They Will Move You to the District of Columbia

Title 26: Internal Revenue Code
Subtitle F: Procedure and Administration
Chapter 79: Definitions
§ 7701: Definitions

(a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof—

(39) Persons residing outside United States If any citizen or resident of the United States does not reside in (and is not found in) any United States judicial district, such citizen or resident shall be treated as residing in the District of Columbia for purposes of any provision of this title relating to—

(A) jurisdiction of courts, or
(B) enforcement of summons.

If you are a resident or citizen of the United States that does not live in a United States judicial district, then you will be treated as if you were living in the District of Columbia so that they can (1) put you in their jurisdiction to take you to court and (2) summon you to court. Why do they have to “move” you to DC to do all this?


5 Responses to “They Will Move You to the District of Columbia”

    6 March 2010 at 15:24

    Umm, so ‘they’ don’t have to travel far ? I take it this rule or definition, or whatever it is, relates to tax violations against people who do not reside within the boundaries of the United States. Therefore someone has gone abroad and dragged this person back to the United States to face charges related to the tax violations. Isn’t D.C. as good, or as bad, as anywhere else in the U.S. ? Of course the motel rates would be lower in, say, Peoria, but I doubt the IRS, as prosecutor, really cares what a miscreant is having to pay for a motel. Or perhaps room and board are provided in D.C.

  2. 6 March 2010 at 23:22

    @ROUGH JUSTICE: What? It says “shall be treated as” not “shall move you.” This is about how they legally treat you. For you to be legally responsible for something, you have to be within their legal district. If you are not physically there (and the residency in their legal district is obvious) then they have to essentially alter your “residence” to make it so that you are in their legal jurisdiction.

    So with that said, does that make any difference to you on how you state your “residency” for the purposes of taxation?

    7 March 2010 at 09:16

    Ah ! Good point – I overlooked the significance of “shall be treated as” compared to “shall move you to.” Nevertheless, I am guessing that the purpose of this “Definition” is to define how – or more particularly ‘where’ – the IRS will deal with a person who resides in Siberia, and says so, but has not surrendered his U.S. citizenship. That person is still liable for U.S. income taxes (and possibly FICA) on his income, even though it is generated by his doing work in Siberia. FYI, if you didn’t know it, the U.S. is the only country in the world, who has this unique tax obligation held against its citizenry regardless of their country of residence. And who said this isn’t a great country ?

    Side note – if you are not familiar with the tax case against the Dart brothers, Ken and Robert, it makes interesting reading, even in summary on the great book of knowledge, Wikipedia. In short, Dart Corp. is the largest producer of their well-known Styrofoam drinking cups in the world. In fact they are the only producer of their particular cup as the method of forming the cup is as well protected as the formula for Coca Cola. So both sons of the founder of the company are multi-billionaires, one cup at a time, who have this odd unwillingness to contribute their fair share to the operation of the U.S. government – even though most of their plants are located within the geographical boundaries of the U.S. Having fled to the Cayman Islands to avoid paying taxes, but having the IRS out-maneuver them on that attempt, they took to the high seas in a fully self contained, and well armed ship that cruises only in international waters. Having long since renounced their U.S. citizenship, but not their income from their U.S. operations, they truly remain non-citizens of any sovereignty, and therefore beyond the reach of the IRS. Since the ship is well armed, they have made it clear that any ship or plane approaching them while they are in international waters (which is always) will be sunk or shot down without hesitation. Interesting how massive wealth can expand one’s options. Frankly, I’m cheering them on, even though it leaves me having to carry part of the burden they would be carrying if they were ‘good boys’ and paid their taxes like the rest of us assholes.

    But, back to reality: I don’t know if I can state this completely accurately, but I also think that even an individual who has renounced his citizenship – “If the IRS believes they have done so for the purpose of avoiding taxes” – is still liable to the U.S. for taxes on earned income for ten years after renouncing his citizenship. That would be in addition to any income taxes the individual would owe to his new country of citizenship. Fortunately for most of us working slobs, I believe that particular rule applies only to individuals worth more than $1million or some number that is way beyond my worth. So I don’t personally have to worry about that little issue, should I decide to renounce my citizenship and change my residency to, Cuba, for instance; where even in my poor state of riches I would be considered a wealthy person.

    My point in relating these two examples of persons with residencies outside the geographic borders of the U.S. – one who has retained his citizenship, and one who has surrendered his citizenship – is to explain to you that it is, indeed, possible to be in violation of U.S. tax code, in either situation, regardless of whether, or where, you declare your residency to be. That is what I thought you were talking about in your initial posting; so that is why I said that there are going to be situations where the IRS sends an agent abroad to fetch the villain back to the USSA to stand trial for his misdemeanors. Since said villain has a residency in Siberia, the IRS can’t very well try him there (except with a bullet), so upon said villain’s return in cuffs to the USSR to stand trial, the IRS is going to “treat him as if he resided in the D.C.”

    So, my good fellow, I believe I am disagreeing with your statement(correctly or not correctly):
    “For you to be legally responsible for something, you have to be within their legal district.” Such is not true when it comes to collecting income taxes on former citizens and/or residents of the U.S. for up to ten years after their departure. Does any of what I have written make sense ? (Not ‘make sense’ in terms of being logical; ‘make sense’ in terms of understanding my points.)

    Looking forward to reading your Federalist 39 – which I can see is going to consume a lot of brain cells; but, nevertheless, looks well worth it. Thanks for your stimulating thoughts and information. But either use the goddamn gun, or put it away ! ;-)

  4. 8 March 2010 at 03:50

    @Rough Justice: I’d like to start off by saying that the gun and me are one. Possibly, not me using it, but me having the option of using it. This is a sacred unalienable right of self-protection. If it offends you, I am not sorry for it. :)

    you have hit on some interesting subjects here in this message. You can be a citizen of many things… or of nothing. With citizenry of any flavor you are offered some sort of “benefit.” If you are a citizen of nothing – then you have nobody… you are on your own in every manner. However in America you don’t have to be a citizen of nothing to “escape” taxes. Nor do you have to flee.

    The Dart Brothers seem to have taken the most extreme approach to all this. It does work but I don’t think it is nessisary to do. You don’t need to expatriate in all forms just to be “free.”

    The US tax code is broken up into essentially two parts.
    Are you a person that is liable for taxes?
    Did you participate in a taxable activity?

    If the answer to the latter question is “yes” then it does not matter where you live, what you are a citizen of, or where you live. I would contend that even though the Dart Brothers are off on the seas, they still pay taxes. If they roll in to buy supplies from whoever – they are probably going to pay taxes on the goods they buy – a sales tax. In my opinion this is an acceptable tax because it is an indirect tax – they can chose to pay the tax or not. Say if they need more ammunition, they can pull up and grab a box off the shelf and pay sales tax… or they can buy from someone that has saved spent shells and repacked them with new primer, gunpowder, and bullet. In the latter scenario, they would have escaped the tax. But that is the beauty of the indirect tax system.

    But the former question of, are you a person liable for taxes is a more tricky one. Of course nobody in the IRS is going to tell you that if you reside in China… or in Germany… or in a boat on the Atlantic… that you are liable for taxes. This would be insane to say… and very overreaching for the US government to do. This is why, again, you need to participate in taxable activity to be taxable by the US government.

    However, for some reason the US Government wants us to believe that just by us being here in America that we owe taxes if we work. If that is true then we really have no option. So they make a false dichotomy of this – you either don’t work and thusly pay no taxes OR you work and pay taxes. This is thievery of the worst – and possibly slavery because we “have” to work.

    This is why I challenged Alan to the idea that somewhere along the line we have conceded our right to chose to work without interference. That somewhere along the line we have told the government that we will voluntarily give up part of our paycheck to them.

    Here are some interesting facts for you. (IRS Returns)(Population)
    In 1913 358,000 returns were filed. The population was 97,225,000.
    In 1939 7,652,000 returns were filed. The population was 130,879,718.
    In 1940 14,711,000 returns were filed. The population was 132,122,446.
    In 1998 124,771,000 returns were filed. The population was 270,298,524.
    This gives us 00.37% people filing in 1913.
    This gives us 05.85% people filing in 1939.
    This gives us 11.13% people filing in 1940.
    This gives us 46.16% people filing in 1998.

    Why the big jumps? The 16th Amendment supposedly is what made us all liable for taxes for “income from whatever source derived,” right? That was passed in 1913. So if that was such a life-changing Amendment, then why did that only make 5.48% more of the American population liable for taxes? Even out to 1939, we still only have 11.13% of the people filing. What about the other 30%? (For the purposes of this arguement I am saying that only 50% of the population works at a given time. This is very conservative and the numbers look even worse if I could figure out how many people were able to work).

    But I think it is most interesting of the 5.28% extra, or 7,059,000 more returns, from 1939 to 1940. Why the change? How about the Revenue Act of 1939 which first affected the 1940 filing? What did the Revenue Act of 1939 do you ask? It included the Subchapter C language – employment taxes – which had connections to the Social Security Act of 1935.

    You see, the federal government has always had pension plans and retirement plans for its employees. In the 1930s we had the Great Depression and common citizen was financially hurting. If they were unemployed there was nobody to help them. If there was an old person living on their saved money and the market went out there was nobody to help them. So the government signed the Social Security Act in 1935 to open up the Federal programs to the general public – but for a price.

    As with any “membership” dues must be payed… and that is exactly what the government did. They opened up a retirement program and offered enrollement. How to enroll? Pay 25-30% (or whatever) you make per paycheck and when things go bad we will help you out (unemployment). When you get old, we will give that money you put into the system back to you. So many people liked the program that it became commonplace and even expected. Then in 1942 the government passed the Victory Tax, which mandated that everyone must have taxes taken out of their paycheck which made it even more commonplace and expected.

    The notion of not paying and filing taxes and never wanting benefits (like SS) was history. Thus, the safety net was born.

    With all this said, the tax laws have never really changed. The Supreme Courts have ruled on this time and time again that there have been no significant changes to the tax laws. So, if that is so, then it should be assumed that taxes could be handled like they were in 1913 or 1939 where <12% of the people even filed, much less had money taken out of their paycheck.

    What ya think?

    9 March 2010 at 09:07

    Hi, again – Same message as I left on Taxes: This or That. I appreciate your great response. Many good points I want to tackle. But right now I’m up to my ass in alligators it seems; so must deal with reality for now and ponder philosophy at some time in the near future. “I’ll be Bach !” as the man said. Caio. R-J

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