see section  514 of  the Soldiers' and Sailors' Civil Relief
     Act of  19406, 50  App. U.S.C.  574.   The residence  of  an
     individual, and,  therefore, the  jurisdiction with which he
     is required to file an income tax return under paragraph (b)
     of this section, may change from year to year.


Section 574(1)  of The  Soldiers' and  Sailors' Relief Act states
that:

     For the  purposes of  taxation in  respect of  the  personal
     property, income,  or gross income of any such person by any
     State, Territory,  possession, or  political subdivision  of
     any of  the foregoing, or the District of Columbia, of which
     such person  is not  a  resident  or  in  which  he  is  not
     domiciled ...  personal property  shall not  be deemed to be
     located or  present in  or to  have a  situs for taxation in
     such State,  Territory, possession or political subdivision,
     or district.
                                                 [emphasis added]


           EXTRAORDINARY AND EXCEPTIONAL CIRCUMSTANCES
                                
     56.  Plaintiffs herein are at an advanced age of 62 and both
are in ill health, unable to work or to pay the tax or to sue for
a refund.   Lois  has only  one kidney  which does  not  function
properly;  complicating this is a lung disease which prevents her
from breathing.   She  has been totally disabled since 1981, with
no earned  income from  any source  since that  time.   John  has
emphysema and  has difficulty  breathing upon exercise.  They are
____________________
6.   See Exhibit #6 attached hereto and made a part hereof. 


                        Page A - 22 of 26

                                                       Appendix A


unable to  pay the  tax and  sue for  refund without the complete
destruction of their home, which is combined with their business.
The property which is the subject of this case is a one-of-a-kind
property which  is, or  would be,  irreplaceable years  down  the
road, if  a refund  suit was  won.   The property  has a value of
$100,0007 and was allegedly sold for the sum of $16,000.00, which
is all  that could  be recovered  in a refund suit as pertains to
said  property.    This  creates  an  irreparable  situation  for
Plaintiffs.   The tax  with penalties and interest claimed by the
government against  both Plaintiffs for 1982 is around $19,000.00
and, without  the sale of the business property and home, it will
be many  years before  a tax  in this amount can be paid in full.
Plaintiffs will  not live  long enough  to prosecute such a suit.
Equity and justice require some relief in such a situation.

                                
         AUTHORITY FOR THE COURT TO ISSUE THE INJUNCTION
                                
                                
     57.  In Botta  vs Scanlon, 288 F.2d 504 (2nd Circuit, 1961),
the Court  set forth  the general  exceptions to  the bar  at  26
U.S.C., Section 7421, stating (see EXHIBIT #7):

     "...  [I]t   has  long   been  settled   that  this  general
     prohibition is  subject to  exception  in  the  case  of  an
     individual taxpayer against a particular collector where the
     tax is  clearly illegal or other special circumstances of an
     unusual character  make  an  appeal  to  equitable  remedies
     appropriate."   National Foundry  Co. of N.Y. vs Director of
     Int. Rev., 2 Cir. 1956, 229 F.2d 149, 151.

The Court then gave a number of examples, as follows:

          "(a) Suits to  enjoin collection of taxes which are not
     due from  the plaintiff  but, in  fact, are due from others.
     For example,  see Raffaele vs Granger, 3 Cir. 1952, 196 F.2d
     620, 622 ....

          "(b) Cases in  which plaintiff  definitely showed  that
     the taxes sought to be collected were "probably" not validly
     due.   For example,  Midwest Haulers,  Inc. vs Brady, 6 Cir.
     1942, 128  F.2d 496,  and John  M. Hirst & Co. vs Gentsch, 6
     Cir. 1943, 133 F.2d 247.

          "(c) Cases in  which  a  penalty  was  involved.    For
     example, Hill  vs Wallace, 259 U.S. 44, 42 S.Ct 453, 66 L.Ed
     822;  Lipke vs Lederer, 259 U.S. 557, 42 S.Ct. 549, 66 L.Ed.
     1061;   Regal Drug  Corporation vs Wardell, 260 U.S. 386, 43
     S.Ct 152,  67 L.Ed  318;  Allen vs Regents of the University
     System of Georgia, 304 U.S. 439, 58 S.Ct 980, 82 L.Ed 1448.

____________________
7.   The property had a value of $125,000 two years ago, when the
     IRS allegedly sold it.


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          "(d) Cases in which it was definitely demonstrated that
     it was  not proper  to levy  the tax  on  the  commodity  in
     question, such  as Miller  vs Standard Nut Margarine Company
     of Florida, 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed 422.

          "(e) Cases  based   upon  tax  assessment  fraudulently
     obtained by  the tax  collector by  coercion.   For example,
     Mitsukiyo Yoshimura  vs Alsup,  9 Cir.  1948, 167  F.2d 104"
     (141 F.Supp. at page 338).

     [4]  In the  present case,  if any of the plaintiffs are not
     subject to  any tax  liability, such plaintiff might well be
     within the  exception stated  in 9  Mertens, Law  of Federal
     Income Taxation,  Section 49.213,  Chapter 49,  page 226, as
     follows: ...

     "[2] It is  equally well  setted [sic] that the Revenue laws
     relate only  to taxpayers.  No procedure is prescribed for a
     nontaxpayer where  the Government  seeks to levy on property
     belonging to him for the collection of another's tax, and no
     attempt has  been made  to  annul  the  ordinary  rights  or
     remedies of a non-taxpayer in such cases.  If the Government
     sought to  levy on  the property  of A  for a  tax liability
     owing to B, A could not and would not be required to pay the
     tax under  protest and  then institute  an action to recover
     the amount  so paid.  His remedy would be to go into a court
     of competent  jurisdiction and  enjoin the  Government  from
     proceeding against  his property."  In Tomlinson vs Smith, 7
     Cir. 1942,  128 F.2d  808 ...  the Court  affirmed an  order
     granting interlocutory injunction and noted the "distinction
     between suits instituted by taxpayers and non-taxpayers" (at
     page 811).

                           CONCLUSION
                                
     Plaintiffs  are  in  no  way  subjected  to  any  derivative
liability.   The  procedures  set  forth  in  26  C.F.R.  do  not
authorize the Secretary or his delegate to manufacture income and
tax it  where a  Person is without the taxable class.  26 C.F.R.,
Section 871  is unclouded  in that, where there is no income from
sources within  the "United  States" by  a nonresident alien, the
choice is  delegated to  that Person  by Congress as to whether a
return is  to be filed or not (see 26 C.F.R. 1.871-8).  Where the
Secretary determines  the existence  of taxable income when there
has been  no return,  he should  sign the  substitute return  and
assume the responsibility for the determination as required by 26
U.S.C. 6020(b)(1).   Treasury  Decision 2313  explains  that  the
withholding agent  is responsible  for withholding  the tax  from
sources within  the "United States", for filing a Form 1040NR and
for paying  over the  tax withheld  from said  nonresident alien.
(See Treasury  Decision 2313 and 26 C.F.R. 1.1461-3).  Therefore,
no penalties  should accrue  to the Plaintiffs.  Lois K. Knox has
no community  property interest in John's Military Retirement Pay
and, therefore, no taxable income accrues therefrom.


                        Page A - 24 of 26

                                                       Appendix A


     The fact  that  the  Knoxs  were  not  aware  of  the  above
information from the early years of their lives and they reported
the "earned income" from their labor in the foreign States of the
Union as  a local  tax of  the "United  States", does  not change
their status  as Citizens  of the  Republic of Union States.  Nor
does it  change their  status from  nonresidents  aliens  to  the
"individuals" defined  in 26  C.F.R., Section 1.1-1.  Nor does it
justify the Secretary's actions taken when he has been repeatedly
informed by  the Knoxs  of their  true status.   The Secretary is
required to  know the  law he is administering, and to do so with
justice and  equity within  the parameters set forth by Congress.
Arbitrary actions  are discouraged by the Executive, the Congress
and the Courts.
                                
                                
                             PRAYER
                                
                                
     WHEREFORE, PREMISES  CONSIDERED, Plaintiffs  pray that  this
Court grant a temporary and permanent injunction against the IRS,
its employees,  agents, Commissioner  and Attorneys by ordering a
cessation of  the  levies  and  seizures  against  all  forms  of
property owned  by Plaintiffs;   that the Court order a return of
property seized  in the  past, declare  the sale of such property
voidable or  void, and order a release of all liens filed against
the Plaintiffs.  In the alternative, Plaintiffs request that this
case be remanded back to the Administrative Agency for resolution
and arbitration.   Plaintiffs  further request the Court to grant
such other  and further  relief in law or in equity as Plaintiffs
may be entitled.


     I declare  under penalty  of perjury,  under the laws of the
United States of America, that the foregoing is true and correct,
to the best of my knowledge and belief, per 28 U.S.C. 1746(1).


     Executed on this 5th day of September, 1991.


                                        Respectfully submitted,

                                        /s/ John H. Knox













                        Page A - 25 of 26

                                                The Federal Zone:


                    [addendum to Knox brief]
                                
                                
                              CASES
                                
                      ARGUED AND DETERMINED
                                
                             in the
                                
                   SUPREME COURT OF JUDICATURE
                                
                             of the
                                
                        STATE OF INDIANA
                                
              at Indianapolis, November Term, 1878,
              in the Sixty-Third Year of the State.
                                
                                
                           -----+-----
                                
                                
       Daly et al. vs The National Life Insurance Company
                of the United States of America.
                         [cite omitted]
                                
                                
"Foreign Corporation"  Defined. --  The statutes  of  this  State
define a  foreign corporation  to be "a corporation created by or
under the  laws of  any other  state, government, or country," or
one "not incorporated or organized in this State".

Same. --  Insurance Company  Created by  Act of  Congress. --  An
insurance company  created by  an act  of Congress  is a  foreign
corporation subject  to the  requirements of  the statute of this
State approved  June 17th, 1852, "respecting foreign corporations
and their agents in this State."  1 R.S. 1876, p. 373.

Same. --  Congress as a Local Legislature. -- Constitutional Law.
-- An  act of  Congress creating a private corporation is the act
of Congress as the local Legislature of the District of Columbia;
as Congress  can not,  under the  federal  constitution,  as  the
Congress of the United States, create a private corporation.




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