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


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Case 1:08-cv-00269-CCM

,. Document 12-3
, ~,

Filed 07/29/2008

Page 1 of 22

Claimant Name LU

Social Security #
Client File No. (US CNMI) BQF FICA 00036

EXHIBIT 1: FORM 843 Claim for Refund and Request for Abatement

2003 i/

2005 1/

2004 V

2006 iL

EXIBIT 2: Copy of Passport
Copy of Social Securit Card
EXHIBIT 3: FORM 2848 Power of Attomey and Declaration of Representation

EXHIBI~2

Page --

Case 1:08-cv-00269-CCM

Document 12-3

Filed 07/29/2008

Page 2 of 22

Q (V03~
\
Form 843
(Rev. November 2005)
Departent of the Treasury

Claim foli Refund and Request for Abatement
ID See separate instctions.

OMS No. 1545-0024

Inteal Revenue Serce

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 additions to tax on line 4a. Do not use Form 843 if your claim is for$ An overpayment of income taes;

C! A refund for nontaxable use (or sales) of fuel; or

o An overpayment of excise axes reported on Form(s) 11-C, 720, 730, or 2290.
Name of claimant

~
.. o
II

??

(

1 Period. Prepare a separate Form 843 for each tax period

2

From 01/01/2003 to 12131/2003
3a Type of tax, penalty, or addition to tax:

br~nded or abated

l! Employment 0 Estate 0 Gift 0 Excise (see instructions)
o PenaltyIRC section ~

b Type of return filed (see instructions):

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

04720

o Other (specify

o Interest as a result of IRS errors or delays. o A penalt or additon to tax as a result of erroneous advice from the IRS.
b Dates of payment ~
5 Explanation and

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

additional claims. Explain why you believe this claim should be allowed, and show the computation of your

Attached opinion letter.

POSTMARK
o 4 1 6 '2007

RECEIVED
o 4 1 aZ007

:'. .'

193 IRS - PHllA, PA

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 fi.led by corporations must be signed by a corporate offcer autorized to sign, and the signature must be

accompanied by the offcer's title. ,_' "
belief, It is true, correct, and

Under penalties of perjury, i declare that I have examined this claim. including accompanying ShEWi'.ilig~rlents, and, to the bes of my knowledge and

complete. . (,Lt(l tttri" . . ...., ,.~.:

sighi~~.rii~: ~'appii~~~:~; by fg~;atI~s'';~ ;~. ;ig:: ~;Q~~~....... :.':. ;.:: ".':... ..:....:............ ...... ~tft..~... .'.~"..,. .'~'.:...
Signature
For PnvacyAct and Paperwork Reducton Act Notice, see separate instctons.
Cat. No. 101 BOR

L Gv ' ,.,,1.. ;)J /JJ ,'.'
Date
Form 84 (Rev.

11-2005)

EXHIBIT 2

Page d

~

Case 1:08-cv-00269-CCM

Document 12-3

Filed 07/29/2008

Page 3 of 22

~ trtfu iSa1. FederallD Number

SUBSTITUTE FORM APPROVED BY REVTAX
DEPARTMENT OF FINANCE

DIVISION OF REVENUE AND TAXTION COMMONWEALTH OF THE NORTHERN MARIANAS ISLANDS

a.3
VOID

b. Serial number

g. Lac. code

h. Days out of

i. Cil code

Copy

2

66-0536360
a2. CNMI Tax 10 no.

CNMI

66-0536360

D

00062

20

eN
i. Entry permit no.

To Be Filed With

Employees
Income Tax

j.sie
2300

c. Name, address and zip code of employer

.k.SOC 6432

190627
2a. Income tax withheld
(Chap 7)

. Return
2b. Local wage & salary

US-CNM Development Corporation
pi.m 68, Box 10003

1. VVages, tips, other compensation

tax withheld (Chap 2)

Saipan, MP 96950

14,542.43
3. Social secunty wages

395.14
901.63
6. Medicare tax withheld

634.86

4. Social secunty tax withheld

14,542.43
d. Employee social security number
e. Employee first name and initial
5. Medicare wages & tips

14,542.43
Last name
7. Social.security tips

210.87
8. Allocated tips
10. Dependent care benefits
12a. See instructions for box 12

GUI LU

f. Employee address and ZiP code

9. Advnce EIC payment

PMB 68. Box 10003 Saipan, MP 96950

It
'I"

11. Nonqualified plans
13. Sttutry
employe

roe

Form 2003
W-2CM

Wage and Tax

14a. Other

0 0 0
plan

Retirement

Thrid-pait
sick-pay

I $

roe

12b.

$ $
$

12c.

14b.

roe

12d.

Statement

coe

EXHIBIT 2

Page i. 3

Case 1:08-cv-00269-CCM

Document 12-3

Filed 07/29/2008

Page 4 of 22

f3Qr::"3e

Form 843
(Rev. November 2005)
Department of the T reu~J

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

OMS No. 1545-0024

Interal Revenue Serce

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

or additions to tax on line 4a. Do not use Form 843 if your claim is fore An overaymen of income taxes; 61 A refund for nontaxable use (or sales) of fuel; or
e An overpayment of excise taxes reported on Form(s) 11-C, 720, 730, or 2290.

L;0fCb~

ddri\S (nlJm r, street. '\ Vroom or suite no.)) '0

City or town, state, and zip code

JDD
Empl9Yer identification ni,mber (EIN)

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

- lt: ~ 53 (n '3 b -0
Daytime telephone number
(

1 Period. Prepare a separate Form 843 for each tax period

From 01/01/2004 to 12131/2004
3a Type of tax, penalty, or addition to tax:

2 ~mo nt 1- ,P"l:Se, Q' abated

l! Employment 0 Estate 0 Gift 0 Excise (see instructions)
b Type of return filed (see instructions):
o PenaltyIRC section ~

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

o 4720

o Other (specif)

o Interest as a result of IRS errors or delays. o A penalt 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
o 4 1 6 2-f07

RECEJVED
o 4 1 8 2007

'RS - PHILA.. PA

193

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 penalties of pe~ury, I declare that I have-examined this claIm, including accompanying ~c;ticji~,,.,lj~n ents, and, to the bes of my knowledge and ._

belief, It is true, corr, and complete. , .' Sifl titw\_~ _ .: ,; ~~ -- \.,f." -.
s~~~ .criti~:kp~~i~~ l~rq;~~tI~:~~;~.~~d.bY - ~ff~~~~.'.".' :-.;.: :-::. ~ ~-~-.'~ ~..'..: .-............. D;r~. ~ (. ~ 1.1. .:'~.:.:.
................. --........ ....-.... --.... _... --.. ..._-... .... -....... -- -_....-... --..... ....._--- -_.. ..-_.. ---- --....... ................ _............................ --..... .......

Signature
For Pnvacy Act and Paperork Reduction Act Notice, see separate instctions.
Cat. No.1 01 BOR

Date

Form 84 (Rev. 11-2005)

Page

EXHIBIT 2

Case 1:08-cv-00269-CCM
.

Document 12-3

Filed 07/29/2008

Page 5 of 22

SUBSTITUTE FORM APPROVED BY REVTAX DEPARTMENT OF FINANCE DIVISION OF REVENUE AND TAXTION COMMONWEALTH OF THE NORTHERN MARIAAS ISLANOS

a1. FederallD Number

66-0536360
a2. CNMI Tax 10 no.

a.3
VOID

b. Serial number

g. Lac. code

h. Days out of CNMI

i. Cit. code

CopyB
For

66-0536360

D

00032

20
j.SIC 2300
k. SOC

CN
i. Entry permit no.

c. Name, address and ZiP code of employer

US-CNMI Development Corporation

6432

190627
2a. Income lax withheld
(Chap 7)

PMB 68, Box 10003

Employees Record
2b. Local wage & salary

1. Wages, tips, other compensation

Saipan, MP 96950

lax withheld (Chap 2)

15,466.62
3. Social security wages

388.97
958.93
6. Medicare fax withheld

737.02

4. Social security tax withheld

15,466.62
d. Employee social security number
name and initial
Last name

5. Medicare wages & tips

7. Social security tips

8. Allocated tips
10. Dependent care benefits

f. Employee address and zip code

PMB 68. Box 10003 Saipan, MP 96950

9. Advance EIC payment

11. Nonqualified plans
13. Stutory
empll'iyqe

12a. See instrctons for box 12

code

Form 2004
W-2CM

Wage and Tax

14a. Other

0 0 0
plan

Retireent

Thrd.party

I

$ $
$

slck-pay

12b.
code

12c.
code

14b.

Statement

12d.
code

$

!

/

Page 5

EXHIBIT 2

Case 1:08-cv-00269-CCM

Document 12-3

Filed 07/29/2008

Page 6 of Be; 22

t-:~ 3l

Form 843
(Rev. November 2005)
Deparent of the Treaury
Intem Revenue Serce

Claim for /Refund and Requet for Abatement
~ See separate instctions.

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 addiions to tax on line 4a.

Do not use Form 843 if your claim is fore An overpayment of income taes;

e A refund for nontaable use (or sales) of fuel; or e An overpayment of excise taxes reported on Form(s) 11-C, 720, 730, or 2290.

i) J)O

Spouse's SSN or ITIN

1 Period. Prepare a separate Form 843 for each tax period

From 01/01/2005 to 12/31/2005
3a Type of tax, penalty, or addition to tax:

2 ~~~1!n~d_or a~ted

( )

l! Employment 0 Estate 0 Gift 0 Excise (see instructions)
b Type of return fied (see instructions):
o Penalty-IRC section ~

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

o 4720

o Oter (specif)

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
o 4 1 6 2007

RECEIVED
o 4 1 8 2007

193
IRS. PHILA., PA

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. __.

Un~er pi:alties of perjury, I declare that I have exained this claim, including accompanyln~_ ~Che(.kr'~-.:71Q~I~ents, and, to the bes of mx knowledge and . ."~. ~...

belief, It is true, correct. and complete. . . tl6N tit.f1~ " '.. :2 . C;.' /, '. ,..\'.
Signature (ritle, If applicable. Claims by corporations must be signed by an offcer.) Date
................ -_.. -... ..-.-........_.... -......... _.. -. -.. --- _.._---_.... -... ---_.. -- --_.. ----.............. -..... ...................... -.... -- ---- -- ---....... ......._.. --_..

......... X..... .... .Q... .~~.L... ..('.~.. .'.. .V\........... .............:..:: ::": ...~:........................ .... ..:......: _'" :-.... _....
...................................... .........

L' .. "-.. ~l'V /~y.'
Date
cat No. 10180R
Form 84 (Rev.

Signature
For Pnvacy Act and Paperwork Reduction Act Notice, see separate instuctons.

11-2005)

Page "

EXHIBIT 2

SUBSTIT UTE Document 12-3 Case 1:08-cv-00269-CCM FORM APPROVED BY REVTAX 07/29/2008 Filed
.

Page 7 of 22

DEPARTMENT OF FINANCE

DIVISION OF REVENUE AND TAXTION COMMONWEATH OF THE NORTHERN MARIANAS ISLADS

a1. Federal

10 Number

66-0536360
a2. CNMI Tax 10 no.

a.3
VOID

b. Serial number

g. Lac. code

h. Days out of

i. Cit. code

CNMI

CopyB
For Employees Record
2b. Local wage & salary

66-0536360

0

00018

20

CN
k.SOC 6432
i. Entr permit no.

c. Name, address and zip code of employer

US-CNM Development Corporation
PMB 68, Box 10003

j.SIC .2300

190627
2a. Income tax withheld
(Chap 7)

1. Wages, tips, other compensation

ta withheld (Chap 2)

Saipan, MP 96950

9,259.06
3. SDcial security wages

228.41

420.59

4. Social security ta withheld

9,259.06
d. Employee social security number

574.06
134.26
8. Allocated tips
10. Dependent care benefits
12a. See coe Iinstrctions for box 12 $

9,259.06
name and initial
Last name

7. Social security tips

f. Employee address and zip code

9. Advance EIC payment
11. Nonqualified plans
13. StaMory
employee

PMB 68. Box 10003 Saipan, MP 96950

Retirement
plan"

D

0

Thrillpa
sick-pay

D

coe

12b.

$

Form
2005
W-2CM

Wage and Tax

14a. Other

14b.

coe

12c.

$

Statement
DEPARTMENT OF FINANCE

12d.
code

$

,_,_. ,-.~______..~.~~"" ~..__._...__..., r-.-- __,_.....~~_.y-- ~.r-..-.,-..-...-.... -'- .

. DIVISION OF REVENUE AND TAXATION
COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS
a3. b. Seriainumber
VOID

g. Lc.code

h. Dys out of the i. Cit. code
CNMI

opyB
For Employee'S

G

o 134
. 'SERV1CES CQRPOR..AT!ON
.m A47 r.o.BOX 10001

2tl
,..~

eN

Req)rd.

j.SIC'.,.

1. Wages, tips, other

'i300 compensation 641

k. SOC i. Entiy pemiit no. 190627
2a.lncome ta withheld 7) (Chap.

2b. LocI'Nage &saliy ..
ta wlthheid(Chap. 2)

Si\iPAN , MF.' 96950

i~.50
3. Social security Wages

S:i.J1
4. Social security tax withheld

103.69

2,591.50
5. Medicare wages and tips
;.. d.Employee y number
Last

160.74
6. Medicare tax withheld..

2;91.50
name
7. Social security tips
B. Allocated tips

37.59

e. Employee'S first tiamend initial

GU1~flN Lt.l
J., EmployeelS ddress and zip code

9. Advance EIC payment

10. Dependent care benefis
12a. See Instructions for bod 2
,C

. i.. A41 P.., ,BuX 1t.ll Pl\IB .\~/. n ". ( l(

11. Nonqualfied pians

SAlP.~,'AP 96950

13..StatuOrY Retirement Third-part

Employee plan sick"pay

14a. Other

000
14b.

~ $
c o
d

12b.

$

1ac.
o d.

$.
$

(l W..2CM Statement
._~---------_.- .'._'-~- ..__._-

2005 Wage and Tax

12d. c
o d e

".. -----_._---_._-- _--------

EXHIBIT 2

Page I

Case 1:08-cv-00269-CCM

Document 12-3

Filed 07/29/2008

Page 8 of 22

O (~ :f ~

Form .843
(Rev. November 2005)
Department of the Treaury
Intemal Revenue Serce

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

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 additions to ax on line 4a.

Do not use Form 843 if your claim is fore An overpayment of income taxes; e 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

Spouse's SSN or ITN

1 Period. Prepare a separate Form 843 for each tax period

( )

From 01/01/2006 to 12/31/2006
3a Type of tax, penalty, or addition to tax:

2 AmjJnt to be refunded or abated $ fi 2. ~

l! 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 !K 941 0 943 0 945 0 990-PF
4a Reques for abatement or refund ot

o 4720

o Other (specif

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
o 4 1 6 Z007

RECEIVED
o 4 1 8 2007

IRS - PHILA., PA

193

Signature. If you are filing Form 843 to request a refund or abatement relating to a joint retum, 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 penalties of peiury, I declare that I have examined this claim, including accompanng lSCheii\~;ltj.sian\ents, and, to the bes of my kno"i1edge and. .' \:. .','

belief, it is tre, ~orr:ot and complete. (.. ;' . SiGi' M~~~ .l 7 j . -;t. .
Signature (lle. If applicale. Claims by corporations must be signed by an offcer.) Date
....................... -....... ............."'................... ...... .._-.. --- -- _...................... _.... ...-........ ...... --'" _. ---- --- .._- -- --.... ......... ----.. -..- -... ----

............ ..L.Ll......~...... ~~~~.. 0. _.. _... ..-.. ........... "~:":~-.:.::.:: ..:':~. ~...... _......._ _ _.. . _.__..a ~rt~J!...
Dae
cat No. 10180R
Form 84 (Rev.

Signature
For Privacy Act and Papeiwork Reduction Act Notice, see separate instrctons.

11-2005)

EXHIBIT 2 Page ?

iJnou

Case 1:08-cv-00269-CCM
COMMONWEALTH OF THE

Document 12-3
DEPARTMENT

OF FINANCE

Filed 07/29/2008

Page 9 of 22

DIVISION OF REVENUE AND tAXTION.

VOID CNMI

NORTHERN MARIANA ISLANDS

a3. b. Serial number g. Loc. code h. Days out of the 1. Ci. code

o
\:

Copy::
T9t~~\Flea with ~mR,gyee's

128

20

eN
L Entr pemiit rio.

j. sic

k.SOC

BQF SER\ilCESCORPRATION
UR:fHl

230'0

6432.
14,S.4:S~

19\fii7
i. iiometxWitthld
(Chap.

i:MB.A47 BOX 10001

1. Wages, tips, other cmpensatiol1

\..,

8~AN ,.MP 96950

7)

ib.s~larY
(f~4;7$

TaxRet~..n .

lnome.

held (qiap. 2)

\0
Last

3;($!~i
.;. 4: sodlseritY tax wi\:heil

3. Socjal s~urty wages

14.l~.lji.
5.

d. Emp

rity number

Medicare wages and:ps

6. MedjareJ:ax withheld

14~l.~.'..
e.Eniployee's.firshameand initial
'!.~'

'4
. ili ... iii:cated tips

name

7. Spiilse~ritYtpS

f.EmploYee'sddrs arid ZIP code .
::;~\,..

9. Advance EIC paynienl

19. Depenpntcare ~nelits

11. Nriquaifiedplis

.I~O

P:M.
SAD

BOX 10001
t . . 4 V. . ..

t"Za;See tnW:onstor bQxZ;.-

'i $
t~b:

MP..9~9.5fi

13. Sta~tJrY RetirementT\iri;hpart-

Employee plan sit.pay.

n...... ; 0.. ....

LJ ~. .c';
\., .;
i

A

. ."''- ',' ..".,.",

.ii',
",l....
"i'd.

i
i

i. . 5! W..2CM
E 2006
-I- .,'

Wage

nd

Tax

Statement.

,,~_--~",.--~ .

r
1 I .I

~L=~--~ ....~,
,

':.e

,~

p$. ...
._:,

.,f\'l:'... !l.~.''V''2,.:::.;:: '-(;f.v'l

,t "','c:...,."..,y..

..:.~(e;~o",;~~; ;!~~r~~,~r
;~,';'::"~3:.1;'''h.~; 'i~ ,';:.::~. . ,.

,t~:~:~~~~Jl~~~p.n;~~~~~
RECIPIENT'S amii'

.1

'.'LfJ~~:ii~

'-__,';v".__,~--,---".' '-~' .'" .--'..

...._v_..,__......v...-.-,,.....' ,-. .

'C' " '

.;' ,:.i;'., :,.:;. ~

EXHIBIT 2

Page-3

Case 1:08-cv-00269-CCM

Document 12-3

Filed 07/29/2008

Page 10 of 22

(Rev. Ma 20

De Re $ece T- Olt..,n, ~ Se 'ie ~ irCi() In oIlh Tre ~ ~ i: ...

~ff~ Dooft~~~~ ~ ~~re~~

P~~fl m Atto~jf

OMS No 154150
Fo iRS Use Only

Reve b~

_ Po'\wr of Aty
f. C/l/w /11/ /l

Na

Telepone

T~r~am;!an~a~~.
hereby appoints) the following ree(s) as ateys)--fac
Name and addre

~ iCn: Form 2.S W17f not be honre fo any purse oth

1 T~ nfcn 'Taxers) must sign and date this form o

~
9. .

th IR

Fuclon

Da I I

Emloye idencaoil

num

Dame telephone mnnbe 'Plan number (If applicale)

( )

2 Repe(s) mus sign and dai this form on pae 2, Pa U_
CN= No_ ____________~.!~._~___._____.

Alex Fallon Es.

Telephon No. ______._(~l~(J~_.:____._

PMB 50 P.O. Box 10000

Sapan MP 96

Check if new Adre 0 Telephoe No_ 0 Fa No_ 0
Ci No. .__________.____________________________

Fa No_ .________.J~~_..____.___.

Name and addres

Telephone No_ _________________________________

Chec if new Ades 0 Telephone No. 0 Fa No_ 0
Name and addres
C No_ _______________....__________________..___... :,'"
Telephone No. __._________________.____________
Fa No_ ________________________________________

Fa No_ __________________.______.______________

Ch if new Addr 0 Telephoe No_ 0 Fa No_ 0

to repre 1h~ taers) bee the Intal Revenue Sece for 1he followi ta ma

3 Tax ma
Typ'of Tax Oncoe. Employen Exci et.)

or eivl Penal (se the inons fo Une 3)

Tax Fonn Numbe

Yeas) or Peod(s)

(104.941.720, etc.)

(se fue inons for line 3)

RCA-Employt

941. 941~ 84

1std,3r quars 203
throu 2\06
-

4 Spciiim~ on ~~oi!' Ff (CAIfthe pow of atmeisforaspecc use not rerd
on CAF chec this box. Se the inctons fo Li 4. Spc us no ie on eM. _ . _ . _ _ _ _ . ~ 0

5 Ac auto The rere ar auori to ree an in confden biinaton an to perrm any

and al ac th I (w) ca peor wi re to the ta ma des on lin 3. fo exple. 1he auori to sign aI

ageeen, co: or ot doc The aut doe not ir the poer to rece red'chec (se rIDe 6

beow), 1he powe to subs anofer re 1he poer to s ce re or the poer to exec a reques fo disos of ta re or re inrmon to a tiird pa. Se fue li 5 incl fo more inrmon.

Excetions AA unened re pr canot si an docen for a ta an ma only rere 'taer h

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Form 284 (R. 3- Page 2
1 NOce aB oom~1l Orgial notice and oter wrn cornrm.iicaons .illi be set to y~u and a copy to the fist repese risec on rin 2.

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9 Enrolled Actrolled as an ac by 1h Join Bo for the Enen of Actes under 29 U_S.C. 1242 (!e

autori to practce befre 1he Se is Iit by seon 10.3(d) of Tre Deen Cicula No. 2.0). h U~ened Ret Pre-u auori to prctce before 1he Intal Ree Se Is limied by Tre Deent
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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

SAIPAN, MP 96950

E-MAIL: ALEXISFALLON(iUSA.NET

Internal Revenue Service 11601 Roosevelt Blvd Philadelphia, P A 19114

DpNl02
Att: J. McCandless

RE: FICA LEGAL OPINION 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

()

contributions (FICA) that were sent by my office earlier this week. Each application contains a Form 843 for each tax yea along with their identity and the relevant W-2's. In the Form 843 it references ths Legal Opinion. If you could note that in your receipt of
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 filed income tax retus with the CNM Division of Revenue and
Taxation as provided by IRe Section 935 and Covenant Section 601.

i

B. . FACTS

i ...',

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~)

All of the applicants are similarly 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 refud 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 eligibility "Form 1-9." None of the applicants have
successfully completed Form 1-9.

C. SUMMY OF POSITION
First and foremost, the geographic defmition 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 CNMI. 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 CNlV. This ambiguity creates
an impossibility of a self-executing provision of

the Covenant.

()

D.

LEGAL POSITION

1. Application of

Federal Insurance Contributions 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 purposes of

ths Chapter-

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

Columbia, the Commonwealth

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.

I:.)

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

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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
defintion 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 CNMJ 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. Tils omission is a significant distinction from the other Terrtories.

At ths time, it would be prudent to review the enabling legislation makg FICA
that specifically amended the Internal Revenue Code to applyFlCA to those Territories.
applicable to the U.S. Territories. In every instance of the application to the territories (Puerto Rico, Virgin Islands, Guam and American Samoa), there was a Congressional act

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. R~p.No. 2165, 86th Cong., 2d Sess. 18 (1960) (conference report)(Guam and American Samoa); and S. Rep.No. 1669, 81 st 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 CNlv matter, the U.S. Congress has not taken any legislative

action to amend the Internal Revenue Code, as Congress has don 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 ufthe 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. 104 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.

i ''j !
i \

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

I .~-,

P.L. 98-369; and in 1983, P.L. 98-118. Congress. had no fewer than. seventeen
opportties to specifically include the CN 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

CNMJ, 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 ful U.S.
Congress in Pub. L. No. 94-241, 90 stat. 263 (1976), codified at 48 U.S.c. 180L. This
agreement is commonly known as the Covenant To Establish a Commonwealth of the

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

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

ex. reI. Richards v. Guerrero, 4 F.3d 749 (9th CiI. 1993). Curently, authority of the Uiuted States towards the CNM arises solely from the Covenant. Hilbloom v. United States, 896 Fold 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 CNMI. With regards to taxation, immigration 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 the Trusteeship Agreement or upon such earlier date as may termnation of 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. L. No. 98-213, 9)

Under this 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.

the Trusteeship or (2) by an agreement prior to the termnation of (1) the termnation of the Trusteeship between the United States and the governent of the Northern Mariana Islands. The language of Section 606(b) is conspicuous with the use of the word "will".
This could be interpreted that Congress wished to create a self-executing provision for

the application of FICA to the CNMJ upon the occurence of either of these events. Under this interpretation, when the Truteeship over the CNMJ 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 ths 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 it did, IRC Section 312l(e) would include the CNM in the definition of to the CNM. If "state" and "United 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 3121 (e), because if they did so, they would have included the CNMI in

() ,_/

Section 3121(e).

..

The phrase "as they apply to Guam" creates a latent ambiguty. Guar1s 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 CNM contract werkers is at minimum 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 opinon 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 Security 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
t 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) "Lawfully admitted.. . for permanent residence" or (2) "permanently residing... under the color of law" (other wise known as PRUCOL). However, (any J suggestion that admission of guest

workers under the laws of the NM would meet the first test is incorrect "lawfl
admission for a temporar period, no matter how long, does not satisfy ths test.")
It is Congress' job to clarif the application of this 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
l(e)

ii. Without an explicit statutorv amendment to IRC Section 312

, 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
amended, satisfy in rem

jurisdiction. Quite simply, without a specifc amendment to IRC Section 3121(e), the IRS lacks in rem jurisdiction to enforce the collection of the tax
authorized to work in the United States. The IRS has exclusive administration authority

agaist CNMI Contract Workers who are not present in the United States and not

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 personam.

With regards to pqssible 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 CNMI.

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 alens. However, Section 1277 (b) of the TRA 1986, P.L. 99-5143, fuer

2 Yang Hi Kei v. American Intern'l Knitters Corp., 789 F. Supp 1074 (D.N.Mar.!. 1992).

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

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

(.J
i !

(a) In general. Except as otherwise provided 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 this Section) is in effect between the Ucited States
and such possession." (Emphasis added.)

TRA 1986 Sections 1271, 1272, and 1277 are encompassed in TRA 19&6 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 app.ear 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 with, or
effectively connected with the conduct of a trade or business withi, the possession, or

makes that grant of authority applicable to Guam, American Samoa, or the CNlv
and such possession.s

(2) received or accrued by a resident of the possession.4 TRA 1986 Section 1271(b)

provisional on the existence of an implementing agreement between the United States

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

o

amendments conditional on the existence of the requied implementation agreement

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 generaly 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 Conseq.ently, as long as an implementing agreement is not signed

between the United States and the CNlv, 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 931 note. 4 TRA 1986 sec. 1271(a).

1.)-i (

5 Specking v. Comm'r, 117 T. C. 95 (2001). 61d. '.

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), JuneS, 1986.

I."
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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 permissible construction of the statute." ld. 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." Id., 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

C-) ,-

Internal Revenue Code sections, means the IRS does not have the requisite explicit jurisdictional authority to enforce the PICA tax as to the CNM Contract Workers who are not admitted in the United States and are not authorized to work in the United States.

I. The Tax Status of CNM Contract Workers
As stated previously, Covenant Section 606(b) contains ambiguous language that states that excise taxes and self-employmeiit taxes will become applicable to the CN:M in the same maner as Guam. This language does not address the significant difference between the CNM and Guam. As stated previously, the CNM Governent controls its
own irrgration. In fact, Social Security regulations prohibit the issuance of Social

Security Cards for work without the satisfaction of Deparment of Homeland Security (replacing Immigration Naturalization Service) Visa permttng an individual to work. 20 CFR Section 422. l04. Section 422.104 states, that an alien is eligible for a Social Security number where "An alien lawfly admitted to the Uruted States for permanent residence or under other authority of law permtting 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 CFR 422.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 alien provides a Form I-

94. "... (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.l05(a).

Since the CNM controls its own immgration policies, CNM contract workers are not admitted into the United States for work puroses. Covenant Section 503 states that the 8
immigration and natualization laws are inapplicable to the Nortern Mariana Islands.

From the plain meanng of Covenant 503, the only exceptions from the inapplicabilty 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.Mar.I. 1992), the U.S. District Cour considered the issue of the imigration power of the CNML "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 Affairs and the Commonwealth of the Nortern Marana Islands, signed September, 2003; see also the Immigration and Nationality Act, 8 U.S.C. 1101(a)(38)). So Section lOl(a)(38) of
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 LJnited States citizen or non-citizen national parents permanently residing in the Northern 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 Mariana Islands all the provisions of the said Act wil apply, commencing when a claim 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 been admitted to the United States for lawfl permanent

had the "immediate relative"

this Section wil be presumed to have that date without residence as of

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 101(a) paragraph (36) of the said
Act. The Courts of record of the Northern Mariana Islands and the District Court for the Northern Mariana Islands will be included among. the court specified in Subsection 310(a) of the said Act and wil have jurisdiction to naturalize persons who become
eligible under this Section and who reside within their respective jurisdictions.

(.)

this Covenant or under this Section the loss of

(d) With respect to persons who wil become citizens or nationals of the United States under Article II of the said Act wil apply. nationality provisions of

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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 DRS

(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 CNM 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 allow for the issuance of a Social Securty Card for an alien. None of the Social Security

regulations acknowledge that the issuance of CNMJ 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 CNM 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 CNMJ is clearly ambiguous with regard to the application of FICA to contract workers permtted to work

-

only in the CNMI. 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 will 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 this offce.

i,:~)

~~
Sincerely,

Fallon Law Offices

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