












                           Appendix P
                                
                      Miscellaneous Letters








































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                                                The Federal Zone:


Reader's Notes:























































                        Page P - 2 of 98

                                                       Appendix P


MEMO

TO:       Trusted Colleagues

FROM:     Mitch Modeleski, Founder
          Account for Better Citizenship

DATE:     November 4, 1992

SUBJECT:  Trusts, Foreign and Domestic


     I  have   recently  taken   a  keen  interest  in  practical
applications  of   The  Federal   Zone  to   trust  creation  and
administration.   In particular,  I now  believe  I  have  enough
evidence to  prove that  the correct  distinction between foreign
and domestic  corporations is  equally applicable to trusts.  The
purpose of  this memo is to share some of this evidence with you,
in order  to challenge your thinking on this subject and possibly
to open new possibilities for trust creation and administration.


     Black's Law  Dictionary, Sixth  Edition, is  a good place to
begin.   In this  dictionary, we  find  the  following  important
definitions:


     Foreign situs  trust.   A trust  which owes its existence to
     foreign  law.     It  is  treated  for  tax  purposes  as  a
     non-resident alien individual.
                                                 [emphasis added]
                                                                 
     Foreign trust.   A  trust  created  and  administered  under
     foreign law.


Black's Law  Dictionary, Sixth  Edition, defines  "foreign state"
very clearly, as follows:


     The several  United States***  are considered  "foreign"  to
     each other  except as  regards  their  relations  as  common
     members of the Union.
                                                 [emphasis added]


I have  added three  asterisks ("***")  after "United  States" in
order to  emphasize that  the "United  States"  in  this  context
refers to the 50 States of the Union.

     Now examine  the definition  of "foreign estate or trust" in
the definitions section of the Internal Revenue Code, as follows:




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                                                The Federal Zone:


     Foreign Estate  or Trust.  -- The terms "foreign estate" and
     "foreign trust" mean an estate or trust, as the case may be,
     the income  of which, from sources without the United States
     which is  not effectively  connected with  the conduct  of a
     trade  or   business  within   the  United  States,  is  not
     includible in gross income under subtitle A.

                                          [26 U.S.C. 7701(a)(31)]


Do a  bit of  grammatical reconstruction,  so as to eliminate the
references to "foreign estate", and you get the following:

     The term  "foreign trust" means a trust, the income of which
     is not  includible in  gross income  under subtitle  A.  The
     income of  a foreign trust is not includible in gross income
     when it  derives from  sources which are without the "United
     States" and  which are  not effectively  connected with  the
     conduct of a trade or business within the "United States".


     Recall the  definition of "foreign situs trust" from Black's
supra.   Now compare  the IRC  definition of "foreign trust" with
the IRC  definition  of  "gross  income"  for  nonresident  alien
individuals.  Notice the component criteria of gross income for a
nonresident alien  individual, and  their close similarity to the
same criteria for foreign trusts:

     In the  case of a nonresident alien individual, except where
     the  context   clearly  indicates  otherwise,  gross  income
     includes only --

     (1)  gross income  which is  derived from sources within the
          United States  and which  is not  effectively connected
          with the  conduct of  a trade  or business  within  the
          United States, and

     (2)  gross income  which is  effectively connected  with the
          conduct of  a  trade  or  business  within  the  United
          States.

                               [26 U.S.C. 872(a), emphasis added]


It is  crucial to remember that the term "United States", as used
in these  sections of  the IRC, means the federal zone, i.e., the
territory  over   which  Congress   has   exclusive   legislative
authority.   Income which  is derived  from sources  without  the
"United States"  is not  included in gross income for nonresident
aliens.  Likewise, income which is effectively connected with the
conduct of a trade or business without the "United States" is not
included in  gross income  for nonresident  aliens.  Therefore, I
have proven  that the following rule has identical application to
nonresident aliens and foreign trusts:


                        Page P - 4 of 98

                                                       Appendix P


     Income is  excludible from the computation of "gross income"
     if it  derives from  sources which  are without  the "United
     States" and  which are  not effectively  connected with  the
     conduct of a trade or business within the "United States".

     Now, let's dig a little deeper in order to determine if this
finding is  supported by  other sections  of the  IRC.   Find the
heading "foreign  trusts" in  the Topical  Index of  the  IRC  as
published by  Commerce Clearing  House.    There  you  will  find
references to  "situs" at  402(c)  and  404(a)(4).    Read  these
sections carefully:

     Taxability of  Beneficiary of  Certain Foreign Situs Trusts.
     --   For purposes of subsections (a) and (b), a stock bonus,
     pension, or  profit-sharing trust  which would  qualify  for
     exemption from  tax under section 501(a) except for the fact
     that it  is a  trust created or organized outside the United
     States shall  be treated  as if  it were a trust exempt from
     tax under section 501(a).

                               [26 U.S.C. 402(c), emphasis added]
                                                                 
     Trusts Created  or Organized  Outside the  United States. --
     If a  stock bonus,  pension, or  profit-sharing trust  would
     qualify for  exemption under  section 501(a)  except for the
     fact that  it is  a trust  created or  organized outside the
     United States,  contributions to such a trust by an employer
     which is  a resident, or corporation, or other entity of the
     United States,  shall  be  deductible  under  the  preceding
     paragraphs.
                            [26 U.S.C. 404(a)(4), emphasis added]

It is  a well established principle of law that the 50 States are
"foreign" with respect to each other, just as the federal zone is
"foreign" with  respect to  each of them (In re Merriam's Estate,
36 NE  505 (1894)).   The  status of being foreign is the same as
"belonging to"  or being  "attached to"  another state or another
jurisdiction.   The proper  legal distinction  between the  terms
"foreign" and  "domestic" is  best seen in Black's definitions of
foreign and domestic corporations, as follows:


     Foreign corporation.   A  corporation doing  business in one
     state though chartered or incorporated in another state is a
     foreign corporation  as to the first state, and, as such, is
     required to  consent to  certain conditions and restrictions
     in order to do business in such first state.


     Domestic corporation.   When  a corporation is organized and
     chartered in a particular state, it is considered a domestic
     corporation of that state.

                                                 [emphasis added]


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                                                The Federal Zone:


     In light of all the above, I now contend that untold numbers
of trusts  have been  created on  the basis of a belief that they
are domestic  trusts when,  in fact,  they are foreign trusts, as
the terms  "domestic" and "foreign" are defined in the IRC and in
the law  dictionaries.   The Internal  Revenue Code  was  written
under authority granted to Congress for the exercise of exclusive
legislative jurisdiction over the federal zone.  Accordingly, the
50 States  and their  respective laws  are actually  foreign with
respect to  the federal  zone.   The 10th Amendment makes it very
clear that powers not specifically delegated to the United States
by  the  Constitution,  nor  prohibited  to  the  States  by  the
Constitution, are  reserved to  the States  or to  the people.  A
common-law trust  situated in  California exercises  rights which
are reserved  to the  people, because  California is a common-law
State and  because the  U.S. Constitution  specifically  reserves
such rights to the people.




                             #  #  #



































                        Page P - 6 of 98

                                                       Appendix P


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

                                   February 15, 1993


Dagny Sharon
Attorney-at-Law
c/o 17332 Irvine Boulevard, #230
Tustin, California Republic
Postal Code 92680/tdc

Dear Dagny:

     I appreciated  the opportunity  to make your acquaintance at
the Libertarian  Party Convention in Sunnyvale this past weekend.
I also  regret that  we didn't  have a  chance to spend more time
together.  Your videotape is quite original and light-hearted;  I
hope it brings you much success.

     Had we  found a  way to  spend more  time talking  with each
other, there  is one  important matter  which I  would definitely
have  wanted   you  to  consider  more  carefully.    During  our
conversation in  the bar,  while I  was eating lunch, you implied
that one  of your  goals is  to work  towards a  "democracy"  for
America.   Whether you  intended it  this way or not, such a goal
directly contradicts Article 4, Section 4 of the Constitution for
the United States of America, to wit:


     Section 4.  The United States shall guarantee to every State
     in this Union a Republican Form of Government ....


     What exactly  is a  "Republican Form"  of government?  It is
one in  which the  powers of sovereignty are vested in the people
and exercised  by the  people.   Black's  Law  Dictionary,  Sixth
Edition, makes this very clear:


     Republican government.   One  in   which   the   powers   of
     sovereignty are  vested in  the people  and are exercised by
     the people,  either  directly,  or  through  representatives
     chosen by  the people,  to whom  those powers  are specially
     delegated.   In re  Duncan, 139  U.S. 449,  11 S.Ct. 573, 35
     L.Ed. 219;   Minor v. Happersett, 88 U.S. (21 Wall.) 162, 22
     L.Ed. 627.


     Both  the   California  State   Constitution  and  the  U.S.
Constitution state  that the  latter shall  be the supreme Law of
the land.  In the U.S. Constitution, Article 6, Clause 2 states:


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                                                The Federal Zone:


     This Constitution,  and the  Laws of the United States which
     shall be  made in Pursuance thereof;  and all Treaties made,
     or which  shall be  made, under  the Authority of the United
     States, shall  be the  supreme Law  of the  Land;   and  the
     Judges in  every State  shall be bound thereby, any Thing in
     the Constitution  or Laws  of  any  State  to  the  Contrary
     notwithstanding.


     At the  turn of the century, the U.S. Supreme Court issued a
series of  controversial cases  now known  as The  Insular Cases.
These cases  were predicated,  in part, on the principle that the
Constitution for the United States as such does not extend beyond
the boundaries  of the  States which  are united by and under it.
Accordingly, this  principle  set  a  crucial  precedent  whereby
Congress was free to establish a legislative democracy within the
federal zone, instead of a constitutional republic.

     The federal  zone is  the area over which Congress exercises
exclusive legislative  jurisdiction;  it encompasses the District
of Columbia  and such areas as Guam and the Virgin Islands.  Even
more important  is  the  fact  that  this  exclusive  legislative
jurisdiction extends  to all  persons  who  are  subject  to  it,
regardless of  where they  may reside.   As  such, the  status of
"citizen of  the United  States" (also  known as  "U.S. citizen")
causes one to be subject to the letter of all municipal statutes,
rules and  regulations which Congress enacts under this exclusive
legislative authority.   The  constitutional definition  of  this
second class  of citizens  is alleged  to be  the so-called  14th
Amendment.   However, two  standing decisions of the Utah Supreme
Court have  struck  down  the  ratification  of  this  amendment.
Coupled with all the evidence which that Court utilized to arrive
at these  decisions, we  have therein good cause to conclude that
the so-called  14th Amendment  is null  and void  for  fraud  and
duress.   My book  The Federal  Zone discusses the so-called 14th
Amendment as follows:

     Not only  did this  so-called "amendment"  fail  to  specify
     which meaning  of the  term "United  States" was being used;
     like the 16th Amendment, it also failed to be ratified, this
     time by  15 of  the 37  States which  existed in  1868.  The
     House Congressional  Record for  June 13, 1967, contains all
     the documentation  you need to prove that the so-called 14th
     Amendment was  never ratified  into law  (see page  15641 et
     seq.).   For example,  it itemizes  all States  which  voted
     against the  proposed amendment,  and the precise dates when
     their Legislatures  did so.   "I  cannot  believe  that  any
     court, in  full possession  of its faculties, could honestly
     hold that  the amendment was properly approved and adopted."
     State vs  Phillips, 540  P.2d. 936,  941 (1975).   The  Utah
     Supreme Court  has detailed  the shocking and sordid history
     of the  14th Amendment's  "adoption" in the case of Dyett vs
     Turner, 439 P.2d 266, 272 (1968).



                        Page P - 8 of 98

                                                       Appendix P


     With this background knowledge firmly in hand, it is easy to
explain why  the federal  government would reiterate the theme of
"democracy" and  "democratic institutions"  over and  over in its
media propaganda.   It  is now  obvious that such programming has
been entirely  successful;    witness  the  large  percentage  of
"Libertarians" who  make repeated  reference to  their  political
goal of  "democracy" for  America.   Perhaps without  knowing it,
they are  participating in  the slow  but steady  demise  of  the
nation symbolized  by the  Stars and  Stripes, "the  Republic for
which it stands, one Nation, under God, indivisible, with liberty
and justice  for all."   The  Insular Cases  made it possible for
America to  become divisible into a constitutional republic and a
legislative democracy.    It  is  the  strategy  of  "divide  and
conquer", being  applied once  again with much success, this time
to our very own homeland.

     I hope I have given you a few things to think about.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship

enclosures:  People vs Boxer pleadings
             "Citizen is a Term of Municipal Law"

copy:  Jerry Collette

























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                                                The Federal Zone:


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

                                   February 7, 1993
John Voss, Director
N.C.B.A.
c/o P.O. Box 2255
Longmont, Colorado
Postal Code 80502/tdc

Dear John:

     Thanks so  much for  all the  materials which  you  recently
sent,  with  a  copy  of  your  letter  to  Mitch  Beals.    Time
permitting, I  do intend to do a thorough analysis of the written
opinions.   I am  very disappointed,  but not surprised, that the
appellate decisions  were "not  for publication".  I took all the
decisions to  the law  library yesterday,  but simply  ran out of
time.  Enclosed are the preliminary results of that one afternoon
at the  library.   Nevertheless, a  distinct pattern  is emerging
already.


Item #1:   28  U.S.C. 297.  Assignment of judges to courts of the
          freely associated compact states

     This  statute   was  part  of  the  comprehensive  "Judicial
Improvements Act" submitted to  Congress by Peter F. Rodino, Jr.,
Chairman, Committee  on the  Judiciary, House of Representatives.
It went  into law  on  November  19,  1988  (P.L.  100-702,  copy
attached).   Notice that  subsection (a)  refers to  "the  freely
associated compact  states" and  to "the  laws of  the respective
compact state".   In  and of  themselves,  these  references  are
significant because  I was  unable to  find any discussion of the
legislative history  for this  specific statute;    the  material
cited in U.S. Code Cong. and Adm. News skipped any mention of it.
The statute  is  also  too  recent  for  any  case  law  to  have
developed, and  much too  recent for  the term "freely associated
compact states"  to appear  in Words  and Phrases,  C.J.S., or Am
Jur, although  "compact" has  several  meanings  in  Black's  Law
Dictionary.

     What makes  this term even more significant is the reference
to it that is found in subsection (b), to wit:


     The Congress  consents the  acceptance and  retention by any
     judge so  authorized of  reimbursement  from  the  countries
     referred to in subsection (a) ....
                                                                 
                                                 [emphasis added]



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                                                       Appendix P


I am going on memory now, but I do seem to recall a key exception
to the  definition of  "state" once  found  in  Title  28.    The
exception was to another provision of Title 28 which utilized the
term "State  court".   I think  this  exception  has  since  been
removed by  subsequent amendment,  but the  pre-amendment version
clearly implied  that the  meaning of  "state" as  found  in  the
standard definition  was different from the meaning of "state" as
intended by  the term  "State court"  (hence  the  need  for  the
"exception" clause).   Therefore, the standard definition implied
a federal state, not a Union State.

     In section 297 supra, we are faced with a choice between two
conflicting and mutually incompatible interpretations of the term
"freely associated  compact states".   If  these states are Union
States, then  the "compact" may well be the U.S. Constitution and
Congress has admitted openly that Union States are the "countries
referred to  in subsection  (a)".   If  these  states  are  other
nations in  the family  of nations  (e.g. China, Japan), then the
"countries"  referred  to  in  subsection  (a)  are  these  other
nations, and  I can  only speculate  about the "compact" to which
Section 297  refers.  Could it be the U.N. charter?  If not, what
else could  it be?  some international treaty?  I wonder if there
is a  way to  inquire of  the House  Judiciary Committee  without
tipping our  own hands  and giving  the  Committee  a  reason  to
obfuscate the  real answer.    Or,  what  about  the  Library  of
Congress, or  Congressional Research Service?  I wouldn't put too
much faith  into the  CRS, in light of the hack job they continue
to do on "Frequently Asked Questions about Federal Income Taxes".

     This little  tidbit is highly significant when placed in the
larger context  of  all  the  research  now  assembled  into  the
electronic version  of The  Federal  Zone,  third  edition  (disk
enclosed).   In particular,  my interpretation of the distinction
between "foreign"  and  "domestic"  is  amply  supported  by  the
definitions in  Black's Sixth  Edition,  and  especially  by  the
Supreme Court decision to uphold the New York Court's decision of
In re Merriam's Estate, 36 NE 505 (1894).  Black's definitions of
foreign and  domestic corporations,  in my  opinion, leave little
room for  doubt about  the correct  distinction  here.    Black's
defines "foreign state" very clearly, as follows:


     The several  United States***  are considered  "foreign"  to
     each other  except as  regards  their  relations  as  common
     members of  the Union.  ... [O]ne  state  of  the  Union  is
     foreign to another.
                                                 [emphasis added]

Item #2:  U.S. Code Service, Lawyers Edition, Interpretive Notes

     In light  of the  pivotal  importance  of  this  distinction
between "foreign"  and "domestic",  it was  revealing to discover
the nearly  total absence  of case  law on  this question  in the
U.S.C.S. Lawyers  Edition (where  you would  expect a plethora of


                        Page P - 11 of 98

                                                The Federal Zone:


citations).   In the  main body  of U.S.C.S. dealing with the IRC
definitions in  7701, there  is only  one reference  to  "foreign
estate" (a  revenue ruling)  and there are only two references to
"domestic building  and loan association" (a revenue ruling and a
district court  ruling).  What is even more revealing is the case
of U.S.  vs Bardina,  the one  and   only  citation  to  the  IRC
definition of "United States", to wit:


     Even though  26 USCS  7701(a)(9) defines  "United States" as
     including only  United  States  and  District  of  Columbia,
     Puerto Rico  is considered as being within United States for
     purposes of  6-year statute  of limitations  on tax  crimes;
     ....
                                                 [emphasis added]


Notice the  blatant tautology  (again).   Notice also  that  this
interpretation flatly contradicts the actual IRC definition:


     (9)  United States. -- The term "United States" when used in
     a geographical  sense  includes  only  the  States  and  the
     District of Columbia.
                           [26 U.S.C. 7701(a)(9), emphasis added]
                                                                 
                                                                 
The term  "States"  is  very  different  from  the  term  "United
States".  And, of course, the corresponding definition of "State"
makes absolutely no mention of any Union States:


     (10)   State. --  The term  "State" shall  be  construed  to
     include the District of Columbia, where such construction is
     necessary to carry out provisions of this title.
                                                                 
                                          [26 U.S.C. 7701(a)(10)]
                                                                 
                                                                 
     Moving on  to the  Cumulative Supplement  for  the  U.S.C.S.
Lawyers Edition,  we find  a similar  pattern.  Here, we find one
revenue ruling  concerning a "foreign estate", and four citations
to "resident and nonresident alien", two of which are "TC Memos",
one of  which is a "Private Letter Ruling", and one of which is a
"Revenue Ruling".   These  are not  exactly sterling authorities!
One of  these citations  concerned a former official of a foreign
government that  was overthrown  while  he  was  in  the  "United
States" under  diplomatic passport.    Another  concerned  a  "US
citizen who  obtained a  US passport  before moving  to a foreign
country".  Another concerned a spouse's election to be treated as
a resident  alien under  IRC 7701(b).  The last citation is worth
investigating:




                        Page P - 12 of 98

                                                       Appendix P


     Status of trust as foreign trust turns upon whether trust is
     comparable  to   nonresident  alien   individual;      trust
     established and  administered under  laws of foreign country
     whose trustee  is a  foreign  entity  and  whose  corpus  is
     located in a foreign country is nonforeign trust even though
     trust is  grantor trust and its income is taxable to grantor
     who is United States citizen.  Rev Rul 87-61, 1987-2 CB 219.

                                                 [emphasis added]

     It would be revealing to examine the details about the trust
in question,  i.e., what was the "foreign country" under the laws
of which the trust was established and administered.  If it was a
Union State,  we have  a bingo.   Who  or what  was the  "foreign
entity" trustee?  Where exactly was the "corpus" located?  Notice
the term "nonforeign";  I presume this means "domestic", based on
the  IRC   definition  of  "foreign"  at  7701(a)(5)  (i.e.,  not
domestic).   Finally, notice  that there  is a "grantor" who is a
"United States  citizen";   this status  appears to  be the  only
mention of any nexus with the federal zone (if any).


Item #3:  United States Code Annotated (U.S.C.A.)

     Again, an  identical  pattern  is  found  in  the  annotated
version of  the United  States  Codes.    Here,  we  do  find  an
interesting exception  to the  general rule for the federal zone,
i.e., a  Guam corporation  is "foreign"  for federal  income  tax
purposes:

     Guam is  not a  "territory" within  meaning of  this section
     defining domestic corporation as one created or organized in
     United States or under laws of United States or of any state
     or territory,  and Guam  is considered  a possession so that
     its  corporations   are  foreign   for  federal  income  tax
     purposes.  Sayre & Co. vs Riddell, C.A. Guam, 1968, 395 F.2d
     407.


     Notice  how  carefully  they  skirt  the  general  issue  of
exclusive legislative  jurisdiction by  ruling  that  Guam  is  a
"possession", and  "possessions" were  not mentioned in the IRC's
definition of "domestic" at that time ("or Territory" was deleted
in 1977).   In  other words, in 1968 the definition of "domestic"
mentioned "United  States", and  "any State or Territory".  Since
Guam was  found to be a "possession" and not the "United States",
not a  "State" and  not a  "Territory", it  was not  domestic and
therefore foreign.   This  is a  fascinating little  intricacy in
this semantic jungle.

     The only  other citation  of any  interest is  the 1944 case
which interpreted  the meaning  of "includes".   I  consider this
decision to  be erroneous,  for reasons which I explain in detail
in Chapter  12 of The Federal Zone, third edition.  Specifically,


                        Page P - 13 of 98

                                                The Federal Zone:


in formal  English, a  noun is  either a  person, a  place, or  a
thing.   The IRC specifically defines a trust to be a "person" as
opposed to  a "place"  or a  "thing" (see  IRC 7701(a)(1)).   The
clarification of  "includes" at  IRC 7701(c)  specifically states
that this  term shall  not be  deemed  to  exclude  other  things
otherwise within  the meaning  of  term  defined;    notice  that
"persons"  and   "places"  are  conspicuously  absent  from  this
clarification of  "includes".   Therefore, a  "trust" cannot be a
thing otherwise  within the  definition of "transferee" because a
trust is  a person,  by definition,  and a  "transferee" is not a
person because  it is  not mentioned  in the  IRC  definition  of
"person".  I know this may sound strained, but the IRC definition
of "person" clearly embraces only an individual, a trust, estate,
partnership, association,  company  or  corporation;    moreover,
there is ample evidence that the IRC does obey strictly the rules
of formal English grammar.


     That's it!   Now,  don't you  get the feeling, as I do, that
they are  trying their  best to  avoid these crucial distinctions
between "foreign"  and "domestic"?  In light of the clarity which
is  found   in  Black's   definitions  of  foreign  and  domestic
corporations, I  would be hard pressed to demonstrate a clear and
consistent pattern  among these sparse authorities, many of which
are not even courts.  John, I am forced to conclude that some (if
not all)  of these  cases were contrived, and that a thorough set
of consistent  Court authorities  is  very  conspicuous  for  its
absence.


Item #4:  McKinley vs United States of America, S.D. Ohio, 1992

     Time  permitting,   I  will  try  my  best  to  analyze  the
unpublished cases  which you generously provided to me.  For now,
I will  take  a  brief  look  at  McKinley  because  it  will  be
published, and  because there is so little in this decision which
is relevant to The Federal Zone, i.e.:


     The Court  takes  judicial  notice  that  while  Ohio  is  a
     sovereign state,  it is  nevertheless  part  of  the  United
     States and  Ohio residents  are also residents of the United
     States and  are subject  to taxation.   The  Court finds the
     plaintiffs to be residents of the United States and not non-
     resident aliens.
                                                 [emphasis added]
                                                                 
     I  guess   this  Court   failed  to   read  Hooven   or  the
corresponding definitions  of "United  States" in  Black's.  More
importantly, this  decision flatly  contradicts the definition of
"United States"  at IRC  7701(a)(9).   Sure, Ohio  is part of the
"United States"  if "United  States" means  the several States of
the Union.  However, the IRC says that "United States" (when used
in a  geographical sense)  includes only the District of Columbia


                        Page P - 14 of 98

                                                       Appendix P


and the  States, and  "State" shall  be construed  to include the
District of  Columbia (and  nothing else)!   Since  singular  and
plural are  interchangeable (per Title 1), since "include" is not
found in  the clarification  of  "includes"  and  "including"  at
7701(c),  and  since  7701(c)  mentions  only  "things"  and  not
"persons" or  "places", we are entirely justified in arguing that
the term  "United States"  at 7701(a)(9) omits any mention of the
Union States because they were intended to be omitted.  The rules
of statutory  construction support  this  inference,  as  do  the
changes to  7701(a)(9) &  (10) that  resulted from the Alaska and
Hawaii Omnibus Acts:  Alaska and Hawaii were removed from the IRC
definition of  "State" when  they joined  the  Union  (of  freely
associated compact  states).   So,  as  pro  bono  judge  of  the
Sovereign Electrical  Circuit of  Justice, I  hereby reverse  the
holding in  McKinley vs  United States of America and remand with
instructions to  take explicit judicial notice of the legislative
history of  IRC 7701(a)(9),  in addition  to the well established
rules of statutory construction (see Sutherland, for example).


Item #5:  Notes on Decisions re: 1:6:2 and Null and Void Lloyd

     These cases are either favorable or neutral.  Lloyd, you are
a sitting  duck.  Notice also the careful IRC distinction between
"Secretary of  the Treasury"  and "Secretary" at 7701(a)(11).  At
first glance, this is bad news for our 7401 challenge, but closer
examination reveals the following:


     (A)  In General. -- The term "or his delegate" --

     (i)  when used  with  reference  to  the  Secretary  of  the
          Treasury, means any officer, employee, or agency of the
          Treasury Department duly authorized by the Secretary of
          the Treasury  directly, or  indirectly by  one or  more
          redelegations of  authority, to  perform  the  function
          mentioned or described in the context;


     Even though  IRC 7401  utilizes the  term "Secretary", which
means the Secretary of the Treasury or his delegate, the term "or
his  delegate"   means  an   officer,  employee  or  agency  duly
authorized by  the Secretary  of the Treasury either directly, or
indirectly by  one or  more redelegations of authority.  In other
words, Lloyd  Bentsen must  be in  the loop,  either directly, or
indirectly by  one or  more redelegations  of authority.   So, it
looks as if Null and Void Lloyd remains in a heap'a trouble;  his
colorable acts will spread through the Treasury Department like a
computer virus,  infecting everything  they touch.  We should get
an expert  on delegation  of  authority  to  see  what,  if  any,
redelegations originated  from Nicholas  Brady and  whether  they
remain valid and in force after Bentsen's reign began.




                        Page P - 15 of 98

                                                The Federal Zone:


     Enough for now.  I know you have nothing else to do but read
these technicalities.  The devil is always in the details.

Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship

enclosures

copy:  Mitchell Beals
       (great first name)









































                        Page P - 16 of 98

                                                       Appendix P


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

                                   February 8, 1993
John Voss, Director
N.C.B.A.
c/o P.O. Box 2255
Longmont, Colorado
Postal Code 80502/tdc

Dear John:

     In my  letter to you of February 7, my memory failed me when
I referred to Title 28;  the correct reference was Title 8 (I got
one number right).  I tracked it down today for you, because I am
convinced that  one of the "unpublished" cases which you recently
sent to  me is  completely wrong for ruling that Union States are
not "foreign  countries" for  purposes of  the IRC.   Enclosed is
stunning proof  of my  position from  American Jurisprudence.   I
picked  up  the  trail  in  Ballentine's  Law  Dictionary,  Third
Edition, where it defines "sovereign state" as follows:

     In the  United States, each state constitutes a discrete and
     independent sovereignty,  and consequently  the laws  of one
     state do  not operate of their own force in any other state.
     16 AmJur J2d, "Conflict of Laws", Section 4.

                     [Ballentine's Law Dictionary, Third Edition]

     I had to go hunting for the corresponding section in Am Jur,
because the  reference to  Section 4 is a typographical error.  I
found what I was looking for at Section 2 instead.  The key is to
understand that  the IRC  is a  "municipal law"  as far as income
taxation is concerned (see Conclusions in The Federal Zone):

     "... [T]he several states ... are otherwise, at least so far
     as private  international law  is  concerned,  in  the  same
     relation as  foreign countries13.   The  great  majority  of
     questions of private international law are therefore subject
     to the  same rules when they arise between two states of the
     Union as when they arise between two foreign countries,  and

                                                  [continued ...]


____________________

Footnotes:

13.  Hanley vs Donoghue, 116 U.S. 1, 29 L.Ed 535, 6 S.Ct 242
     Stewart vs Thomson, 97 Ky 575
     Emery vs Berry, 28 NH 473


                        Page P - 17 of 98

                                                The Federal Zone:


     in the  ensuing  pages  the  words  "state,"  "nation,"  and
     "country" are  used synonymously  and interchangeably, there
     being no intention to distinguish between the several states
     of the  Union and  foreign countries  by the  use of varying
     terminology.

                    [16 Am Jur 2d, "Conflict of Laws", Section 2]

Notice, in particular, the comment in footnote 11:

     In the sense of public international law, the several states
     of the  Union are  neither foreign  to the United States nor
     are they  foreign to each other, but such is not the case in
     the field of private international law.  Robinson vs Norato,
     71 RI 256, 43 A2d 467, 162 ALR 362.

Not to  be outdone,  Black's Sixth  Edition chimed  in  with  the
following similar message:

     The term "foreign state," as used in a statement of the rule
     that the  laws of  foreign nations  should be  proved  in  a
     certain manner,  should be construed to mean all nations and
     states other  than that in which the action is brought;  and
     hence one  state of  the Union is foreign to another, in the
     sense of that rule.

                          [Black's Law Dictionary, Sixth Edition]

     Further stunning  proof of  The Federal Zone thesis is found
in the  Immigration and  Nationality Act  (see  attached),  where
Congress slipped  by including  a key  exception in its statutory
definition of  "State"  at  8  USC  1101(a)(36).    Prior  to  an
amendment in 1987, this definition included the language "(except
as  used   in  section  310(a)  of  title  III  [8  USCS  Section
1421(a)])".  At that time, Section 1421(a) of Title 8 referred to
courts "in any State" and "all courts of record in any State".  I
failed to  pull the  current text  of 1421(a),  but  the  current
1101(a)(36) removed  the exception  clause!   I  would  bet  that
1421(a) now  has a  special  definition  for  the  term  "State",
because 1421(a) must be talking about courts of the Union States.
For corroboration,  I have  enclosed a  page from  the California
State Constitution (1879), wherein California Superior Courts are
given clear  original jurisdiction  to naturalize  and "to  issue
papers therefor".

Sincerely yours,



/s/ Mitch Modeleski, Founder
Account for Better Citizenship
enclosures:  photocopies of evidence




                        Page P - 18 of 98

                                                       Appendix P


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

                                   February 1, 1993
Rich Pralle, CFS
R D P & Associates
100 Brush Creek Road, #105
Santa Rosa, California Republic
Postal Code 95404/tdc

Dear Rich:

     I may  have misunderstood something which you said about the
Internal Revenue  Code.  Am I correct in remembering you say that
IRC 6672 concerned "withholding agents"?  When I returned home, I
looked up this section:

     Section 6672.  Failure to Collect and Pay Over Tax,
                    or Attempt to Evade or Defeat Tax

     (a)  General  Rule.  --  Any  person  required  to  collect,
     truthfully account for, and pay over any tax imposed by this
     title who willfully fails to collect such tax, or truthfully
     account for  and pay over such tax, or willfully attempts in
     any manner  to evade  or defeat  any such tax or the payment
     thereof, shall,  in addition  to other penalties provided by
     law, be liable to a penalty equal to the total amount of the
     tax evaded,  or not collected, or not accounted for and paid
     over.   No penalty  shall be  imposed under  section 6653 or
     part II  of subchapter  A of  chapter 68  for any offense to
     which this section is applicable.

                                 [26 U.S.C. 6672, emphasis added]

As you  can see,  there is  no explicit  mention of  "withholding
agents" in IRC 6672.  The section to which I was referring in our
conversation was IRC 7701(a)(16):

     (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.

                          [26 U.S.C. 7701(a)(16), emphasis added]

     Sections 1441, 1442 and 1443 are too long to reproduce here.
Their headings provide some indication of their contents:

     Section 1441.  Withholding of Tax on Nonresident Aliens

     Section 1442.  Withholding of Tax on Foreign Corporations

     Section 1443.  Foreign Tax-Exempt Organizations


                        Page P - 19 of 98

                                                The Federal Zone:


     The following  is the entire text of IRC 1461.  This section
is important  because it  specifically makes "withholding agents"
liable for the taxes they deduct and withhold:

     Section 1461.  Liability for Withheld Tax

     Every person  required to  deduct and withhold any tax under
     this chapter  is hereby  made liable  for such  tax  and  is
     hereby indemnified  against the  claims and  demands of  any
     person for  the amount  of any  payments made  in accordance
     with the provisions of this chapter.

                                 [26 U.S.C. 1461, emphasis added]
                                                                 
     In other  words, the persons from whom they withhold are not
liable for  the taxes  which they  withhold.   That  is  to  say,
nonresident aliens are not liable for the taxes that are withheld
from the  dividends they  receive from  stock issued  by domestic
corporations (see Treasury Decision 2313).

     So, we can link 1461 and 6672 because withholding agents are
liable for  the taxes  they deduct  and withhold,  i.e., they are
required to  collect  and  pay  over  the  tax  imposed  by  1461
(combining the language of 6672 and 1461);  if they don't pay the
taxes they  deduct and withhold, then they would be liable to the
penalty defined in 6672.

     Our research  indicates that  "withholding agents"  are  the
only ones  who are  specifically made  liable by  the IRC for the
payment of  income taxes.   If  you can  find another IRC section
which specifically  makes anyone  else liable  for the payment of
income taxes,  I would appreciate getting the exact citation from
you.

     On another subject, I have several serious problems with the
T.A.G. flyer  entitled "Are You Really Liable?"  One excerpt from
this flyer reads:

     Section 7701(a)(1) defines the term person as:

          "The term  'person' shall  be  construed  to  mean  and
          include an  individual, a  trust, estate,  partnership,
          association, company or corporation."

     Well now,  that certainly  seems  easy  enough  and  section
     7701(a)(1) makes  no mention  of the term "U.S. Individual".
     Now, look at section 7701(a)(30):

          "The term 'United States person' means -
          (A)  a citizen or resident of the United States,
          (B)  a domestic partnership,
          (C)  a domestic corporation, and
          (D)  any estate or trust ...."
                                                  [continued ...]


                        Page P - 20 of 98

                                                       Appendix P


     There  is   no  mention   of  the   term   "U.S.   Citizen";
     "Individual", or "U.S. Individual".

     ...

     Assuming the  term "U.S." means United States, then the 1040
     would be  for a  "United States  Individual", the 1120 for a
     "United States Corporation".


     In my  opinion, this  sequence of  logic is misleading.  The
flyer assumes  that the  term "U.S.  means United  States".  Fair
enough.   If it  doesn't mean "United States", the flyer does not
tell us  what else  it might  mean.   So, for  purposes  of  this
analysis, the term "U.S." means "United States".

     However, the  flyer also  states that there is no mention of
the term  "U.S. Citizen".   This  is technically correct, because
the IRC  never utilizes a capital "C" when it refers to "citizens
of the  United States" or "United States citizens" (except when a
capital "C"  is required  in the  first word  of  a  sentence  or
heading).   This is  misleading, because  the same  flyer  quotes
section 7701(a)(30)  which does  mention "citizen  or resident of
the United  States", i.e.,  "citizen of  the  United  States"  or
"resident of the United States".

     The flyer  also states  that there is no mention of the term
"Individual" or  "U.S. Individual".   Again,  this is technically
correct, because  the IRC  utilizes the  lower-case "i"  when  it
refers to  individuals.   But, for  similar reasons, the flyer is
misleading because "citizens of the United States" and "residents
of the United States" are among the "individuals" to whom the IRC
refers.   This is  so because  "person"  means  and  includes  an
"individual";   it also  means  and  includes  a  trust,  estate,
partnership, association,  company or corporation.  Therefore, an
"individual" is  a person  in the  same way  that a  horse is  an
animal;   moreover,  using  permissible  substitution,  the  term
"United States  person" means  and includes  a "U.S. individual".
The "U.S.  individuals" to  whom the IRC refers are the "citizens
of the United States" and "residents of the United States".  This
can be confirmed at 26 CFR 1.1-1 et seq.

     For similar  reasons, I  also consider the following excerpt
of the flyer to be misleading and erroneous:


     At section  6011, when required by regulations prescribed by
     the Secretary  any person made liable for any tax imposed by
     this title  ... shall  make a  return.   Did  the  Secretary
     prescribe by regulations that a citizen of the United States
     was liable for filing?  No, of course not.

                                                 [emphasis added]



                        Page P - 21 of 98

                                                The Federal Zone:


Here's the corresponding section of the CFR:


     1.6011-1  General requirement of return, statement, or list.

     (a)  General rule.  Every person  subject  to  any  tax,  or
     required to  collect any  tax, under Subtitle A of the Code,
     shall make such returns or statements as are required by the
     regulations in  this chapter.  The return or statement shall
     include therein  the information  required by the applicable
     regulations or forms.


Another important regulation is the following:


     1.6012-1  Individuals required to make returns of income.

     (a)  Individual citizen or resident --

          (1)  In general.   Except  as provided  in subparagraph
          (2) of  this paragraph,  an income  tax return  must be
          filed by  every individual  ... for  each taxable  year
          beginning after  December 31,  1972,  during  which  he
          received  $750   or  more  of  gross  income,  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 ....

     
     So, I  think the  T.A.G. flyer  is entirely  wrong  when  it
states that  "of course"  the Secretary  has "not"  prescribed by
regulations that  a citizen  of the  United States was liable for
filing.   I have  just proven  that the  Secretary has prescribed
regulations which  require a  "citizen of  the United  States" to
make an  income tax  return, provided  that  his  "gross  income"
exceeds the specified dollar threshold.  The computation of gross
income for  nonresident aliens is defined at IRC 872(a);  in most
situations, that  computation results  in a gross income of zero.
Frank Brushaber's "gross income" was not zero because he received
a dividend  from a  "U.S. corporation", namely, the Union Pacific
Railroad Company.   It  was a  U.S. corporation  because  it  was
incorporated by Congress.


     Finally, I  realize that  the California  voter registration
form does  say "For U.S. Citizens Only" in red letters across the
top of  the form.   However,  the affidavit  on that registration
form is the statement that matters:




                        Page P - 22 of 98

                                                       Appendix P


          READ THIS STATEMENT AND WARNING PRIOR TO SIGNING

     I am  a citizen of the United States and will be at least 18
     years of  age at  the time  of the  next election.  I am not
     imprisoned or  on parole  for the conviction of a felony.  I
     certify under penalty of perjury under the laws of the State
     of California that the information on this affidavit is true
     and correct.

                             WARNING
                                
     Perjury is  punishable by  imprisonment in  state prison for
     two, three or four years.  Section 126 Penal Code

                                           [emphasis in original]
                                                                 
                                                                 
     I contend  that the  "citizen of the United States" to which
this form  refers is  the same  "citizen of the United States" to
which the  Internal Revenue  Code refers,  to which  the Code  of
Federal Regulations refers, and to which the so-called Fourteenth
Amendment refers.  If you are interested, we have now located two
Utah  Supreme   Court  cases  which  struck  down  the  so-called
Fourteenth  Amendment.    The  language  of  Section  1  of  that
amendment is almost identical to the definition of "citizen" that
is found in 26 CFR 1.1-1(c).  Given that the so-called Fourteenth
Amendment was  never properly  approved and adopted, the earliest
definition of  "citizen of  the United  States" that we have been
able to find in law is found in the 1866 Civil Rights Act.

     Thanks for your consideration.


Sincerely yours,
     



/s/ Mitch Modeleski, Founder
Account for Better Citizenship


copy:  Rleen Joy
       Don Fletcher












                        Page P - 23 of 98

                                                The Federal Zone:


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

                                   December 22, 1992
Andrew Melechinsky
Constitutional Revival
P. O. Box 3182
Enfield, Connecticut
Postal Zone 06083/tdc

Dear Andy:

     Thanks very much for your unsigned note, postmarked December
16, 1992.   In response to my previous question concerning 1:8:17
in the U.S. Constitution, you wrote the following:


     Answer.   It is  self evident  that no  state or  any  other
     governing body  is authorized  to make laws for the District
     of Columbia  or other  enclaves which  belong to  the United
     States.   It should  be obvious  that this  provision of the
     Constitution was designed to make Congress the equivalent to
     the Enfield  Town Council  or the  Podunk Board of Selectmen
     for the purpose of governing those areas.
                                                    [my emphasis]


     I couldn't  agree more  with your  answer.   In fact,  it is
uncanny how  close our  thinking is  on this  question.    In  my
research and  writings, I  often refer to Congress as "City Hall"
for the  federal zone.  In other words, if Congress wants to pass
a "dog  leash" law  for D.C., it is authorized to do so by 1:8:17
in the  Constitution.  This dog leash law would apply only inside
D.C., and nowhere else, right?

     Now, let's  use a  similar example,  only  this  time  let's
incorporate a  tax in our example.  Let's say that Congress wants
to tax  the sale  of dog  leashes inside  D.C.  This is an excise
tax, right?   Congress  is empowered to levy excise taxes, right?
But, here's the rub:  must the tax rate be uniform throughout the
50 States?

     Wait a  minute, you  ask, the  question of  uniformity  only
applies to federal excises levied inside the 50 States.  This tax
on the  sale of  dog leashes  only applies inside the District of
Columbia.   The 50  States are  irrelevant to  the application of
this  tax  and,  therefore,  the  issue  of  uniformity  is  also
irrelevant, is  it not?   Such  an excise tax need not be uniform
throughout the  50 States, because it has no application anywhere
inside the  50 States.  It is a "municipal" tax.  No State or any
other governing  body is  authorized to  levy such  a tax  inside
D.C., just  as Congress  is not  authorized to  levy such  a  tax
outside D.C. and inside the 50 States.


                        Page P - 24 of 98

                                                       Appendix P


     The key  court  decision  on  this  question  is  Downes  vs
Bidwell, which  is one  of The Insular Cases, as they are called.
You might  also read  the several  articles which appeared in the
Harvard Law  Review on these cases.  I have enclosed a memo which
I wrote some time ago on exclusive authority as applied to direct
taxes.

     You  also  wrote  that  "it  takes  a  wild  imagination  to
visualize the  District of  Columbia as a second 'United States'.
Even if  it was,  it would still be subject to the constraints of
the Bill  of Rights."   Let's postpone correspondence on the Bill
of Rights until you and I can clarify our respective positions on
federal taxing  authority, OK?  In this context, the key question
is this:   are  federal municipal taxes subject to the uniformity
and apportionment  rules found in the Constitution?  My answer is
this:   no, because those restrictions only apply to federal laws
which are  levied inside  the 50  States.   One  of  the  Supreme
Court's best  statements on  this dual or heterogeneous attribute
of federal laws is the following excerpt from the Hooven case:


     ... [T]he  United States** may acquire territory by conquest
     or by  treaty, and may govern it through the exercise of the
     power of  Congress conferred  by Section  3 of Article IV of
     the Constitution ....

     In exercising  this power,  Congress is  not subject  to the
     same constitutional  limitations, as  when it is legislating
     for the  United States***. ... And in general the guaranties
     [sic] of the Constitution, save as they are limitations upon
     the exercise of executive and legislative power when exerted
     for or  over our insular possessions, extend to them only as
     Congress, in  the exercise  of its  legislative  power  over
     territory belonging  to the  United States**, has made those
     guaranties [sic] applicable.

             [Hooven & Allison Co. vs Evatt, 324 U.S. 652 (1945)]
                                                 [emphasis added]


     Now, let's  imagine, just for the sake of argument, that the
income tax  provisions in the Internal Revenue Code are municipal
statutes, which  are "not  subject  to  the  same  constitutional
limitations" which  apply when  Congress "is  legislating for the
[50] United  States" of  America.  You will notice that the IRC's
petroleum taxes  are uniform  throughout the  50 States,  and  in
those provisions  the term  "State" is  defined to include the 50
States.   However, when it comes to the graduated income tax, the
term "State"  is defined to include only the District of Columbia
(and none  of the  50 States).  Isn't this odd?  Not really, when
you realize that the graduated income tax is, indeed, a municipal
statute which  is unaffected  by the uniformity and apportionment
restrictions in  the  Constitution,  for  the  reasons  discussed
above.


                        Page P - 25 of 98

                                                The Federal Zone:


     Last but  not least,  we have in America a government of the
"United States"  and a  government of each of the several States;
each has citizens of its own.  Therefore, we have State Citizens,
and we  have federal  citizens (also  known as  "citizens of  the
United States").    See  the  Cruikshank  case  for  the  seminal
authority on  this dual  citizenship.  Now, the exercise of State
Citizenship is  an unalienable right, endowed by the Creator (see
the Declaration  of Independence).   But,  and this is important,
even crucial  to the  issue of taxation, federal citizenship is a
statutory privilege,  the exercise  of which can be taxed with an
excise tax without uniformity throughout the 50 States.  The term
"citizen of  the United States" was first expressed in law by the
Civil Rights  Act of  1866.  Some people say that it was put into
the Constitution by the so-called 14th Amendment, but we have now
located two  (2) Utah  Supreme Court  cases which  held that  the
Amendment was  not properly  ratified.   Therefore, the status of
"United States  citizen" is at best the creation of Congressional
legislation -- endowed by Congress and NOT by the Creator.

     So, think  of federal  citizens as  citizens of  the federal
zone.   The taxation  of their incomes is a municipal excise tax,
just like  the tax  on dog leashes discussed above.  The "income"
is not  the subject  of the  tax;   the subject of the tax is the
exercise of  the statutory privilege known as federal citizenship
(also known  as "U.S.  citizenship").  The "income" is simply the
measure of the tax.

     I hope  I have  made some  sense out  of the jungle of legal
jargon and double-talk which gets in the way of clear thinking on
this subject.   Admittedly, the whole situation is made immensely
complicated by  the deliberate vagueness and confusion which were
incorporated into  Title 26 and its regulations in the CFR.  But,
I am  confident we  have now proven that the graduated income tax
provisions of Title 26 are municipal statutes which apply only to
the federal  zone (e.g. federal employees) and to the citizens of
that zone, no matter where they might "reside".  In fact, to be a
"resident" of  California, strictly speaking, means that one is a
federal citizen  who resides  outside the federal zone and inside
California.   Technically speaking,  a  State  Citizen  does  not
"reside" in the State of his domicile.

     I would  appreciate getting your written comments on all the
above.   In the  meantime, thanks  for your  continuing  work  to
benefit the Freedom Movement in America today.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship



                        Page P - 26 of 98

                                                       Appendix P


                                   c/o P. O. Box 6189
                                   San Rafael, California
                                   Postal Zone 94903-0189/TDC
                                   November 4, 1992
Karl Loren, Author
1831 North Bel Aire Drive
Burbank, California Republic
Postal Zone 91504/tdc

Dear Karl:

     Thank you  for the  complimentary copy  of Verity, Volume 2,
Number 10, dated November 1, 1992.  Although I do not care to get
embroiled in  the trust  controversy described  in this  issue of
Verity, your  newsletter does  contain the  following  paragraphs
which, in  my humble opinion, contain serious errors.  Numbers in
[brackets] are my paragraph numbers, for ease of reference:


[1]       We in  the United  States tax  U.S. Citizens  on  their
     income whether  they live  in  the  U.S.  or  in  a  foreign
     country.     We  tax  those  U.S.  Citizens,  regardless  of
     residence, on  their income  whether they  received it  from
     within the United States or from outside the United States.

[2]       We even  go so  far as  to tax aliens who reside within
     the United  States -- on their income from either within the
     U.S. or outside the U.S.

[3]       A U.S.  Supreme Court  case [Cook  v. Tait, 265 U.S. 47
     (1924)] requires the U.S. Citizen abroad to pay taxes in the
     U.S.

[4]       The Supreme  court ruled  in this  case that the United
     States has  the power to tax its citizens on their worldwide
     income solely by reason of their citizenship.

[5]       "No  other   major  country  in  the  world  taxes  its
     nonresident citizens on their foreign-source incomes at all"
     according to  Marshall J.  Langer, Professor  of Law,  Miami
     University, author  of Practical International Tax Planning.
     There is even a tax law that makes it illegal to change your
     U.S. citizenship for the purpose of avoiding taxes!  [citing
     IRC Section 877(a)]

[6]       We even  go so  far as  to tax  nonresident aliens  who
     reside outside  the U.S., but who receive income FROM within
     the United States. [citing IRC Sections 871(a) and 871(b)]

[7]       But, the  IRS certainly  does not try to collect income
     taxes from  a nonresident alien who receives his ONLY income
     from sources without the United States.




                        Page P - 27 of 98

                                                The Federal Zone:


[8]       It would  be ludicrous  to even  pause to  consider the
     possibility of  the United  States claiming tax jurisdiction
     over a  nonresident  alien  earning  income  from  a  non-US
     Source!


     I am  somewhat chagrinned  to be  writing this letter in the
first place,  because you  purchased The Federal Zone some months
ago, and  your written  communications to me seemed to imply that
you understood,  and agreed  with, the  book.   The above  quoted
paragraphs from  Verity, dated  November 1,  1992, now  leave  me
wondering just how much of The Federal Zone you actually read and
understood.   Let me proceed with an analysis of your statements,
paragraph-by-paragraph:


[1]       The Internal  Revenue Code (26 USC) and the regulations
     which promulgate  that Code  (26 CFR)  do not impose federal
     income taxes  on "U.S. Citizens".  The regulations at 26 CFR
     1.1-1(b) and  (c) state that income tax liability is imposed
     on the  worldwide income  of "citizens of the United States"
     and "residents  of the United States".  In English, there is
     a world  of difference  between a  proper noun  and a common
     noun.   Proper nouns are capitalized;  common nouns are not.
     If you  think  this  distinction  is  irrelevant  or  merely
     academic, then  it is  now incumbent  upon you  to carry the
     burden of  finding and demonstrating one single reference to
     "U.S. Citizens"  in the IRC and its regulations.  References
     to "Citizen"  or "Citizens" in the first word of a sentence,
     or in  paragraph headings,  do  not  count,  because  formal
     English requires that terms in such grammatical positions be
     capitalized.

          Moreover, the  Hooven case  quoted and discussed in The
     Federal Zone  proves that  the term  "United States"  has at
     least three  different  meanings  in  law.    This  fact  is
     supported by  the same  meanings which  are found in Black's
     Law Dictionary,  Sixth Edition.   The  late John  Knox  once
     confided to  me that  the Solicitor  General in  De Lima  vs
     Bidwell actually argued that the term "United States" has at
     least five (5) different meanings in the Constitution.  I am
     also told that James Madison anticipated the ambiguity found
     in the  term "United  States", and documented this ambiguity
     in his  notes on the Constitutional Convention.  These notes
     were reportedly  published in  1840, but to date I have been
     unsuccessful in  locating a  copy  of  these  notes.    Your
     paragraph [1]  is ambiguous  for failing to define precisely
     which of  these several meanings you are utilizing.  This is
     crucial  because  you  make  the  all-important  distinction
     between income  derived  from  sources  within  the  "United
     States" and  income derived from sources without the "United
     States".    A  precise  definition  of  "United  States"  is
     therefore pivotal  to any and all discussions of federal tax
     law.


                        Page P - 28 of 98

                                                       Appendix P


          Moreover, the  50 States  are considered to be "foreign
     countries" with respect to the "United States", for purposes
     of federal  taxation, because the regulations clearly define
     the "United  States" to  be the  territory  over  which  the
     federal government  has exclusive  rights.  This is the very
     same term  that is  found in  1:8:17 in the Constitution and
     for this  reason "exclusive" is also a pivotal term.  The 50
     States of  the Union  retain all  rights not reserved by the
     people  and   not  explicitly  enumerated  for  the  federal
     government  by  the  Constitution  (see  the  9th  and  10th
     Amendments for proof).


[2]       Again,  this  paragraph  fails  to  provide  a  precise
     definition of "United States".  Moreover, it makes reference
     to "aliens"  who "reside  within the United States".  If you
     study IRC  7701(b)(1)(B) very  carefully, you  will discover
     that an  "alien" is  an individual  who is not a "citizen of
     the United  States" and a "nonresident" is an individual who
     is not  a "resident of the United States (within the meaning
     of  subparagraph  (A)".    IRC  7701(b)(1)(A)  is  important
     because  it   defines  the  three  tests  which  distinguish
     "resident aliens"  from "nonresident  aliens".   These three
     tests are  the only  ways in  which  an  "alien"  can  be  a
     "resident alien".    Therefore,  these  three  tests  define
     "residence" for  purposes of  federal income  taxation.  See
     also IRS Publication 519:  "For tax purposes, an alien is an
     individual who  is not  a U.S. citizen."  Therefore, a State
     Citizen who  is not  also a  federal citizen is an alien for
     federal tax  purposes.   Your paragraph  [2]  is  vague  and
     therefore void.

[3]       Again, you  make reference  to a  "U.S. Citizen".   See
     discussion of paragraph [1] above.

[4]       Now you  make reference  to the  "United States",  "its
     citizens" and "their citizenship".  Oddly, this paragraph is
     grammatically and legally correct, because the Congress does
     have exclusive legislative jurisdiction over its own federal
     citizens, no matter where on planet Earth they may "reside".
     The enclosed  materials go  into great  depth to explain the
     distinction between  federal citizens and State Citizens, so
     I won't  belabor this  distinction here.  It is important to
     realize that  the distinction  between these  two classes of
     citizenship  is   as  important   and  fundamental   as  the
     distinction between  the State and federal governments.  See
     the Cruikshank  case, K.  Tashiro vs  Jordan, and  Ex  parte
     Knowles for  proof.   The  Slaughter  House  Cases  are  the
     seminal decisions  in this  area.   If you  fail to  educate
     yourself  about  this  important  legal  history,  you  will
     continue to propagate the kind of confusion which is evident
     in Verity for November 1, 1992.




                        Page P - 29 of 98

                                                The Federal Zone:


[5]       Here again  you are  back on track, but it is not clear
     whether you  are back  on track knowingly and intentionally,
     or not.   Congress  has authority  to tax  its  own  federal
     citizens, wherever  they reside  and wherever  the source of
     their  income.      Therefore,   "resident   citizens"   and
     "nonresident citizens"  are treated  the same in federal tax
     law because  the worldwide  income of  both groups is taxed.
     Your paragraph  [5] does  make a grievous error, however, by
     stating that  the tax  law makes  it illegal  to change your
     "U.S. citizenship"  for the purpose of avoiding taxes.  Your
     paragraph [5]  then cites  IRC 877(a).   This  is  not  what
     Section 877(a) says, nor is expatriation made illegal by any
     subparagraphs of  Section 877.   Read  them!  IRC 877 merely
     discusses the rules which shall govern federal tax liability
     when expatriation occurs.  It does not outlaw expatriation!

[6]       This paragraph  is also correct on its face, but it too
     suffers for  lacking a precise definition of "United States"
     and "U.S."   Sections  871(a) and 871(b) are governed by the
     statutory definition of "United States" that is found at IRC
     7701(a)(9).   This definition,  in turn,  is governed by the
     statutory  definition  of  "State"  that  is  found  at  IRC
     7701(a)(10).   IT IS  VERY IMPORTANT TO TAKE CAREFUL NOTE OF
     THE EXACT WORDING OF 7701(a)(10):

          The term  "State" shall  be construed  to  include  the
          District  of   Columbia,  where  such  construction  is
          necessary to carry out the provisions of this title.

                                                 [emphasis added]
                                                                 
          Now,  it   is  true   that  the  terms  "includes"  and
     "including" are  qualified by  IRC 7701(c),  but notice that
     "include" is  not qualified  by IRC  7701(c).  This may seem
     like nit-picking,  but  the  published  rules  of  statutory
     construction do  apply here.    Specifically,  the  rule  of
     inclusio unius  est exclusio  alterius (the inclusion of one
     is the  exclusion of  others)  states  that  an  irrefutable
     inference must  be drawn  that what  is omitted  or excluded
     from a  statutory definition  was intended  to be omitted or
     excluded.  The term "include" is excluded from 7701(c).  The
     term "California"  is excluded from 7701(a)(10).  Therefore,
     all by itself, this rule of statutory construction allows us
     to infer that "include" is not expansive and "California" is
     excluded from  the statutory  definition of "State" found at
     7701(a)(10).

          There are  other rules  of statutory construction which
     produce the  same result, e.g., ejusdem generis (the federal
     zone and  the 50 States are not in the same general class of
     entities because  the 50  States are  members of  the Union,
     while the  areas within  the federal zone are not).  Now the
     burden is  upon you  to prove  otherwise.  Don't forget that
     any doubt  must be  resolved in favor of those upon whom the


                        Page P - 30 of 98

                                                       Appendix P


     tax is  sought to  be laid;   the Supreme Court has said so,
     more than once!

[7]       The IRS most certainly does try to collect income taxes
     from nonresident  aliens who  receive their ONLY income from
     sources without the "United States".  For purposes of income
     taxation, the  "United States"  as defined  in the IRC is no
     larger than  the territory  over  which  Congress  exercises
     exclusive legislative authority, i.e., the federal zone.  If
     you study Treasury Decision 2313 carefully, you will come to
     discover that Frank Brushaber was classified by the Treasury
     Department as  a nonresident  alien.   His  court  documents
     prove that  he claimed  to be  a State Citizen who lived and
     worked in  New York City.  Therefore, State Citizens who are
     not also federal citizens are "nonresident aliens" as far as
     federal income  taxes are  concerned.   How many millions of
     Americans  have   been  victimized  by  the  deliberate  and
     criminal confusion  which has  been fostered  by  vague  and
     ambiguous terms  in the  IRC?   I say  at least 100 million,
     counting all  those who  have paid  income taxes  and passed
     away since 1913.

[8]       It certainly  is ludicrous  for the  "United States" to
     claim tax  jurisdiction over  nonresident  aliens  who  earn
     income from  "non-US" sources,  but IT  makes this claim all
     the time.  By IT I mean the authority granted to Congress by
     1:8:17 and  4:3:2 in  the U.S. Constitution, which authority
     MUST be  lawfully delegated  to the Internal Revenue Service
     (a private  mercantile organization  which collects interest
     payments for the Federal Reserve banks).

          The evidence  is overwhelming that Congress simply does
     not have exclusive legislative authority over the 50 States.
     The study  entitled "Jurisdiction  Over Federal Areas Within
     the States" makes this case over and over and over.  At last
     count, this  study cites  more than  700 federal  and  state
     court cases  which all  found the same thing:  Congress does
     not enjoy  exclusive  legislative  jurisdiction  inside  the
     boundaries of  the  50  States  until  and  unless  a  State
     Legislature cedes  its sovereign  jurisdiction to  Congress,
     and does  so for  a  specific  parcel  of  land  (called  an
     "enclave").

          At this  point in  the game,  Karl, you  can no  longer
     claim ignorance  of this massive body of case law.  Congress
     cannot impose a direct tax on State Citizens unless that tax
     is duly  apportioned.   The earnings  of State  Citizens are
     exempt  from   taxation  by   the  fundamental   law.    The
     apportionment rule  is found  in the  fundamental  law,  but
     there  are  no  apportionment  provisions  anywhere  in  the
     Internal Revenue  Code.  The burden is now upon you to prove
     otherwise!




                        Page P - 31 of 98

                                                The Federal Zone:


     A man  with your  intelligence should  not hesitate to admit
that the  ambiguities in Title 26 had to be intentional.  We know
that the  Treasury Department  can be  clear when  it needs to be
clear.   The most  important ambiguity  is found  in the  several
meanings of  "State" and  "United States"  in the statute and its
regulations.   There is an obvious reason why the definitions are
not crystal  clear and completely unambiguous, and that reason is
MONEY.   A crystal clear and completely unambiguous definition of
federal income  tax jurisdiction  would limit  the definition  of
"United States"  to the  federal zone  and no  more.   There is a
massive amount  of case  law which  proves that Congress does not
exercise exclusive  legislative  jurisdiction  upon  any  of  the
Citizens or the territory of the 50 States.

     In support of all my observations above, I have enclosed for
your information  the drafts  of several  chapters from the third
edition of The Federal Zone, which has not yet been published.  I
strongly encourage  you to  devour this  material, and  also  the
court cases and other publications cited therein.  If you persist
in claiming  that there  is nothing  to  be  made  of  difference
between "Citizens"  and "citizens",  particularly in  the face of
all the  evidence which I am now sharing with you, then I will be
forced to  conclude that  you and I going in opposite directions.
At the  very least,  I will  be  forced  to  conclude  that  your
understanding of  federal tax law does not warrant the high costs
you are charging for your trust advisory services.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship

enclosures



















                        Page P - 32 of 98

                                                       Appendix P


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

                                   October 1, 1992
Hi John,

     I've continued  to think about De Ganay vs Lederer, 250 U.S.
376.   Here's a  decision table to help us organize our thoughts.
It is  not necessarily  rigorous or  exhaustive, but  provides  a
useful framework.   For what it's worth, this table distinguishes
stockholder dividends from corporate profits, as follows:


Case 1:
Both stockholder and corporation are overseas.

Plaintiff Defendant 16th Result

overseas  overseas  yes  Congress cannot tax at all because
NRA       corp.          both are beyond its jurisdiction.

overseas  overseas  no   Congress cannot tax at all because
NRA       corp.          both are beyond its jurisdiction.

The decisive  factor here  is territorial jurisdiction.  The 16th
Amendment is irrelevant.


Case 2:
Corporation is  chartered by a Union State (a/k/a "State corp.").
The tax on stockholder dividends is a "direct" tax, per Pollock.

Plaintiff Defendant 16th Result

overseas  State     yes  Congress can tax without apportionment
NRA       corp.          because stockholder is not protected by
                         the Constitution.

overseas  State     no   Congress can tax without apportionment,
NRA       corp.          because stockholder is not protected by
                         the Constitution.

State     State     yes  Congress can tax without apportionment
Citizen   corp.          if both are inside a Union State.

State     State     no   Congress cannot tax without apportion,
Citizen   corp.          Congress can    tax with    apportion,
                         if both are inside a Union State.

The decisive  factor here  is  the  protection  afforded  by  the
applicable Constitution(s),  if any.   Note  that a ratified 16th
Amendment makes  a difference  for State  Citizens, but  not  for
overseas NRA's.


                        Page P - 33 of 98

                                                The Federal Zone:


Case 3:
Corporation is  chartered by a Union State (a/k/a "State corp.").
The tax on corporate profits is always an "indirect" tax:

Plaintiff Defendant 16th Result

either    State     yes  Congress can tax if tax is uniform and
NRA       corp.          corporation is inside a Union State.

either    State     no   Congress can tax if tax is uniform and
NRA       corp.          corporation is inside a Union State.

The decisive  factor here  is that  profit  generation  by  State
corporations is  a revenue-taxable  activity because corporations
are privileged  creations of government (they enjoy the privilege
of limited liability).  The tax rates must be uniform, however.

Case 4:
Corporation is chartered inside federal zone (a/k/a "domestic").
The tax on corporate profits is always an indirect tax.

Plaintiff Defendant 16th Result

either    domestic  yes  inside federal zone, Congress can tax
NRA       corp.          without uniformity or apportionment

either    domestic  no   inside federal zone, Congress can tax
NRA       corp.          without uniformity or apportionment

The decisive  factor here is that profit generation by "domestic"
corporations  is   a  revenue-taxable   activity  because   these
corporations are  privileged creations  of Congress.   Tax  rates
need not  be uniform or apportioned;  only majority rule needs to
be satisfied.

Summary

     Thus, if  my analysis  of corporate  profits is correct, the
16th Amendment  is not  relevant,  even  if  the  corporation  is
chartered by  a Union State.  Congress is free to define a tax on
corporate profit as an excise tax, and Congress need only satisfy
the uniformity  rule if  the corporation  is chartered by a Union
State.     Congress  need  only  satisfy  majority  rule  if  the
corporation is chartered inside the federal zone (see Chapter 13,
3rd edition).

     The  situation   is  a  bit  different  if  the  subject  is
dividends.   The  status  of  dividend  recipients  then  becomes
relevant, as  does the  ratification of  the 16th  Amendment.   I
distinguish dividends  from profits  because they  can  be  taxed
separately.   There is  no compelling logical reason why dividend
payors must  be held  liable for  the tax on dividends;  dividend
recipients could  be designated  the liable  party  (if  not  the
withholding agent).


                        Page P - 34 of 98

                                                       Appendix P


     So, the  De Ganay  case does  not represent  a threat to the
thesis of  The Federal  Zone after  all.   This is so because the
dividend recipient  was unprotected  by the  Constitution and the
corporation  was   engaged  in   a  privileged,   revenue-taxable
activity, even  if  it  was  chartered  by  the  Commonwealth  of
Pennsylvania.

     If this  analysis  does  anything,  it  reveals  a  need  to
distinguish overseas  NRA's (like  Emily  De  Ganay)  from  State
Citizens (like Frank R. Brushaber).  The current Internal Revenue
Code does not make this distinction, however.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship




































                        Page P - 35 of 98

                                                The Federal Zone:


                   Conklin Rebuttal (briefly)
                                
                               by
                                
                    Mitch Modeleski, Founder
                 Account for Better Citizenship

                          July 4, 1992


Liability of Individuals

Conklin is  saying that  nobody is  made liable for income taxes.
His ad  in The  Connector of  May 1992  stated:  "My name is Bill
Conklin and  I have searched the Internal Revenue code for twelve
years:   it is  my opinion after extensive research that there is
no statute  that makes  anyone liable  for the  income  tax  ..."
[emphasis added].  This statement is wrong;  "withholding agents"
are specifically  made liable  by Sections  1441 and  1461 of the
Internal Revenue Code (IRC).

Effect of Regulations

Conklin has  written privately  that Congress  cannot  promulgate
regulations which exceed the statute and that a regulation cannot
exceed the limitations created by the statute.  The preponderance
of case  law proves  that the  regulations in  26 CFR do have the
force and  effect of  law.   See 2 Am Jur 2d, Section 289 et seq.
See also  the Federal  Register Act  and Administrative Procedure
Act.  The regulations in 26 CFR are not so easily swept away.

In re: Becraft

This is  not a good decision because Becraft's research concludes
that only  "aliens here  and  citizens  abroad"  are  liable  for
federal income  taxes.  This conclusion is easily disproven by 26
CFR 1.1-1(b),  one of the key regulations which define the income
tax liability of individuals:

     In general,  all citizens  of the  United States**, wherever
     resident, and  all resident  alien individuals are liable to
     the income  taxes imposed  by the Code whether the income is
     received from sources within or without the United States**.

                                [26 CFR 1.1-1(b), emphasis added]

Moreover, that  court reduced Becraft's argument to one elemental
proposition, and rejected it for "absurdity" and "frivolity":

     The  Sixteenth   Amendment  does   not  authorize  a  direct
     non-apportioned  income   tax  on   resident  United  States
     citizens [sic] and thus such citizens are not subject to the
     federal income  tax laws.   We  hardly need  comment on  the
     patent absurdity and frivolity of such a proposition.


                        Page P - 36 of 98

                                                       Appendix P


Well, the  Brushaber decision  found otherwise.    Moreover,  the
Becraft court  uses the  term "resident  United States  citizen",
which  manifests   a  lack   of  understanding  of  the  relevant
regulations and  their legislative  history.   The  citizen/alien
dimension is  a birth  status (or  naturalization status).    The
resident/nonresident dimension  is a  location status.   The term
"resident United  States citizen" only makes sense if one intends
to distinguish  it  from  "nonresident  United  States  citizen",
"resident alien"  and "nonresident  alien".   The  Becraft  court
would benefit  enormously by mastering The Matrix as explained in
The Federal Zone.  Their failure to define terms is a serious, if
not fatal flaw.

U.S. vs Collins

*    By citing  Collins as an authority for defeating The Federal
     Zone thesis,  Conklin confuses  judicial  jurisdiction  with
     legislative jurisdiction.   The two are obviously different:
     district  court   jurisdiction  is   created   by   statute,
     legislative jurisdiction is created by the Constitution.

*    Collins ruled:  "The argument  that the  sixteenth amendment
     does not  authorize a  direct, non-apportioned tax on United
     States citizens similarly is devoid of any arguable basis in
     law" [emphasis added].  This statement is demonstrably false
     because the Brushaber decision supports this argument.

*    Collins also  ruled:   "For seventy-five  years, the Supreme
     Court has recognized that the sixteenth amendment authorizes
     a direct  nonapportioned tax  upon  United  States  citizens
     throughout the  nation, not  just in  federal enclaves,  see
     Brushaber ...."   Brushaber  is NOT  an authority  for  this
     statement;   Brushaber ruled  that income taxes are indirect
     taxes and  the only  effect of  the 16th  Amendment  was  to
     overturn the Pollock principle.  Read it!

The existence  of one  or more  apparently unfavorable cases does
not invalidate The Federal Zone (see Unfavorable Case Law below).

Sixteenth Amendment

Most federal  courts refuse to recognize the mountain of material
evidence which  impugns the  ratification of  the so-called  16th
Amendment.  However, the judge in U.S. vs Benson admitted, on the
record, that  there is  no law  if Bill  Benson is  correct.   By
citing Collins,  Conklin is  siding with irresponsible judges who
label the  evidence a  "political" question.   Well,  it wasn't a
"political" question in the years immediately after the amendment
was "declared"  ratified.  Both the Collins and Becraft decisions
are badly  defective because  they attempt to sustain the obvious
fiction that  there is  no material  evidence  against  the  16th
Amendment.  Mr. Conklin needs to choose between fact and fiction.
(Racing firemen don't stop for curb dogs.)



                        Page P - 37 of 98

                                                The Federal Zone:


Treasury Decision 2313

This Treasury  Decision is  crucial  evidence  that  The  Federal
Zone's status  and  jurisdiction  arguments  are  valid.    Frank
Brushaber declared  himself to  be a  citizen of the State of New
York, and  a resident  of the Borough of Brooklyn, in the City of
New York.   Both  the federal  courts and the Treasury Department
found that  Frank Brushaber was a NONRESIDENT ALIEN, according to
their own  rules!  The Secretary of the Treasury had no basis for
extending T.D.  2313  to  those  who  were  not  parties  to  the
Brushaber case.   Frank  Brushaber did  err in  assuming that his
defendant was  a foreign corporation;  the Union Pacific Railroad
Company was  a domestic  corporation, because  it was  originally
created by  an Act of Congress.  Conklin has neglected to mention
T.D. 2313 anywhere in his published and private communications.

The Three United States

The Hooven  case is standing authority for the fact that the term
"United States"  has three  separate meanings, all different from
each other.   Federal  courts had an excuse before this decision;
but after  Hooven, courts  have no  excuse for failing to specify
which of  these three  meanings they  intend, with each and every
use of  the term.  This lack of specificity leads to uncertainty,
which leads  in turn  to court  decisions which are also void for
vagueness.   The 6th  Amendment guarantees  our right  to  ignore
vague and  ambiguous laws, and this must be extended to vague and
ambiguous case  law.  Moreover, Hooven is also standing authority
for the  principle of  territorial  heterogeneity,  an  important
theme  in   The  Federal   Zone  which   Conklin  ignores  almost
completely.   Similarly, Conklin  has failed even to mention "The
Insular Cases" or to deal with the obvious relevance of Downes vs
Bidwell,  namely,  excise  uniformity  doesn't  rule  inside  the
federal zone;  the majority rules inside the federal zone.

Knowledge of the Book

Conklin has  not purchased The Federal Zone, and has yet to admit
that he  has even  read the book.  The failed ratification of the
Sixteenth Amendment figures prominently in the book's main logic.
Territorial heterogeneity is a theme which Conklin ignores almost
completely.   The "void for vagueness" doctrine affords all of us
an opportunity  to agree,  on the  vagueness at  least.   If  the
statute is  clear, then why did Conklin fail to find the sections
that make  withholding agents  liable?   He had  12 years, and he
still missed them.  The Spreckels case ruled that "doubt is to be
resolved in  favor of  those upon  whom the  tax is  sought to be
laid."   Wigglesworth ruled  that, in  case  of  doubt,  statutes
levying  taxes   "are  construed   most  strongly   against   the
Government, and  in favor of the citizen".  The continuing debate
on all  sides is important empirical proof that the IRC should be
nullified for  vagueness.   If the Supreme Court cannot be clear,
then nobody can;  and their titles are Justice.



                        Page P - 38 of 98

                                                       Appendix P


Unfavorable Case Law

The existence  of one  or more  apparently unfavorable cases does
not invalidate  The Federal  Zone, particularly  when those cases
are  predicated   on  rebuttable   assumptions  (like   the  16th
Amendment, or  "clarity" in the statute, or arbitrary definitions
of "income").   The book proves that chaos exists in the relevant
federal cases:  the Supreme Court has clearly contradicted itself
when defining  the effects  of a  ratified 16th  Amendment.  "The
devil  can  quote  scripture  for  his  purpose,"  wrote  William
Shakespeare.   With courts  in conflict, one can cite authorities
for either  side of  any such  unresolved debates.  The Prince of
Darkness is also the Prince of Lies.

Private Law

There are  many mysteries  which are  amazingly clarified  by The
Federal Zone, including the "private law" nature of the IRC.  The
IRC is a municipal statute for the federal zone.  Congress is the
sovereign municipal  authority for the federal zone.  If Congress
had intended  the IRC  to apply  to all 50 States, Title 26 would
have need to be enacted into positive, "public" law.  It was not.
(For details, see Super Gun by Lori Jacques, pages 74-81.)

Uniform Commercial Code

The UCC  is precisely  on point,  because federal tax returns are
"foreign  bills   of  exchange"   which  are  subject  to  rules,
regulations and case law which have built up around the UCC.  The
50 States are "foreign" to each other, just as each is foreign to
the federal  zone (see  In re  Merriam).   The UCC  has  explicit
provisions for  reserving the  unalienable rights  of  those  who
enter such  contracts, including  but not limited to the right to
due  process   and  the   immunity  against   self-incrimination.
Moreover, the UCC has a guarantee that statutes must be construed
in harmony  with the  Common Law.   The  U.S. Constitution is the
last vestige of the Common Law at the federal level.

The Smoking Gun

The Federal  Zone documents  the "smoking  gun" --  awesome proof
that  the  vagueness,  deception,  confusion  and  jurisdictional
ambiguities in Title 26 were intentional.













                        Page P - 39 of 98

                                                The Federal Zone:


MEMO

TO:       John Voss, Director, N.C.B.A.
          other interested parties

FROM:     Mitch Modeleski, Founder
          Account for Better Citizenship

DATE:     June 9, 1992

SUBJECT:  Do the regulations in 26 C.F.R.
          have the force and effect of law?


The debate  fostered by  the claims  on N.C.B.A.'s $50,000 Reward
appears to have reached the following point of departure:


     Mr. Conklin has argued that Title 26 makes nobody liable for
     federal income taxes.

     This argument was defeated by reference to clear sections of
     Title 26  which make "withholding agents" liable for federal
     income taxes.

     I do not as yet know if Mr. Conklin is a withholding agent.

     In a private communication, Mr. Conklin has also argued that
     the regulations  in 26 C.F.R. create no liability because "a
     regulation cannot  exceed the  limitations  created  by  the
     statute."


The purpose  of the remainder of this memo is to cite some of the
case law  which is  relevant to the questions of validity, and of
the legal  force and  effect, of  regulations promulgated  by the
Secretary of  the Treasury.  The attached abstracts from American
Jurisprudence reveal  a substantial body of case law which is not
always entirely consistent on this question.  For example:


     A regulation cannot supply omissions of the statute.

                                       [2 Am Jur 2d, Section 289]
                              -but-

     A regulation which fulfills the purpose of the law cannot be
     said to be an addition to the law.

                                             [ibid., Section 300]


The following  are notable  excerpts from  the  attached  Am  Jur
sections that deal with the effect and validity of rules:


                        Page P - 40 of 98

                                                       Appendix P


     Rules,  regulations,   and   general   orders   enacted   by
     administrative agencies  pursuant to the powers delegated to
     them have the force and effect of law.  [page 119]

     There have  been applied  to administrative  regulations the
     principles that everyone is presumed to know the law or that
     ignorance of  the law is no excuse, and the courts will take
     judicial notice of them.  [page 120]

     ... [T]here  is no  violation of the Federal Constitution in
     an act of Congress which provides for a defense to an action
     under the  statute based  on good  faith reliance  upon  any
     administrative regulation ....  [page 120]

     Administrative regulations are held to be "laws" for various
     purposes, including  jurisdiction  of  courts  and  criminal
     liability.   If  Congress  imposes  criminal  sanctions  for
     disobedience of regulations, it can hardly be contended that
     such regulations  are not  a "law"  for the  purposes of the
     Criminal Code.  [page 121]

     Compliance  with   valid   administrative   regulations   is
     compliance with law, as has been held where it was sought to
     induce actions  contrary to  the regulations  or  to  impose
     liability  for  actions  which  accorded  with  regulations.
     [page 122]

     Valid administrative  rules  or  regulations  are  generally
     regarded as legislative enactments, and have the same effect
     as if  enacted by the legislature.  They have the force of a
     statute and  the same  effect as  if part  of  the  original
     statute.   They  become  integral  parts  of  the  statutes,
     particularly where  they are  legislative in  nature -- that
     is, are called for by the statute itself.  [page 122]

     While in  the strict  sense of  the term  an  administrative
     regulation is  not actually  a "statute"  but is  at most an
     offspring of  a statute,  a regulation may be deemed to come
     within the term "statute."  [page 123]

     ...[R]ules and  regulations will  be upheld  where they  are
     within the statutory authority of the agency and reasonable,
     ... they  must be  sustained unless unreasonable and plainly
     inconsistent with the statute.  [page 123]

     Only  when   discretion  has   been  arbitrarily  exercised,
     resulting  in   injustice  or   unfairness,  do  the  courts
     intervene to  strike down  a rule  promulgated by the proper
     agency designed to give appropriate effect to the provisions
     of the act involved.  [page 124]

     Administrative  regulations   which  go   beyond  what   the
     legislature can  authorize are  void and may be disregarded.
     [page 124]


                        Page P - 41 of 98

                                                The Federal Zone:


     Regulations which are legislative in character should not be
     overruled by  the courts unless clearly contrary to the will
     of the legislature.  [page 124]

     Thus there are applicable the rules in regard to presumption
     of validity  and partial or entire invalidity;  and, just as
     in  individual   cases  hardship  and  loss  may  flow  from
     legislative  acts   which   are   nevertheless   valid,   so
     administrative regulations may also operate.  [page 125]

     Administrative rules  and regulations,  to be valid, must be
     within  the  authority  conferred  upon  the  administrative
     agency.   A rule  or regulation  which is  broader than  the
     statute empowering  the making  of rules, or which oversteps
     the boundaries  of interpretation  of a statute by extending
     or restricting  the statute  contrary to its meaning, cannot
     be sustained.  [page 127]

     They are valid and binding only when they are in furtherance
     of the  intention of  the legislature  as evidenced  by  its
     acts, and  a regulation,  valid  when  promulgated,  becomes
     invalid upon the enactment of a statute in conflict with the
     regulation.   However, an administrative regulation will not
     be  considered  as  having  been  impliedly  annulled  by  a
     subsequent  act  of  the  legislature  unless  the  two  are
     irreconcilable, clearly  repugnant, and so inconsistent that
     they cannot have concurrent operation.  [page 127]

     Administrative  regulations   which  go   beyond  what   the
     legislature has  authorized, which  violate the  statute, or
     which are  inconsistent or  out of  harmony with the statute
     conferring the power, have been said to be void.  [page 128]

     ... [A]dministrative  regulations, to be valid, are required
     to be appropriate, reasonable, or not inconsistent with law.
     A rule  or regulation  which is  within the broad rulemaking
     powers commonly conferred on administrative agencies will be
     sustained by the courts.  [page 128]

     ... [A]  regulation which  fulfills the  purpose of  the law
     cannot be  said to be an addition to the law.  Before a rule
     or regulation  may be declared void it must be definitely in
     excess of  the scope  of authority,  or plainly  or palpably
     inconsistent with law.  [page 129]

     ... [A]n  administrative agency  may not  create a  criminal
     offense or  any liability  not sanctioned  by the  lawmaking
     authority, especially  a liability  for a  tax or inspection
     fee.  [page 129]

     ... [I]ssuance  of regulations  is  in  effect  exercise  of
     delegated legislative power.  [page 770]




                        Page P - 42 of 98

                                                       Appendix P


     Administrative Procedure  Act ...  and Federal  Register Act
     ... set  up procedure  which must  be followed  in order for
     agency rulings to be given force of law.  [page 770]

     Contents of  Federal Register are judicially noticed and may
     be cited by volume and page number.  [page 772]

     ... [F]ederal courts are required to take judicial notice of
     contents of Federal Register.  [page 772]

     Code  of   Federal  Regulations   being  nothing  more  than
     supplemental edition  of Federal Register, court is entitled
     to take  judicial notice  of cited  regulation in  brief  of
     prosecution[,] and  conviction of  defendant thereon  is not
     precluded  by   government's  failure   to  introduce   such
     applicable section in evidence.  [page 772]

     Court was  required to  take judicial  notice of the Federal
     Register and the Code of Federal Regulations.  [page 772]


In closing, the following excerpt from an unpublished treatise by
attorney Lowell  Becraft is  extremely relevant  to the force and
effect of regulations:


                   CONSTRUCTION OF REGULATIONS
                                
          In  5   U.S.C.,  section   301,  heads   of   Executive
     departments  are   given  authority   to  make  and  publish
     regulations.   It has  been previously  demonstrated how the
     current federal  income tax  laws in  question today  relate
     back to  the 1916  income tax  act.   Section 15 of that act
     defined the  terms "State"  and  "United  States"  in  clear
     jurisdictional  terms.    All  income  tax  acts  passed  by
     Congress have  authorized the  Secretary of  the Treasury to
     promulgate regulations,  which he  has done  since the first
     income tax  act in  1913.  All of the income tax regulations
     published since  January 28,  1921, have  defined the people
     subject to the tax as "citizens of the United States subject
     to its  jurisdiction."  Thus, this phrase has been a part of
     the regulations  for some 67 years, and applied to the 1918,
     1921, 1924,  1926, 1928,  1932, 1934, 1936 and 1938 acts, as
     well as the 1939 and 1954 Codes.

          The Secretary of the Treasury and the United States are
     firmly bound  by these  prior regulations  as  well  as  the
     current Treasury  Regulation  1.1-1(c),  which  defined  the
     subject of  the current  tax as  a "citizen  subject to  its
     jurisdiction."   A long  line of  Supreme Court  cases holds
     that an  executive department  head such as the Secretary of
     the Treasury  is bound  by the regulations he so promulgates
     and publishes ....



                        Page P - 43 of 98

                                                The Federal Zone:


          And  the  Supreme  Court  has  found  that  regulations
     consistently promulgated in the same language for repeatedly
     re-enacted laws  are very significant.  In Old Colony R. Co.
     v. Commission  of Internal  Revenue, 284  U.S. 552, 52 S.Ct.
     211 (1932), the Supreme Court held that such regulations are
     given an implied legislative approval:


          "The  repeated   re-enactment  of   a  statute  without
          substantial change may amount to an implied legislative
          approval of  a construction placed upon it by executive
          officers," 284 U.S., at 557

                                                 [emphasis added]
                                                                 
                                                                 
This brings us to the following regulation; it mentions liability
explicitly:


     In general,  all citizens  of the  United  States,  wherever
     resident, and  all resident  alien individuals are liable to
     the income  taxes imposed  by the Code whether the income is
     received from sources within or without the United States.

                                             [26 C.F.R. 1.1-1(b)]
                                                                 
                                                                 
                             #  #  #



























                        Page P - 44 of 98

                                                       Appendix P


MEMO

TO:       John Voss, Director
          National Commodity and Barter Association

FROM:     Mitch Modeleski, Founder
          Account for Better Citizenship

DATE:     June 7, 1992

SUBJECT:  Federal Income Tax Liability

     
     As distinct  from the  regulations published  in 26  C.F.R.,
does the  Internal Revenue  Code itself specifically make anybody
liable for  federal income  taxes?  Answer: a "withholding agent"
is specifically named as a "person" who is made liable for such a
tax.   The proof is found in the combination of Sections 1441 and
1461 of the IRC, as follows:


     Section 1441.  Withholding of Tax on Nonresident Aliens.

     (a)  General  Rule.  --  Except  as  otherwise  provided  in
     subsection (c), all persons, in whatever capacity acting ...
     having the  control, receipt,  custody, disposal, or payment
     of any  of the  items of  income specified in subsection (b)
     (to the  extent that  any of  such items  constitutes  gross
     income from  sources  within  the  United  States),  of  any
     nonresident alien  individual or  of any foreign partnership
     shall ... deduct and withhold from such items a tax equal to
     30 percent  thereof, except  that in the case of any item of
     income specified  in the  second sentence of subsection (b),
     the tax shall be equal to 14 percent of such item.


     Section 1461.  Liability for Withheld Tax.

     Every person  required to  deduct and withhold any tax under
     this chapter  is hereby  made liable  for such  tax  and  is
     hereby indemnified  against the  claims and  demands of  any
     person for  the amount  of any  payments made  in accordance
     with the provisions of this chapter.

                                                 [emphasis added]
                                                                 

Therefore, if  Bill Conklin  is a  withholding agent,  then he is
liable for  the federal  income tax  on the  amount he withholds.
The question  now becomes:   Is Bill Conklin a withholding agent?
Yes or  No?   It is  impossible to answer this question from your
$50,000 Reward  advertisement, and  I cannot tell from any of the
written communications I have received from him to date.



                        Page P - 45 of 98

                                                The Federal Zone:


     Now, permit  me to  specify the  conditions under which Bill
Conklin would  actually be  liable for  such a  tax, by  using  a
practical and  realistic example.   Let  us say that Bill Conklin
has a  good friend  named Sam who is an Air Force budget analyst.
This friend  is responsible  for a  government  research  budget,
which provides  grants for  research in  various areas  of  human
resources.  Sam is impressed with Bill Conklin's knowledge of the
IRC.  With Bill's consent, Sam agrees to hire Bill under contract
to the  Air Force  to provide  tax consulting  to other Air Force
budget analysts  like Sam.   When  Bill gets this money, he calls
his colleague  Mitch to help him work on this project, and agrees
to pay Mitch a flat rate of $60 per hour from the research grant.

     Mitch, by the way, is a nonresident alien, as confirmed by a
recent formal  affidavit served on the Secretary of the Treasury.
Having accepted  funds  from  the  Air  Force,  Bill  is  thereby
receiving money from a source that is "inside the United States".
Rather than  paying Mitch  the full  $60 per  hour,  the  statute
requires Bill  to withhold  30 percent  from Mitch's  wages,  per
Section 1441  of the IRC.  Moreover, Bill Conklin is the "person"
who is  liable for  this tax, not Mitch.  However, Mitch would be
required to file a "return" on Form 1040NR, because he had "gross
income" as  defined in  Section 872(a),  to show that the tax had
already been  withheld and  therefore paid.   The tax is actually
paid by the "person made liable", that is, Bill Conklin.

     Now, to  elaborate this  example just  a little  more,  Bill
hires two  more people,  both of  whom declare  themselves to  be
"United States  citizens" and  both of  whom complete  and sign a
valid W-4  certificate.   By law, Bill is also required to act as
their "withholding  agent", albeit  at rates  that are  different
from the  flat 30  percent levied  against the  gross  income  of
nonresident aliens.   Graduated  tax rates  are applied  to their
taxable income.   Once again, as their withholding agent, Bill is
also liable  for the amounts which he withheld from their pay, as
authorized by  W-4 certificates  that were  lawfully and  validly
executed.   The tax is actually paid by the "person made liable",
that is, Bill Conklin.


     Incidentally, the  above Sections  are  listed  in  the  IRC
definition of "withholding agent", as follows:


     (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.

                                          [26 U.S.C. 7701(a)(16)]
                                                 [emphasis added]
                                                                 





                        Page P - 46 of 98

                                                       Appendix P


     John, maybe  I should  withdraw my original claim and submit
another one  for the  full $50,000  amount.   This is  my  formal
notice to you that I have reserved my right to do so, even though
and regardless  of the  fact that  I have already filed one claim
for $1 of this reward.

     As I  write this, I must add that my colleague John C. Alden
just now  informed me that recent N.C.B.A. literature admits that
withholding agents  are specifically  defined by  statute  to  be
liable for  federal income taxes.  For the record, I have not yet
read your  literature on  this subject,  and honestly heard about
the literature for the first time from John C. Alden.

     Thank you very much for your consideration.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship


copies:   John Pleasant
          Brett Brough
          other interested parties




























                        Page P - 47 of 98

                                                The Federal Zone:


MEMO

TO:       John C. Alden, M.D.

FROM:     Mitch Modeleski, Founder
          Account for Better Citizenship

DATE:     June 7, 1992


Let's combine  two recent  analyses into  one:   the  "liability"
question and The Matrix "chain" of logic.

It is  interesting that the only "person" actually made liable by
the statute is a withholding agent.

When  you  go  to  the  sections  listed  in  the  definition  of
"withholding agent", the term "nonresident alien" is mentioned.

When you go to the definition of "nonresident alien", the term is
defined as "not a citizen" and "not a resident".

The terms  "citizen" and "resident" are entirely dependent on the
meaning of "United States".

The definition  of "United States" is dependent on the meaning of
"District of Columbia" and the "States".

The definition of "States" is dependent on the meaning of the
"District of Columbia" and "include".  And so on.

Notice how  the thread from "liability" takes you right back down
the same  path already  traversed in  my original  claim  to  the
$50,000 reward.   It's like a pile of spaghetti, only the strands
merge.

That is,  "include" may  be expansive,  but it can only encompass
territory over which the "United States" is sovereign.

For purposes  of acquiring citizenship at birth, a person is born
subject to  the jurisdiction  of the "United States" if his birth
occurs in  territory over  which the "United States" is sovereign
(from Am Jur).

We end up at the same place  --  sovereignty  --  which vaults us
into the  domain of  the study entitled Jurisdiction over Federal
Areas within  the States  (see  Chapter  11  and  also  Becraft's
excellent brief on jurisdiction).

As you  may already  know, there is a large number of cases which
define the  res judicata  of sovereignty.   We are right where we
want to be!




                        Page P - 48 of 98

                                                       Appendix P


MEMO

TO:       John C. Alden, M.D.

FROM:     Mitch Modeleski, Founder
          Account for Better Citizenship

DATE:     May 28, 1992

SUBJECT:  Sovereignty and The Matrix


     I want  to try  some logic on you;  it's an extension of the
matrix logic  discussed in  The Federal  Zone.    Let's  use  the
following schema, in order to develop a "chain" of logic:

                        c    a
                      +---------+                 
                    R | Rc | Ra | R
                      |----+----|
                    N | Nc | Na | N
                      +---------+
                        c    a

Use capital  letters to  identify one matrix dimension, and small
letters to identify the other matrix dimension.

     Now, take  an index  card and cover up row 1 (the "Resident"
row).   This leaves only row 2 (the "Nonresident" row), columns 1
and 2.   If you are a "Nonresident", then it is important to know
whether you are a "citizen" or not.  If you are a "citizen", then
you are  an "Nc"  and you pay tax on your worldwide "income".  If
you are  not a  "citizen", then you are an "alien" and you are an
"Na".  The definition of "citizen" is therefore pivotal.

     Now, move  the index  card so  it covers  only column 2 (the
"alien" column).   Whether you are a "Resident" citizen ("Rc") or
a "Nonresident" citizen ("Nc"), you are still a "citizen" and you
pay tax  on your  worldwide  "income"  regardless  of  where  you
"Reside".  The definition of "citizen" is again pivotal.

     Once again, move the index card so it covers only row 2 (the
"Nonresident" row).   Whether you are a Resident "citizen" ("Rc")
or a  Resident "alien" ("Ra"), you are still a "Resident" and you
pay tax  on your  worldwide "income"  regardless of  your status.
Now the definition of "Resident" becomes pivotal.

     Finally, move the index card so it covers only column 1 (the
"citizen" column).   If  you are an "alien", then it is important
to know  whether you  are a  "Resident" or  not.   If you  are  a
"Resident", then  you are  an  "Ra"  and  you  pay  tax  on  your
worldwide "income".   If  you are not a Resident, then you are an
"Na".  The definition of "Resident" is again pivotal.



                        Page P - 49 of 98

                                                The Federal Zone:


     We deduce  from the  above that the definitions of "citizen"
and "Resident"  are both  pivotal.   Are  these  two  definitions
related in  any way?   Yes,  they both  refer to  the same thing,
namely, the  "United States".   If you are not a "citizen" of the
"United States",  then you  are an  alien  with  respect  to  the
"United States".   If  you are  not a  "Resident" of  the "United
States", then  you are  a Nonresident with respect to the "United
States".   The definitions of "citizen" and "Resident" thus pivot
around the same term:  "United States".

     Although Becraft's essay does an excellent job of describing
the jurisdiction  of the  "United States", it lacks the necessary
rigor to  define precisely  the status  of its  "citizens".  As a
result, his  discussion of  tax "subjects" is vague and confusing
(e.g., "aliens  here, citizens  abroad").   This  is  surprising,
since our  logic proves  that the  terms "citizen" and "Resident"
both  pivot   around  the   meaning  of   "United  States",   the
jurisdiction of  which Becraft  appears to understand quite well,
but the  citizens of which Becraft appears to misunderstand.  His
confusion might  have been eliminated by better research into the
exact definition of "citizen".

     Compare his  discussion of  tax "subjects"  with the  key we
have found in American Jurisprudence:


     "A person  is born subject to the jurisdiction of the United
     States, for  purposes of  acquiring citizenship at birth, if
     his birth  occurs in  territory over which the United States
     is sovereign ...."


I keep  coming back to this statement, because it is so clear and
unequivocal.   It's  too  bad  that  Becraft  didn't  quote  this
definition and  incorporate it  into his treatise.  A "citizen of
the United States" is a person who was either born or naturalized
in the  "United States"  and is also subject to its jurisdiction.
Thus, you  are a  "citizen of the United States" if you were born
in the  "United States"  and you are subject to its jurisdiction.
You are  also a  "citizen of  the  United  States"  if  you  were
naturalized in  the "United  States" and  you are  subject to its
jurisdiction.     Pure  logic   allows  for   the  following  two
permutations:   (1) you  were born in the "United States" but you
are not  now subject  to its  jurisdiction and   (2)    you  were
naturalized in the "United States" but you are not now subject to
its jurisdiction.   "Expatriation" is the legal way of accounting
for these two permutations.

     There are  three official  definitions of  "United  States",
only two  of which are singular nouns (the nation and the federal
zone).   Using grammatical rules, the term "its jurisdiction" can
only apply  to the  nation or to the federal zone, but not to the
50 States  (because the  50 States  are plural).   So, we have to
choose between  the nation and the federal zone, and the best way


                        Page P - 50 of 98

                                                       Appendix P


to do  so is  to understand  the meaning  of "sovereign"  as used
above.   The terms  "citizen" and  "Resident"  pivot  around  the
meaning of  "United States",  and the term "United States" pivots
around the  meaning of "sovereign".  Clearly, that territory over
which the  "United States"  is sovereign  becomes  logically  and
absolutely fundamental to the whole discussion.

     Having come  this far,  the door  is now  open to  Becraft's
excellent treatise  on jurisdiction,  and to  the myriad of cases
which define  the territory  over which  the "United  States"  is
sovereign.   The cases  all demonstrate  that this territory does
NOT include  the 50  States.   (I am  not aware  of a single case
which found  otherwise.)   Therefore, the term "United States" is
NOT the  nation in  this context,  because the  50 States belong,
without question,  to the nation.  The logic is not only correct;
it also conforms to the intent of the Constitution.


                             #  #  #





































                        Page P - 51 of 98

                                                The Federal Zone:


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

                                   May 18, 1992
Charles L. Harrison
Corresponding Secretary
Monetary Realist Society
P. O. Box 31044
St. Louis, Missouri
Postal Code 63131/TDC

Dear Charles:

     I am writing in response to a statement that is made in your
bulletin for April 1992 in the article entitled "He Didn't Do It;
I Saw  Him with  My Own Eyes!".  This article makes the following
statement:

     "... the  XVIth Amendment was never properly ratified by the
     states, and thus, there IS no income tax!"

This statement  is  incorrect  because  it  is  a  non  sequitor.
Enclosed please  find a  collection of  essays which examine this
notion in  depth.   With all  due respect  to authors  Benson and
Beckman, and to the leaders of Patriot groups around the country,
this assertion is not only misleading, but also the cause of much
unnecessary  confusion   among  the   membership,  and   would-be
membership, of  these groups.   I  believe that,  if you take the
time to review the logic in the enclosed papers, you will come to
see why there can be an income tax without the 16th Amendment.

     In "The  Insular Cases" that were decided at the turn of the
century, 12  years prior  to the  so-called 16th  Amendment,  the
Supreme Court gave its blessing to a doctrine which I have called
"territorial  heterogeneity"  in  my  recent  book  entitled  The
Federal Zone.   In  exercising its  exclusive authority  over the
federal zone,  Congress is not subject to the same constitutional
limitations that  exist inside  the  50  states.    Specifically,
Congress is  not required to apportion direct taxes levied inside
the federal zone, with or without a 16th Amendment.

     For reasons like this, the areas that are inside and outside
the federal  zone are  heterogeneous with  respect to each other.
This  difference   results  in   a   principle   of   territorial
heterogeneity:  the areas within (or inside) the federal zone are
subject to  one set of rules;  the areas without (or outside) the
federal zone  are subject  to a  different set  of  rules.    The
Constitution rules  outside the  zone and  inside the  50 States.
The Congress rules inside the zone and outside the 50 States.

     The 50  States are, therefore, in one general class, because
all  constitutional   restraints  upon   Congress  are  in  force
throughout the  50 States,  without prejudice  to any  one State.


                        Page P - 52 of 98

                                                       Appendix P


The areas  within the  federal zone  are in  a different  general
class, because these same constitutional restraints simply do not
limit Congress  inside that  zone.  This principle of territorial
heterogeneity is  documented in  detail in  Chapters 12 and 13 of
The Federal  Zone: Cracking  the Code  of Internal  Revenue.   It
stems from  our pivotal  finding that  Title 26  is a  "municipal
statute", the  territorial extent  of which  is the federal zone.
Congress is the "City Hall" for the federal zone.

     Now, there certainly are a host of reasons to believe that a
failed 16th  Amendment nullifies  the federal  income tax.  Among
these  reasons   are  statements   in  the  Federal  Register  by
Commissioners   of    Internal   Revenue,   and   other   written
communications  which  have  issued  from  the  Internal  Revenue
Service over  the years,  that the  16th Amendment is the federal
government's general  authority to tax the incomes of individuals
and corporations.   If  you are  building a reliance defense, the
Federal Register  statements are certainly a good place to start,
because  of  the  legal  status  extended  to  notices  that  are
published therein.

     Nevertheless,  given   the  huge   mass  of  evidence  which
seriously impugns its ratification, in the face of which Congress
has now  fallen silent,  the act  of declaring the 16th Amendment
ratified was  an act  of outright  fraud by  Secretary  of  State
Philander C.  Knox in  the year  1913.    Therefore,  it  is  not
surprising that  succeeding officials  in the federal government,
like Donald  C. Alexander in the year 1974, might also be victims
of this  fraud, because  the work  of Benson  and Beckman was not
published until  the year 1985.  It is entirely possible that IRS
officials were  acting in  good faith when they told America, for
so many  years,  that  the  16th  Amendment  was  their  required
authority.   That's  how  sinister  Knox's  fraud  actually  was.
However, a  failed 16th Amendment does not mean that Congress now
has no  authority whatsoever  to levy  direct taxes  on  incomes,
particularly when  those incomes  derive from  sources  that  are
situated inside  territory  over  which  Congress  has  exclusive
legislative jurisdiction, i.e., the federal zone.

     I  sincerely   hope  that  this  letter,  and  the  enclosed
materials, do  provide you  with a  satisfactory clarification of
the 16th  Amendment and  the real  constitutional implications of
its failure to be ratified.  Thank you for your consideration.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship

enclosures


                        Page P - 53 of 98

                                                The Federal Zone:


Memo

TO:       Friends, Neighbors, Colleagues
          and all interested people

FROM:     Mitch Modeleski, Founder
          Account for Better Citizenship

DATE:     April 8, 1992

SUBJECT:  The "Key"

     In the course of doing further research for the next edition
of The  Federal Zone,  I was  directed by the work of author Lori
Jacques to investigate the reference work American Jurisprudence.
I was  delighted to find a definition which provides the "key" we
have all  been looking  for.  This key provides yet more dramatic
support for  the major jurisdictional thesis of The Federal Zone,
namely, that the Internal Revenue Code is a municipal statute and
"citizens of  the United  States"  are  those  who  are  born  or
naturalized into  this municipal  jurisdiction.   Congress is the
"City Hall"  for the  federal zone.    Read  the  following  very
carefully:

     Sec. 1420. --  Who is  born in  United States and subject to
                    United States jurisdiction

     A person  is born  subject to the jurisdiction of the United
     States, for  purposes of  acquiring citizenship at birth, if
     his birth  occurs in  territory over which the United States
     is sovereign,  even  though  another  country  provides  all
     governmental services within the territory and the territory
     is subsequently ceded to the other country.            [!!!]

                                        [3A Am Jur 2d, page 1419]
                                                                 
     Note that  the term  "United States" is used in its singular
sense, that  is, "...  territory over  which the United States is
sovereign".  This is crucial evidence to support my argument that
the term  "United States",  as used  in Title  26, refers  to the
second of  three official  definitions of  that term  by the U.S.
Supreme  Court.     Note,   in  particular,   the  pivotal   word
"sovereign", which  controls the  entire meaning of this passage.
The federal  zone is  the area  over which Congress is sovereign;
it does  not include  the  50  States  because  Congress  is  not
sovereign over  the 50 States.  Chapter 11 in The Federal Zone is
dedicated to  discussing sovereignty  in depth.    My  thesis  is
bolstered even  further by the qualifying phrase "... even though
... the  territory is  subsequently ceded  to the other country."
Governmental sovereignty  over any territory is relinquished when
that territory is ceded to another country, but not before.  (See
Chapter 11  for details.)  An area of land joins the federal zone
if and only if one of the 50 States cedes that land to Congress.



                        Page P - 54 of 98

                                                       Appendix P


     Now refer  to the  definition  of  "citizen  of  the  United
States" as published in the Code of Federal Regulations for Title
26, the Internal Revenue Code:


     (c)  Who is  a citizen.  Every person born or naturalized in
     the United  States and  subject to  its  jurisdiction  is  a
     citizen.
                                                [26 CFR 1.1-1(c)]
                                                 [emphasis added]
                                                                 
     Notice the  singular sense  of "its  jurisdiction"  in  this
regulation.   If a  person is naturalized in the "United States",
he is  automatically "subject  to its  jurisdiction", because the
Constitution  authorizes   Congress  to   legislate   rules   for
immigration and  naturalization.   On the other hand, a person is
born "subject  to  its  jurisdiction"  if  his  birth  occurs  in
territory  over   which  the   "United  States"   is   sovereign.
Therefore, a  person is  born subject  to the jurisdiction of the
"United States" if his birth occurs inside the federal zone.

     Notice also  that the  letter "c"  in "citizen"  is in lower
case.   This is  the case  that is  used in  the  word  "citizen"
throughout  the   Internal  Revenue   Code  and   throughout  the
regulations.   Those  who  argue  against  the  upper/lower  case
distinction are overlooking this remarkable consistency, spanning
more than  8,000 pages  of law  and regulations.    Such  amazing
consistency could  never have  happened by  accident;   the  odds
against such  an accident are astronomical.  We must discount all
references to  "Citizen" in  the  first  word  of  any  sentence,
because English  grammar requires  that it be capitalized in that
position.   The other  occurrences of  "Citizen" are found in the
first word of heading phrases, for example:


     (b)  Citizens or  residents of  the United  States liable to
          tax.
                                                [26 CFR 1.1-1(b)]

     Whatever  ambiguity   this  usage   may  create  is  totally
eliminated by  the statutory  definition of  "United  States"  in
Title 26.  It is now conclusive that the term "United States", as
defined in Title 26, is the federal zone.

     The above citation from American Jurisprudence is the key we
have all  been looking  for:   it is  succinct, unequivocal,  and
razor sharp.   It  is the  key which unlocks the chains that bind
our freedom,  the chains  which now  belong on  the  Congress  of
[belonging to] the united States of America.


Account for Better Citizenship
c/o USPS Post Office Box 6189
San Rafael, California Republic


                        Page P - 55 of 98

                                                The Federal Zone:


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

                                   April 7, 1992
Free State Constitutionists
P. O. Box 3281
Baltimore, Maryland
Postal Code 21228/TDC

Dear Free State Constitutionists:

     I have recently received from you a document entitled:

                 WE CHALLENGE ANYONE TO DISPROVE
                THESE FACTS ABOUT INCOME TAX LAW
                                
I hereby  accept this challenge, in good faith and with a sincere
intent to  get to  the bottom of this mess we call federal income
taxation.  A document very similar to yours has been disseminated
by the Save-A-Patriot Fellowship for some years.

     Your document  is erroneous  because it is based on obsolete
technology and  an evident  failure to  penetrate the intentional
deceptions which are built into the Internal Revenue Code and its
regulations.   See enclosed documents.  For example, your Fact #1
states:

     RESIDENTS OF THE STATES OF THE UNION ARE NOT REQUIRED BY LAW
     TO FILE  FORMS 1040  AND THEY ARE NOT LIABLE FOR THE PAYMENT
     OF A TAX ON "INCOME" UNLESS THEY ARE WITHHOLDING AGENTS.

This statement  is erroneous  because  all  "U.S.  citizens"  are
liable for federal taxes on their worldwide income, regardless of
where they  "reside" and   even  if they  are "residents  of  the
States".   I assume  by "States"  you mean  the 50  States of the
Union.   See 26  CFR 1.1-1  et seq.   Congress  has the  power to
delegate to  the Secretary of the Treasury the authority to issue
regulations which  have the  force and effect of law.  Therefore,
it is  somewhat misleading  to argue  that the  statute does  not
contain this or that specific provision when the regulations do.

     Moreover, if  a "resident  of  the  States"  should  receive
dividends from  stocks  and/or  interest  from  bonds  issued  by
"domestic" corporations,  the income  derived therefrom  would be
included in  the quantity  "gross income" as defined at 26 U.S.C.
872(a).     The  payor  of  the  dividends  or  interest  is  the
"withholding" agent,  not  the  recipient.    This  is  explained
clearly in  Treasury Decision  2313.   Frank  Brushaber  declared
himself a citizen of the State of New York, and a resident of the
Borough of Brooklyn, in the city of New York.  As such, T.D. 2313
designated him  a nonresident alien.  Any other allegations about
his citizenship  and residence  assume facts  that  were  not  in
evidence.


                        Page P - 56 of 98

                                                       Appendix P


     For your  information, I  have enclosed  a number  of  other
letters, and  a memorandum  to individuals  at the Save-A-Patriot
Fellowship.   I have  heard nothing  from them  in response to my
memorandum.

     I have also enclosed an order form for my recently published
book entitled  The Federal  Zone: Cracking  the Code  of Internal
Revenue.   The following  succinct statement is directly over the
target (which  explains to  me why  we are  getting so  much flak
about our understanding of the statute and its regulations):


     3A Am Jur 1420, Aliens and Citizens, explains:  "A Person is
     born subject  to the  jurisdiction of the United States, for
     purposes of  acquiring citizenship  at birth,  if his  birth
     occurs  in   territory  over  which  the  United  States  is
     sovereign ..."

          [quoted in A Ticket to Liberty, November 1990, page 32]
                                                                 
                                                                 
This statement,  in and of itself, has enough power to unlock the
entire puzzle  of federal  income taxation.   When you understand
sovereignty as  it applies to federal and State jurisdiction, you
will own  the key.   And then you can share this key with others.
You would  expect the  government to create a flood of propaganda
and other  diversions in order to distract everyone from the core
of their  deception.    This  core  is  found  in  the  statutory
definitions of "State" and "United States".

     The constitutional  authority for  Title 26  is  1:8:17  and
4:3:2.   The Supreme  Court gave  its blessing  to a  legislative
democracy inside  the federal  zone in  the  case  of  Downes  vs
Bidwell (see  enclosed).   Accordingly, within  the federal zone,
Congress is  not restrained  by the apportionment rule for direct
taxes, nor  by the  uniformity rule  for  indirect  taxes.    The
"majority" rules inside the federal zone, not the constitution.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship


enclosures







                        Page P - 57 of 98

                                                The Federal Zone:


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

                                   March 27, 1992
Bill Conklin
N.C.B.A.
8000 E. Girard Avenue, Suite 215
Denver, Colorado
Postal Code 80231/TDC

Dear Bill:

     This is my sincere attempt to claim the $50,000 Reward which
you have  recently publicized  in newspapers  around the country.
Before I  detail my  claim, I wish to express my solemn intent to
rebate $49,999 back to the N.C.B.A., in the event that I earn the
reward.   Thus, you will owe me $1.00 if I win, and I will gladly
pay you  $1.00 if I lose.  By the way, who are the judges in this
contest?  Are they unbiased?  Are they federal?

1.   What statute makes Bill Conklin liable to pay an income tax?

     Before I  can address  this question,  I need  to know  your
answers to the following two questions:

     (a)  Are you a "citizen of the United States"?

     (b)  Are you a "resident of the United States"?

If your  answer to either of these questions is YES, then you are
liable for  federal taxes  on the  income which  you derive  from
worldwide sources, as follows:


     In general,  all citizens  of the  United  States,  wherever
     resident, and  all resident  alien individuals are liable to
     the income  taxes imposed  by the Code whether the income is
     received from  sources within  or without the United States.
     ...   As  to  tax  on  nonresident  alien  individuals,  see
     sections 871 and 877.

                                                [26 CFR 1.1-1(b)]
                                                                 
                                                                 
If you  have any  question as to the meaning of the term "citizen
of the  United States",  then base  your answer  on the following
definition:


     Every person  born or  naturalized in  the United States and
     subject to its jurisdiction is a citizen.

                                                [26 CFR 1.1-1(c)]


                        Page P - 58 of 98

                                                       Appendix P


     If you  are not  a "citizen  of the United States", then you
are an alien with respect to the "United States". If you have any
question as  to the  meaning of  "resident alien", then base your
answer on the following definition:


     Definition of Resident Alien and Nonresident Alien.  --

     (1)  In General.  --  For purposes of this title (other than
          subtitle B) --


          (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 Test.
                    --  Such   individual  makes   the   election
                    provided in paragraph (3).


               (iii) First Year Election.
                    --  Such   individual  makes   the   election
                    provided in paragraph (4).

                                 [26 USC 7701(b), emphasis added]


     If  you   are  not   resident,  then  you  are  nonresident.
Accordingly, if  you are not a "citizen of the United States" and
you are  not a  "resident of  the United  States", then you are a
"nonresident alien" by definition:


          (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)).  [see above]

                                 [26 USC 7701(b), emphasis added]
                                                                 
                                                                 
     If you  are a  nonresident alien  as defined,  then you  are
liable for federal taxes on your "gross income" as defined:


                        Page P - 59 of 98

                                                The Federal Zone:


     (a)  General Rule.  -- In  the case  of a  nonresident alien
          individual, except  where the context clearly indicates
          otherwise, gross income includes only --

          (1)  gross income  which is derived from sources within
               the United  States and  which is  not  effectively
               connected with  the conduct of a trade or business
               within the United States, and

          (2)  gross income  which is  effectively connected with
               the conduct  of a  trade or  business  within  the
               United States.

                                                  [26 USC 872(a)]
                                                                 
                                                                 
     If you  are unclear  what  is  meant  by  the  term  "United
States", you  may utilize  the general  definition found  in  the
Internal Revenue Code, as follows:


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

                                              [26 USC 7701(a)(9)]
                                                                 
     If you  are unclear  what is  meant by  the term "States" in
this  definition   of  "United   States",  you  may  utilize  the
definition found in the Internal Revenue Code, as follows:


     (10) The term  "State" shall  be construed  to  include  the
          District  of   Columbia,  where  such  construction  is
          necessary to carry out provisions of this title.


     If you  are unclear  about the operative meaning of the term
"include" in the above definition of "State", you may utilize the
following clarification  of the terms "includes" and "including",
as follows:


     (c)  Includes and  Including. --  The terms  "includes"  and
          "including" when used in a definition contained in this
          title shall  not be  deemed  to  exclude  other  things
          otherwise within the meaning of the term defined.

                                                 [26 USC 7701(c)]
                                                                 
You will  note that  the term  "include" is  not mentioned in the
definition of  "includes" and  "including" at  7701(c).  However,
words importing the plural include and apply to the singular form
of those words:


                        Page P - 60 of 98

                                                       Appendix P


     Section 1.  Words denoting number, gender, and so forth.

     In determining  the meaning  of any  Act of Congress, unless
     the context  indicates  otherwise  --  words  importing  the
     singular include  and apply  to several  persons, parties or
     things;  words importing the plural include the singular;

                                                        [1 USC 1]
                                                                 
     Thus, the  definition of "State" also applies to the meaning
of "States",  and the  definition of  "includes" also  applies to
"include".   The phrase  "It includes ..." is singular in syntax;
the phrase  "they include  ..." is  plural in  syntax.  Thus, the
term "include"  when used  in Title 26 shall be deemed to include
other things  otherwise within  the meaning  of the term defined.
Therefore, the  meaning of  "State"  is  not  restricted  to  the
District of  Columbia.    To  determine  what  other  things  are
otherwise within  the  meaning  of  the  term  defined,  see  the
following:

     (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
          states, the  District of  Columbia, the possessions and
          territories 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,  with respect to the exploration and
          exploitation of natural resources.

                                              [26 CFR 1.911-2(g)]

Thus, based  upon the  preceding,  you  may  define  the  "United
States" to consist only of the following constituent components:


(1)  District of Columbia ......................... Federal State
(2)  Commonwealth of Puerto Rico .................. Federal State
(3)  Virgin Islands ............................... Federal State
(4)  Guam ......................................... Federal State
(5)  American Samoa ............................... Federal State
(6)  Northern Mariana Islands ................ Federal Possession
(7)  Trust Territory of the Pacific Islands .. Federal Possession

     Inclusive of  the aforementioned  Federal States and Federal
     Possessions, "exclusive  federal jurisdiction"  also extends
     over all  Places purchased by the Consent of the Legislature
     of one  of the Fifty States, in which the Same shall be, for
     the Erection  of Forts, Magazines, Arsenals, dock-Yards, and
     other needful Buildings.

                      [see 1:8:17 and 4:3:2 in U.S. Constitution]


                        Page P - 61 of 98

                                                The Federal Zone:


     Therefore, you  may, as  I have  done, define  the territory
under the  sovereignty of  the "United  States" to consist of the
District of  Columbia, the  federal territories  and possessions,
and the  enclaves ceded to Congress by acts of State Legislatures
(such as  military bases  and the  like).  I have coined the term
"Federal Zone"  to refer  to all  territory which  is  under  the
sovereignty of the "United States".  This interpretation conforms
to the  second of  three Supreme  Court definitions  of the  term
"United States", as follows:


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

                    [Hooven & Allison Co. vs Evatt, 324 U.S. 652]
                                                 [emphasis added]

     To summarize,  you are  liable for  federal taxes  on income
derived from  worldwide sources  if you  are either a "citizen of
the United  States" or a "resident of the United States" as those
terms are  defined above.   If  you are  neither, then  you are a
nonresident alien  and, as such, you are liable for federal taxes
on all  income which  is derived  from sources  within the United
States (as defined above), and on all income which is effectively
connected with  the conduct  of  any  "United  States"  trade  or
business.   For example,  if you  are  employed  by  the  federal
government, your pay comes from a source inside the United States
(as defined).   Similarly,  if you  receive dividends  from bonds
issued by the federal government, or by corporations chartered in
the District  of Columbia  (i.e., "domestic"  corporations), this
"income" derives  from a  source that is within the United States
(as defined) and it is taxable.  See Treasury Decision 2313 for a
clarification of  the  taxability  of  bond  interest  and  stock
dividends issued by domestic corporations to nonresident aliens.

     If you  are unclear  as to the meaning of the term "income",
please understand  that the Supreme Court has instructed Congress
it cannot  by any definition it may adopt conclude the matter (of
defining income),  because Congress  cannot by  legislation alter
the Constitution,  from which  alone  it  derives  its  power  to
legislate, and  within whose  limitations alone that power can be
lawfully exercised.   Even  though the  16th Amendment  was never
ratified and  the word "income" is not found in the Constitution,
Congress has  continued to  obey this prohibition.  Nevertheless,
the Supreme Court has issued numerous official definitions of the
term "income",  perhaps the  most famous of which is the decision
which issued  this prohibition,  namely, Eisner  vs Macomber, 252
U.S. 189.   The  Supreme Court has had to define "income" so many



                        Page P - 62 of 98

                                                       Appendix P


times, it  decided that  the definition  was finally  settled  in
Merchant's Loan & Trust vs Smietanka, 255 U.S. 509.

     Finally,  the  16th  Amendment  is  not  the  constitutional
authority for  Title 26.   That  authority issues from 1:8:17 and
4:3:2 in  the U.S.  Constitution.   Title  26  is  a  "municipal"
statute which is not affected by either the apportionment rule or
the uniformity  rule in  the Constitution.   Think of Congress as
"City Hall"  for  the  federal  zone.    Congress  has  exclusive
legislative authority  within the  federal zone  (see  Downes  vs
Bidwell, 182  U.S.  244,  which  is  discussed  in  the  attached
memorandum to  staff members  of the  Save-A-Patriot Fellowship).
The operant "rule" that applies to Title 26 is majority rule.  If
you want  to change  Title 26, then change the composition of the
Senate and House of Representatives.


2.   How can  Bill Conklin  file a tax return without waiving his
     Fifth Amendment protected Rights?

     Sign  your   name  with  the  following  phrase  above  your
signature:

     with explicit  reservation of  all my unalienable rights and
     without prejudice to any of my unalienable rights UCC 1-207

In order  to inform  the world  as to the meaning of this phrase,
you may opt to attach an explanation like the following:

     My use  of the  phrase "WITH  EXPLICIT RESERVATION OF ALL MY
     RIGHTS AND  WITHOUT PREJUDICE  UCC 1-207" above my signature
     on this document indicates: that I explicitly reject any and
     all benefits  of the Uniform Commercial Code, absent a valid
     commercial agreement  which is  in force and to which I am a
     party, and  cite its  provisions herein only to serve notice
     upon ALL  agencies  of  government,  whether  international,
     national, state, or local, that they, and not I, are subject
     to, and  bound by,  all of  its  provisions,  whether  cited
     herein or  not;   that my explicit reservation of rights has
     served  notice  upon  ALL  agencies  of  government  of  the
     "Remedy" they  must provide  for me under Article 1, Section
     207  of   the  Uniform   Commercial  Code,  whereby  I  have
     explicitly reserved  my Common Law right not to be compelled
     to perform  under any contract or commercial agreement, that
     I  have   not  entered   into  knowingly,  voluntarily,  and
     intentionally;   that my  explicit reservation of rights has
     served notice  upon ALL agencies of government that they are
     ALL limited  to proceeding  against me  only in harmony with
     the Common  Law and  that I  do not, and will not accept the
     liability associated  with the  "compelled" benefit  of  any
     unrevealed  commercial   agreements;    and  that  my  valid
     reservation of  rights  has  preserved  all  my  rights  and
     prevented the  loss of any such rights by application of the
     concepts of waiver or estoppel.


                        Page P - 63 of 98

                                                The Federal Zone:


     Put simply,  if you  are  signing  a  tax  return,  you  are
entering  a   commercial  agreement  with  the  "United  States".
Government officials  are bound by the Uniform Commercial Code to
preserve your  rights unless you waive any of them with knowingly
intelligent acts,  done with sufficient awareness of the relevant
circumstances and  consequences (see Brady vs U.S., 397 U.S. 742,
748 (1970)).   This  places government  officials on  notice that
they must  disclose in  advance all terms and conditions attached
to that  commercial agreement.    Your  explicit  reservation  of
rights prevents  the loss  of any  of your rights, including your
Fifth Amendment  protected right  against self-incrimination,  by
application of the concepts of waiver or estoppel.

     Finally, per  28 USC  1746, if  you are a nonresident alien,
you  should  modify  the  perjury  jurat  on  all  IRS  forms  by
indicating that  you are  making your  affirmation  "without  the
United States,  under the  laws of the United States of America".
I have  attached the  operative statute,  for  your  information.
Note also  the Form  1040X and  1040NR instructions  for  foreign
addresses.   If you do not follow these instructions, the "United
States" is entitled to presume that you have a "domestic" address
and that you are, therefore, "resident" in the "United States" as
defined.

     If you  have any  questions about the above, and/or you wish
additional clarification,  please don't hesitate to contact me in
writing at  the above  address.   Copies  of  The  Federal  Zone:
Cracking the Code of Internal Revenue have already been forwarded
to John  Voss, Sharon  Voss, and  Brett Brough.   Much additional
clarification of  my answers  in this letter can be found in that
book.

     Thank you very much for your interest in Title 26.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship

enclosures

copies:   John Voss
          John Pleasant
          Brett Brough








                        Page P - 64 of 98

                                                       Appendix P


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

                                   March 29, 1992

The Sovereign Advisor
Common-Law Service Center HQ
3rd Judicial District
564 La Sierra Drive, Suite 187
Sacramento, California Republic

Dear Sovereign Advisor:

     I was  very happy  to receive  a complimentary  copy of  The
Sovereign Advisor  recently from  a friend  and colleague  in the
freedom movement.   Please  accept my  qualified praise  for your
first edition,  the December  Issue "91".   I am writing to share
with you  some of the many thoughts which occurred to me as I was
reading this first issue.

     First of  all, I  am alarmed  by what  I consider  to  be  a
glaring contradiction  which is  evident in  your newsletter.  On
page 2  in the  article entitled  "5, 4,  3, 2, 1, Liftoff!", you
state:
     
     There are  several groups  out there  that are  deliberately
     trying to  keep you within the system by claiming you are an
     American Citizen,  this is  a false and misleading term. ...
     Now if  you are  or claim  to be an American Citizen and you
     are located  within any  one of  the states of the union you
     are a  federal citizen, subject to the municipal laws of the
     district of columbia [sic].


     On page  6, in  the article  entitled "Is  the United States
Guilty of Genocide?", you state:

     The State  of  California  was  required  to  have  its  own
     Citizens,  who   were  first,  State  Citizens,  then  as  a
     consequence of  State Citizenship  were  American  Citizens,
     known as  Citizens of the United States, (Capitol [sic] "C")
     there  were  [sic]  no  specific  class  as  this,  but  for
     traveling and  protection by  the United  States  government
     while  out  of  the  country,  they  were  generally  called
     Citizens of the United States.  (capital "C")


It is  difficult enough  to identify  oneself  with  the  freedom
movement in  the United  States of America without also having to
reconcile the positions of various organizations which contradict
each other.    It  is  entirely  impossible  to  reconcile  those
sections of your newsletter which flatly contradict each other.



                        Page P - 65 of 98

                                                The Federal Zone:


     Second, the  former paragraph quoted above states that there
are several  groups "out  there" that  are deliberately trying to
keep us  within the  system by  claiming  that  we  are  American
Citizens.   I strongly  object to  this  statement,  for  several
reasons.   Your statement  implies that  you  are  privy  to  the
motivations of  individuals and  groups who make this claim, when
you  are  not.    Unless  people  have  actually  revealed  their
motivations to  you, I don't see how you can be so privy to those
motivations.   Such a  statement in  your newsletter  suggests  a
desire on  your part  to convince  readers that  you have all the
answers, and  that others  in the  freedom movement do not.  This
sounds more  like crass commercial advertising than serious legal
scholarship,  and   it  does   serious  damage  to  your  overall
credibility.

     I, for  one, have  been known  to utilize the term "American
Citizen" and  I have  not done  so with  the purpose  of  keeping
myself and others "within the system" as you put it.  If I am not
an American,  then I  do not  know  what  I  am.    I  have  also
distributed a  great deal  of written  materials, among  them  an
affidavit  of  revocation,  which  utilizes  the  term  "American
Citizen" by defining it clearly to mean a "free sovereign natural
born Citizen  per 2:1:5  in the  U.S.  Constitution".    I  would
certainly hope  that you  would have  the courtesy to extend your
respect to  any of  us who take the time to define our terms with
care, and not accuse us of trying to keep people "in the system",
even though our choice of definitions may not agree with yours.

     Since our  nation has  been known  as the  United States  of
America at  least since  the U.S. Constitution was ratified, your
definition  of   "American  Citizens"   as  federal  citizens  is
misleading and  confusing.   There is a popular, colloquial sense
in which  we are  ALL Americans.   I  would hesitate to recommend
that any  Americans stop  using that term to identify themselves,
particularly when  The Sovereign Advisor obviously cannot make up
its own mind about the meaning of "American Citizens".

Elsewhere in your newsletter, you state:

     An American Citizen is an Indian who leaves the reservation;
     a U.S.  Citizen residing outside the District of Columbia in
     one of the federal judicial districts;  an alien residing in
     one of the several states;  a State Citizen residing outside
     of the several states of the union.

In this  statement, did  you mean to say that an American Citizen
is a  "U.S. Citizen" or a "U.S. citizen"?  Your use of the phrase
"residing outside  the District  of Columbia"  is also confusing.
The distinction  that is  made between  the terms  "resident" and
"nonresident" at  26 U.S.C.  7701(b)(1) suggests  that one can be
either a  "U.S. Citizen"  or  a  "U.S.  citizen",  regardless  of
whether one  is a  "resident" in the District of Columbia or not.
One attribute  is a  birth  status;  the  other  attribute  is  a
location status.   Note, in particular, your own citation of Cook


                        Page P - 66 of 98

                                                       Appendix P


vs Tait,  which  stated  that  "citizens  of  the  United  States
wherever they  are resident" are subject to the income tax, which
is based  upon citizenship  of the  United States.    The  phrase
"wherever they are resident" is very revealing in this context.

     Title 26, Section 7701(b)(1)(B) makes it very clear that one
is an  "alien" with respect to the "United States" if and only if
one is  not a  "citizen of the United States".  You have used the
term "alien" without defining it, and without proper citations in
case law.  (See Treasury Decision 2313.)  The definition found in
Title 26  makes it very clear that one is an alien if and only if
one is not a "citizen of the United States".  Therefore, the term
"alien" as  defined  encompasses  all  of  the  following:  State
Citizens, Citizens  of foreign  countries like France, and beings
from other  planets.   Very simply, you are an "alien" if you are
not a  "citizen", and  you are  a "nonresident"  if you are not a
resident (see 26 U.S.C. 7701(b)(1)(A)-(B)).

     Allow me to offer the following clarifications.  I define an
"American Citizen"  to mean  a sovereign State Citizen.  (You are
free to  disagree with  this definition, but bear with me for the
moment,  please.)     As  such,  a  sovereign  State  Citizen  is
identifiable by  the term "U.S. Citizen", which is an abbreviated
way of  saying "Citizen  of the  United States  of  America",  or
"Citizen of one of the 50 States of the Union".  The term "United
States" in  this context means the 50 States of the Union, united
by the Constitution.

     A sovereign  State Citizen  is not  a "citizen of the United
States" (which  is another  way of saying "U.S. citizen") because
the "United  States" in  this  context  means  the  subjects  and
jurisdiction  over   which  Congress  has  exclusive  legislative
authority.   In order to solve a very large number of terminology
problems, I  refer to  this jurisdiction  as "The  Federal Zone",
namely, the  areas of  land over which the Congress has exclusive
legislative authority.   These  areas  of  land  consist  of  the
District of  Columbia, the  federal territories  and possessions,
and all  federal enclaves  ceded to Congress by acts of the State
Legislatures.   The authority to have exclusive jurisdiction over
these areas  of land  issues from  1:8:17 and  4:3:2 in  the U.S.
Constitution.     You  may   choose   to   disagree   with   this
interpretation of  the term  "exclusive", but in doing so you are
disagreeing with  the Supreme  Court of  the United  States  (see
Downes vs Bidwell, 182 U.S. 244 (1901)).  The authority for Title
26 is  not the  so-called 16th  Amendment, despite  statements to
that effect  which have been published in the Federal Register by
former Commissioners of Internal Revenue.

     Accordingly, an  "alien  residing  in  one  of  the  several
states" is  a "nonresident  alien" with  respect to  the  "United
States" as  defined in  Title 26,  that is,  with respect  to The
Federal Zone,  if he was born in one of the 50 States.  An "alien
residing in one of the several states" is a "resident alien" with
respect to the "United States" as defined by Title 26, i.e., with


                        Page P - 67 of 98

                                                The Federal Zone:


respect to  The Federal Zone, if he was born in a foreign country
like France and he was lawfully admitted for permanent residence.
Notice the  phrase "lawfully  admitted for  permanent residence".
Birth status  and location  status create  four different  cases:
resident  citizen,   nonresident  citizen,  resident  alien,  and
nonresident alien.

     Congress   has    jurisdiction    over    immigration    and
naturalization;     Congress  does  not  have  jurisdiction  over
sovereign State  Citizens, because They created the Constitution,
and the  Constitution created  Congress.   I presume that you are
using the  term "several  states" to  mean the  50  States,  even
though you  have not  capitalized the word "states".  I prefer to
use the  lower-case "states"  to refer to federal territories and
possessions and  upper-case "States" to refer to the 50 Sovereign
Members of the Union.

     The phrase  "State Citizen  residing outside  of the several
states of  the union"  is also  ambiguous, because  it  does  not
identify whether  this "State  Citizen" is  residing  inside  The
Federal Zone,  or inside a foreign country like France.  It makes
a difference.  If this "State Citizen" resides inside The Federal
Zone,  then   he  is   a  "resident  alien"  by  definition  (see
substantial presence  test at  7701(b)(1)(A)).    If  he  resides
inside a  foreign country  like France, then he is a "nonresident
alien" with  respect to  The Federal  Zone, but  he  is  still  a
"Citizen of  the United States of America" and, as such, Congress
does have  jurisdiction over  him as  long as he resides therein.
He could request the protection of the U.S. State Department, for
example, by seeking help from an American embassy, and his status
as a  "Citizen of the United States of America" would entitle him
to that protection.

     Finally, I  am  very  concerned  about  the  poor  state  of
grammar, spelling  and  punctuation  in  your  newsletter.    Any
organization which  claims to  know a technical subject like law,
and which claims to know it well enough to publicize a newsletter
on a  specialized aspect of law, should be willing to embrace the
minimum standard  for language  accuracy.   You have  made a  big
issue of upper and lower case letters, then you refer to the seat
of  government  and  "the  municipal  laws  of  the  district  of
columbia".   When the  District of Columbia is obviously at issue
here, you should know better than to refer to the first letter in
"Citizen" as  "Capitol C",  when the correct term is "capital C".
Then you  refer to  "capital C"  immediately after  referring  to
"Capitol C".   (Is  it possible  that your staff is infiltrated?)
The Congress  conducts its  business in  the "Capitol"  building;
upper case  letters are referred to as "capital" letters.  If you
are  attempting   to  write  in  an  expository  style,  then  do
everything to  insure that  your exposition is clear, unequivocal
and precise.   Otherwise, you run the risk that a competing group
will criticize you for being motivated by an intent to equivocate
in your  newsletter, when  you are  not so motivated (as far as I
can tell).


                        Page P - 68 of 98

                                                       Appendix P


     Please accept these criticisms in the constructive spirit in
which they  are made.   The  issues which you have raised in your
newsletter are  just too  terribly important  to risk any loss of
credibility through  contradictions and substandard English.  Our
language is  rich and  powerful enough  to accommodate  the  most
exacting requirements of any discipline.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship









































                        Page P - 69 of 98

                                                The Federal Zone:


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

                                   March 17, 1992

Louis Watson
International Tax Technology
16776 Bernardo Center Drive, #203
San Diego, California Republic
Postal Code 92128/TDC

Dear Lou:

     Thank you  for the  time and  energy  that  went  into  your
presentation in  Sparks, Nevada last Friday evening.  I have been
debating whether  or not  to write you about my experience there.
Since I  am still  thinking about  it, now  four days later, I am
taking the  chance that  you will  read this  letter with an open
mind and an honest interest in what I have to say.

     Please bear  in  mind  that,  at  least  twice  during  your
lecture, you  invited the audience to challenge anything you were
saying.   Unfortunately for me, when I took you up on your offer,
your response  was anything  but receptive.   In  fact, after  my
first question,  your volume increased dramatically and your tone
of voice  became defensive and harsh.  It is for this reason that
I feel  I am  taking a  chance that  you may not read this letter
with an open mind and an honest interest in what I have to say.

     Let me  begin with  a somewhat  technical point which, as it
turns  out,  is  representative  of  the  many  problems  we  all
experience with  Title  26.    As  you  already  know,  the  word
"include" and  its several  variations are  utilized in  many key
definitions within  the IRC.   After much research and writing on
the subject,  I personally  believe that  it begs the question to
make  our  point  with  a  partial  quotation  from  Black's  Law
Dictionary.   If it does anything, such a partial reading exposes
our own  biases, more  than anything else.  Fortunately, we can't
afford, nor  do we need bias to win our argument with the IRS and
to convince  the general  public of the validity of our position.
The following  is  the  complete  definition  of  "include"  from
Black's, Sixth Edition:

     Include.   (Lat. inclaudere,  to shut  in, keep within.)  To
     confine within,  hold as  in an  inclosure, take in, attain,
     shut up,  contain, inclose,  comprise, comprehend,  embrace,
     involve.    Term  may,  according  to  context,  express  an
     enlargement and  have the  meaning of and or in addition to,
     or merely specify a particular thing already included within
     general words  theretofore used.  "Including" within statute
     is interpreted  as a  word of enlargement or of illustrative
     application as well as a word of limitation.
                                                 [emphasis added]


                        Page P - 70 of 98

                                                       Appendix P


     Notice, in particular, that this definition permits both the
expansive as  well as the restrictive meanings.  For this reason,
it is  misleading to quote only the first definition, "to confine
within ...",  when we  attempt to decipher the IRC definitions of
"State" and  "United  States".    Moreover,  the  statute  itself
manifests an  expansive intent  when it  defines  "includes"  and
"including" as follows:

     Includes  and   Including.     The  terms   "includes"   and
     "including" when  used in  a definition  contained  in  this
     title shall  not be deemed to exclude other things otherwise
     within the meaning of the term defined.

                                                 [26 USC 7701(c)]

     I find  it quite  fascinating that the word "include" is not
mentioned in  this definition.   Are  we therefore  justified  in
arguing  that  "includes"  and  "including"  are  expansive,  but
"include" is  restrictive?  This is not an idle question, because
the word  "include" is  used in  the  definition  of  "State"  at
7701(a)(10), and the word "includes" is used in the definition of
"United States"  at 7701(a)(9).   Black's  doesn't help  us here,
because it  embraces both the expansive and restrictive meanings.
How do we resolve this ambiguity?

     One could  argue that "includes" is the singular form of the
verb, while  "include" is  the plural  form of  the  verb.    For
example, the  sentence "It  includes ..."  has a singular subject
and a  singular predicate.  The sentence "They include ..." has a
plural subject  and a  plural predicate.  An entry in the Code of
Federal Regulations of 1961 explains how plural forms include the
singular, and vice versa:

     170.60  Inclusive language.

     Words in the plural form shall include the singular and vice
     versa, and  words in  the masculine gender shall include the
     feminine  as   well  as   trusts,   estates,   partnerships,
     associations, companies, and corporations.

                   [26 CFR 170.59, revised as of January 1, 1961]

     On the basis of this regulation, therefore, one is justified
in arguing  that "include" is also expansive because it is merely
the plural form of "includes", which is expansive per 7701(c).  I
believe that this same rule is found in Title 1 of the U.S. Code,
but I can't quite put my finger on the citation just now.

     It would  be nice  if this  were the  end of  the story, but
unfortunately for us, it is not.  There are other published rules
which produce  different results.   One  well established rule of
statutory construction is the rule of inclusio unius est exclusio
alterius.  Black's defines this rule as follows:



                        Page P - 71 of 98

                                                The Federal Zone:


     Inclusio unius  est exclusio alterius.  The inclusion of one
     is the exclusion of another.  The certain designation of one
     person is  an absolute  exclusion of  all others.  ...  This
     doctrine  decrees   that  where   law  expressly   describes
     particular situation to which it shall apply, an irrefutable
     inference must be drawn that what is omitted or excluded was
     intended to be omitted or excluded.


     Now, the  word  "include"  is  omitted  from  the  expansive
definition of  "includes" and "including" found at 7701(c), is it
not?   Using  the  above  rule,  we  are  permitted  to  draw  an
irrefutable inference  that the  word "include"  was  omitted  or
excluded because  it was  intended to  be  omitted  or  excluded.
Well, if "include" is not among the list of terms which are to be
given an  expansive meaning,  can we infer therefrom that it must
be given a restrictive meaning instead?  If so, why?

     Another  rule  which  raises  even  more  questions  is  the
"ejusdem generis"  canon, defined  in Black's  Sixth  Edition  as
follows:


     Under "ejusdem  generis" canon  of  statutory  construction,
     where general  words follow  the enumeration  of  particular
     classes of  things, the  general words  will be construed as
     applying only  to things  of the same general class as those
     enumerated.
                                                 [emphasis added]


     Is California  in the  same general class as the District of
Columbia?     Is  Puerto  Rico  in  the  same  general  class  as
California?  One of the major points of my book is to distinguish
the 50  States from the federal zone by using a principle which I
call "territorial  heterogeneity".   The 50  States  are  in  one
general class,  because of  the Constitutional  restraints  under
which Congress  must operate  inside those  50 States.  The areas
within the federal zone are in a different general class, because
these same constitutional restraints simply do not limit Congress
inside that zone (see Downes vs Bidwell, 182 U.S. 244).

     This line of reasoning allows for an expansive definition of
"include", but  expansive only  up to  a point,  and not  beyond.
What is that point?  Refer now, if you would, to the start of the
IRC section on definitions, which begins as follows:


     When used  in this  title, where  not  otherwise  distinctly
     expressed  or   manifestly  incompatible   with  the  intent
     thereof--
                                                    [26 USC 7701]




                        Page P - 72 of 98

                                                       Appendix P


     So, if  an expansive  definition  of  "include"  results  in
applying Title 26 to the 50 States, have we not produced a result
that is "manifestly incompatible with the intent thereof"?  There
are no  provisions for  apportioning the  direct taxes  levied by
Title 26,  and the  Constitution still requires that direct taxes
be apportioned.   This  fact is  dramatically reinforced  by  the
17,000 State-certified documents which have been assembled by Red
Beckman  and  Bill  Benson  to  prove  that  the  so-called  16th
Amendment was  never ratified.  It cannot have been the intent of
Title 26  to violate  the Constitution.   Just  how do we resolve
this apparent  conflict?   You already  know  the  answer:    the
territorial scope of Title 26 is the federal zone;  the political
scope of  Title 26  is the  set of  persons who are "citizens" of
that zone  (whether those  persons are natural born, naturalized,
or "artificially born" per the 14th Amendment).

     We  could  spend  even  more  time  reviewing  the  numerous
decisions  of   the  Supreme  Court  which  have  adopted  either
expansive or  restrictive definitions  of "include"  and its many
variations in  order to  arrive at  those decisions.   I  am  now
convinced that this is a waste of time, because it doesn't settle
the debate;   it only aggravates the debate.  If I leave you with
any one  single point,  I want  to stress  that Title 26 utilizes
words that have a long, documented history of semantic confusion.
"Include" and its many variations are among those words:


     This word  has received  considerable discussion in opinions
     of the courts.  It has been productive of much controversy.

                                [Treasury Decision 3980, Vol. 29]
                                [January-December, 1927, page 64]
                                                 [emphasis added]
                                                                 
     Accordingly, I  am delighted  if you  agree  with  the  main
thesis of The Federal Zone, that is, the principle of territorial
heterogeneity.  But I am also delighted if you disagree with this
thesis,  because  in  doing  so,  your  disagreement  constitutes
undeniable proof  of a  parallel  thesis  of  The  Federal  Zone,
namely, that  Title 26 is null and void for vagueness.  The "void
for vagueness"  doctrine is  deeply rooted  in our  right to  due
process (under  the Fifth  Amendment) and  our right  to know the
nature and  cause of  an accusation  (under the Sixth Amendment).
The latter  right goes  far beyond  the contents  of any criminal
indictment.

     The right  to know  the nature  and cause  of an  accusation
starts with  the  statute  which  any  defendant  is  accused  of
violating.     A  statute   must  be  sufficiently  specific  and
unambiguous in  all its  terms,  in  order  to  define  and  give
adequate notice  of the  kind of conduct which it forbids.  If it
fails to indicate with reasonable certainty just what conduct the
legislature  prohibits,   a  statute   is  necessarily  void  for
uncertainty, or  "void for  vagueness" as  it is usually phrased.


                        Page P - 73 of 98

                                                The Federal Zone:


Any prosecution  which is  based upon  a vague  statute must fail
together with  the statute  itself.   A vague criminal statute is
unconstitutional for violating the 6th Amendment.


For your  information, I  have enclosed some additional materials
which supplement the arguments I have made in this letter.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship


enclosures

copies:   Chris Wilder
          Michael Thomas
          Red Beckman

































                        Page P - 74 of 98

                                                       Appendix P


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

                                   July 24, 1991



Church of Scientology International
6331 Hollywood Boulevard, Suite 1200
Los Angeles, California Republic
Postal Code 90028/TDC

Dear Church of Scientology:

     Please accept  my  sincerest  praise  for  the  courage  and
dedication you have shown by publishing a full-page advertisement
in the  July 3,  1991 issue of USA Today.  Your ad, "We Believe A
Fair Tax  Is Worth  Fighting For",  was very  professional,  very
informative, and very convincing.

     I am  writing to  take issue  with the contents of paragraph
three of that ad, which reads:


     This door  opened a  crack in  1913 with  the passage of the
     16th Amendment  to the Constitution, which allowed an income
     tax to  be instituted.   This  door has since swung wide and
     Americans again are subjected to an unfair tax system.


     Attached please find a copy of my letter dated March 1, 1991
to Mr.  David Miscavige,  author of the article "Freeing the U.S.
From the  IRS" which  appeared in Freedom magazine, May 31, 1990.
In my  letter to  Mr. Miscavige, I did my best to explain briefly
how the  16th Amendment  was  never  ratified;    it  was  merely
"declared" ratified  by Secretary  of State  Philander C. Knox in
the year  1913, in  the face  of serious  evidence impugning  the
entire ratification process.

     Moreover,  Congress   never  "passed"  the  16th  Amendment,
because  Congress   has  never   been  empowered   to  amend  the
Constitution.   Congress merely  passed  "resolutions"  proposing
that the  State  legislatures  ratify  the  text  of  a  proposed
amendment.   Since three-fourths  of the  States failed to ratify
the text  of the  proposed amendment, the proposal never became a
law.  Therefore, as law-abiding Americans, we must act as if "the
bill never  became a law and was as completely a nullity as if it
had been  the act or declaration of an unauthorized assemblage of
individuals," to quote an Illinois State court.






                        Page P - 75 of 98

                                                The Federal Zone:


     This issue  is not  a  minor  legal  technicality.    It  is
misleading to  publish a  statement that  "the 16th Amendment was
passed in  1913," without also referring to documented historical
facts which  prove that  the proposed  amendment was  simply  not
ratified.  This issue is a major constitutional question.  If any
attempt to  amend the  Constitution fails  to obey  the rules for
amending that document, which rules are found in the Constitution
itself, then  the text  of that  attempt cannot  in  any  way  be
considered a part of the Constitution and must be considered null
and void.

     The United  States Constitution  is the  supreme law  of the
land, and any statute, to be valid, must be in agreement with it,
and therefore  with all  relevant provisions for amending it.  It
is impossible for both the Constitution and a law violating it to
be valid;   one  must prevail.   That  "one" is the Constitution.
This is succinctly stated as follows:


     The general rule is that an unconstitutional statute, though
     having the  form and  name of law, is in reality no law, but
     is wholly  void and  ineffective for  any  purpose;    since
     unconstitutionality dates  from the  time of  its enactment,
     and not merely from the date of the decision so branding it.
     An unconstitutional  law,  in  legal  contemplation,  is  as
     inoperative as  if it had never been passed.  Such a statute
     leaves the  question that  it purports  to settle just as it
     would be[,] had the statute not been enacted.


     Since  an   unconstitutional  law   is  void,   the  general
     principles follow  that it  imposes no  duties,  confers  no
     rights, creates  no office, bestows no power or authority on
     anyone,  affords   no  protection,  and  justifies  no  acts
     performed under it ....


     A void  act cannot  be legally  consistent with a valid one.
     An unconstitutional  law cannot  operate  to  supersede  any
     existing valid  law.   Indeed, insofar  as  a  statute  runs
     counter to the fundamental law of the land, it is superseded
     thereby.


     No one  is bound  to obey  an unconstitutional  law, and  no
     courts are bound to enforce it.

                               [Sixteenth American Jurisprudence]
                                    [Second Edition, Section 177]
                                                 [emphasis added]






                        Page P - 76 of 98

                                                       Appendix P


     I invite  you also  to review  the enclosed  letter  to  the
Save-A-Patriot Fellowship, in which I stress the legal importance
of  being   historically  correct   about  the   so-called  "16th
Amendment". The  preponderance of historical evidence proves that
the proposal  to amend  the Constitution  failed  to  obtain  the
approval of 36 States, and as such never achieved the status of a
ratified  Amendment   and  never   became  an   Article  of  that
Constitution.   It is  not now a law, and never was a law, not in
this country, not in all of recorded history, not on this planet.

     Thank you for your consideration.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship




































                        Page P - 77 of 98

                                                The Federal Zone:


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

                                   March 1, 1991

Mr. David Miscavige, Chairman
Religious Technology Center
c/o Freedom Magazine
6331 Hollywood Blvd., Suite 1200
Los Angeles, California Republic
Postal Code 90028-6329/TDC

Dear Mr. Miscavige:

     I enjoyed  reading your  article entitled  "Freeing the U.S.
From the IRS" which appeared in the May 31, 1990 issue of Freedom
magazine.

     The article  cites numerous excellent reasons for abolishing
federal  income   taxes.     I  agree  with  every  one  of  your
conclusions.   I cannot, however, agree with all of your "facts".
Specifically, in your first paragraph, you write,

     Since 1913,  when an  income tax  was made  possible by  the
     passage of the 16th Amendment, Americans have faced a filing
     deadline 78  times.   When the  constitutional amendment was
     passed, voters  were promised  this new  tax would be fairly
     administered.


     I cannot  agree with  this statement,  because the  evidence
which is  available to  me indicates  that the 16th Amendment was
never lawfully  ratified.   It was  merely "declared" ratified by
the U.S.  Secretary of State in 1913, Philander Knox, in the face
of serious evidence impugning the entire ratification process.

     Enclosed please  find a  detailed summary  of  the  evidence
against the 16th Amendment, and a brief analysis of the legal and
economic implications  of acting  on these  facts.   That is,  as
law-abiding Americans, we must act as if "the bill never became a
law and  was as completely a nullity as if it had been the act or
declaration of  an unauthorized  assemblage of  individuals",  to
quote an Illinois State court.

     I would enjoy hearing from you on this important question.


Sincerely yours,



/s/ Mitch Modeleski, Founder
Account for Better Citizenship


                        Page P - 78 of 98

                                                       Appendix P


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

                                   April 10, 1991


Dr. Lois Callahan, President
College of San Mateo
1700 West Hillsdale Boulevard
San Mateo, California Republic
Postal Code 94402/TDC

Dear Dr. Callahan:

     I am  writing to file a formal complaint against the offices
of television  station KCSM,  which are  located in Building 9 on
your campus.

     Last evening,  I personally  witnessed an  act of  political
censorship by  the staff  of station  KCSM.   My  colleague,  Mr.
Godfrey Lehman,  had previously  received a written invitation to
appear on  the KCSM  program "Legal  Currents" at  7:30 p.m.  The
scheduled topic  was "Income  Tax Filing:   What are your rights?
Where will  the money  go?"   In addition  to a cover letter, the
invitation included  two maps  with directions to KCSM offices, a
temporary parking  permit, and wardrobe guidelines.  I personally
drove Mr. Lehman and accompanied him to this scheduled event.

     After our  arrival, the  second scheduled guest arrived, Mr.
Larry Wright,  Public Affairs  Officer with  the Internal Revenue
Service in  San Francisco.   Upon learning of KCSM's plans to air
the two  guests together,  Mr. Wright objected to the presence of
Mr. Lehman  on the same program.  He cited what he termed a long-
standing policy  of the  IRS to avoid all confrontations over the
tax law  outside the  court room.   A  KCSM staff member was also
present to hear Mr. Wright's objections.  This staff member tried
in vain to persuade the IRS agent to modify his position.

     At this  point, the KCSM staff member left the room in order
to obtain  a decision  from her  management.   She returned  some
minutes later  to inform  all of  us that  Mr.  Wright  would  be
allowed to  appear on  the program, but that Mr. Lehman would not
be allowed  to appear  on the  program.   At this  point, Godfrey
Lehman and  I obtained  permission to  view the  "Legal Currents"
program on  a television  monitor which  was already installed in
the office  where we had been meeting.  The aired program offered
no explanation  for Mr.  Lehman's absence, offered no apology for
the abrupt change of scheduled programming, and made no reference
whatsoever to Mr. Godfrey Lehman, despite the fact he had already
informed numerous colleagues of his scheduled appearance.





                        Page P - 79 of 98

                                                The Federal Zone:


     Now that I have summarized the relevant facts of this event,
I wish  to express  my outrage at such a blatant act of political
censorship by  the management of television station KCSM.  When a
private Citizen  is flatly  denied  access  to  public  broadcast
media, while  government agents are allowed to prevail, do we not
thereby undermine  the very  foundations  of  our  constitutional
republic?   Have we not emphatically and dramatically denied that
Citizen his  right  to  freedom  of  speech,  a  right  which  is
explicitly guaranteed  by the First Amendment to the Constitution
of the  United States?   Even  if the station can be persuaded at
some future  date to abide by some "equal time doctrine", how can
we begin  to assess  the real  damage to  that Citizen's precious
civil rights?   When  government distortion  and intimidation are
sponsored without  challenge, are  we not paving a sure path away
from educated  electorates, in  the  direction  of  police  state
tactics and totalitarian control?

     I am  asking these  questions because  I require  answers to
these questions.   Is  it,  or  is  it  not  the  policy  of  the
administration of  the College  of San  Mateo to  encourage  this
brand of media censorship?  on the campus of a public educational
institution?   in the  offices of  a publicly  licensed broadcast
station?   Are you  now aware  that government "public relations"
agents have  been allowed  to prevail over the written invitation
to a  private  Citizen,  a  published  author  and  a  recognized
constitutional authority on the federal tax law?

     I would greatly appreciate your immediate attention to this
important matter.  If I can assist you in any way to investigate
this incident, please don't hesitate to contact me.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship


copy:  Board of Trustees,
       San Mateo County Community College District













                        Page P - 80 of 98

                                                       Appendix P


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

                                   March 18, 1991


Mr. Peter Gabel, President
New College of California
50 Fell Street
San Francisco, California Republic
Postal Code 94102/TDC

Dear Mr. Gabel:

     I was  shocked to  read the  recent San  Francisco Chronicle
article about the threatened IRS seizure of one of your classroom
buildings.   With this  letter, I hope to make you fully aware of
the powerful  forces which  can be  made available to defend your
college against this unjust and illegal attack.  Permit me to get
right to the major points:

     Our  research  into  the  U.S.  Constitution,  Congressional
taxing powers,  and the  Internal Revenue Service has uncovered a
mountain  of  material  evidence  which  supports  the  following
conclusions:


     1.   Wages are  not taxable  income, as  the term is clearly
          and consistently  defined by  several key  decisions of
          the U.S. Supreme Court that remain in force today.


     2.   The  U.S.  Constitution  authorizes  Congress  to  levy
          "direct taxes"  on private  property, but only if those
          taxes are apportioned across the 50 States.


     3.   The IRS  now enforces  the collection of "income taxes"
          as direct  taxes without  apportionment, and  cites the
          16th Amendment for its authority to do so.


     4.   The  16th   Amendment,  the   so-called  "income   tax"
          amendment, was  never lawfully ratified by the required
          36 States,  but  was  declared  ratified  by  the  U.S.
          Secretary of State in the year 1913.


     5.   The 16th  Amendment could never have done away with the
          apportionment rule  for any  direct taxes  if it  never
          became a law in the first place.




                        Page P - 81 of 98

                                                The Federal Zone:


     The documentary  substantiation  for  these  conclusions  is
found in  the attached  formal petition, dated December 24, 1990,
to Congresswoman Barbara Boxer, my Representative in the Congress
of the United States.  Rep. Boxer has, to date, failed to respond
to this formal petition.  For this reason, we have recently filed
a formal  Request for  Investigation by  the Marin  County  Grand
Jury, a  copy of  which is  attached for  your review.   We  have
requested the Marin County Grand Jury:

     1.   to investigate  possible  obstruction  of  justice  and
          misprision of  felony by  Rep. Barbara  Boxer  for  her
          failure, against  a spoken  promise before  hundreds of
          witnesses at  Pt. Reyes  Station on August 22, 1990, to
          examine the material evidence of felony fraud when U.S.
          Secretary of  State Philander C. Knox declared the 16th
          Amendment ratified,

     2.   to subpoena  or otherwise  require Representative Boxer
          to explain,  under oath,  why she  and her  staff  have
          failed to  answer  our  formal,  written  petition  for
          redress of  this major  legal grievance  with agents of
          the federal government,

     3.   to review  the material  evidence against the so-called
          16th Amendment which we have assembled and are prepared
          to submit in expert testimony, under oath, to the Marin
          County Grand Jury.

     Mr. Gabel, we have developed a network of constitutional and
legal experts whose resources can be made available to assist you
on very  short notice.   As  you can  infer for yourself from the
attached materials,  we see  the IRS attack on your college as an
illegal and  unconstitutional act  by an  agency of  the  Federal
Reserve System.  This attack is designed to harass and intimidate
an educational  institution dedicated  to  the  goals  of  social
responsibility and  progressive change.  These goals are inimical
to the  purposes for  which the  IRS was  established.   You must
fully appreciate  that the  Internal Revenue  Service  is  not  a
service to  the American people.  It is not a service to the U.S.
Government.  It is a service to the Federal Reserve System, which
is not an agency of the federal government.

     After you  have had  a chance  to review this letter and its
attachments, may  I recommend  that we  meet privately to discuss
your situation  and to  consider the several ways in which we can
bring our  collective expertise  to bear upon it.  For example, I
am ready  on short  notice to present the results of our research
in a guest lecture to your law students and faculty, at no charge
to the  College.   Similarly, I am prepared to share with you the
material evidence  against the  16th Amendment  which I currently
hold in  my possession.  I should think that a fight for the very
survival of  your college  would provide  an excellent motivation
for one  exciting moot  courtroom drama  for all faculty members,
students, and staff.


                        Page P - 82 of 98

                                                       Appendix P


     Please feel  free to  call me  at your earliest convenience.
If I  have not  heard from  you by  this coming  Friday,  I  will
contact your  office by  telephone to  discuss  this  letter  and
hopefully arrange  a meeting.   Thank  you  very  much  for  your
consideration, and good luck!


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship

attachments

copies:  selected colleagues






































                        Page P - 83 of 98

                                                The Federal Zone:


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

                                   March 25, 1991

Marion McEwen
FIJA California
24828 Canyon View Court
Hayward, California Republic
Postal Code 94541/TDC

Dear Marion:

     I obtained your name and address from the Special Conference
Issue of  The FIJA  Activist.   I am  writing you  to request any
advice or assistance you may be able to provide to me in a matter
of utmost  importance to  the general  welfare  of  all  American
Citizens.

     In the  summer  of  1990,  I  personally  received  material
evidence that  the  16th  Amendment,  the  so-called  income  tax
amendment, was  never lawfully ratified.  This evidence indicates
that the  act of  declaring the  16th Amendment "ratified" was an
act of  outright fraud  by then  Secretary of  State Philander C.
Knox.   In August  of  1990,  I  brought  this  evidence  to  the
attention of  Congresswoman Barbara  Boxer, my  representative in
the Congress  of the  United States.  In front of several hundred
witnesses at a community meeting sponsored by Rep. Boxer, she did
agree to  examine the evidence to which I refer.  During the next
several months,  I heard nothing from Rep. Boxer's office on this
matter.

     In December of 1990, I personally prepared a formal, written
petition to  Rep. Barbara  Boxer, reminding her of her promise to
examine the  material evidence  against the  16th Amendment,  and
reminding her  also of  her solemn  oath of  office, by which she
swore to uphold and defend the Constitution of the United States.
A copy  of this  formal, written  petition is  enclosed, for your
review.   To date,  I have  received no responses from Rep. Boxer
nor from any of her staff on this matter.

     Accordingly, on March 11, 1991, I filed a formal Request for
Investigation by  the Marin  County Grand Jury.  As stated in the
summary section  of our  completed form,  we requested  the Grand
Jury to do the following:


     1.   investigate  possible   obstruction  of   justice   and
          misprision of  felony by  Rep. Barbara  Boxer  for  her
          failure, against  a spoken  promise before  hundreds of
          witnesses, to  examine the  material evidence of felony
          fraud when  U.S. Secretary  of State  Philander C. Knox
          declared the 16th Amendment ratified,


                        Page P - 84 of 98

                                                       Appendix P


     2.   to subpoena or otherwise require Rep. Boxer to explain,
          under oath, why she and her staff have failed to answer
          our formal,  written petition for redress of this major
          legal grievance with agents of the federal government,


     3.   to review  the material  evidence against the so-called
          16th Amendment which we have assembled and are prepared
          to submit in expert testimony, under oath, to the Marin
          County Grand Jury.


     In a written response dated March 13, 1991, the Marin County
Grand Jury  declined to  proceed with  an investigation.    Their
reasons were stated as follows:


     In the  panel's opinion  that subject  matter was not within
     its jurisdiction.   We serve in a watchdog manner over local
     public departments and agencies.  As a result of Proposition
     115  this  Grand  Jury  is  apparently  relegated  to  civil
     matters, whereas  indictment and  accusation cases are to be
     handled by a special criminal Grand Jury.


These reasons  were cited,  despite a  recent  newspaper  article
which described the Grand Jury as follows:

     The Grand  Jury operates  under the auspices of the Superior
     Court and has the authority to investigate the personnel and
     operations of any county, city or local government agency as
     well as  the conduct  of any  elected,  appointed  or  hired
     official.
                                                                 
              [Coastal Post, March 4, 1991, p. 3, emphasis added]


     I do  understand  from  your  newsletter  that  there  is  a
parallel FIGJA  (grand jury)  organization.   Because I intend to
write to  them directly,  I would  appreciate it very much if you
could do  more than  merely refer  this  letter  to  them.    For
example, I would be very interested to know if there is any way I
can  successfully   persuade  the  Marin  County  Grand  Jury  to
reconsider their  decision to  decline the  investigation which I
have requested.

     Please understand  that I  have no personal vendetta against
Rep. Boxer, nor do I wish to create an embarrassing situation for
her.   I agree with her positions on a number of important public
policy issues,  and wish  her the  best of  luck in her bid for a
seat in the Senate of the United States.  Nevertheless, she is my
elected Representative  in the Congress of the United States, and
the First  Amendment to  the U.S.  Constitution does guarantee my
right to petition the Government for a redress of grievances.


                        Page P - 85 of 98

                                                The Federal Zone:


     If Rep.  Boxer has anyone to fear, it is Rep. Boxer herself.
If she  or her staff have, in fact, chosen to ignore this matter,
then she  is failing to do the job she was elected to do, and she
may in  fact be  guilty of  obstructing justice and misprision of
felony (see attached).

     For your  information,  I  am  also  planning  to  write  to
Supervisor  Gary   Giacomini  of   the  Marin   County  Board  of
Supervisors.   In the  March 11,  1991 issue of the Coastal Post,
Supervisor Giacomini was quoted to say:


     "It's a bad time for us that are in government with no money
     coming from  Washington or  the State.   Nineteen  years ago
     when I  got started,  the federal government paid 34 percent
     of the  county budget.   Now  they pay 7 percent.  There are
     dues to  pay for  the deficit  in Washington and dues to pay
     for war," he explained.
                                                 [emphasis added]


     To many,  there is  little if any connection between federal
income taxes  and the  current fiscal  squeeze on state and local
governments, or  the  poor  state  of  the  national  economy  in
general.   On the  contrary, the  research I have done during the
past 9  months now  convinces me  that the  connection is direct.
Federal income  taxes are  used to  make interest payments to the
Federal  Reserve  banks,  and  their  collection  agency  is  the
Internal Revenue Service.  The IRS is not a service to the people
of the  United States.   It is not a service to the government of
the United  States.   It is  a service  to  the  Federal  Reserve
System, a  private credit  monopoly described as "one of the most
corrupt institutions  the world  has ever  known" by  Congressman
Louis T.  McFadden, Chairman  of the  U.S. Banking  and  Currency
Commission for  some 22  years.    Witness  McFadden's  statement
published in the Congressional Record of June 10, 1932:


     Mr. Chairman,  we have  in this  country  one  of  the  most
     corrupt institutions  the world  has ever known.  I refer to
     the Federal  Reserve Board  and the  Federal Reserve  banks.
     The Federal  Reserve Board,  a Government board, has cheated
     the Government  of the  United States  and the people of the
     United States  out of enough money to pay the national debt.
     The depredations and iniquities of the Federal Reserve Board
     and the Federal Reserve banks acting together have cost this
     country enough  money to pay the national debt several times
     over.  This evil institution has impoverished and ruined the
     people of the United States;  has bankrupted itself, and has
     practically bankrupted  our Government.   It  has done  this
     through the  defects of  the law  under which  it  operates,
     through the  maladministration of  that law  by the  Federal
     Reserve Board,  and through  the corrupt  practices  of  the
     moneyed vultures who control it.


                        Page P - 86 of 98

                                                       Appendix P


     Some people  think the  Federal  Reserve  banks  are  United
     States Government  institutions.   They are  not  Government
     institutions.  They are private credit monopolies which prey
     upon the  people of  the United  States for  the benefit  of
     themselves  and   their  foreign  customers;    foreign  and
     domestic speculators  and swindlers;  and rich and predatory
     money lenders.  In that dark crew of financial pirates there
     are those  who would  cut a man's throat to get a dollar out
     of his  pocket;   there are those who send money into States
     to buy  votes to  control our  legislation;   and there  are
     those who  maintain  an  international  propaganda  for  the
     purpose of  deceiving  us  and  of  wheedling  us  into  the
     granting of  new concessions which will permit them to cover
     up their  past  misdeeds  and  set  again  in  motion  their
     gigantic train of crime.


     The manipulations  of the  Federal Reserve  System and their
effects on  the entire  American economy  have been  shrouded  in
considerable secrecy  for too  many years  now.  This secrecy has
been  a  conscious  and  deliberate  feature  of  its  corrupting
influence on officials in all branches of the federal government.
To illustrate my point, I have now personally witnessed documents
which prove  that a  federal grand  jury in Orem, Utah issued two
formal indictments  against the Federal Reserve System, but those
indictments were  subsequently obstructed  by the  Department  of
Justice and  by the Federal judiciary.  These documents show that
the first  indictment was  issued on  or about February 16, 1982.
The second  indictment was issued on or about July 7, 1982.  This
documentation can be made available to you upon request.

     I sincerely  hope that  this letter  has provided you with a
glimpse  of  just  how  serious  and  widespread  a  problem  the
so-called 16th Amendment has created for millions of Americans, a
problem that  now extends  through two  whole generations  of our
brief history  as a  nation.  As I myself have come to appreciate
the true  essence of  this problem,  I  have  also  come  to  the
conclusion that  the millions  of hard-working Americans burdened
by  this  scourge  now  deserve  an  honest  explanation.    This
explanation can  only be  forthcoming if we, the people, exercise
our unalienable  right to  correct a  government  which  has  now
drifted so far off course, it hardly resembles the constitutional
republic it was designed to be.

     I do  honestly believe that, whenever any form of government
becomes destructive  of our rights, it is also our right to alter
or abolish  it, and  to institute  a new  government, laying  its
foundation on  such principles, and organizing its powers in such
form, as  to us,  the U.S.,  shall seem most likely to effect our
safety and our happiness.

     To this  end, I  dedicate my life, my fortune, and my sacred
honor.  Won't you please join me?



                        Page P - 87 of 98

                                                The Federal Zone:


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship


copy:  Lowell A. Airola, Foreperson
       Grand Jury of Marin County

       Gary Giacomini, Member
       Marin County Board of Supervisors










































                        Page P - 88 of 98

                                                       Appendix P


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

                                   April 29, 1991

Dianne Bast
Heartland Institute
654 South Wabash, 2nd Floor
Chicago, Illinois
Postal Code 60605/TDC

Dear Dianne:

     At the  request of  my  colleague,  Kirby  Ferris,  enclosed
please find  a collection  of papers  and letters which summarize
our continuing  research and political action with respect to the
16th Amendment and related subjects.

     It has  been difficult obtaining reliable information on the
Federal Reserve  System, because this syndicate has been shrouded
in almost  total secrecy  since its creation.  Even though I take
exception to  the  religious  prejudice  he  sometimes  exhibits,
author Eustace  Mullins does  appear to  have the inside track on
the origins  and development  of this  syndicate.  In particular,
the enclosed  quote from  A Writ for Martyrs is the most succinct
statement of  "The  Problem"  that  I  have  been  able  to  find
anywhere.

     Interestingly, the  enclosed quote  by  Eustace  Mullins  is
entirely consistent  with statements  by Beardsley  Ruml  in  the
January 1946  issue of  American Affairs  magazine.    Mr.  Ruml,
Chairman of  the Federal  Reserve Bank  of New York at that time,
was the person who devised the income tax withholding system.  In
this article, he wrote,


     By all  odds, the most important single purpose to be served
     by the  imposition of  federal taxes is the maintenance of a
     dollar which has stable purchasing power over the years.


     In   other   words,   federal   income   taxation   is   the
counterbalance to  the flood  of paper money which pours into the
economy as  the Fed  creates it  "out of thin air".  Without this
counterbalance, inflation  would skyrocket.   "...  [W]ithout the
use of federal taxation all other means of stabilization, such as
monetary  policy   and  price   controls   and   subsidies,   are
unavailing," concluded Ruml [emphasis added].

     What does  all this  mean?   It means that income taxes have
nothing to  do with  the funding  of government  services.    The
report of  the Grace  Commission confirmed the same finding.  All
individual income  tax revenues  go to  pay for  interest on  the


                        Page P - 89 of 98

                                                The Federal Zone:


national debt,  which debt  is owed  to a private credit monopoly
once described  by Congressman  Louis T.  McFadden as "one of the
most corrupt institutions the world has ever known".

     Therefore, as  you study  the many  problems that exist with
the so-called  "ratification"  of  the  16th  Amendment,  try  to
realize the  true  motives  which  underpin  the  chicanery  that
occurred in that ratification process.  For example, the Governor
of the  State of  Arkansas vetoed  the resolution  to  amend  the
Constitution.   The Kentucky  Senate Journal recorded a vote of 9
FOR and 22 AGAINST the resolution.  An Illinois State court ruled
that "it  never became  a law, and was as much a nullity as if it
had been  the act or declaration of an unauthorized assemblage of
individuals."   Nevertheless, the  U.S. Secretary of State in the
year 1913,  Philander C. Knox, "declared" it ratified anyway.  It
is no coincidence that this act by Secretary Knox occurred in the
same year the Federal Reserve Act was passed by Congress.

     For your  information, I  have also  enclosed a  copy  of  a
recent bibliography  which we  have assembled  on the subjects of
income taxes, the 16th Amendment, and the Federal Reserve System.
These  references   are  an  excellent  place  to  continue  your
education.   If there  is anything else we can do for you, please
don't hesitate to contact us.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship

copy:  Kirby Ferris

enclosures:  bibliography
             assembled papers


















                        Page P - 90 of 98

                                                       Appendix P


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

                                   May 29, 1991
Producers
60 Minutes
524 West 57th Street
New York, New York
Postal Code 10019/TDC

Dear Producers:

     I am writing this letter at the request of my colleague, Mr.
Godfrey Lehman.  In his letter to you dated May 21, 1991, Godfrey
has already  written an  excellent summary  identifying the major
problems which  his research  has discovered  with federal income
taxes and the Internal Revenue Service.

     Do you  have any interest in developing a special segment to
discuss the  mass of new evidence which now seriously impugns the
ratification of  the 16th  Amendment, the  so-called  income  tax
amendment?

     The material evidence in our possession proves that the 16th
Amendment was  never lawfully  ratified.  This evidence indicates
that the  act of  declaring it  "ratified" was an act of outright
fraud by  Secretary of  State Philander C. Knox in the year 1913.
You may already know that fraud has no statute of limitations.

     To date,  I have  already filed  four formal  petitions  for
redress of  this major  grievance with the Congress of the United
States.     Three  were   addressed   to   Barbara   Boxer,   the
Representative for  the Congressional district in which I reside.
The fourth  petition was  addressed  to  Rep.  Dan  Rostenkowski,
Chairman of  the House  Committee on  Ways and  Means.  Copies of
these petitions  are enclosed,  for your review, in addition to a
collection of letters and other materials.

     To many,  there is  little if any connection between federal
income taxes  and the  current fiscal  squeeze on state and local
governments, or  the disintegration  of the  national economy  in
general.   On the  contrary, the  research I have done during the
past year now convinces me that the connection is direct.

     Federal income  taxes are  used to make interest payments to
the Federal  Reserve banks,  and their  collection agency  is the
Internal Revenue Service.  The IRS is not a service to the people
of the  United States.   It is not a service to the government of
the United  States.   It is  a service  to  the  Federal  Reserve
System, a  private credit  monopoly described as "one of the most
corrupt institutions  the world  has  ever  known"  by  Louis  T.
McFadden, Chairman  of the  House Banking and Currency Committee,
1927-1933.


                        Page P - 91 of 98

                                                The Federal Zone:


     The manipulations  of the  Federal Reserve  System and their
effects on  the entire  American economy  have been  shrouded  in
considerable secrecy  for too  many years  now.  This secrecy has
been  a  conscious  and  deliberate  feature  of  its  corrupting
influence on officials in all branches of the federal government.

     This secrecy  has also  made it  very  difficult  to  obtain
reliable information  about the  Federal Reserve.   Even though I
take exception  to the religious prejudice he sometimes exhibits,
author Eustace  Mullins does  appear to  have the inside track on
the origins  and development  of this  syndicate.  In particular,
the enclosed excerpt from A Writ for Martyrs is the most succinct
statement of  "The  Problem"  that  I  have  been  able  to  find
anywhere.   In his recent book The Shadows of Power, author James
Perloff puts it this way:


     The year  1913 was an ominous one  --  there now existed the
     means to  loan the  government colossal  sums  (the  Federal
     Reserve), and  the means  to exact  repayment (income  tax).
     All that  was needed now was a good reason for Washington to
     borrow.   In 1914,  World War  I  erupted  on  the  European
     continent.  America eventually participated, and as a result
     her national debt soared from $1 billion to $25 billion.


     I sincerely  hope that  this letter  has provided you with a
glimpse  of  just  how  serious  and  widespread  a  problem  the
so-called 16th Amendment has created for millions of Americans, a
problem that  now extends  through two  whole generations  of our
brief history  as a  nation.  As I myself have come to appreciate
the true  essence of  this problem,  I  have  also  come  to  the
conclusion that  the millions  of hard-working Americans burdened
by  this  scourge  now  deserve  an  honest  explanation.    This
explanation can  only be  forthcoming if we, the people, exercise
our unalienable  right to  correct a  government  which  has  now
drifted so far off course, it hardly resembles the constitutional
republic it was designed to be.

     Please feel  free to  contact me at any time concerning this
proposal for  "60 Minutes"  coverage of the 16th Amendment fraud.
Thank you very much for your consideration.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship

enclosures



                        Page P - 92 of 98

                                                       Appendix P


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

                                   May 29, 1991

Mr. Dennis Bernstein
Radio Station KPFA
2207 Shattuck Avenue
Berkeley, California Republic

Dear Mr. Bernstein:

     Do you  have any interest in developing a segment to discuss
the  mass  of  new  evidence  which  now  seriously  impugns  the
ratification of  the 16th  Amendment, the  so-called  income  tax
amendment?

     The material evidence in our possession proves that the 16th
Amendment was  never lawfully  ratified.  This evidence indicates
that the  act of  declaring it  "ratified" was an act of outright
fraud by  Secretary of  State Philander C. Knox in the year 1913.
You may already know that fraud has no statute of limitations.

     To date,  I have  already filed  four formal  petitions  for
redress of  this major  grievance with the Congress of the United
States.     Three  were   addressed   to   Barbara   Boxer,   the
Representative for  the Congressional district in which I reside.
The fourth  petition was  addressed  to  Rep.  Dan  Rostenkowski,
Chairman of  the House  Committee on  Ways and  Means.  Copies of
these petitions  are enclosed,  for your review, in addition to a
collection of letters and other materials.

     To many,  there is  little if any connection between federal
income taxes  and the  current fiscal  squeeze on state and local
governments, or  the disintegration  of the  national economy  in
general.   On the  contrary, the  research I have done during the
past year now convinces me that the connection is direct.

     Federal income  taxes are  used to make interest payments to
the Federal  Reserve banks,  and their  collection agency  is the
Internal Revenue Service.  The IRS is not a service to the people
of the  United States.   It is not a service to the government of
the United  States.   It is  a service  to  the  Federal  Reserve
System, a  private credit  monopoly described as "one of the most
corrupt institutions  the world  has  ever  known"  by  Louis  T.
McFadden, Chairman  of the  House Banking and Currency Committee,
1927-1933.

     The manipulations  of the  Federal Reserve  System and their
effects on  the entire  American economy  have been  shrouded  in
considerable secrecy  for too  many years  now.  This secrecy has
been  a  conscious  and  deliberate  feature  of  its  corrupting
influence on officials in all branches of the federal government.


                        Page P - 93 of 98

                                                The Federal Zone:


     This secrecy  has also  made it  very  difficult  to  obtain
reliable information  about the  Federal Reserve.   Even though I
take exception  to the religious prejudice he sometimes exhibits,
author Eustace  Mullins does  appear to  have the inside track on
the origins  and development  of this  syndicate.  In particular,
the enclosed excerpt from A Writ for Martyrs is the most succinct
statement of  "The  Problem"  that  I  have  been  able  to  find
anywhere.   In his  recent book  Shadows of  Power, author  James
Perloff puts it this way:


     The year  1913 was an ominous one  --  there now existed the
     means to  loan the  government colossal  sums  (the  Federal
     Reserve), and  the means  to exact  repayment (income  tax).
     All that  was needed now was a good reason for Washington to
     borrow.   In 1914,  World War  I  erupted  on  the  European
     continent.  America eventually participated, and as a result
     her national debt soared from $1 billion to $25 billion.


     I sincerely  hope that  this letter  has provided you with a
glimpse  of  just  how  serious  and  widespread  a  problem  the
so-called 16th Amendment has created for millions of Americans, a
problem that  now extends  through two  whole generations  of our
brief history  as a  nation.  As I myself have come to appreciate
the true  essence of  this problem,  I  have  also  come  to  the
conclusion that  the millions  of hard-working Americans burdened
by  this  scourge  now  deserve  an  honest  explanation.    This
explanation can  only be  forthcoming if we, the people, exercise
our unalienable  right to  correct a  government  which  has  now
drifted so far off course, it hardly resembles the constitutional
republic it was designed to be.

     Please feel  to contact  me  at  any  time  concerning  this
proposal for  KPFA coverage  of the  16th Amendment fraud.  Thank
you very much for your consideration.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship


enclosures








                        Page P - 94 of 98

                                                       Appendix P


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

                                   July 21, 1991


Ken Ellis
Maintenance Engineer
KPFA-FM 94.1
2207 Shattuck Avenue
Berkeley, California Republic
Postal Code 94704/TDC

Dear Ken:

     I enjoyed  our brief  conversation after the last meeting of
the Free  Enterprise Society  in Berkeley.  Enclosed is a copy of
my letter of May 29, 1991 to Dennis Bernstein.

     For your information, Lewis vs United States, 680 F.2d 1239,
June 24,  1982 is  the Ninth  Circuit Court decision which proves
that the Federal Reserve is a private corporation.

     Two full  pages are  dedicated to the details of this ruling
in Alan  Stang's excellent  book entitled  Tax Scam, published by
Mount Sinai  Press, P.  O. Box 1220, Alta Loma, California 91701,
telephone (714)  980-3165.   Stang's mailing address is 4770 West
Bellfort, #269,  Houston, Texas  77035.   Quoting Stang from page
232:


     Mr. Lewis  was hit  by a  truck owned by the Federal Reserve
     Bank of  San Francisco, so he sued.  The trouble was that he
     sued the  U.S. government under the Federal Tort Claims Act,
     in the  belief that  the bank  is a  government agency.  The
     Court ruled  against  Mr.  Lewis,  explaining  that  he  had
     mistakenly named  the wrong  defendant, that  the government
     had nothing  to do  with it   --   and that Mr. Lewis should
     have sued the Bank, which is a private corporation.


     You know,  if I wished to subvert the monetary system of any
country, I  would arrange  a secret  meeting of  finance  moguls,
require all  participants to  use first  names only,  shield  the
meeting from  the scrutiny of press and public, draft legislation
which was  too long  for experts  to understand  without  lengthy
study, and  ram it thru Congress two days before Christmas, after
donating first  class travel  fare to  all my opponents, glossing
over dozens  of major  differences between  the House  and Senate
versions, and scheduling a vote at 1:30 in the morning, after all
my opponents were scattered to the four winds.




                        Page P - 95 of 98

                                                The Federal Zone:


     Those who prefer to regard the events at Jekyll Island as an
unsubstantiated conspiracy  appear, to  me, very similar to those
who even  now retain  their belief that Lee Harvey Oswald was the
lone assassin of President Kennedy.  If there were no conspiracy,
then why  all the  evidence indicating  that there  was?  One can
argue that  some author  doesn't have  his facts straight because
that same  author harbors  a prejudice  or two, but to argue this
way in  the face  of incriminating facts really begs the question
that is  raised by  the facts  themselves.   The secrecy alone is
something which  I personally find abhorrent to our principles of
due process, representative government, and freedom of the press.
If anyone  can produce  a credible  challenge  to  the  facts  we
allege, then  let's hear  from them.  Until then, the facts as we
know them  speak for  themselves.    All  by  itself,  the  fraud
surrounding the  16th Amendment is substantiated by 17,000 State-
certified documents.

     Isn't this  mass of  evidence enough to justify maybe even a
brief mention on a publicly funded radio station?


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship


copy:  Dennis Bernstein
       interested colleagues
























                        Page P - 96 of 98

                                                       Appendix P


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

                                   August 23, 1990

Editor
Point Reyes Light
P. O. Box 210
Pt. Reyes Station, California Republic
Postal Code 94956/TDC

Dear Editor:

     On the  evening of  August 22, 1990, in Point Reyes Station,
Congresswoman  Barbara   Boxer  publicly   consented  to  inspect
personally the  evidence against  the 16th  Amendment to the U.S.
Constitution (1913  Income Tax).   This  evidence shows  that the
16th Amendment was fraudulently ratified.  We applaud her courage
and her willingness to pursue the truth in this matter.

     Six States  are on  official federal  record as opposing the
16th Amendment.   If  we can  prove to  Representative Boxer that
seven additional States were so immersed in fraudulent procedures
as to  nullify  their  ratification  proceedings,  we  will  have
produced a  total of  thirteen votes  against the 16th Amendment.
Such proof  will effectively nullify the Income Tax in the United
States of  America, since 36 of 48 States were required to ratify
a constitutional amendment in 1913.

     Needless to  say, this  is a  mind-boggling  assertion,  but
fraud has no statute of limitations.  We do not ask our neighbors
to take  our claims lightly.  We do want the opportunity to prove
our case  to the American people.  Therefore, we will publish the
document numbers  that are  pertinent in the "dirty seven" States
that we  have identified.  Each and every one of you will be able
to request  your own certified copies of these documents from the
State houses of those seven States.

     Remember that  an income  tax is  absolutely unnecessary  to
finance the  U.S. government.   From  1787 until  1942 (when  the
income tax  had reached a nominal 2 percent on corporations only)
our nation  demonstrated unprecedented  prosperity.   Ironically,
the national  debt has  increased as income taxes have increased.
Before long,  the interest  on the  national debt will exceed the
total income  tax revenues  collected by  the federal government.
It doesn't take a genius to figure out what that means.

     Not one  penny of  your Form 1040 check goes anywhere except
into the  vaults of  the private  banks of  the  Federal  Reserve
System (see  report of  the Grace  Commission).   Every penny  of
income tax  is diverted  to pay  interest to bankers on the money
they authorize  the U.S.  Treasury to  print (i.e., create out of
thin air)  as Federal  Reserve Notes,  and then  LOAN to  us!  We


                        Page P - 97 of 98

                                                The Federal Zone:


advise all  American Citizens to pay very close attention as this
story unfolds.   Imagine  being able  to raise  your own personal
credit limit simply by raising your hand.  The U.S. Congress does
it all  the time  when it  passes laws  to raise the federal debt
limit.

     Again, our  thanks to  Congresswoman Barbara  Boxer for  her
willingness to  keep an  open mind  and to seek the truth in this
matter.


Sincerely yours,




/s/ Mitch Modeleski, Founder
Account for Better Citizenship






































                        Page P - 98 of 98

