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Regarding "The OMB Control Number" Misunderstanding 


There is an erroneous contention widely circulated within the 'tax honesty' community-- (mostly) by those flogging versions of the '861 argument'-- which involves the gratuitous mischaracterization of the meaning of "OMB control numbers".  The claim is that because the OMB-numbered form associated with section 1.1 of 26 CFR is 'Form 2555- Foreign Earned Income', it stands as proven that the tax applies exclusively to foreign earnings-- and that a 1040 is not a form either required or appropriate for use by Americans.  An example of how this contention is typically presented follows (this is originally from 'TaxGate.com', and is now posted at 'Jerseyguy.com'):


26 CFR 602.101 - The Form Required


26 CFR 602.101 - The Form Required

The Paperwork Reduction Act was passed in 1980. This act prohibits the government and its agencies from attempting to collect more information than is actually required by the letter of the law.

Under this Act, Section 602.101 was created in the Code of Federal Regulations for Title 26 in 1985, when the I.R.S. finally complied with its mandate to list ALL of the information collection requests (forms) required by any given code section, necessary to satisfy the legal requirements of that code section. This table is the complete legal authority for the IRS to request and demand information from individuals in the United States of America This table was prepared and provided by the I.R.S. itself. PART 602 - OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

Section 602.101. OMB Control numbers.

(a) Purpose.. This part collects and displays the control numbers assigned to collections of information in Internal Revenue Service regulations by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1980. The Internal Revenue Service intends that this part comply with the requirements of .... (OMB regulations implementing the Paperwork Reduction Act), for the display of control numbers assigned by OMB to collections of information in Internal Revenue Service regulations....

  26 CFR 602.101 (4-1-94 Edition)  

CFR part or section where identified and described

Current OMB Control No

1.1-1 .................................................................


This table clearly shows that the only Form required by Chapter 1, Sec. 1. Tax Imposed (the code section that imposes the income tax) carries the OMB Document Control number 1545-0067.

The OMB Document Control number assigned to Form 1040 is 1545-0074. (You can find the OMB Document Control number in the upper right hand corner of any Form 1040.) According to the law, and the I.R.S.'s own filings with the Office of Management and Budget (OMB), Form 1040 is NOT required from citizens to report their own income !!!

What form is required?

FORM 2555 - FOREIGN EARNED INCOME, carries the OMB Document Control number 1545-0067. Does that help ?






Although the first line of this triumphal assertion is technically correct, the conclusion manipulated from it is completely incorrect.  While the Paperwork Reduction Act DOES "prohibit the government and its agencies from attempting to collect more information than is actually required by the letter of the law", the OMB control number system does not identify "THE ONLY FORM REQUIRED BY LAW, ACCORDING TO THE LAW, TO SATISFY THE INDIVIDUAL'S LIABILITY ESTABLISHED AND IMPOSED" by anything.  The "income" tax is not imposed by the collection of information-- it is merely facilitated by the collection of information, and no one's 'liability is satisfied' by filling out a form (although a liability can be established by virtue of assertions on forms).  Most pertinently for the sake of this discussion, OMB control numbers have nothing to do with any statutory obligation-to-act in the sense being suggested by this contention.


OMB numbers are assigned to forms merely to associate an information-gathering regulatory provision with the form on which such information is to be collected, and to provide a framework by which the resulting paperwork impositions can be quantified, so that the bureaucracy can be (theoretically) held to account for, and made to ameliorate, any undue or unnecessary imposition.  This fundamentally farcical protocol realizes its ambitions with the publication of the resulting data as shown below (from www.whitehouse.gov/omb/library/OMBINV.TREASURY.html, January 14, 2005):


OMB NO: 1545-0074 EXPIRATION DATE: 09/30/2007 RESPS:410,494,223 HOURS:1,555,688,934 COSTS(000):$0 U.S. Individual Income Tax Return FORMS: 1040 SCHEDULES-A-B-C SCHEDULES-C-EZ SCHEDULES-D-D-1 SCHEDULES-E-EIC SCHEDULES-F-H-J SCHEDULES-R-SE


OMB NO: 1545-0067 EXPIRATION DATE: 08/31/2007 RESPS:286,955 HOURS:1,403,210 COSTS(000):$0 Foreign Earned Income FORMS: 2555


Consequently, when sec. 1.1-1 of 26 CFR was associated with Form 2555 Foreign Earned Income (OMB #1545-0067), it was because sec. 1.1-1 contains a reference to credits available in computing one's tax liability-- within the structure of which is a linkage to the Foreign Earned Income provisions*:

§ 1.1–1 Income tax on individuals.

(a) General rule. (1) Section 1 of the Code imposes an income tax on the income of every individual who is a citizen or resident of the United States and, to the extent provided by section 871(b) or 877(b), on the income of a nonresident alien individual. For optional tax in the case of taxpayers with adjusted gross income of less than $10,000 (less than $5,000 for taxable years beginning before January 1, 1970) see section 3. The tax imposed is upon taxable income (determined by subtracting the allowable deductions from gross  income).  The tax is determined in accordance with the table contained in section 1. See subparagraph (2) of this paragraph for reference guides to the appropriate table for taxable years beginning on or after January 1, 1964, and before January 1, 1965, taxable years beginning after December 31, 1964, and before January 1, 1971, and taxable years beginning after December 31, 1970. In certain cases credits are allowed against the amount of the tax. See part IV (section 31 and following), subchapter A, chapter 1 of the Code.  (Emphasis added)

It is not coincidental that the portion of 26 CFR in which section 1.1-1 is found is titled: 'DETERMINATION OF LIABILITY', not 'ESTABLISHMENT OF LIABILITY', 'IMPOSITION OF LIABILITY', or 'SATISFACTION OF LIABILITY'.


And, guess what?  Section 1.1-1 is no longer associated with 'Form 2555 Foreign Earned Income'.  In fact, the current Treasury Department OMB control number compliance table associates NO form with section 1.1-1 as a whole, and only prospectively associates an as-yet-unpublished portion of the section (1.1(h)-1(e)) with a yet-to-be-identified form, and the OMB control number 1545-1654:


Internal Revenue Service

26 CFR Parts 1 and 602

[TD 8902]

RIN 1545–AW22

Capital Gains, Partnership, Subchapter S, and Trust Provisions

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final regulations relating to sales or exchanges of interests in partnerships, S corporations, and trusts. The regulations interpret the look-through provisions of section 1(h), added by section 311 of the Taxpayer Relief Act of 1997 and amended by sections 5001 and 6005(d) of the Internal Revenue Service Restructuring and Reform Act of 1998, and explain the rules relating to the division of the holding period of a partnership interest. The regulations affect partnerships, partners, S corporations, S corporation shareholders, trusts, and trust beneficiaries.

DATES: Effective Date: These regulations are effective September 21, 2000.


Jeanne M. Sullivan or David J. Sotos (202) 622–3050 (not a toll-free number).


Paperwork Reduction Act

The collections of information contained in these final regulations have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507) under control number 1545–1654. Responses to these collections of information are required to verify compliance with section 1(h) and to determine that the tax on capital gains has been computed correctly.


Again, the resulting data record from www.whitehouse.gov/omb/library/OMBINV.TREASURY.html:

OMB NO: 1545-1654 EXPIRATION DATE: 07/31/2005 RESPS:1 HOURS:1 COSTS(000):$0 REG-106527-98 (Final) Capital Gains, Partnership and Subchapter S, and Trust Provisions FORMS: NONE


Form 2555 'Foreign Earned Income' (OMB 1545-0067) has been re-associated with §§ 1.119-1: Meals and lodging furnished for the convenience of the employer; 1.911-1 through -7: 'Partial exclusion for earned income from sources within a foreign country and foreign housing costs', 'Qualified individuals', 'Determination of amount of foreign earned income to be excluded', 'Determination of housing cost amount eligible for exclusion or deduction', 'Special rules for married couples', 'Disallowance of deductions, exclusions, and credits' and 'Procedural rules'; 1.913-13 (which does not exist in the current regulations); and 1.6012-1 through -5: 'Individuals required to make returns of income', 'Corporations required to make returns of income', 'Returns by fiduciaries', 'Miscellaneous returns' and 'Composite return in lieu of specified form'; all-in-all, a more sensible organization.


The errors of this misunderstanding are readily apparent to anyone not over-eager to seize upon anything which offered even a strained opportunity to support their shaky theory.  Even leaving aside the issue of the actual, easily-comprehended purpose of OMB control numbers, the law generally requires that all liability-establishing documents filed pursuant to the federal "income" tax be executed under penalty of perjury, and Form 2555 doesn't even require a signature.  Like all other forms of the same kind, it is intended to be covered by the perjury declaration on the 1040 to which it must be attached (as is clearly specified in the regulations), which declaration applies to all "accompanying schedules and statements".  (Indeed, the instructions on Form 2555 itself clearly state that the figures calculated and recorded thereon must be transferred to various lines on a 1040 in order to have any effect.)


Obviously, anyone so taken with this notion as to be willing to post and promote it could have-- and should have-- done a little research, and discovered the truth for themselves beforehand.  But that would have been work-- and would risk facing a moral obligation to abandon a helpful prop supporting the pet 'theory'.  Posting something which is simply not known to be true is less of a moral problem than posting something which is KNOWN to be wrong...  Better to just not look too closely, and hope no one else does either.


Related Material

Regarding The Paperwork Reduction Act (PRA), And The Use Of Government-Printed Forms (Such As 1040s)

Regarding the misrepresentation of Treasury Decision 2313

There IS "A Law", And This Is How It Works


Learn the Truth

*This line originally ended: "among which are those recorded and calculated on Form 2555", which was not accurate.  My thanks to Larken Rose for pointing out the error.