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Businessman hopes to expose tax 'corruption'
Constitutional argument against income taxes is increasingly popular.

May 3, 2001

By ALDRIN BROWN

The Orange County Register [http://www.ocregister.com/]
ocregister@link.freedom.com

Huntington Beach businessman George "Nick" Jesson thinks Wednesday's raid of his home and offices is the first step in an attempt to end a movement to educate Americans about what he and thousands of like-minded citizens already believe: The federal income tax is unconstitutional.

"There's no law in any of the tax books that applies to your personal wages," said Jesson, 50. "We want to expose the corruption."

Jesson is one of a growing number of people who contend paying income taxes is voluntary under the Constitution. About half of his 22 employees have taken advantage of his offer not to withhold taxes from their paychecks.

Their assertion is based on the 16th Amendment to the Constitution, which was passed by Congress in 1913 to circumvent a constitutional provision that made illegal any federal tax on wages that wasn't apportioned by state population.

The idea, income-tax opponents say, was for residents of more populous states to pay lower individual taxes than residents of states with smaller populations.

But in a ruling on a 1916 case, the U.S. Supreme Court determined the 16^th Amendment did not abolish the apportionment requirement, according to the interpretation by opponents of the tax.

Furthermore, they say, the fact that information in a tax return can be used in criminal proceedings against the filer is a violation of the 5^th Amendment right against self-incrimination.

California Franchise Tax Board officials declined to comment on Jesson's case but defended the legality of income taxes.

"Those kinds of constitutional arguments have been raised for decades, and the U.S. Supreme Court has continued to rule that many of those arguments are frivolous and without merit," spokesman Jim Reber said.

Last month, Internal Revenue Service Commissioner Charles O. Rossotti, testifying before the Senate Finance Committee, called the effort "organized tax evasion" and cited it as "an important threat to our tax administration system."

Irwin Schiff, owner of Freedom Books in Las Vegas and an author and lecturer on anti-tax philosophy, says the income tax is being illegally enforced. He has sued the federal government and the state of California in an effort to stop it.

The Supreme Court declined to hear the federal case. The California case is pending in the courts.

"The only reason that people pay the tax is because they're misled, largely by the federal courts," Schiff said. "By using the word 'frivolous,' that avoids their having to address the issue."

Jesson said he received a $217,000 refund from the IRS after reporting zero adjustable income for 1997. He has filed for a similar refund from the state.

IRS officials also declined to comment about Jesson's case.

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State fires first in O.C. man's tax battle
Agents raid his Huntington Beach business and his home. He contends income taxes are unconstitutional.

May 3, 2001

By ALDRIN BROWN
The Orange County Register

Huntington Beach businessman George "Nick" Jesson has appeared on television, radio and in newspapers nationwide promoting his belief that income tax is a fraudulent government scheme and daring government agencies to make him pay.

On Wednesday, state tax authorities responded to his public challenges by raiding his home and his $15 million-a-year electronic-components distributorship, hauling away computers, documents and financial records.

But Jesson sees the raid as the beginning of a legal showdown that he hopes will force the government to acknowledge once and for all the illegality of collecting money from workers' paychecks.

He is among at least 23 business owners around the country who stated publicly in recent months that they would not pay income taxes or collect withholding taxes from their employees.

"We knew that sooner or later this would happen," Jesson said. "But if we don't stand up and fight for what is right, then what's going to happen to our children?"

Franchise Tax Board staff referred questions to the Orange County District Attorney's Office.

Orange County prosecutors said only that search warrants were served as part of an investigation into possible violations of tax and other laws.

Jesson and the other business owners said their beliefs stem from the 16^th Amendment to the Constitution and to subsequent federal court rulings, which they say preclude the government from levying direct taxes on wages.