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The Truth About The Income Tax

UPDATE 4/19/2014: The original title of this thread was "The Truth About The Income Tax Is Now Free To Learn".

At the time of the original post, a free .pdf copy of the book was available for free download. The book is no longer available for free download, but it is available for purchase on Amazon...


...or directly from the author (for half the price)

There is however a wealth of free information at the author's website

(Note: I am not the author, and have no interest in the distribution of this book, other than spreading the truth about the widely misunderstood tax)

Here is an updated link describing the history of government efforts to suppress the truth revealed in this book...

I'm leaving the rest of the original post as it was before this update.

While most everyone hates the income tax and many people know there is something majorly wrong with it, there are a lot of misuderstandings about it even among the patriot community and tax honesty movement. Even among the good folks here at the DP.

Peter Hendrickson uncovered the truth about the tax and wrote a book about what he found, called "Cracking the Code: The Fascinating Truth About Taxation In America".

He has just released a digital version of the 12th edition of this book in .pdf format for free download. Yes, absolutely FREE!

I encourage everyone to download this book, read it, and pass it to everyone you know who cares about freedom. Even if you think you already know the truth about the tax, please get the book and read it anyway. You may find that even YOU (yes, YOU) have had some misconceptions about it.

Get the book here: (again, absolutely FREE)

Here is the page describing the book and what you will find in it:

Here is a 10-page description of the governemnts efforts to suppress the book ever since it was published (in 2003):

Please, everyone download this book, read it, and learn from it. Then pass it along to others.

(And beware of anyone who discourages you from reading this book)

Edit: I forgot to include a link to the Victory pages, where a fraction of the many people who have applied what they learned in the book --to receive full refunds of everything withheld from their paychecks-- have posted their proof of the truth:

Before you file for 2010, learn the truth. Get the book!

UPDATE, November 1, 2011: For those naive enough to believe that Pete's conviction in a federal kangaroo court somehow discredits the information in the book, you may wish to read Pete's appeal (set to be heard Nov. 18th) and get a rough idea of how this "conviction" was obtained...

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bump for Positive Activism


"We can see with our eyes, hear with our ears and feel with our touch, but we understand with our hearts."

The fbi's new marketing

The fbi's new marketing strategy for 2011. This should head off that upcoming prisoner shortage projected for later in the year

You think you're funny

You're not.

Truth will Come out soon enough.

Hi oruval

Hi oruval


...after a seven-years-and-counting desperate campaign by the government to suppress the book, the fbi decided to convert the latest edition into digital format, hack into the author's website and place it there for free download, send out an e-mail to everyone on the author's e-mail list encouraging them to distribute the book, and even get his wife to confirm it was his idea. Sheesh.

If you do not wish to educate yourself, please do not discourage others from doing so. Are you that fearful that you will not even accept knowledge given to you for free? Then please stand aside and let those with the courage to learn the truth and stand up for the rule of law do so.

Joη's picture

the book's been available online for years

or so I've heard *cough*

And F-Buzz is simply pointing out that flying monkey agents don't always follow their own rules; even if I arranged my lifestyle to not engage in "trade or business" in a "State" defined as "including the District of Colombia", nor accepted any government benefit, nor emanated any indication that I was a federal citizen, there's a not small chance I will still be hassled by force monopolies.

I doubt he literally meant what he wrote.

"You underestimate the character of man." | "So be off now, and set about it." | Up for a game?

What number would the 'force

What number would the 'force monopolies' use to track you if you did all of the things that you are implying?

The Social Security number used in connection with your job is what creates the presumed liability, and initiates the IRS involvement.



This is a common misunderstanding...

However, simply having a social security number doesn't make you liable for the tax.

When you furnish a SSN to the company you work for and complete a W-4, the company will withhold a portion of your pay and report its payments to you when it files a Form W-2/W-3 , and THAT creates a presumption that, if left unrebutted, will lead to IRS hassles. But if you are not being paid statutory "wages" the presumption is rebuttable, and the free ebook teaches you how to do it.

In some cases, the IRS attempts to ignore your rebuttals and intimidate you into backing down, but that does not mean they are acting lawfully.

Again, even people who think they are already knowledgeable about the tax should download the ebook for FREE and read it. What is the worst that could happen? The "loss of ruinous illusions"?

See also this free excerpt from "Was Grandpa Really A Moron?", the follow-up book to Cracking the Code, which addresses this common misunderstanding in depth:

The Effect of A Social Security Number

Joη's picture

that fell under the "federal citizen emanation" category

Abandoning its use permanently, even after five years, will not eliminate the hassles.

"You underestimate the character of man." | "So be off now, and set about it." | Up for a game?

it eliminates new hassles,

it eliminates new hassles, since the number is NOT required to work...the old hassles may remain.

see EEOC V. Information Systems Consulting and others


the number is not required to work, but unless you are working for yourself, good luck getting hired by anyone without providing one.

Please see my reply above. Simply having a SSN does not make everything you do taxable. The presumptions associated with having one are rebuttable.

Simply having a number does

Simply having a number does not make you liable, but it does three things.

1) If you attach it to your job, you work becomes a "trade or business" as defined in USC Title 26, 7701:
(26) Trade or business
The term “trade or business” includes the performance of the functions of a public office.

ALL federal personnel are considered "public office"

2) It supplies evidence that you are a "Federal citizen" under the 14th Amendment, either born or naturalized in the UNITED STATES. Only lawfully admitted aliens and Federal citizens can get a SS number.

3) It removes your constitutional protection against direct taxes (among other things) by converting you into an OBJECT of the Government, that Congress is charged with making ALL rules for.
see Constitution Art I, section 8,

"To make Rules for the Government and Regulation of the land and naval Forces;"

and Art 4, Sec 3, clause 2

"The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States; and nothing in this Constitution shall be so construed as to Prejudice any Claims of the United States, or of any particular State.


Here is where the SS number converts you into an object of government:

(13) the term “Federal personnel” means officers and employees of the Government of the United States, members of the uniformed services (including members of the Reserve Components), individuals entitled to receive immediate or deferred retirement benefits under any retirement program of the Government of the United States (including survivor benefits).

For the record Im not saying there isnt good information in the ebook, Im just pointing out what most people miss, including Pete.

I disagree...

With regard to point (1), yes that is how the term "trade or business" is defined, but having a SSN or furnishing it to a payer does not magically transform your work into a trade or business, and it doesn't even transform you into federal personnel.

Please read the link I provided above about the effect of a SSN:

with respect to (2), this is debateable, but not really relevant anyway. Being a federal citizen does not transorm private-sector, non-federally connected activities into excise-taxable, federally priviledged activities.

and with respect to (3), having a SSN does not do any such thing as remove your protection against unapportioned direct taxes, and the income tax is not a direct tax anyway (although it is misapplied as though it were). If you consider yourself to be federal property, then speak only for yourself.

Your misunderstanding of 5 USC 552 is specifically addressed beginning on page 5 of the .pdf I urged you to read for illumination at:

You have a better grasp of the subject than most, but I think you could benefit by reading Pete's research.

P.S. If what you say is true, then how come people with SSN's are receiving complete refunds of EVERYTHING withheld from their pay, including their social security and medicare deductions, as displayed at

You are missing a VERY

You are missing a VERY important part that MANY tax honesty people are missing...

With regard to 1), there is NO reason to use a Federal Number associated with your work if it is NOT federal work, secondly ONLY federal citizens can even HAVE the number, thereby allowing for the presumption that you are a Federal Person. Income tax is an indirect tax when applied to non federal persons and must be on a taxable activity and only measured by Income, but federal persons can have an unaportioned direct tax levied on them.
The link you sent is incorrect. Although it is true that applying for a fishing license, as the link points out, doesnt make everything you do on the lake "fishing" it does exchange your "right to fish" to a "privilege to fish"...so, if you are fishing with your license, and you catch too many fish, you are subject to the penalties...with regard to work, if you use a federal number (used only for federal persons with no right to work) you forfeit your "right to work" in exchange for the "privilege to work". The privileges granted to federal persons are known as "civil rights" and are vastly different than "human rights"

    "A 'civil right' is considered a right given and protected by law, and a person's enjoyment thereof is regulated entirely by the law that creates it."
    82 CA 369, 373, 255, P 760.

see http://www.dailypaul.com/node/140903

with regard to 2), federal citizens are not protected by the Constitution unless Congress or the courts say so, this is why Federal citizens, aka "citizens of the United States" cannot purchase a gun without permits and licenses, being a Federal citizen is a "Privilege":

    Status of citizenship of United States is privilege, and Congress is free to attach any preconditions to its attainment that it deems fit and proper. In re Thanner, D.C.Colo.1966, 253 F.Supp. 283. See, also, Boyd v. Nebraska, Neb.1892, 12 S.Ct. 375, 143 U.S. 162, 36 L.Ed. 103; Application of Bernasconi, D.C.Cal.1953, 113 F.Supp. 71; In re Martinez, D.C.Pa.1947, 73 F.Supp. 101; U.S. v. Morelli, D.C.Cal.1943, 55 F.Supp. 181; In re De Mayo, D.C.Mo.1938, 26 F.Supp. 696; State v. Boyd, 1892, 51 N.W. 602, 31 Neb. 682.

As Lost Horizons points out the definition of "United States" means federal territory (where rights dont apply and congress makes all the rules) if you claim to be a "citizen of the United States" or a "Resident of the United STates" you "WILL BE TREATED AS RESIDING IN THE DISTRICT OF COLUMBIA"

see USC Title 26, 7701

    (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...

You probably know that Direct taxes and Representation must be apportioned "Among the States" but NOT D.C. or the Territories.
Furthermore, working for the Government AND being a Federal citizen are both federal privileges.

    "United States citizenship does not entitle citizens to rights and privileges of state citizenship."
    [K. Tashiro v. Jordan, 201 Cal. 236, 256 P. 545 (1927), 48 Supreme Court. 527.]

with regard to 3) The Social Security number (when ever used) makes the person using it, and the activity it is used for a federally privileged activity, and makes that person the same as if he/she wer an officer in the Military. Section 552 "records maintained on individuals" specifically relates to all matters dealing with the Federal Government and ALL RECORDS held by the Federal government OR ANY political subdivision therein. You are correct that the Income tax is NOT a Direct Tax, BUT that makes no difference when referring to Federal Personnel. A direct tax can be levied on Federal persons, Federal Employees, Military, etc.

Page 5 of the link you sent (and others) is absolutely incorrect!!
Title 5 is Government organizations and Employees, Ch. 5 is "Administrative Procedure", and the term "Federal Personnel" is not accidentally defined to use the terms "ANY RETIREMENT PROGRAM", it is not very often that the word "ANY" is used in law, so when it is, you should know that it means "any".

The Social Security program IS a Retirement program of the United States, it is NOT mandatory, which automatically makes it a privilege to anyone who is a member, only Federal Persons can join, the Number is used to process Tax payments, and you cannot get free healthcare without one, it doesnt get much clearer.


    IF THERE is any Doubt that USC Title 5, 552 will be used to determine that YOU are "Federal Personnel" see the following:

    ‘(2) ACCESS TO CLAIMS AND PAYMENT DATABASES- For purposes of conducting law enforcement and oversight activities and to the extent consistent with applicable information, privacy, security, and disclosure laws, including the regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 and section 552a of title 5, United States Code, and subject to any information systems security requirements under such laws or otherwise required by the Secretary, the Inspector General of the Department of Health and Human Services and the Attorney General shall have access to claims and payment data of the Department of Health and Human Services and its contractors related to titles XVIII, XIX, and XXI.


    ‘(B) For purposes of this paragraph, the term ‘system of records’ has the meaning given such term in section 552a(a)(5) of title 5, United States Code.’.


    (c) Ensuring Patient Privacy- The Secretary shall ensure that information on physician performance and patient experience is not disclosed under this section in a manner that violates sections 552 or 552a of title 5, United States Code, with regard to the privacy of individually identifiable health information.

The page link you sent states "Does anyone really imagine that a minor child can be thus made irrevocably subject to a tax?"

Of course not, which is why when you get older you have to re-acknowledge that number with your drivers license, selective service, college application, first job, etc. Not only that, the Social Securty Administration offers you te opportunity to withdrawl your application:

To answer your last question, I think Lost Horizons is great, and I dont believe the IRS is ready to tip its hand and say "you owe Income Tax because you are a Federal Person", I also think that disputing the tax rather than blindly paying is a great idea and will (may) result in refunds etc., but as long as you have a Federal Number you are a Federal Person, as long as you use that number you are engaging in a federally privileged activity where the UNITED STATES will pay you 'money' on every 'dollar' you earn, and because of that privilege you are treated as Federal Personnel engaged in a trade or business; Also, because you are a "citizen of the United States" you will be treated as residing in the District of Columbia; also you will be able to receive benefits from the Government and fellow members of that 'Government' (a federal Corporation) in the form of Health Care.


"These Welfare Codes have only one connection to the State Constitution or the 14th Amendment
state citizen, not the 9th Amendment state citizen. What is the difference? If a parent consents to
the Welfare Codes as a 14th Amendment citizen, then he or she does so by uninformed consent,
without the knowledge of the contractual relationship with child protective services. By contrast,
the 9th Amendment citizen has constitutional protections that disconnect the link or connection of
the Welfare and Institution Codes and disconnect the federal state."

"…the Fourteenth Amendment protects very few rights because it neither incorporates any of the Bill of Rights nor protects all rights of individual citizens. … Instead, this provision protects only those rights peculiar to being a citizen of the federal government; it does not protect those rights which relate to state citizenship."
[Jones v. Temmer, 829 F.Supp. 1226 (1993)]


I appreciate your taking the time to read the link I provided. I still disagree with you, but my purpose in creating this thread was not to debate the finer points of the tax law.

I merely wanted to let the freedom-loving readers of the DP know that a valuable resource on the income tax was now available for them to absorb absolutely free. I believe if the knowledge contained in that book became widely known it would do wonders for our freedom movement.

Even though I am reluctant to carry this thread away from its limited purpose by continuing to engage you in debate, I would like to say one thing in response to your thoughtful comments. The right to work is fundamental and cannot be forfeited (or revoked).

If I could offer one more item for your consideration, it may help you to correct your apparent misunderstandings about the 14th amendment and federal citizenship. It is only 7 pages in .pdf format and you can read it here:

And if you haven't yet read the ebook I provided in the OP, I hope that you will consider doing so. Clearly you have some previous exposure to studies made of the income tax (as did I prior to reading the book), but you may alter your current views after reading it (as I did).

Even though we are not in complete agreement, I have no suspicions about your sincerity or your devotion to the causes that unite us all here at the DP.

The ONLY thing that I wanted

The ONLY thing that I wanted to point out, as a reader and follower of Hendricks, SEDM, famguardian, Concess, etc. is the FACT that many disregard the Federal citizen connection masterly crafted by John Bingham in 1866-1868.

The Book is great and I reccomend everyone read it!!

as to your link, the sites are laughable...
read "Callan v. Wilson 1888" closely:

"there is nothing in the history of the Constitution or the original amendments...that the people of the District [of Columbia] may be deprived of...life, liberty, and property."

This is in 1888, why is it ONLY referring to the Original Amendments? because the 13th and the 14th do exactly that. The 13th allows for "voluntary servitude" and the 14th creates a "new class of citizen"

see Capital Traction v. Hof

"Congress can exercise authority over D.C....so long as it does not contravene any of the provisions of the Constitution of the United States"

If Congress has unlimited power over D.C., granted by the Constitution, and if Congress has "absolute legislative jurisdiction" over the same, and Congress is granted the power to make ALL rules for Government, then NOTHING that Congress did in D.C. or with the Government property would violate the Constitution.

    "It is clear that Congress, as a legislative body, exercise two species of legislative power: the one, limited as to its objects, but extending all over the Union: the other, an absolute, exclusive legislative power over the District of Columbia" U.S. Supreme Court, COHENS v. COM. OF VIRGINIA, 19 U.S. 264 (1821)
    19 U.S. 264 (Wheat.)


The first clause of the fourteenth amendment made negroes citizens of the United States, and citizens of the State in which they reside, and thereby created two classes of citizens,
one of the United States** and the other of the state.
[Cory et al. v. Carter, 48 Ind. 327]
[(1874) headnote 8, emphasis added]

I think you should grab your Constitution and see the requirement for president, a natural born "Citizen" with a capital "C", then look at the use of the lower case "c" in the 14th Amendment, NOT AN ACCIDENT.

Sorry to continue the debate, but you should research this aspect for yourself. Pete went to jail for a reason, he made a mistake (in my opinion) and this was the mistake he made, that and using a "Resident" status instead of a "non resident" status. Residency when dealing with Congress refers to the District of Columbia and other federal zones, that is the territory for Congressional law.

I suggest you read this:


w-4,1099,1098 etc

Download this manual here to see where the liability is created. You sign an "agreement" to pay a "gift" because you love being oppressed so much . :)


PG 72 shows that "class 5" taxes are "gift" taxes/information returns

PG 26 has W-4 forms and you will notice they are "class 5".

Pg 32 has 1099 and 1098, etc and again "gift" taxes/information returns.

Anyone who exhibits due diligence is going to find that "income" to be reached by the Act was certainly defined clearly. Tafts letter to Congress, address to Colorado, and the debates themselves make quite clear that "unearned income" derived from investment of capital/labor is income. I make interest. It is income. I pay someone $10/hr and charge the customer $15, $5 is taxable income.

If you mean...

...the hard-copy book has been available for purchase online, then of course it has, but I'm not aware of it being previously available for free in .pdf format, and certainly not with the author's permission (until now).

In any event, it doesn't really sound like you took advantage of its prior availability going by your statement about arranging your lifestyle, because if you had read it, you should know that it is not necessary for most people to make any changes to their lifestyle to be free of the tax (I say "most" because there are a relative few who engage in federally excise-taxable activities who would have to cease such activities in order to lawfully avoid the tax, but most people do not and need only correct the record by rebutting the false information reported about them by third parties).

It is true that people who apply the law correctly in their filings could encounter unlawful resistance by the irs goons, but that is a risk that each person must decide if they are willing to take. However, there is no reason not to at least LEARN the information, even if you choose not to act upon it.

I already learned the information.

Do you propose a huge number of people acting on it at once?

I see a lot of issues with the information....the risk with this information is enormous.

Are you suggesting people band together in a huge formation, and all act on this information at the same time? Fill the trial courts to overturn the law?

That might work in a limited community way.....but it will do nothing on a national scale. For that we have to use the states.


As I said in reply to your other post, the law does not need to be "overturned". It need only be observed. The law is already on our side! It is made overly complicated to obfuscate the truth, but Hendrickson "Cracked the Code" and uncovered the carefully hidden truth, and he reveals it in the FREE ebook.

If you truly already know the information, then I do not understand why you make such statements as you have made. It really sounds like you merely imagine that you know what is revealed in the book, without having actually read it for yourself. The truth is there for those who will take the time to learn it.

"The law needs only to be observed"

It was observed by over a hundred people and did nothing.

Face it, the law as you call it needs to be updated by state-wide amendments.

People will never be able to effectively enact this law without updating its writing. Its too convoluted to "help" the masses of ignorance.

Sorry to bring a reality check to your party.....this type of activity demands grassroots support via amendments & then a million people acting on the law.


I am sorry, but I do not know what you are talking about?

Exactly WHAT "was observed by over a hundred people and did nothing"?

WHO are these hundred people who observed it?

What updates do you feel are needed and what amendments?

Frankly this just sounds like excuses for inaction to me. The law is designed to be confusing, but the average person is capable of understanding it if it is explained properly. The ebook does exactly that. No changes are really needed to the law, but it would certainly be nice if it were simplified.

If you don't want to read it, then don't, but the whole point of the thread was to let people know that it is now there for people who do wish to read it to do so for free. Do you have any objection to people reading a free book?

hahahah..nice one. I bought

hahahah..nice one. I bought this book like 5 years ago, and it is great. NICE to see it online.


I was thinking of posting this info, as well. This book is very empowering. It eliminated my pre-programmed fear of the IRS. God bless Pete for what he is enduring in the name of liberty. Very few people can risk it all for the truth like Pete has done and continues to do. I hope to meet him someday and shake his hand.