Over 160 Years of Injustice
Most people assume that federal judges apply the Internal Revenue Code correctly, obeying its rules. The reality is that it is the exact opposite. The Code is ignored because of long-standing assumptions that there is a domestic income tax.
Search engines and AI replace judicial assumption-based reading with exact word matching. Since 1862, the federal income tax has applied only when income crosses national borders. Since 1954, that limit has been stated in the Internal Revenue Code in Subchapter N, “Tax Based on Income From Sources Within or Without the United States”:
“Sources within the United States.”
“Sources without the United States.”
“Partly within and partly without the United States.”
These phrases DO NOT mean that Congress taxes purely domestic income or purely foreign income simply because it exists. Their purpose is to classify income by origin/location. The tax appears only when income crosses national borders in either direction.
Section 7701 defines “persons” as foreigners outside the United States. They are subject to the tax when they receive income from inside the United States because it crosses national borders. Federal lawyers and judges ignore the Internal Revenue Code and substitute this BELIEF.
They prosecuted me for Willful Failure to File and Filing a False Tax Return (1040X, refund request) that, by statute, only apply to “persons.” This site documents how judges ignore statutory law—and how convictions are obtained by concealing the statutory limits of the income tax from juries.
Location Words Reveal the Limit
The same location structure has appeared since 1862. The words changed as the statutes were revised, but the limit did not.
The income tax has always depended on location: where the person is, where the income is, and whether income crosses the national border.
Today, Subchapter N contains those location rules. Section 7701 identifies who is taxed. Together, they show that income staying inside the United States is not taxable.
Yet the IRS, the Department of Justice, and federal courts have treated the tax as if it applies inside the United States the entire time.
Meet Tom Clayton, MD
Unmasking the Crucial Sections
Dr. Tom Clayton, a medical doctor with a background in pure mathematics, has always required strict obedience to rules to prevent error. With no quality issues in his entire medical career, he questioned why tax advisors and the IRS repeatedly made mistakes over the same period.
He found Subchapter N, “Tax Based on Income From Sources Within or Without the United States,” which reveals the income tax as an indirect, cross-border structure. Because the statutes omit references to Subchapter N and Section 7701, experts assumed a direct unapportioned income tax inside the United States that Congress never imposed.
Upon reviewing the income tax statutes back to 1862, he found that the rules apply only when income crosses national borders, not to citizens or residents inside the United States with purely domestic income. The assumption of a domestic income tax originated with the federal courts, not the statutes.
Tom Clayton, MD
The Story
Clayton is a board-certified radiologist with a magna cum laude degree in pure mathematics. When he applied the same rule-based discipline to his taxes, he learned why professionals repeatedly made errors that increased what he owed.
Using the Internet and search engines to read current and prior statutes, he found Subchapter N, “Tax Based on Income From Sources Within or Without the United States,” which no tax authority or federal judge had ever mentioned. It is located in the middle of the law, with no cross-references from the tax-imposed section. Concealing this cross-border structure has caused more than 160 years of misapplication of the tax inside the United States.
Errors persist because federal judges believe in an income tax inside the United States that is not in the Internal Revenue Code. Because the statute did not mention citizens inside the United States with only domestic income, Clayton refused to say his income was taxable. For insisting on obeying the written law, he was prosecuted, convicted, and imprisoned illegally because the law conflicted with their BELIEF.
His case reveals a century-long pattern: federal enforcement based on belief, not statute. Clayton wrote “Concealing Section 7701” to show how courts replaced the written law with assumptions—taxing millions of Americans inside the United States for over a century without lawful authority.
Click on the Dog and Pony Show Section header and individual chapters for more details.
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