Free Second Amended Complaint - District Court of Federal Claims - federal


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Case 1:08-cv-00269-CCM

Document 12-4

Filed 07/29/2008

Page 1 of 19

Claimant Name He, Bao Hua Social Security # 586 37 . 0991

Client File No. # 00145
EXHIBIT 1: FORM 843

Claim for Refqd and Request for Abatement

2003 tI2006

2004=:

2005~
EXHIBIT 2: Copy of Passport
Copy of Socal Securit Card

EXHIBIT 3: FORM 2848 Power of Attorney and Declaration of Repreentation

EXHIBIT 3

Page-l

Case 1:08-cv-00269-CCM

Document 12-4

Filed 07/29/2008

Page 2 of 19

Form 843
(Rev. November 2005)
Department of the Treasury Internal Revenue Service

Claim for Refund and Request for Abatement
~ See separate instructions.

OMS No. 1545-0024

Use Form 843 only if your claim involves (a) one of the taxes shown on line 3a or (b) a refund or abatement of interest, penalties, or additons to tax on line 4a.

Do not use Form 843 if your claim is for. An overpayment of income taxes; . A refund for nontaxable use (or sales) of fuel; or . An overpayment of excise taxes reported on Form(s) 11-C, 720, 730, or 2290.
Name of claimant
.:

Your SSN or ITIN

'l BAOHUAHE
c. .. Address (number, street, and room or suite no.)

586 :
:

37

: 0991
:

Spouse's SSN or ITIN
Employer identification number (EIN)

~ P. O. BOX 502682

~

City or town, state, and zip code

Saipan, MP 96950
Name and address shown on return if different from above

98-0085959

Michigan

Daytime telephone number
( )

1

Period. Prepare a separate Form 843 for each tax period to 12/31/2003 01/01/2003 From

2 Amount to be refunded or abated
$ 703.97

3a Type of tax, penalty, or addition to tax:

ii Employment 0 Estate 0 Gift 0 Excise (see instructions)
o Penalty-IRC section ~

b Type of return filed (see instructions):

o 706 0 709 0 940 IK 941 0 943 0 945 0 990-PF
4a Request for abatement or refund of:

o 4720

o Other (specify

o Interest as a result of IRS errors or delays. o A penalty or addition to tax as a result of erroneous advice from the IRS.
b Dates of payment ~
5 Explanation and additional claims. Explain why you believe this claim should be allowed, and show the computation of your

tax refund or abatement of interest, penalty, or addition to tax. If you need more space, attach additional sheets.

Attached opinion letter.

POSTMARK
0416 Z007

RECEIVD

Signature. If you are filing Form 843 to request a refund or abatement relating to a joint return, both you and your spouse must sign the claim. Claims filed by corporations must be signed by a corporate offcer authorized to sign, and the signature must be

accompanied by the offcer's title. //'\
Under penalies of pe~ury, I declare that I have examined this claim, inc'ui~ accompanyin ts, and, to the bes of my knowledge and /" 0e~e /'

"'::'JI~~~iI~mn~t(l_'m___mn_n_mnnnun___nn__ l)~__~_2:~:_Ol/~~~/ an offcer.) Date
Signature (ritle, if applicale. Claims by corporations m~ir-~~ signed by

Signatre
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.
Cat. No. 10180R

Date
Form 84 (Rev.

11-2005)

EXHIBIT 3

Page d-

Case 1:08-cv-00269-CCM

Document 12-4

Filed 07/29/2008

Page 3 of 19

Form 843
(Rev. November 2005)
Department of the Treasury
Internal Revenue Servce

Claim for Refund and Request for Abatement
~ See separate instructions.

OMS No. 1545-0024

Use Form 843 only if your claim involves (a) one of the taxes shown on line 3a or (b) a refund or abatement of interest, penaltes,

or additions to tax on line 4a. Do not use Form 843 if your claim is for. An overpayment of income taxes; . A refund for nontaxable use (or sales) of fuel; or . An overpayment of excise taxes reported on Form(s) 11-C, 720, 730, or 2290.
Name of claimant
Your SSN or ITIN

'l BAO HUA HE
'a Address (number, street, and room or suite no.) .. ~ P. O. BOX 502682 ~ City or town, state, and zip code

.586 :
:

37

: 0991
:

Spouse's SSN or ITIN

Employer identification number (EIN)

Saipan, MP 96950
Name and address shown on return if different from above

98-0085959

Michigan

Daytime telephone number
( )

1

Period. Prepare a separate Form 843 for each tax period to 12/31/2004 01/01/2004 From

2

Amount to be refunded or abated
$ 790.63

3a Type of tax, penalty, or addition to tax:

ii Employment 0 Estate 0 Gift 0 Excise (see instructions)
o Penalty-IRC section ~

b Type of return filed (see instructions):

o 706 0 709 0 940 IK 941 0 943 0 945 0 990-PF
4a Request for abatement or refund of:
o Interest as a result of IRS errors or delays.

o 4720

o Other (specify

o A penalty or addition to tax as a result of erroneous advice from the IRS.
b Dates of payment ~
5 Explanation and additional claims. Explain why you believe this claim should be allowed, and show the computation of your

tax refund or abatement of interest, penalty, or addition to tax. If you need more space, attach additional sheets.

Attached opinion letter.

POSTMARK
0-416 2007

RECEIV
041 8 Z007

219
.

IR . PHILA. PA

Signature. If you are filng Form 843 to request a refund or abatement relating to a joint return, both you and your spouse must
sign the claim. Claims filed by corporations must be signed by a corporate officer authorized to sign, and the signature must be

accompanied by the officer's title. //\
belief, it is tre, correct, and complete. . ~ ~ 2 /'!ie /'
sig~~hi~;-triti~,~~~~~~~~~~- ~~~-b~-~ig~;d-by-~ off~~r m__u - - -- - ---- mum m - _u u __m -- -~ ~;-m: --~1. -~~:.~/
Signatre
For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.
Cat. No. 10180R
Date
Form 84 (Rev.

nts, and, to the best of my knowledge and // 0e~e//

11-2005)

EXHIBIL3
Page :.

Case 1:08-cv-00269-CCM

Document 12-4

Filed 07/29/2008

Page 4 of 19

Form 843
(Rev. November 2005)
Deparent of the Treasury Internal Revenue Service

Claim for Refund and Request for Abatement
~ See separate instructions.

OMS No. 1545-0024

Use Form 843 only if your claim involves (a) one of the taxes shown on line 3a or (b) a refund or abatement of interest, penaltes,

or additions to tax on line 4a. Do not use Form 843 if your claim is fore An overpayment of income taxes; . A refund for nontaxable use (or sales) of fuel; or . An overpayment of excise taxes reported on Form(s) 11-C, 720, 730, or 2290.
Name of claimant
Your SSN or ITIN

'l BAOHUAHE 'C
c.

586 :
:

37

: 0991
:

!

5 Gl P. O. BOX 502682 City or town, state, and zip code

Address (number, street, and room or suite no.)

Spouse's SSN or ITIN
Employer identification number (EIN)

Saipan, MP 96950
Name and address shown on return if different from above

98-0085959 ,

Michigan

Daytime telephone number
(
)

1

Period. Prepare a separate Form 843 for each tax period to 12/31/2005 01/01/2005 From

2 Amount to be refunded or abated
$ 627.36

3a Type of tax, penalty, or addition to tax:

ii Employment 0 Estate 0 Gift 0 Excise (see instructions)
o Penalty-IRC section ~

b Type of return filed (see instructions):

o 706 0 709 0 940 IK 941 0 943 0 945 0 990-PF
4a Request for abatement or refund of:

o 4720

D Other (specify

o Interest as a result of IRS errors or delays. o A penalty or addition to tax as a result of erroneous advice from the IRS.
b Dates of payment ~
5 Explanation and additional claims. Explain why you believe this claim should be allowed, and show the computation of your
tax refund or abatement of interest, penalty, or addition to tax. If you need more space, attach

additional sheets.

Attached opinion letter.

POSTARK
1)416 lOT

RECEI
0.0 8 Z007

219 lR"PHPA

Signature. If you are filng Form 843 to request a refund or abatement relating to a joint return~ both you and your spouse must
sign the claim. Claims filed by corporations must be signed by a corporate offcer authorized to sign, and the signature must be

accompanied by the officer's title. . //'\
b_~I~e::_It_~~tLe:~ii:'IH_~_m__~~__~__m___m__________m__m__m_m_____. ~~_~_~~_~.~ _~~~~/
Under penaltIes of perjury, I declare that I have examined thIs claim, including accompanying ts, and, to the bes of my knowied~gd// \ \e~~//

Signature (lite, if apPli;le. Claims by corporations must b~-ligned~~r.) Date
Signature
Date

For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 10180R

Form 84 (Rev.

11-2005)

EXHIBIT ~

Page l-

Case 1:08-cv-00269-CCM

DEPARtMENT OF FINANCE

Document 12-4

Filed 07/29/2008

Page 5 of 19
(g'~~;\\

DIVISION OF REVENUE AND TAXATION
COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS
a1. FederallD number 9 ()8 '~"On85 9 5.~
a2. CNMI Tax 10 number
a3. b. Serial number
VOID

\~~)
~::::~... .:...;:5

g. Loc. code

h. Days out of CNMI

i. Cit. code

CopyB
fJ~

qq:"IOi;O 5S1

o

()35

/

l
j.SIC

Of)
k. SOC

. i. Entry permit no.
1 ',td 1.::.

c. Employer's name, address, and zip code

;1 i (,h 1 -;lilll Cor pa t 1 Olt

.l3.uO

'lf~~;~4

For Employee's Record
2b. Loc wage & salary
ta withheld (Chap. 2)

;'..c' (:f,:'" ::.0;'1',82, SaJparl"
"' MP ')&950

1..JNages, tips, other compensation

2a. Income ta withheld
(Chap.

7)

J 7 .09
4. Social security tax withheld

.5 ~)f: ,. ~J'/

5;'0,,50
d. Emploee's social securi~inumber
6. Medicare tax withheld

5K('37 -09?1 .
Last name
9. Advance EIC payment

133.4;

e..

Employee's first name and initial

8. Allocated tips
10. Depndent care benefits

..'i.Ut HE
f. Enipipy.e's address aod ZiP code .

M1ChlQR corpoatioh

P..G box 5-02&&2, ~;aipa.n.
tj..' 96950

11. Nonquafified plans

12a: See Instructions for box 12

'; 1 $
13. Sttuory Retirement Third.part

DOD
14b.
";..."!

12b.
c

employee plan sick pay

a
d

.
o ~

1$ 1$
I $

\2C.

14a. Other

if W-2CM Statement

E 2003 Wage and Tax

12d.
c o d

e

....._._._ .__._ .__~.___ _._" ~"-'--:" .;0.,,;:-.-: :~:~---;.---~~..--~~~~~~"'~~~~~~'~~'-

~--..~="""""'--'--'

I.

.

. a1. F~~~!j'51.
..
.~. . ."' . ~
..

...11.
00354
20
. sic, '" ').,,
:. Qq-:roo S~rq

.h. Days. out

of

i. Cit. code
(~t~

CNMI

a2tCN.M~Jg.j~ulilQ~r

00
k. SQ."'-4

CopyB
For Employee's Record
2b. Lacl wage & salary ta witheld (Cha.. 2)

.

c. Eritye:flin~t~Ifcbl~~dM.
P . G. bcV': S2:aZ ~ Sal para
. .MP '36950
:::",; .~ .. .

.:J'-~U

roY

L Entry p~tri9.! ~

l~i.i..
~... 1

1. Viages, tips, .other compensation

2a Incn ta witheld
(Chap. 7)" ') 8

10.334,52
3. Social security wages

,.1L:;

~\':'? ;':J,./..':,. d.... ,.. . ,:): .

4. Scial securi tax withheld

: lQ, 134.5'2
'. d .
'.. ~

640(.73
6. Medicare lax withheld

.d.. Empl!?Yee's soii\ saClrity number

~~. ~,Y-a,gS irid tis
... ..__~. ,~"," .,,' ., If' ~....'l. ",.'j., '_..-:~.;"':.. ,u. ".,J"l. ~,_

$a6"".~rj::f1991 .
e..Emit~~Mrtni and

, .149.:35

initial

Last

name

7. s'ciec~rity tips
9. Advan.ce EIC payment
, .~ ~.~

8. Allocted tips
10. Dependent care benefits

f.Employe~'s;iiddress and ZIP code . Micfi18an in~)r~J!ated.

19, i)~ bo"t- ~02682, Saipan:,

11. Nohqualified plans

1J2a. See instructions for box 12

MP %SSG
;,... .~, .
13. SlatLry Retirement. Thir-part

12b.
c o
d

~ $. .
e

::, ". ~

14a. Other

ODD
14b.

eml9loyee plan sick pay

1$
1$

1!C.

o
~

if W-2CM Sttement

E 2004 Wage. and Tax

12d.
c
o d

EXHIBIT 3
I, $

e

Page S

a 1. Federal

1 D 'n.nir .

:j~j OSS-j,tj

e
HE

Case 1:08-cv-00269-CCM
DIVISION
a3.
VOID
..

DEPARTMENT OF FlNANCE
OF

Document 12-4

Filed 07/29/2008

Page 6 of 19

REVENUE AND TAXATION
g.Lc. code
h. Days o.ut of the
CNMI
i. Cit. code

COMfiONWEALTH.OF.TliENORTHERN MARIANA ISLANDS
b. Serial number

....~ Copy B
For Employee's Record
2b. Loca wage & salary
ta withheld (Chap. 2)

G

a2. CNMI Tax ID.riLimber.

')'/-1000589
hi c r'Jo.n

O.
"

0.SS4

2
j.sie

(H)

GN
c

c. Employer's name;ad~ress,ind .zip code

k.SOe

i. Entry Pennit no.

F'"G
"U;J

b-o;"
';:'f:/:~

CQrpOation 502.'R2~ Saipa.ri,

7654
,

156113
2a. kJC9me tax witheld

1. Wages, tips; other compensatio.n

(Oh'ap.7)

8.199~94
3. Social security wag.es

.S5,16
4. SoCial security tax wihheld
!:it)'S". 4 6
6. Medicare tax withheld

:;2~5..16

'1:' c..
.,AtL'. ...

8.19~l,. 94
5: Medjcare, wages aRd tips
Last name

(

d.Eirplgy..e'1($Ocal seC1rity number
t~if.'~.~~ '.:~,'~~~i\~!6.;;r:~41 .

$:,1'19. ~r4

118,,';0
8. Al1icated tips

e. Emp.lyee's first name and initial

7. Social security, tips
.

t:~.)HGH

f. Employee's addre.ss and ZIP code

9. Advance EIC.paymeft

10.. Dpen1ent care benefits
i ...

'jl:i.9Gif1. CZjrp9.t:iQI
P
t.~ M' ~..

~... .-

t~..jji

Sa.i 5 (; ~l&8 2 'of'

p a ri :.

11. Nonqualifie.l plans.

. \2a; See rstructions for box 12

f';P

'f~;t69~.O

..
13. Statuory. Re\iremerii Third-part Employee pian . sick-pay

~.$
c Q d

12b.

D
E I-

ii W~2CM

0

200.$

. Wage

and Tax Statement

..

0
'.

D
1.4b.

.

l $

1,fC.
Q

14a.Ottier

d

1$ 1$

12d.
c
Q

d e

'.

'\

EXHIBITr3

Page _..

"',Q,' if' ;0; ", 'ii".,,,.j, .,", FOlTn;L ;,, ,;0, .
(Rev. March 2004)

, ~i~~

Case 1:08-cv-00269-CCM

Document 12-4

Filed 07/29/2008

Page 7 of 19
OMS No. 1545-01GO
IrtlW L"$ IUs ~61!y

G0CIW(~1l CIff i'l'&CIIlU-l(V
JOl9 iQ(~O&lflJ'OOCDl (Qi( ~~r.!(~~OttJ'lgW~

Oparlment 01 the Treasury

Interal Revenue Service

; lye ~ !Ii'l

~ ~ \l ~6"f ilil'llc'ii~Ii.

Received by:

Name

I~jf~
1

I?ItW~1l Itii ~iliiIl~1f

; ~ '.\.. ,''0).' '''~

((siMft(!ir: FOlTfl 2848 wil not be honored for any purpose other than representation before tl7e IRS.

lelephone
Function

:axprt:~m ar~1eMt
i~~
"tv,-

1isi~~SJw~rr irrf~llsiji~ir, Taxpayer(s) must sign and date this 10rl1 on page 2, line 9.

t\
i

Date

/

~(IlCiSJ! ~lCl\ir~ irl\m~rr($)

/

~IMoi(lv~rr icd~bfti'cm(lfi
1Q,mloerr

L! 0 Ale. lCt'7, fi::\ 1&'" "'t:.t en ( 1(~V
lOC,t\

f).~c.Q.S;

S'DLI, W. l? (36" 5 ii:rp ~"f ,'I J ~V)f C;bct~o hereby appoint(s) the following representative(s) as attorney(s)-in-fact:
2 IPeprrsieJntative($) must sign and date this form on page 2, Part II.

~t1t-oCf1/
( )

Daytime telephone num~er

Plan number (if applicable)

Name and address

~\e v (~~:: \l C,~), E5r:~.
;.~ I ir=ri lr (\1 P e 1045 D

I' ; ..: '. Q (0000
'PW\ B 'oLt, l" O. \.o'l .

IIe h one ,f,,"J-o' '22~-e-"",l.l ep N ,0. ~""_:~_U___.,____..._.__~_____._
Faie No. --f-0-lQ.l.--3'?'3-=-/J21.L____.
CAF No. __ __ '''__ ________ ______ _ ._..___._____.__.

CAF No. --??.3t!J_-:S~_y.p.2._S(jS:___

Name and hddress \.

Check if new: Address 0 Telephone No. 0 Faie No. 0
Telephone No. ____.___._......._.......__...._._
Fax No. _ __. ____ ._______________... __ __ __._______

Name and address

Checl( if new: Address 0 Telephone No. 0 Faie No. 0
CAF No. ____________._...___________________._.__

Telephone No. ____.______..._.____...__._______.
Faie No. .. ____ ___ _.. _ _._. __ ____ _ _ __ _.. __ _ __ __ _.__

to represent the Ixpayer(s) before the Internal Revenue Service for the following tax matters:
3 'fal maitteD'

Check if ne.w: Address 0 Telephone No. D Fax No. 0

Type of Tax (Income, Employment, Excise, etc.) or Civil Penalty (see the instructions 10r line 3)

Tax Form Number

Year(s) or Period(s)

(1040, 941, 720, etc.)
10(.10 j ~ '- '\
~

(see the instructions for line 3)

. . iV-i c.JY\ IQ J tbK. V-"'Se. hq J(

Z'b '20031 '1 DOc. I i. ncS 1..

4 ~pcmc: M$ not rrcoirir~ \i1i (;eUitrai!ia:erd f.Mt!oirzsillon fiDe ((;f.LS, 11 the power of attorney is for a specific use not recorded
on CAR check this box. See the instructions for line 4, ~pecmc MSes Irot recorded Ol' CAf. . . . . . . . . . 0
5 Acts alloir;;ed, The representatives are authorized to receive and inspect confidential taie information and to perform any

. and all acts that I (we) can perform wit respect to the tax matters described on line 3, for example. the authority to sign any agreements, consents, or other documents. The authority does not include the power to receive refund checks (see line 6 below), the power to substitute another representative, the power to sign certin returns, or the power to execute a request
for disclosure of tax returns or return information to a third part. See the line 5 instructions for more information.

~KOOptiOi1$, An unenrolled return preparer cannot sign any document for a taxayer and may only represent taiepayerS in limited situations. SeeQJl'enro!8si IPeiMlil' ffrrpairir on page 2 of the instructions. An enrolled actuar may only represent taiepayers to the extent provided in section 10.3(d) of Circular 230. See the line 5 instructions for restrictions on taic matters

partners.
List any specific additions or deletions to the acts otherwise authorized in this power of attorney: _..__..._.____.__.____________
.......................... -- --- ---...................... -.... -........ -................................ _.......................................... -.. -_.. --- -_........................ --- --.... -................ - - -.. - - -.... - - --.._.. -- - _.. _.. _....-

--

............... - -... - - --.. .._-- - -.... -.. - _........ - --........ _........... -- - --...... _...... _.. _.. - -. - -_. -- _......... - - - - _........ -. _._...... -..- ----.... - - _....... _..... - _.. --...... - -..... _....-.. - .'........-.. -_...... - -...... _........_.... - -......... - - _.. -.. -.... - - ..-..._.... -.. _..... - - - - -- - --.. - --................. - _..... -- -- ---_.. _.... - _.. - _.... -.._.. _.. -_.. - ---_...... - -.... _.... -.... .__.. _.. - _.. - _.... _.....

fa Reooipt of reful1d cl1~ck$, If you wa t to au horize a representative named on line 2 to receive, ISQJ1i f\~1i 1i~ ~fig(lf~~

OIR ((A~H, refunc1eJ~ck~.i iJlalAiere and list the name of that representative below.
a)&~-ifl1-X~.t i.' ~ 9 Name of representative to receive refund check(s) ~ I Ai,f. 0 17 Rt.
For ~Slcy Aet M4) Pa:sio&il ReOluctia' Notice, see pii 4 of the ii1~oili\\~ Cat. No. 11980J Form ~ (Rev.

3-2004)

EXHIBIT 3

Page 7

Case 1:08-cv-00269-CCM Document 12-4 Filed 07/29/2008 Page 8 of 19 Fmi 2848 (Rev. 3-200'!) Page 22
rI '~(!~~$ 11~ IC(!limMIlcaiil(fls. Original notices and other written communica'cions wil be sent to you and a copy to the

first representative listed on line 2. '"

- Sl If you also want the second representative listed to receive a copy of notices 81Jid communications, clieck this OOX . . f) 0
r 1'( you do not want any notices or communications sent to your representative(s), checl( this bo), ....... p 0
~ 1R~fe6'iil(IIn'~~(iiil(1 (~ oirr(1T Q)(werr~s~ (' lIit(IT~W. The filng of this power of attorney automatically revokes all earlier

power(s) of attorney on fie with the Internal Revenue Service for the same tEi. matters and years or periods covered by
this document. If you id(! 1(f want to revoke a prior power of attorney, checl( here. . . . . . . . . . . . . Di 0
V(Oll 1Mll~1i c.ITc.t;1H c. t;(OIPV (QIF c.~V IP(O~1R ~IF c.IT~IRIM~ V(Qll Wlr r(Q 1R~lic.OIM DIN ~1F1F~t;1I

~ ~~laiiWll (~ f~&iyeir~s~. If a taix matter concerns a joint return, lo(i! husband and wife must sign if joint representation is requested, otherwise, see the. instructions. If signed by a corporate offcer, pairtner, guardiiii.n, tliX matters partner, executor,

receiver, administrator, or trustee on behalf of the taxpayer, I certify that I have the authority to execute this form on behaJf
of the taxpayer.
f DIF ff(Q1i ~O~IMIEg c.lNg g.Arg, YIHO~ IP(OWIEIR (QIF lTI(Q~1M1E WDll 18~ IRIEYlllRi\lEg.

~\

~ ----11--T---L---------------------- -------__

. Signature
Signature

Uj;1 /, ----ttr~--i()L
Date ;Jt~ Title Qf applicable)
.. ~......... ----------------...... -_.. ----------- ------ ..Oo_...... _____.. ___...... __ ___ ___..

~~ ~ti-Ji-tJH~--!~L~~...-.---------. DODD 0 ~l );. Print Name PIN Number
?h
- - - - - - - -.. - -.... - - - - _.... - _.. -_.. -......... _.. _........ _.. -_.... - - - - -.. _.. - - -.. - _.. - - - - -.. - _.... -...

Print name of taxpayer from line 1 if other than individual

-__.Lt.~_I6._~_rr b .--.----------k~Z-~--tJ-7.?.---

~J(
Print Name

~q TOle Of applicale) -

DDDDD
PIN Number

_ 1Q\l~OJiraiij( (ii ~~~iri~ta1t'l\l
~aQJtio01: Students with a special order.to represent taxpayers in Qualified Low Income Taxpayer Clinics or the Student Tax Clinic

Program, see the instructions for Par II. Under penalties of perjury, I declare that:

~ I am not currently under suspension or disbarment from practice before the Internal Revenue Service; I am aware of regulations contained in Treasury Department Circular No. 230 (31 CFR, Part 10), as amended, concerning
the practice of attorneys, certi"fied public accountants, enrolled agents, enrolled actuaries, and others;

lI I am authorized to represent the taxpayer(s) identified in Pare I for the tei( matter(s) specified there; and
I am one of the following:

ai Attorney-a member in good standing of the bar of the highest court of the jurisdiction shown below. lo Certified Public Accountant-duly qualified to practice as a certified public accountant in the jurisdiction shown below.
e: Enrolled Agent-enrolled as an agent under the requirements of Treasury Department Circular No. 230.

! Officer-a bona fide officer of the taxpayer's organization.
e Full-Time Employeea full-time employee of the taxpayer.

f Family Member-a member of the taxpayer's immediate family (i.e., spouse, parent, child, brother, or sister).
g Enrolled Actuary-enrolled as an actuary by the Joint Board for the Enrollment of Actuaries under 29 U.S.C. 1242 (the

authority to practice before the Service is limited by section 10.3(d) of Treasury Department Circular No. 230).
il Unenrolled Return Prep8ser-the authority to practice before the Internal Revenue Service is limited by Treasury Department

Circular No. 230, section 10.7(c)(1)(vii). You must have prepared the return in question and the return must be under examination by the. IRS. See UnlSnrolled oaei:um Preparei' on page 2 of the instructions.

~ DIF l'fHU~ 1Q1E~lLn!01M !OF IRIiPIRE~lEi\l'A1iWIE U~ H'~l' ~~IMEg ANlg lQcnlEg, TfHlE roWER OIF ATIORi\~ WOll
~IE IREfllIRIMEIQ. See the Part II instrctions. .

Designation-Insert
above letter (ai=h)

Jurisdiction (state) or identification

Signature

Date

C

Fonn ~ (Rev. ~_?nn\

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i 1t. ~r*, il ~t- #J J! 0 .
reqtnsts aiiclv# and

l .k~~~ ~ * ~~. .~K*~*~#.~ ~.~
The Ministry. of Foreign Affairs of the . Peop!e.~s Republic of China

miltary o,uthoritie$ of foreig coun.tres .to allow the
.,

. 1J~rr of thispassp6rl to pa /reel; and ajordass~tance in c~~ of neei .

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April 17, 2007

FALLON LAW OFFICE
PMB 504 P.O. BOX 10000

ALEXIS FALLON, ESQ. TEL: (670) 323-0061 FAX: (670) 323-1061
E-MAIL: ALEXISFALLON(gUSA.NET

SAIPAN, MP 96950

Internal Revenue Service 11601 Roosevelt Blvd Philadelphia, P A 19114

DpNI02
Att: J. McCandless

RE: FICA LEGAL OPINON FOR FORM 843
Dear Mr. McCandless,
Please note that ths letter is to serve as the formal opinon letter attached to all of the
Form 843 requests for refud of overpayment of the Federal Insurance Deposit Act

(J

contributions (FICA) that were sent by my office earlier this week. Each application contains a Form 843 for each ta year along with their identity and the relevant W-2's. In you could note that in your receipt of the Form 843 it references ths Legal Opinion. If
all the refud clais that this is the legal opinion so referenced.

A. PROCEDURA POSTUR
1. All applicants have fied a Form 843 for each tax year.
2. All applicants have attached their W-2 forms to their respective Form 843s

to the extent that it is in their possession.
3. To the extent that the IRS desires to know their filing status for income tax
puroses, the client wil provide ths data on request, or alternatively~ the IRS can

contact the CNM Division of Revenue and Taxation and request verification of

fiing.
4. None of the applicants have fied U.S. income. tax retus. . Rather, all

applicants fied income tax retus with the CNM Division of Revenue and
Taxation as provided by IRC Section 935 and Covenant Section 601.
i

B. . FACTS

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All of the applicants are sinularly situated with the same immigration status: Each applicant is a non u.s. Citizen that is a curent or former CN contract worker. A Copy
of

the each applicant's passport has been attached to their refund claim.

All of the applicant were issued U.S. Social Security cards with the legend "Valid For

Work Only With DRS Authorization" or "Valid For Work Only With INS
Authorization." This legend requires the card holder to present a valid U.S. work visa to

complete an employment eligibilty "Form 1-9." None of the applicants have
successfully completed Form 1-9.

C. SUMMY OF POSITION
First and foremost, the geographic definition of FICA does not include the CNMI. This is directly contrar to how the United States Congress has applied FICA to all the other
U.S. Possessions. Secondly, the IRS has never promulgated any regulations in regard to

the applicability of FICA to the CNM. There is scant regulatory guidance as to why the FICA tax should apply to the CNM. The Covenant between the U.S. and the CNMI is clearly ambiguous with regard to the application of FICA to contract workers permtted to work only in the CNM. It is clearly ambiguous because Congress never addressed the
fudamental differences that exist between Guam and the CNMI. This ambiguity creates

an impossibility of a self-executing provision of the Covenant.

()

D.

LEGAL POSITION

1. Application of

Federal Insurance Contnbutions Act

The Federal Insurance Contribution Act (FICA), 26 U.S.C. 3101-3127, supports the
Federal program of Old-age, Surivors, Disability Insurance ("Social Security") and the

Federal program of hospital insurance ("Medicare"). This tax is collected on services
performed by an employee "withi the United States." 26 U.S.C. 3121(b). FICA

obligates the employer to match any of its employee's FICA contributions. The term "United States" is specifically defined for this statute in Section 3121 (e). The Section
provides that:

Section 3121(e) State, United States, and citizen.
For puroses of

this ChapterColumbia, the Commonwealth

(1) State. The term "State" includes the District of

of Puerto Rico, the Virgin Islands, Guam and American Samoa. (2) United States. The term "United States" when used in the geographical sense includes the Commonwealth of Puerto Rico, the Virgin Islands, Guam and
American Samoa.

(--.,)

....J

The terms "State" and "United States" define the geography of the IRS' collection authority to administer the FICA ta. As a consequence of ths definition, FICA applies by its own terms to the Virgin Islands, Guam, Puerto Rico and' American Samoa and

2

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"Social Security Taxes" (i.e. taxes imposed by FICA) and is therefore collected in those territories in the same maner as the States.

The Commonwealth of the Nortern Mariana Islands ("CNMI") was never added to the
definition of "the United States", or to the term "state" as found in Section 3121(e).

Without clear Congressional action amending Section 3121 to include the CNMI in the definition of either state or geography sections, it creates an ambiguity. Unlike what occured legislatively in the other U.S Territories, where there was clear legislative
action. This omission is a significant distinction from the other Terrtories.

At ths time, it would be prudent to review the enabling legislation makg FICA
applicable to the U.S. Territories. In every instance of the application to the terrtories
(Puerto Rico, Virgin Islands, Guam and American Samoa), there was a Congressional act that specificallY amended the Internal Revenue Code to applyFICA to those Territories.
When the U.S. Congress applied FICA to the Virgin Islands and Puerto Rico, it did so in the Revenue Act of 1950, Pub. L. No. 50-814. The House Committee Report to this Act stated:

()

The House bil and Senate amendment both provided that, notwthstading any other provision of law respecting taxation in the Virgin Islands or Puerto Rico, all taxes imposed by the Self-Employment Contributions Act shall be collected by the Bureau of Internal Revenue under the direction of the Secreta of Treasur and shall be paid into the Treasur of United States as internal-revenue collections. H. R. Committee Report H. R. 8920 (emphasis added).

With regards to Gua and American Samoa, U.S. Congress in Pub. L. No 86-778 Sec. 103, specifically amended section 202(i) of the Social Security Act by strikng out "Puerto Rico or the Virgin Islands" and inserted in lieu thereof "the Commonwealth of Puerto Rico, the Virgin Islands, Guam and American Samoa." See also H.R. Rep.No. 2165, 86th Cong., 2d Sess. 18 (1960) (conference report)(Guam and American Samoa); and S. Rep.No. 1669, 81 sl Cong., 2d Sess. 17 & 292 (1950) (Puerto Rico and the Virgin Islands). All these amendments were eventually codified into what is today, IRC Section
3121(e).

As stated previously in the CNMI matter, the U.S. Congress has not taken any legislative

action to amend the Internal Revenue Code, as Congress has done for Puerto Rico, American Samoa, Guam. and the Virgin Islands. As for the argument of legislative
oversight, such a position is incredulous as the U.S. Congress has amended IRC Section
3121 seventeen times since the passage of

the Covenant in 1978. In 2003, P.L. 108-121;

in 2000, P.L. 106-554; in 1998, P.L. 105-206; in 1997, P.L. 105-61; in 1996, P.L. 104i i i

188; in 1994, P.L. 103-387; in 1993, P.L. 103-178; in 1992, P.L. 102-572, in 1990, P.L.

101-508; in 1989, P.L. 101-239; in 1988, P.L. 100-647, in 1987, P.L. 99-514, in 1984,

i ''j !
i \

1.--,

P.L. 98-369; and in 1983, P.L. 98-118. Congress. had no fewer than seventeen
opportties to specificaly include the CNM in IRC Section 3121(e), However, in the

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same timeframe the U.S. Congress has amended other sections of

the IRC to include the

CNMI, for example IRC Sections 881, 931, 935 and 937.
B. Effect of

Northern Mariana Islands in Political Union with the United States of America
the Covenant to Establish a Commonwealth of

The Commonwealth of the Northern Marana Islands is unque among the U.S. insular possessions. As the terms of ths political union were negotiated between the paries and ratified in a plebiscite, and subsequently approved by the Senate and the full U.S. Congress in Pub. L. No. 94-241, 90 stat. 263 (1976), codified at 48 U.S.c. 1801. This
agreement is commonly known as the Covenant To Establish a Commonwealth of the

Nortern Mariana Islands in Political Uiuon with the Uiuted States of America
("Covenant").

On November 3, 1986, with all of the terms of the Covenant in effect, the Uiuted States tern1nated the Trusteeship Agreement with a Presidential Proclamation. United States

ex. reI. Richards v. Guerrero, 4 F.3d 749 (9th Cir. 1993). Curently, authority of the United States towards the CNM arises solely from the Covenant. Hilbloom v. United States, 896 F.2d 426 (9th Cir. 1990). To fuher the goal of CNM self-governance,
Covenant Section 105 provides

that cert provisions of the Covenant may only be

modified with the joint consent of the U.S. and the CNJ\. With regards to taxation, immgration and minimum wage, the Covenant may be amended by unlateral action of

(~)

Congress, but only by specific reference to the relevant Covenant Sections.

i. Covenant Section 606(b) and the applicabilty of FICA
Covenant Section 606(b) provides that:

the United States which impose excise and self-employment taxes to support or which provide benefits from the United States Social Security System will on Januar 1 of the first calendar year following the termination of the Trusteeship Agreement or upon such earlier date as may be agreed to by the Governent of the Northern Mariana Islands and the
Those laws of

Governent of the United States become applicable to the Nortern
Mariana Islands as they apply to Guam. (Incorporating amendments

found in Pub. 1. No. 98-213, 9)
Under ths Section, one of

two possible conditions precedent must occur before Congress
precedent were either

has the right to apply FICA laws to the CNM. These conditions (1) the termnation of

the Trusteeship or (2) by an agreement prior to the termnation of

the Truteeship between the Uiuted States and the governent of the Northern Mariana

the word "will". Tlis could be interpreted that Congress wished to create a self-executing provision for the application of FICA to the CNMI upon the occurence of either of these events.
Islands. The language of Section 606(b) is conspicuous with the use of

Under this interpretation, when the Truteeship over the CNMI was termnated on

.J
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November 3, 1986, the laws that impose excise and self-employment taxes could then be imposed.
The central issue of this matter is whether Covenant Section 606 (b) was sufficiently

clear to be self-executing, and even if this clause is found to be self-executing, did this clause encompass the significant differences that exist between Gua and the CNMI.
Arguably, to rely on Section 606(b) exclusively as providing suffcient legislative FICA to the CNMI is in direct confict with the legislative authority for the application of history surounding the application of FICA to the other U.S. Possessions. As stated previously, in every instance Congress specifically amended the applicable sections of the Internal Revenue Code to apply FICA to these areas. Even if ths Covenant section

provided sufcient legislative authority, it did not address the actual mechancs as to which Internal Revenue Code sections would apply and in what maner these sections
would apply.

Moreover, Section 606(b) by itself does not amend the existing statutes that apply FICA to the CNMI. Ifit did, IRC Section 3l21(e) would include the CNM in the definition of "state" and "Umted States" in its laundry list. The Research Institute of America and other ta legal authorities have never referenced Covenant Section 606(b) as amending

IRC Section 312l(e), because if they did so, they would have included the CNMI in

(j
,_.-

Section 312l(e).

The phrase "as they apply to Guam" creates a latent ambiguty. Guam is not in charge of its own immigration. All of the contract workers who are in Gua obtain a U.S. Visa

issued by the Deparment of Homeland Security (replacing the Immigration
Natualization Service (IS)). Unlike Guam, contract workers enter the CNM enter on a

FICA to CNMI contract workers is at Ilmmum questionable and more likely than not unsupportble with the present legislative statutes for the reasons stated below.
CNMI Immgration visa. Due to ths critical difference, the application of

In 2004, the U.S. Social Security Administration (SSA) reversed its opiron of coverage

of CNMI foreign contract workers. Whle the enabling language of the revised
regulations states that ths is the first time that U.S. Social Securty has addressed the coverage issues of CNMI Foreign Contract workers it is in error. Attached hereto is an
excerpt of the VanCleve Memorandum 1, it this memorandum Ruth VanCleve references "HHS advises informally that its regulations and guidelines treat national and citizens so

that Samoans in the States would thereby be eligible. This section, however, has the effect of excluding the large alien population in the Nortern Mariana Islands, where

such aliens, who have entered the Northern Marianas for a temporar period for
employment, are believed now to outnumber local residents. Because under the Covenant federal immigration laws do not apply to the Northern Mariana Islands, these workers are

(.)
\"-

not aliens "lawflly admitted for permanent residence" as the phrase is used in federal law. They thus do not meet the statutory requirement, and alien temporar workers in the Nortern Mariana Islands are therefore ineligible for SSI benefits. (citing HHS ".. ...in
i Ruth Van Cleve, Departent ofInterior Memorandum no. 42-3.

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order to be eligible for SSI, a non-citizen (or national) must be either (1) "Lawflly admitted. ..for permanent residence" or (2) "permanently residing... under the color of
law" (other wise known as PRUCOL). However, (any) suggestion that admission of guest

workers under the laws of the NM would meet the first test is incorrect "lawful
admission for a temporar period, no matter how long, does not satisfy ths test.")
It is Congress' job to clarif the application of ths tax and not the Agency's sole

discretion to apply jurisdiction. This analysis reversed their prior decision in the SSI

benefits area and is not considering the express exclusion of the CNMI from the
Immigration Nationality Act found in the Covenant Section 503(a) where the Covenant
excludes the application of

INA Section 506.2

ii. Without an explicit statutory amendment to IRe Section 312l(e). the Internal Revenue Service does not have any jurisdiction to enforce the
collection of this tax on CNM Contract workers who are not present in the United States and not authorized to work in the United States.
The territorial application of the FICA tax would, if IRC Section 3121(e) had been jurisdiction. Quite simply, without a specifc amendment to IRe amended, satisfy in rem Section 3121(e), the IRS lacks in rem jurisdiction to enforce the collection of the tax agaist CNMI Contract Workers who are not present in the United States and not
authorized to work in the United States. The IRS has exclusive admnistration authority

o

over the Intern Revenue Code, as codified in Title 26. IRC Section 7801 provides that

"except as otherwse provided by law, the admstration and enforcement of ths title
shall be performed by or under the supervision of the Secretar of the Treasur." So

failing explicit statutory authority of granting jurisdiction in rem, the secondary method of taxation is jursdiction in personm.

With regards to possible in personam jursdiction, there is no explicit statutory authority over persons in the CNMI. Typically, IRC Section 876 grants the IRS jurisdiction over
resident aliens in U.S. possessions. For reasons stated below, IRC Section 876 is not applicable to the CNM1.

The Tax Reform Act of 1986 (TRA 1986) amended IRC Section 876 to provide that bona

fide residents of Puerto Rico, Guam, American Samoa or CNMI would be taxed as resident aliens. However, Section 1277 (b) of the TRA 1986, P.L. 99-5143, fuer
2 Yang B Kei v. American Intern') Knitters Corp., 789 F. Supp 1074 (D.N.Mar.I. 1992).

3 Application of Oct. 22, 1986 amendments; special rules. Act Oct. 22, 1986, P.L. 99-514, Title XU,

Subtitle G, 1277, 100 Stat. 2600; Nov. 10, 1988, P.L. 100-647, Title I, 1012(z), 102 Stat. 3530,
provides:

(.)
, !

(a) In general. Except as otherwise provded in this Section, the amendments made by this subtitle (for full classification, consult USCS Tables volumes) shall apply to taxable years beginning after December 31, 1986. (b) Special rule for Guam, American Samoa, and the Northern Mariana Islands. The amendments made by this subtitle shall apply with respect to Guam, American Samoa, or

the Northern Mariana Islands (and to residents thereof and corporations created or
6

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provided that"the amendments made by this subtitle shall apply with respect to Guam,

American Samoa, or the Nortern Mariana Islands (and to residents thereof and
corporations created or organzed therein) only if (and so long as) an implementing

agreement under Section 1271 (note to ths Section) is in effect between the United States
and such possession." (Emphasis added.)

TRA 1986 Sections 1271, 1272, and 1277 are encompassed in TRA 1986 Title XII -Foreign Tax Provisions, Subtitle G -- Tax Treatment of

Possessions. TRA 1986 Sections

1271 and 1272 are in par I of subtitle G. Par I specifically addresses the "Treatment of Guam, American Samoa, and the Northern Mariana Islands." TRA 1986 Section 1271, does not appear in, or make any changes to the IRC. Rather, that provision grants Guam,
American Samoa, and the CNM, under certain conditions, the right to enact their own
tax laws independent of the IRC with respect to income (l) from sources withn, or
effectively connected with the conduct of a trade or business withi, the possession, or

(2) received or accrued by a resident of the possession.4 TRA 1986 Section 127 1 (b)

makes that grant of authority applicable to Guam, American Samoa, or the CNMI provisional on the existence of an implementing agreement between the United States and such possession.s

TRA 1986 Section 1272. amends old Section 876 as well as other Code provisions not pertinent here. In TRA 1986 Section 1277(b), Congress makes the application of those
amendments conditional on the existence of the requied implementation agreement

o

between the United States and the specified possession, but only as to Guam, American
Samoa, and the CNM, and the residents and 'corporations thereof.6

Therefore, the Tax Reform Act of 1986 rules coordinating United States and specified possessions (including CNM) taxation generally apply to taxable years beginnng afer. 1986, or as soon as the applicable possession agrees to cooperate with the United States in tax matters. 7 Consequently, as long as an implementing agreement is not signed between the United States and the CNMI, Section 876 of the Tax Reform Act of 1986 does not apply to the CNM.
A carefu review of the language of Covenant Section 606(b) wil demonstrate that there
is no conferment to the Internal Revenue Service for enforcement which would

undermie the deference afford to U.S Treasur regarding promulgation of regulations.

But U.S. Treasur has never promulgated reguations on this issue. The only regulations that have been proposed is by the Social Security Administration. .

organized therein) only if (and so long as) an implementing agreement under Section
1271 is in effect between the United States and such possession.
26 USCS 93 i note.

4 TRA 1986 sec. 1271(a).
5 Specking v. Comm'r, I i 7 T.C. 95 (2001).
6 d.

(.J-".

7 Also See Joint Committee on Taxation, Summar ofH.R, 3838 (Tax Reform Act of 1986) as Reported by
the Senate Committee on Finance (JCS-12-86), June 5, 1986. .

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If there is an ambiguity as to the legislative language indicates, then in accordance with

.:=)

Chevron u.s.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), "If

the

intent of Congress is clear, that is the end of the matter; for the cour, as well as the
agency, must give effect to the unambiguously expressed intent of Congress. If, however, the cour determines Congress has not directly addressed the precise question at issue, the
court does not simply impose its own construction on the statue, as would be necessar in

the absence of an admnistrative interpretation. Rather, if the statute is silent or
ambiguous with respect to the specific issue, the questions for the cour is whether the agency's answer is based on a permssible construction of the statute." Id. at 843. In Cottage Savings Ass 'n v. Commissioner, 499 U.S. 554, 560-561, 113 L.Ed. 2d 589, 111 S. Ct. 1503 (1991), the Supreme Cour conspicuously did not cite Chevron and appeared to apply the traditional rule of tax deference: "Because Congress had delegated to the

Commissioner the power to promulgate 'all needful rules and regulations for the
enforcement of the (Internal revenue Code), 26 U.S.c. 7805(a), we must defer to his
regulatory interpretations of

the Code so long as they are reasonable." rd., at 560-61

Please note the enabling language in the application of FICA to Puerto Rico and the Virgin Islands where Congress was quite explicit in its conferment of authority of the U.S. Treasur to enforce and retain the collection of monies for FICA. The same is tre for the amendments for Guam and American Samoa. The absence of an explicit conferment coupled with the failure of Covenant Section 606(b) to amend the relevant Internal Revenue Code sections, means the IRS does not have the requisite explicit jurisdictional authority to enforce the FICA tax as to the CNM Contract Workers who

C)

are not admitted in the United States and are not authorized to work in the United States.

ii. The Tax Status of CNM Contract Workers
As stated previously, Covenant Section 606(b) contains ambiguous language that states that excise taxes and self-employment taxes will become applicable to the CNMI in the same maner as Guam. This language does not address the significant difference between the CN and Guam. As stated previously, the CNM Governent controls its

own imngration. In fact, Social Security regulations prolubit the issuance of Social Security Cards for work without the satisfaction of Deparent of Homeland Security
(replacing Immigration Naturalization Service) Visa permttng an individual to work. 20

CFR Section 422.104. Section 422.104 states, tht an alien is eligible for a Social

Security number where "An alien lawfly admitted to the United States for permanent residence or under other authority of law permttng you to work in the United States ( 422.105 describes how we determine if a nonigrant alien is permitted to work in the United States)" 20 CFR422.l04(a)(2)(emphasis added).
In fact the Social Security Regulation creates a presumption of authority of a

()

nonimmgrant alien to engage in employment if the individual alen provides a Form 194. "...(I)f your Form 1-94 does not reflect a classification permtting work, you must submit a curent document authorized by the Deparent of Homeland Security that verifies authorization to work has been granted. e.g. an employment authorization

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.)

document, to enable SSA to issue an SSN card that is valid for work:' 20 C.F. R.
422.105(a).

Since the CNM controls its own immigration policies, CNM contract workers are not admitted into the United States for work puroses. Covenant Section 503 states that the immigration and natualization laws are inapplicable to the Nortern Mariana Islands.8 From the plain meanng of Covenant 503, the only exceptions from the inapplicability of the Immgration Natualization Act are those listed in Covenant Section 506. As you wil note, there is no reference to the CNM work visas issued to the alien contract workers being designated or approved by the INS. In Yang Bi Kei v. American International Kntters Corporation et. al., 789 F. Supp. 1074 (D.N.MarJ. 1992), the U.S. District Cour considered the issue of the imigration power of the CNM. "Unlike any of the several States and Territories or Commonwealths, Congress has granted the CNMI authority over
its oWn immigration."

Foreign contract workers enter into the CNMI on a CNMI work visa that does not
provide them access to, nor the right to work in the United States. (See Memorandum of

Agreement Between the U.S. Deparent of Interior, Offce of Insular Affais and the Commonwealth of the Northern Marana Islands, signed September, 2003; see also
Section 101(a)(38) of

the Immigration and Nationality Act, 8 U.S.C. 1101(a)(38)). So

8 Covenant Section 506 states the following:

()

(a) Notwithstanding the provisions of Subsection 503(a), upon the effective date of this

Section the Nortern Mariana Islands wil be deemed to be a par of the United States
under the Immigration and Nationality Act, as amended for the following purposes only, and the said Act will apply to the Nortern Mariana Islands to the extent indicated in each this Section. of the following Subsections of
(b) With respect to children born abroad to United States citizen or non-citizen national

parents permanently residing in the Northem Mariana Islands the provisions of Sction the said Act wil apply. 301 and 308 of
(c) With respect to aliens who are "immediate relatives" (as defined in Subsection 201(b) of the said Act) of United States citizens who are permanently residing in the Northern the said Act wil apply, commencing when a claim Mariana Islands all the provisions of is made to entitlement to "immediate relative" status. A person who is certified by the

Government of the Northern Mariana Islands both to have been a lawful permanent
resident of the Northern Mariana Islands and to have relationship denoted herein on the effective date of

had the "immediate relative"

this Section wil be presumed to have been admitted to the United States for lawfl permanent residence as of that date without

the requirement of any of the usual procedures set fort in the said Act. For the purposes

of the requirements of judicial naturalization, the Northern Mariana Islands will be
deemed to constitute a State as defined in Subsection IOl(a) paragraph (36) of

the said

Act. The Courts of record of th Northern Mariana Islands and the District Court for the

Northern Mariana Islands will be included among the court specified in Subsection 3l0(a) of the said Act and will have jurisdiction to naturalize Rersons who become
eligible under this Section and who reside within their respective jurisdictions.
the United States under Article II of

(~~)

(d) With respect to persons who wil become citizens or nationals of this Covenant or under this Section the loss of nationality provisions of

the said Act wil apply.

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while Social Security has been issuing cards to CNM Contract Workers, it does so with the following admonishment stamped upon the cards, "Valid for Work Only with DHS

(formerly INS) Authorization". This stamp is on every single card issued to CNM Contract workers. The very face of the Social Security Card upholds this analysis that
working in the CNMI is not workig in the United States. See Evidence Requirements
20 C.F. R. 422.107. Section

422.107 states clearly the need for DHS work visas that will
the Social Security

allow for the issuance ofa Social Securty Card for an alien. None of

regulations acknowledge that the issuance of CNMI work visas satisfies the prerequisites

for obtaining a right to work and pay Social Security Tax in the United States. The
absence of regulations is the result of Congressional failure to amend the Federal

Insurance Contribution Act to include the CNMI and the application of the associated
provisions of the Social Security Act.

The failure of the drafer's action in Pub. L. 98-213 (the Amendment to 606(b) of the
Covenant), is that it created more confsion and did not provide definitive guidance to

the treatment of persons who are admitted in the CNM on work visas not issued by the
Deparent of Homeland Security, but by the Commonwealth Deparent of

Immigration. Moreover, while the amendment is reflective of Congressional intent with respect to the application of various social security taxes, it is not a specific amendment
that is requied for statutory constrction in matters of taxation. At best, ths section

could be termed "tax by implication", which not only violates the U.S. Constitution, but
also fails to provide the necessa statutory authority for the Internal Revenue Service to

()

administer the ta.

E. CONCLUSION
Based on the foregoing, the Covenant between the U.S. and the CNMI is clearly ambiguous with regard to the application of FICA to contract workers permtted to work

only in the CNM. This ambiguity coupled with CongressIonal failure to amend IRC Section 3121 to include the CNMI creates a reasonable basis for the refud requests for
their respective FICA contributions.
This matter wil be fuer addressed In other communcations with the Internal Revenue

Service and the Social Security Admistration. Please be advised that ths legal opinon

covers all the applicants for a refud claims from this offce as referenced in each Form
843 processed by ths offce.

i,:~)

~~
Sincerely,

Fallon Law Offices

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