PERSONAL jurisdiction v. PROPERTY jurisdiction – Sovereignty Education and Defense Ministry (SEDM)

SOURCE: Laws of Property, Form #14.018, Section 21

Property law is intimately related to the taxation subject. This is because income tax functions in effect as rent on the beneficial use of property. That property are the civil statuses and offices that government creates. Property law is discussed in:

Hot Issues: Laws of Property*, SEDM

There are only two types of civil jurisdiction a court can exercise: PERSONAL and PROPERTY jurisdiction. Below is a comparison of these two:

#	Category	PERSONAL	PROPERTY
1	Originates from	Domicile	Ownership
2	Found in	Civil statutory law	Constitution 4:3:2, 1:8, Fifth Amendment
3	Operates extraterritorially?	No (personal service of summons must be within the territory)	1. If property is outside the territory, but only if in custody of a government officer. 2. Otherwise must be physically situated within territory.
4	Attaches to	Human being	Tangible or intangible property (humans cannot be property)
5	Method of attachment	Election by human to accept a civil statutory status (e.g. “person”, “taxpayer”, “citizen”)	Election by OWNER to convert civil status of property such as “trade or business” from absolute to qualified or usufruct.
6	Permits administrative levy?	No	1. Yes, if property in custody of government officer only. 2. No if in custody of private party.
7	Type of property regulated and taxed	PUBLIC ONLY	PUBLIC ONLY
8	Jurisdiction protects private property?	NO (only the office, not the officer)	NO (only the public rights attached to the property. Not the property itself)
9	Bill of Rights in its entirely applies?	NO (no standing to defend any constitutional right lost in exercising the status)	NO (no standing to defend any constitutional right lost in exercising the status)

The differences between the two above sources of civil jurisdiction are explained by the U.S. Supreme Court as follows:

But as contracts made in one State may be enforceable only in another State, and property may be held by non-residents, the exercise of the jurisdiction which every State is admitted to possess over persons and property within its own territory will often affect persons and property without it. To any influence exerted in this way by a State affecting persons resident or property situated elsewhere, no objection can be justly taken; whilst any direct exertion of authority upon them, in an attempt to give ex-territorial operation to its laws, or to enforce an ex-territorial jurisdiction by its tribunals, would be deemed an encroachment upon the independence of the State in which the persons are domiciled or the property is situated, and be resisted as usurpation.

Thus the State, through its tribunals, may compel persons domiciled within its limits to execute, in pursuance of their contracts respecting property elsewhere situated, instruments in such form and with such solemnities as to transfer the title, so far as such formalities can be complied with; and the exercise of this jurisdiction in no manner interferes with the supreme control over the property by the State within which it is situated. Penn v. Lord Baltimore, 1 Ves. 444; Massie v. Watts, 6 Cranch, 148; Watkins v. Holman, 16 Pet. 25; Corbett v. Nutt, 10 Wall. 464.

So the State, through its tribunals, may subject property situated within its limits owned by non-residents to the payment of the demand of its own citizens against them; and the exercise of this jurisdiction in no respect infringes upon the sovereignty of the State where the owners are domiciled. Every State owes protection to its own citizens; and, when non-residents deal with them, it is a legitimate and just exercise of authority to hold and appropriate any property owned by such non-residents to satisfy the claims of its citizens. It is in virtue of the State’s jurisdiction over the property of the non-resident situated within its limits that its tribunals can inquire into that non-resident’s obligations to its own citizens, and the inquiry can then be carried only to the extent necessary to control the disposition of the property. If the non-resident 724 *724 have no property in the State, there is nothing upon which the tribunals can adjudicate.

These views are not new. They have been frequently expressed, with more or less distinctness, in opinions of eminent judges, and have been carried into adjudications in numerous cases. Thus, in Picquet v. Swan, 5 Mas. 35, Mr. Justice Story said: —

“Where a party is within a territory, he may justly be subjected to its process, and bound personally by the judgment pronounced on such process against him. Where he is not within such territory, and is not personally subject to its laws, if, on account of his supposed or actual property being within the territory, process by the local laws may, by attachment, go to compel his appearance, and for his default to appear judgment may be pronounced against him, such a judgment must, upon general principles, be deemed only to bind him to the extent of such property, and cannot have the effect of a conclusive judgment in personam, for the plain reason, that, except so far as the property is concerned, it is a judgment coram non judice.”

And in Boswell’s Lessee v. Otis, 9 How. 336, where the title of the plaintiff in ejectment was acquired on a sheriff’s sale, under a money decree rendered upon publication of notice against non-residents, in a suit brought to enforce a contract relating to land, Mr. Justice McLean said: —

“Jurisdiction is acquired in one of two modes: first, as against the person of the defendant by the service of process; or, secondly, by a procedure against the property of the defendant within the jurisdiction of the court. In the latter case, the defendant is not personally bound by the judgment beyond the property in question. And it is immaterial whether the proceeding against the property be by an attachment or bill in chancery. It must be substantially a proceeding in rem.”

These citations are not made as authoritative expositions of the law; for the language was perhaps not essential to the decision of the cases in which it was used, but as expressions of the opinion of eminent jurists. But in Cooper v. Reynolds, reported in the 10th of Wallace, it was essential to the disposition of the case to declare the effect of a personal action against an absent party, without the jurisdiction of the court, not served 725 *725 with process or voluntarily submitting to the tribunal, when it was sought to subject his property to the payment of a demand of a resident complainant; and in the opinion there delivered we have a clear statement of the law as to the efficacy of such actions, and the jurisdiction of the court over them. In that case, the action was for damages for alleged false imprisonment of the plaintiff; and, upon his affidavit that the defendants had fled from the State, or had absconded or concealed themselves so that the ordinary process of law could not reach them, a writ of attachment was sued out against their property. Publication was ordered by the court, giving notice to them to appear and plead, answer or demur, or that the action would be taken as confessed and proceeded in ex parte as to them. Publication was had; but they made default, and judgment was entered against them, and the attached property was sold under it. The purchaser having been put into possession of the property, the original owner brought ejectment for its recovery. In considering the character of the proceeding, the court, speaking through Mr. Justice Miller, said: —

“Its essential purpose or nature is to establish, by the judgment of the court, a demand or claim against the defendant, and subject his property lying within the territorial jurisdiction of the court to the payment of that demand. But the plaintiff is met at the commencement of his proceedings by the fact that the defendant is not within the territorial jurisdiction, and cannot be served with any process by which he can be brought personally within the power of the court. For this difficulty the statute has provided a remedy. It says that, upon affidavit being made of that fact, a writ of attachment may be issued and levied on any of the defendant’s property, and a publication may be made warning him to appear; and that thereafter the court may proceed in the case, whether he appears or not. If the defendant appears, the cause becomes mainly a suit in personam, with the added incident, that the property attached remains liable, under the control of the court, to answer to any demand which may be established against the defendant by the final judgment of the court. But if there is no appearance of the defendant, and no service of process on him, the case becomes in its essential nature a proceeding in rem, the only effect of which is to subject the property attached to the payment of the demand which the court may find to be due to the plaintiff. That such is 726 *726 the nature of this proceeding in this latter class of cases is clearly evinced by two well-established propositions: first, the judgment of the court, though in form a personal judgment against the defendant, has no effect beyond the property attached in that suit. No general execution can be issued for any balance unpaid after the attached property is exhausted. No suit can be maintained on such a judgment in the same court, or in any other; nor can it be used as evidence in any other proceeding not affecting the attached property; nor could the costs in that proceeding be collected of defendant out of any other property than that attached in the suit. Second, the court, in such a suit, cannot proceed, unless the officer finds some property of defendant on which to levy the writ of attachment. A return that none can be found is the end of the case, and deprives the court of further jurisdiction, though the publication may have been duly made and proven in court.”

The fact that the defendants in that case had fled from the State, or had concealed themselves, so as not to be reached by the ordinary process of the court, and were not non-residents, was not made a point in the decision. The opinion treated them as being without the territorial jurisdiction of the court; and the grounds and extent of its authority over persons and property thus situated were considered, when they were not brought within its jurisdiction by personal service or voluntary appearance.

[Pennoyer v. Neff, 95 U.S. 714 (1878)]

To apply the above information to the civil status of “U.S. person” found in 26 U.S.C. 7701(a)(30):

Quotes of U.S. person are found at:
Sovereignty Forms and Instructions Online, Form #10.004, Cites by Topic: “U.S. person”
“U.S. person” is a CIVIL status legislatively created by Congress and therefore PROPERTY of Congress. Civil statuses are described below:
Civil Status (Important!)
“U.S. person” is a res, meaning a SUBJECT of property rights.
“U.S. person” is not the OBJECT of rights.
The OBJECT of rights is the OFFICER who volunteers for the status or office of “U.S. person”.
In order to reach the OFFICER, an additional civil status of “person” is needed under:
6.1 26 U.S.C. 6671(b) for CIVIL enforcement.
6.2 26 U.S.C. 7343 for CRIMINAL enforcement.
Without one of the above two ADDITIONAL civil statuses of the OFFICER rather than the OFFICE or STATUS, civil and criminal enforcement is impossible.
To say the U.S. government has personal jurisdiction over this “U.S. Person” res is FALSE. It only has personal jurisdiction over the OFFICER and not the OFFICE.
If the owner and creator of the “U.S. person” res does not have an OFFICER and agent to control the property, it has no method to REACH or control the property attached to the “U.S person” res.
The Social Security Number or Taxpayer Identification Number is the “franchise mark” that attaches formerly private property to the “U.S. person” civil status.
The civil status of “U.S. person” has a domicile INDEPENDENT of the OFFICER VOLUNTARILY filling the office. This is most clearly seen in discussions of “tax home” within 26 C.F.R. 301.7701(b)-2.

We will now apply the above concepts to “nonresident aliens”, which are legally described as something that Congress HAS no personal jurisdiction over.

Quotes of “nonresident alien” are found at:
Sovereignty Forms and Instructions Online, Form #10.004, Cites by Topic: “nonresident alien”
Nonresident aliens have no civil domicile within the venue.
Nonresident aliens are not a civil status or an office. The definition found in 26 U.S.C. 7701(b)(1)(B) is actually not a definition, but a description. Congress cannot create or define something it does not own or directly control. The ORIGIN of the right to define, in fact is OWNERSHIP. See:
Ownership as the origin of the right to define, SEDM
Nonresident aliens only have property within the civil jurisdiction of the person actually PAYING it, which is the national government. If they tried to assert jurisdiction over the property of two contracting parties exchanging private funds, they would be stealing and interfering with their right to contract in violation of the Constitution.
Nonresident aliens do not even fall in the definition of “person” found in 26 U.S.C. 6671(b) or 7343 for the purposes of CIVIL enforcement or CRIMINAL enforcement respectively. We can find NO nonresident alien who has ever been criminally prosecuted for a tax crime, in fact.
Nonresident aliens can, however, DONATE their PROPERTY to a public use, a public purpose, and a public office if and only if they attach it to a statutory “trade or business”. Thus, the status of their PROPERTY converts from PRIVATE to PUBLIC, but THEIR status does not. See:
The “Trade or Business” Scam, Form #05.001

The following case compares STATUTORY “U.S. Persons”, which are PERSONAL JURISDICTION with STATUTORY “Nonresident Aliens”, which are PROPERTY jurisdiction:

“In the case of the federal government where the individual is either a United States citizen or an alien residing in the taxing jurisdiction, the tax under section 1 of the Code is based upon jurisdiction over the person; where the individual is an alien [LEGISLATIVELY OR CONSTITUTIONALLY “foreign”, INCLUDING states of the Union] not residing in the taxing jurisdiction [the “geographical United States”, meaning the District of Columbia per 26 U.S.C. §7701(a)(9) and (a)(10), the tax under section 871 of the Code is based upon jurisdiction over the [PUBLIC] property or income of the nonresident individual [GEOGRAPHICALLY and PHYSICALLY] located or earned in the taxing jurisdiction”

[Great Cruz Bay, Inc., St. John v. Wheatley, 495 F.2d. 301, 307 (3d Cir. 1974)]

Below is a tabular comparison of STATUTORY “U.S. Persons”, which are PERSONAL JURISDICTION with STATUTORY “Nonresident Aliens”, which are PROPERTY jurisdiction:

#	Characteristic	Nonresident Alien Position	U.S. Person Position
1	Described in what form #?	Form #09.081	Form #05.053
2	Parties made liable	“nonresident aliens” engaged in a “trade or business”. “Foreign estate” if no “trade or business” earnings per 26 U.S.C. §7701(a)(31)	Citizens of the United States (federal zone) Residents of the United States (federal zone)
3	Geographical area where it applies	States of the Union	Federal territory
4	Status established by	Filing 1040NR (changes status of SSN to “foreign person” per 26 C.F.R. §301.6109-1(g)(1)(i))	Filing 1040 (changes status of SSN to “U.S. person” per 26 C.F.R. §301.6109-1(g)(1)(i))
5	Popular among	Private humans	Those practicing law who are worried about losing their license
6	Amount of education/confrontation with withholding agents	High	Low
7	Allows for substitute forms in the regulations?	Yes	Yes
8	Citizenship of those who use it	CONSTITUTIONAL citizens	STATUTORY citizens
9	Complexity	Very complex	Very simple
10	Requires modification of forms or defining terms to properly use for state domiciled parties?	Yes	Yes
11	Requires accepting a civil privilege?	No	Yes (“citizen of the United States” and SSN/TIN)
12	Withholding form to use	Form W-8 (modified because not a statutory “individual” or “alien”)	Modified W-9 (modified to define “U.S.” to exclude that in 26 U.S.C. §7701(a)(9) and (a)(10)). DO NOT use W-4!
13	Tax Return Form	1. Form 1040NR modified or with attachment, but ONLY if engaged in a public office. 2. No tax return required if not engaged in a public office and no income from “sources within the United States**” (federal zone)	1040 modified or custom form
14	Subject to information return reporting? (See Form #04.001)	No	No
15	A STATUTORY “citizen of the United States” under 8 U.S.C. §1401?	No	Yes
16	A “national of the United States”*	Yes, in the case of those born and domiciled in a Constitutional state of the Union.	No
17	A “a person who, though not a citizen of the United States, owes permanent allegiance to the United States” per 8 U.S.C. §1101(a)(22)(B)	Yes, in the case of those born and domiciled in a U.S. possession	No
18	A STATUTORY “nonresident alien”?	1. No for those not engaged in a public office. 2. Yes for those lawfully engaged in a public office.	No
19	A STATUTORY “individual” or “person”?	No. Not an “alien” per 26 C.F.R. §1.1441-1(c)(3)	Yes, but only when abroad per 26 U.S.C. §911(d)(1) as a “qualified individual”
20	Domiciled on federal territory?	No	Yes
21	Required to Use SSN or TIN on withholding documents?	No. 31 C.F.R. §306.10, Note 2, 31 C.F.R. §1020.410(b)(3)(x), 26 C.F.R. §301.6109-1(b)(2).	Yes. 26 C.F.R. §1.1441-1, 26 C.F.R. §301.6109-1(b)(1)
22	“gross income” subject to tax	Only earnings from the statutory geographical “United States” in 26 U.S.C. §7701(a)(9) and (a)(10) and 4 U.S.C. §110(d). Collectively called “the federal zone” or connected to a “trade or business” worldwide. See 26 U.S.C. §871.	Worldwide earnings. See: 1. Cook v. Tait, 265 U.S. 47 (1924). 2. 26 C.F.R. §1.1-1(b).
23	Deductions and exemptions on “gross income”	Only in the case of “effectively connected income” pursuant to 26 U.S.C. §871(b), 26 U.S.C. §873, and 26 U.S.C. §162.	1. All earnings subject to deductions (because EVERYTHING earned is “trade or business” pursuant to 26 C.F.R. §1.1-1(b)) 2. Foreign earned income exclusion if abroad under 26 U.S.C. §911(b)(2).
24	Examples of U.S. sourced payments subject to withholding and reporting	1. Social Security (26 U.S.C. §861(a)(8) ) 2. Federal employee/office earnings. 3. Federal Pensions. 4. Earnings from federal corporations including “U.S. Inc” (see Brushaber v. Union Pacific Railroad, 240 U.S. 1 (1916)	None. See: 1. 26 U.S.C. §1441(d)(1). 2. Treasury Decision (T.D.) 8734: “To the extent withholding is required under chapter 3 of the Code, or is excused based on documentation that must be provided, none of the information reporting provisions under chapter 61 of the Code apply, nor do the provisions under section 3406.” [Treasury Decision 8734, 62 F.R. 53391, (October 14, 1997); SEDM Exhibit #09.038]
25	Income from “employment” within the “United States” not subject to reporting or withholding	None if: 1. Not connected with a “trade or business” or not “wages” (no W-4). 26 C.F.R. §31.3401(a)(6)-1 2. Working for a foreign employer not engaged in a “trade or business”. 26 U.S.C. §864(b)(1).	Everything (see 26 U.S.C. §1441(d)(1) and T.D. 8734 in previous item)
26	Required to use a Social Security Number?	Only if engaged in a “trade or business”, or filing as a resident alien. See 26 C.F.R. §301.6109-1(b)(2).	Always. 26 C.F.R. §301.6109-1(b)(1).
27	Subject to Affordable Care Act?[1]	No	Yes
28	Subject to FATCA reporting?[2]	No	Yes
29	Can take deductions on tax return?	Only on earnings “effectively connected with a trade or business” under 26 U.S.C. §162.	Yes (for EVERYTHING on return)
30	Tax imposed by	26 U.S.C. §871 Tax on Nonresident alien individuals 26 U.S.C. §872 Gross Income 26 U.S.C. §873 Deductions	26 U.S.C. §1 Tax imposed 26 U.S.C. §61 Gross income defined 26 U.S.C. §861 Income from sources within the United States 26 U.S.C. §862 Income from sources without the United States
31	Status defined in	26 U.S.C. §7701(b)(1)(B)	26 U.S.C. §7701(a)(30)
32	Subject to backup withholding?	Only in the case of “reportable payments” under 26 U.S.C. §3406(b) connected to the “trade or business” franchise.	No.

[1] See: Patient Protection and Affordable Care Act, Wikipedia; https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act

[2] See: Foreign Account Tax Compliance Act (FATCA), IRS; https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca.

The following case says PRIVATE rights and PRIVATE property TRUMP any congressional enactment:

“In American jurisprudence, the rights and powers of our dual sovereigns, federal and state, were created through a grant of power from the citizens themselves and are derivative of the “certain unalienable rights” endowed to all persons by their Creator. The Declaration of Independence para. 2 (U.S. 1776); see also N.C. Const. art. I, § 1 (“We hold it to be self-evident that all persons are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, the enjoyment of the fruits of their own labor, and the pursuit of happiness.”); § 2 (“All political power is vested in and derived from the people; all government of right originates from the people, is founded upon their will only, and is instituted solely for the good of the whole.”). The state was created as sovereign to secure these natural rights of her citizens, Declaration of Independence para. 2 (U.S. 1776) (“That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed….”), and “[s]uch constitutional rights are a part of the supreme law of the State.” Corum , 330 N.C. at 786, 413 S.E.2d at 291-92 (citing State ex rel. Martin v. Preston , 325 N.C. 438, 385 S.E.2d 473 (1989) ).”

[. . .]

“”[T]he doctrine of sovereign immunity is not a constitutional right; it is a common law theory or defense established by [our Supreme] Court…. Thus, when there is a clash between these constitutional rights and sovereign immunity, the constitutional rights must prevail.” Id. at 786, 413 S.E.2d at 292. Every expropriation of a citizen’s fruits of his or her labor by the government is a taking, whether through taxation or by the power of eminent domain. However, of all rights enumerated in our constitutions, only the taking of an individual’s property rights by the sovereign for public use requires remuneration. This right “was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States , 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554, 1561 (1960).”)

[. . .]

“Every expropriation of a citizen’s fruits of his or her labor by the government is a taking, whether through taxation or by the power of eminent domain.”)

[Beroth Oil Co. v. N.C. Dep’t of Transp., 256 N.C.App. 401, 415 (N.C. Ct. App. 2017)]

The content of this article is visualized and applied to the income tax subject in the following training course on this site:

Property View of Income Taxation, Form #12.046
https://sedm.org/LibertyU/PropertyViewOfIncomeTax.pdf

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