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Wheeljack
02-11-2012, 03:41 PM
Why do I state this?

Because the people of this nation have been conditioned to believe that employment (working for someone else) is the equivalent of providing a service. It is not.

This is where Ron Paul can win over the working people of this country, by showing that businesses have been giving away a portion of their paychecks to the government for the last 70 years.

This knowledge will have a dramatic impact on the Accounting industry, as well as, the Retirement Financial industry.


This from a Human Resources site on the internet:

Employment Status – Employed or Self-employed?

What is the difference between a “contract of service” and a “contract for services”?

These are common-law terms used to distinguish employees from persons who are self-employed.

The term:
-“contract of service” relates to a person in employment (as in the case of a domestic servant who is described as being “in service”.)
-“contract for services” relates to a person who is self-employed and who provides services to clients.

The term “contract of service” is referred to in employment and tax legislation. A person who works under a contract of service is:
-an “employee” for payroll purposes, and
-an “employee” for employment rights purposes, and
-a “worker” for other employment rights purposes.

In contrast, a person who works under a contract for services, i.e. a self-employed person, is neither an employee nor a worker. There is no requirement for an employer to put such a person on the payroll; rather payment may be made on invoice. There is no entitlement to any of the employment rights available to employees and workers.

How, then, are these terms to be distinguished? Traditionally, there are two key tests to identify an employee, i.e. a person who works under a “contract of service”.
These include:
-“mutuality of obligation”, i.e. both parties to the contract have obligations to each other, the employee to perform the work as directed, the employer to pay for the work performed.
-the “degree of control” exercised by the employer over the work performed by the employee.

Other factors, however, have been taken into consideration when courts and tribunals have endeavored to distinguish between employment and self-employment.
These include:
-whether the individual must perform the work personally, or is able to send a qualified substitute.
-the nature of the pay and benefits that are provided by the employer.
-whether or not the individual has a business structure.
-who decides on how the contract should be performed.
-the extent of the financial risk borne by the individual.
-who provides the materials and equipment necessary for the work.
The duration of the contract is also important, the longer the engagement, the more likely it is that the relationship is employment.

Another simple way of distinguishing employment from self-employment is to consider what it is that the employer is “buying”:
-if the employer is “buying” an employee, there will be a lengthy recruitment process in order to find just the right person.
-if the employer is “buying” a service, the person who will provide the service is likely to be selected by recommendation or simply by choosing an ad in the Yellow Pages.


The Internal Revenue Service has a form which is used for this purpose.
(Form SS-8, Determination of Worker Status)
This form is used to determine who is liable for the employer side of the Social Security and Medicare taxes, if either side questions who is liable.


If we go to the Internal Revenue Code (Title 26) we will find the following definitions, laid out in the Social Security Act of 1935.

TITLE 26 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26.html) > Subtitle C (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C.html) > CHAPTER 21 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C_20_21.html) > Subchapter C (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C_20_21_30_C.html) > § 3121
§ 3121. Definitions
(a) Wages
For purposes of this chapter, the term “wages” means all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash;

(b) Employment
For purposes of this chapter, the term “employment” means any service, of whatever nature, performed


Here we see that employment is defined as service, of whatever nature, thus either performing service (employment) or performing a service (self-employment) is liable to this taxation.




Now, we come to the crux of the matter.


In 1942, Congress passed the Current Tax Payment Act to collect federal income tax at source on wages. Let’s go to the Internal Revenue Code (Title 26) to find this definition from that Act.



TITLE 26 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26.html) > Subtitle C (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C.html) > CHAPTER 24 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C_20_24.html) > § 3401
§ 3401. Definitions
(a) Wages
For purposes of this chapter, the term “wages” means all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remuneration (including benefits) paid in any medium other than cash;


Here we see that wages is not defined by employment, but by services.


As discussed earlier, employment (labor) is not a service. An employee is “in service” to his employer, he does not “provide a service or services” to his employer. An employee may perform services for the employer, but it should be clearly understood that these services are those provided by the employer to his customers.



All remuneration paid expressly for employment, such as hourly wages do not fall under the scope of this definition of wages.

On the other hand, when an employer provides a service or services to his clients, it is an employee who will perform this service. Now if the employee is paid compensation based on the performance of this service or services, usually in the form of a commission, a fee, and/or a tip, then the employee has received remuneration for services and this compensation is fully within the scope of this definition of wages.

Also an employee may receive fringe benefits, such as paid insurance, access to recreational facilities, sick leave, paid holidays and vacation, profit-sharing plans, year-end bonuses, etc. All these are funded through the profits of the employer and therefore fall under remuneration for services and are fully within the scope of this definition of wages.

However, holidays, vacation, sick leave and year-end bonuses may be paid in the form of an hourly wage. This does not make all hourly wages subject to, nor does it relieve fringe benefits from, the scope of this definition of wages.

Federal Income Tax

Section 61 of the Internal Revenue Code, also supports what I have stated.


TITLE 26 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26.html) > Subtitle A (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A.html) > CHAPTER 1 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A_20_1.html) > Subchapter B (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A_20_1_30_B.html) > PART I (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A_20_1_30_B_40_I.html) > § 61
§ 61. Gross income defined
(a) General definition
Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
Compensation for services, including fees, commissions, fringe benefits, and similar items;




I welcome your comments

Wheeljack
02-19-2012, 02:46 AM
Ron Paul says the U.S. is slipping into fascism. He is correct, but he is 70 years behind the fact.

The U.S. slipped into fascism in 1942 when the Congress gave the reporting of the peoples wages into the hands of business and the people of this country perfected this fiction by allowing themselves to become ignorant of their own laws.

When the employer issues a W-2 to the employee, the employer also reports to the IRS the same info by the transmittal of a W-3.

So, why does the IRS require the employee to submit a copy of the W-2?

It is the legal verification by the employee that what the employer reported is true and correct. When the employer reports a falsehood, through his ignorance in the language of the Law, and the employee validates that falsehood, again through their ignorance of the Law, it becomes perfected as the truth.

Ron Paul wants to repeal the 16th Amendment.

This is totally unnecessary, as the Supreme Court ruled that the 16th Amendment did not grant Congress any new power, thus its repeal would not deny Congress this power.

The 16th Amendment established a protection for the people by defining what income the Congress could tax. Congress can not tax all income. It was limited by the four words following income..., from whatever source derived,.

These words protect capital, for it is the source, when it is returned from its investment in the form of income.


Ron Paul does not need to convince anybody to repeal any law to obtain a 0% income tax on working wages. The Law is already in place, all that is needed is to show the people what this law actually does.:)

Danke
02-19-2012, 09:59 AM
Ron Paul does not need to convince anybody to repeal any law to obtain a 0% income tax on working wages. The Law is already in place, all that is needed is to show the people what this law actually does.:)

This is true.

rockerrockstar
02-22-2012, 12:41 PM
If that was true imagine all the back taxes the government would owe the people.

Wheeljack
02-25-2012, 10:26 PM
It is true. And Yes, the government does owe the people refunds, but the people have to claim them, which requires the people to be educated.

There have been people who have raised this issue over the years, but when you read the court rulings you will see that they did not know how to defend their position, thus they lost.

I would very much like to show the Ron Paul campaign this simple truth, which could be used to open the eyes of the working people and their employers.

The money in the peoples pockets would make the payroll tax reduction look silly and unnecessary.:D

Crickett
02-25-2012, 10:32 PM
Wording aside, Obamacare makes a provision for 1099s to be given to just about anyone who sells anything to anyone. At losthorizons.com this tax thing has been explained for years, and people did not even wake up enough to see this new thing in that new legislation.

Crickett
02-25-2012, 10:33 PM
yes Wheel..even Peter Schiff's father is in jail over it..

Danke
02-25-2012, 10:42 PM
At losthorizons.com this tax thing has been explained for years, and people did not even wake up enough to see this new thing in that new legislation.

:confused:

Wheeljack
02-26-2012, 12:16 AM
Crickett,

I have read Hendrickson's book. He does not defend himself with actual case law rulings. He attacks the position of the government, which is supported by their case law, thus he loses.

W-2's are covered by what I have said. 1099's are not. As you have said, 1099's are given for services, not for employment.

This is the difference;
Employment is an investment in a business the value of which is determined by the employer, not the employee.
Services are things purchased the value of which is determined by the provider, not the customer.

The income tax is an indirect tax, and a hidden tax, thus it can be passed on to the customer.

Why did the Congress go to the income tax? And, why is it graduated?

Because the excise taxes they were tacking onto goods were killing the working class. The working people were paying a much higher percentage of their wages, in taxes, as compared to the richer people. The excise taxes were also not hidden thus the consumer knew the tax.

Congress wanted to get the richer middle and upper classes to contribute equally on the percentage of their income.

With the income tax, Congress could eliminate almost all the excise taxes.

So what happened?

The businesses had to figure what they would pay in income tax up front and incorporate it into the pricing of their goods and services.

The working class is still paying the tax, but it was hidden and still passes through the businesses. Thus the lower rates in the scale usually cover the increase paid by the consumers, while the upper rates actually get into taxing the profits of the businesses.

With the withholding of income tax at source in 1942, and the subsequent failure of the people to know the law, the working class is now being taxed twice on their wages.

So, all this malarkey we hear on TV about 49% of the people not having any skin in the game is pure BS.

Enforcer
02-26-2012, 05:31 AM
The 16th Amendment was never legally ratified. I don't need the United States Supreme Court to tell me if / when the rules are being broken.

http://www.freedom-school.com/16th.html

As a matter of fact, the de facto (illegal) courts have tried to suppress the truth from being told

Additionally, the income tax is voluntary. How can you compel anyone to volunteer?

We've known these arguments for years. It does little to cry about it when the only avenue of redress left is to exit the system and refuse to have our earnings extorted by an illegal government. Is that dangerous? Let me quote someone who was active in REALLY fighting the system... an ex - slave:

"If there is no struggle there is no progress. Those who profess to favor freedom and yet deprecate agitation are men who want crops without plowing up the ground; they want rain without thunder and lightning. They want the ocean without the awful roar of its many waters.

This struggle may be a moral one, or it may be a physical one, and it may be both moral and physical, but it must be a struggle. Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress. " (Frederic Douglass)

http://www.blackpast.org/?q=1857-frederick-douglass-if-there-no-struggle-there-no-progress

Wheeljack
02-26-2012, 11:18 AM
Enforcer:

As I pointed out before, the 16th Amendment did not give the Congress any new power, therefore if it was properly ratified or not, it is of no consequence whatsoever to the implementation of the income tax.

Also, as stated before, the 16th Amendment was intended as a protection to the people. To clarify what exactly the tax applied to.

The income tax is voluntary in the sense that when you pursue the creation of profits, you have volunteered into the system.

When the income tax was created, the working class simply received a paycheck for the time spent working and possibly a year-end bonus.

If you worked in sales and were paid by commission, then your pay was controlled by how well you created profits for the company.

With the unionization of the workforce, the workers began to reach into the profits of the companies for benefits, such as vacation and holiday pay, sick pay, profit sharing and pension plans.

It's only these things that fall under the auspices of the income tax.

Enforcer
02-26-2012, 11:49 AM
Enforcer:

As I pointed out before, the 16th Amendment did not give the Congress any new power, therefore if it was properly ratified or not, it is of no consequence whatsoever to the implementation of the income tax.

Also, as stated before, the 16th Amendment was intended as a protection to the people. To clarify what exactly the tax applied to.

The income tax is voluntary in the sense that when you pursue the creation of profits, you have volunteered into the system.

When the income tax was created, the working class simply received a paycheck for the time spent working and possibly a year-end bonus.

If you worked in sales and were paid by commission, then your pay was controlled by how well you created profits for the company.

With the unionization of the workforce, the workers began to reach into the profits of the companies for benefits, such as vacation and holiday pay, sick pay, profit sharing and pension plans.

It's only these things that fall under the auspices of the income tax.

As I understand the IRS Tax Code, the income tax taxes profits. Profits are:

"The amount of money received for goods and services minus the amount spent on same; excess revenue..."

Would that definition be correct? If I work for wages and derive NO benefits from a company, then I would have no taxable income since there is no profit on labor. My time is a straight across the board trade for a set amount of money. Wage earners make no investment and realize no "profit."

Secondly, if one does not volunteer to pay the income tax (i.e. having a Socialist Surveillance Number ...ooops "Social Security Number") then you would be hard pressed to convince me that an individual working for wages and having no company benefits is making any profit; therefore, not subject to any such income tax under a constitutional Republic.

Wheeljack
02-26-2012, 01:06 PM
As I understand the IRS Tax Code, the income tax taxes profits. Profits are:

"The amount of money received for goods and services minus the amount spent on same; excess revenue..."

Would that definition be correct? If I work for wages and derive NO benefits from a company, then I would have no taxable income since there is no profit on labor. My time is a straight across the board trade for a set amount of money. Wage earners make no investment and realize no "profit."

Secondly, if one does not volunteer to pay the income tax (i.e. having a Socialist Surveillance Number ...ooops "Social Security Number") then you would be hard pressed to convince me that an individual working for wages and having no company benefits is making any profit; therefore, not subject to any such income tax under a constitutional Republic.

Enforcer:

Your definition is correct. The first two sentences are correct. The third sentence is not.

Wage earners are making an investment. They invest their time, which the employer has established a value for, in the wage. The wage is the return of the investment (capital). If there is no benefits paid, then there is no return on the investment (profit).

On your second point, when you accept an offer of employment, from an employer who has accepted the social security plan, you have volunteered to enter the system.

Regardless of this, I am not trying to convince you that working for wages without benefits is making profits.

Enforcer
02-27-2012, 03:42 PM
Enforcer:

Your definition is correct. The first two sentences are correct. The third sentence is not.

Wage earners are making an investment. They invest their time, which the employer has established a value for, in the wage. The wage is the return of the investment (capital). If there is no benefits paid, then there is no return on the investment (profit).

On your second point, when you accept an offer of employment, from an employer who has accepted the social security plan, you have volunteered to enter the system.

Regardless of this, I am not trying to convince you that working for wages without benefits is making profits.

So, what is at dispute here is whether or not wages equal income? How do you respond to this?

* Oliver v. Halstead 86 S.E. Rep 2nd 85e9
"There is a clear distinction between `profit' and `wages', or a compensation for labor. Compensation for labor (wages) cannot be regarded as profit within the meaning of the law. The word `profit', as ordinarily used, means the gain made upon any business or investment -- a different thing altogether from the mere compensation for labor."

* Evens v Gore, 253 U.S. 245. US Supreme court, never overruled
"After further consideration, we adhere to that view and accordingly hold that the Sixteenth Amendment does not authorize or support the tax in question. " (A tax on salary)

* Edwards v. Keith, 231 F 110,113
"The phraseology of form 1040 is somewhat obscure .... But it matters little what it does mean; the statute and the statute alone determines what is income to be taxed. It taxes only income "derived" from many different sources; one does not "derive income" by rendering services and charging for them... IRS cannot enlarge the scope of the statute."

* Brushaber v Union Pacific R/R 240 U.S. I, 17; 36 S.Ct. 236, 241.
"Income has been taken to mean the same thing as used in the Corporation Excise Tax of 1909 (36 Stat. 112). The worker does not receive a profit or gain from his/her labors-merely an equal exchange of funds for services"

* Central Illinois Publishing Service v. U.S., 435 U.S. 31
"Decided cases have made the distinction between wages and income and have refused to equate the two."

* Butchers' Union Co. v. Crescent City Co., 111 U.S. 746. 1883
"Among these unalienable rights, as proclaimed in the Declaration of Independence is the right of men to pursue their happiness, by which is meant, the right any lawful business or vocation, in any manner not inconsistent with the equal rights of others, which may increase their prosperity or develop their faculties, so as to give them their highest enjoyment...It has been well said that, THE PROPERTY WHICH EVERY MAN HAS IS HIS OWN LABOR, AS IT IS THE ORIGINAL FOUNDATION OF ALL OTHER PROPERTY SO IT IS THE MOST SACRED AND INVIOLABLE..."

Okay, that's my research so far. I welcome another explanation.

Wheeljack
02-29-2012, 08:55 PM
When you make the blanket statement that wages are not income you will run afoul the law.

You must understand what the law is calling "wages".

What workers receive as compensation for labor is commonly referred to as wages. Compensation for labor is the pay for the actual hours worked.

What the law calls "wages" is defined as compensation for services.
Compensation for services includes commissions, fees, and fringe benefits. (Section 61 of the Internal Revenue Code)

Go back to my original post and reread it.:cool:

Wheeljack
03-04-2012, 02:21 PM
Working people did not pay an income tax on their wages or salaries until 1943 when the Current Tax Payment Act was passed.

Why did they suddenly start? We are led to believe that the Victory Tax Act of 1942 brought the income levels down to $624, which encompassed many workers. Then with the passage of the Current Tax Payment Act the determination of wages, and the withholding of taxes on them, was given to the employers. Who then, because they had been withholding for Social Security for 5 yrs., promptly did not comprehend the difference between employment and services.

The Current Tax Payment Act was championed by Randolph E. Paul, General Counsel of the Treasury.

In an address to the Philadelphia Bar Association, on June 14,1943, Mr. Paul stated the following; (Copied from the text of his speech)

The duty to withhold an amount for income and victory taxes is net imposed on all persons making payments of compensation for personal services rendered. First, there must exist, as in the Social Security tax, the employer-employee relationship, as distinguished from the relationship of independent contractors. Then even where this relationship exists, wage payments in certain enumerated types of occupations, are excepted from the withholding requirement. The three main peacetime groups to which this exception applies are (1) agricultural laborers, (2) domestic servants in private homes, college clubs or fraternities, and (3) casual laborers not engaged in the course of the employer's trade or business. In addition, the service pay of members of the military or naval forces is excluded from the withholding provisions. Services performed for a foreign government or instrumentality and services performed while outside of the United States, where a major part of the services for an employer during the calendar year is to be performed outside of the continental limits, are also excluded. In this regard, however, the law specifically states that services performed on or in connection with an American vessel, or as an employee of the War Shipping Administration, are not services performed outside the United States. A further exception, new to withholding, is made in the case of remuneration paid for Services performed by a minister of the gospel.

From the letters we have received at the Treasury while this Act was under consideration, I know that many persons, particularly in the lower wage levels, have been greatly alarmed at the prospect of having 20 percent of their salaries withheld from them. Much of this alarm arises from an inaccurate conception of the withholding provisions. For the most part these persons fail to recognize that withholding does not result in the imposition of any new tax but is merely a convenient method of paying the tax liability which existing law imposes.


Since it was an R. E. Paul that brought the withholding tax to life. I believe that it should only be fitting that another R. E. Paul show the American people what the extent of that life was to really be.


What say you.:cool:

Wheeljack
04-05-2012, 10:40 AM
One month and no comments. wow!!

heavenlyboy34
04-05-2012, 11:23 AM
As I understand the IRS Tax Code, the income tax taxes profits. Profits are:

"The amount of money received for goods and services minus the amount spent on same; excess revenue..."

Would that definition be correct? If I work for wages and derive NO benefits from a company, then I would have no taxable income since there is no profit on labor. My time is a straight across the board trade for a set amount of money. Wage earners make no investment and realize no "profit."

Secondly, if one does not volunteer to pay the income tax (i.e. having a Socialist Surveillance Number ...ooops "Social Security Number") then you would be hard pressed to convince me that an individual working for wages and having no company benefits is making any profit; therefore, not subject to any such income tax under a constitutional Republic.
Didn't finish the whole thread, but I agree with this^^ Working part time with no benefits, I paid 0 income taxes.

Wheeljack
04-09-2012, 05:28 PM
Didn't finish the whole thread, but I agree with this^^ Working part time with no benefits, I paid 0 income taxes.


Is that because you didn't earn more than your deductions? You got back what your employer took out.

Or because your employer did not take out withholding?


I suspect it is the former.

What I am attempting to educate you on is that it should be the latter.

Danke
04-09-2012, 07:22 PM
Is that because you didn't earn more than your deductions? You got back what your employer took out.

Or because your employer did not take out withholding?


I suspect it is the former.

What I am attempting to educate you on is that it should be the latter.

Good luck. I have shown the law since 2007 on this forum. You can lead a horse, but you can't make them drink.

puppetmaster
04-09-2012, 07:55 PM
I have personalty seen the courts disregard these statements. I have also seen jurys back the irs when these issues are brought forth.

Danke
04-09-2012, 08:01 PM
I have personalty seen the courts disregard these statements. I have also seen jurys back the irs when these issues are brought forth.

And that is always the crux of the matter. If you believe there is no justice, then why bother.

Glad our forefathers did not hold this opinion.

mczerone
04-09-2012, 08:09 PM
Your interpretation of their laws don't matter to them.

Danke
04-09-2012, 08:12 PM
Your interpretation of their laws don't matter to them.

Except I use Supreme Court rulings..."their laws?"

Feelgood
04-09-2012, 08:22 PM
Irwin Schiff

Enforcer
04-09-2012, 09:17 PM
I inadvertently left this thread because nobody else was commenting, so I thought it was dead.

It is true that this is one of the most important issues, yet most people are off to some interesting eye candy on the board because the issue of taxation really taxes your intelligence. Unfortunately, too many people are drinking fluoridated water, smoking too much wacky weed, and graduated from a government school.

Danke
04-09-2012, 09:19 PM
I inadvertently left this thread because nobody else was commenting, so I thought it was dead.

It is true that this is one of the most important issues, yet most people are off to some interesting eye candy on the board because the issue of taxation really taxes your intelligence. Unfortunately, too many people are drinking fluoridated water, smoking too much wacky weed, and graduated from a government school.

http://www.ronpaulforums.com/showthread.php?360238-There-is-no-federal-or-state-income-tax-on-working-wages-by-law-in-this-country.&p=4345549&viewfull=1#post4345549

heavenlyboy34
04-09-2012, 09:28 PM
Is that because you didn't earn more than your deductions? You got back what your employer took out.

Or because your employer did not take out withholding?


I suspect it is the former.

What I am attempting to educate you on is that it should be the latter.
I didn't get a detailed paystub or anything, but it was the former IIRC.

heavenlyboy34
04-09-2012, 09:29 PM
Except I use Supreme Court rulings..."their laws?"
Didn't Irwin Schiff make all the same arguments you're making? (haven't thought about the Schiff case in years)

Danke
04-09-2012, 09:31 PM
http://www.healthonlinee.com/img/images/1.pngThe law?

Which one, specifically?

Danke
04-09-2012, 09:32 PM
Didn't Irwin Schiff make all the same arguments you're making? (haven't thought about the Schiff case in years)


no.

Wheeljack
04-10-2012, 07:02 PM
Didn't Irwin Schiff make all the same arguments you're making? (haven't thought about the Schiff case in years)

The arguments may be the same, the defense of these arguments is totally different.

Schiff and all the others tried to defend their arguments with their own interpretations of the law.

What I am attempting to show you is that the use of the word "service" has been corrupted and that by using the governments positions I can defend my argument.

WilliamC
04-10-2012, 07:24 PM
Show us by doing it yourself, then I'll listen to you.

Danke
04-10-2012, 07:28 PM
Show us by doing it yourself, then I'll listen to you.

I've been "doing it" for a long time. And so have many others on this forum, but I have seen they don't really post anymore, as I wrt this subject.

WilliamC
04-10-2012, 07:36 PM
I've been "doing it" for a long time. And so have many others on this forum, but I have seen they don't really post anymore, as I wrt this subject.

I suppose if you're self employed and don't pay income tax that's possible, but my only real jobs have been through employers who withold for me.

I do know people get killed over not paying taxes, so I'm wary of actually encouraging folks to do this.

But of course anything one can do with cash and a handshake is fine with me ;)

Wheeljack
04-10-2012, 08:06 PM
I suppose if you're self employed and don't pay income tax that's possible, but my only real jobs have been through employers who withold for me.

I do know people get killed over not paying taxes, so I'm wary of actually encouraging folks to do this.

But of course anything one can do with cash and a handshake is fine with me ;)


WilliamC,

If I was self-employed, then I would owe income tax. But I, like you, am a laborer.

I refute my employer's W-2 and only claim as taxable income for the federal, state and local income taxes the remuneration I received for vacation and holiday pay, and a yearly bonus.

Yes, freedom is a very scary thing, but once you go there, you never want to go back.

I have done this for the last 5 years.

Danke
04-10-2012, 08:56 PM
I suppose if you're self employed and don't pay income tax that's possible, but my only real jobs have been through employers who withold for me.

I do know people get killed over not paying taxes, so I'm wary of actually encouraging folks to do this.

But of course anything one can do with cash and a handshake is fine with me ;)

No, I am not self employed.


I work in the private sector.

Just increase your exemptions to not pay income tax outside of FICA.

Wheeljack
04-11-2012, 08:04 PM
No, I am not self employed.


I work in the private sector.

Just increase your exemptions to not pay income tax outside of FICA.


Danke,

Just increasing your exemptions only affects what your employer takes out for income tax. It does not settle the record for what your employer claims he paid you as taxable wages on your W-2 to the IRS or the state.

Weston White
04-12-2012, 12:56 AM
Wow, Wheeljack what a great thread. I must say that you are probably the first person I have come across that I agree with on all points -that is so far as federal income taxation is concerned.

To quickly add (at least to my current understanding), Mr. Schiff operated a business and moreover many of his charges involved off-shoring several million Dollars in profits; thus, he had as fact been engaging in a taxable activity and subsequently had committed serious crimes in attempting to conceal his realized wealth from the knowledge of the government.

I myself file a complete tax refund (a joint claim of refund) with the IRS (from TY-2007 to present). The IRS has in turn to date, and I add unlawfully, has or had:

(1) imposed over $30,000 in individual, ‘frivolous’ penalties against both me and my wife;
(2) issued a ‘lock-in letter’ at “single and zero” on me as of 2008;
(3) issued separate public liens on both me and my wife;
(4) issued separate levies on both me and my wife;
(5) began garnishing my pay since 2011;
(6) claimed that both me and my wife have yet to file any tax returns since TY-2007;
(7) denied me and my wife all administrative due process, while flagging our IRS accounts into an entirely automated “ACS-FRP” based out of both Ogden, UT and Fresno, CA;
(8) failed to reduce our already withheld amounts from whatever penalties imposed, and;
(9) has SFR both me and my wife, but only for TY-2008, and issued related penalty interested;
* This is just a general outline, there are many, many additional issues pertaining to both me and my wife’s classification within the IRS’ internal procedures and documents, assessments, certifications, etc.

Last I heard, the IRS had alleged in court testimony that over 10,000 individuals file for what they have (unlawfully) termed ‘frivolous refund filings’. We need to dramatically increase that sum to at least a very high six-figured number.

Personally, I think this is what we all need to begin doing; we should all be calling out these conversionists for what they really are, by standing up to those tyrannous without any fear whatsoever, regardless of whatever type of sorted hullabaloo-scaremongering they devise or retort upon.


The basis of my own research as to taxation is available for consumption below:

The Crux of Federal ‘Taxation’ (CFT) [PDF] (http://www.iwarrior.defendindependence.us/download/file.php?id=91)
Points in Further Support of the CFT [PDF] (http://www.iwarrior.defendindependence.us/download/file.php?id=94)

Weston White
04-12-2012, 01:28 AM
Also, regarding the earlier SCOTUS quotes:

In: Evans v. Gore, 253 U.S. 245, 263 (1920)
http://supreme.justia.com/cases/federal/us/253/245/case.html#263

I do not think that quote is really relevant to anything relating to the populace. That case was about certain constitutional protections afforded judges, which at the time was being related to the unconstitutional taxing of their earnings; also if I recall that case has since been overturned, as judges are now taxed on their earnings.


In: Brushaber v. Union Pacific R. Co., 240 U.S. 1 (1916)
http://supreme.justia.com/cases/federal/us/240/1/case.html

None of this quote appears to be from that case: “Income has been taken to mean the same thing as used in the Corporation Excise Tax of 1909 (36 Stat. 112). The worker does not receive a profit or gain from his/her labors-merely an equal exchange of funds for services”

Danke
04-12-2012, 04:42 AM
Danke,

Just increasing your exemptions only affects what your employer takes out for income tax. It does not settle the record for what your employer claims he paid you as taxable wages on your W-2 to the IRS or the state.

Correct.

Weston White
04-12-2012, 07:46 PM
Also do not forget that to do so is a crime under 26 U.S.C. Sec. 7205(a) Withholding on wages

“Any individual required to supply information to his employer under section 3402 who willfully supplies false or fraudulent information, or who willfully fails to supply information thereunder which would require an increase in the tax to be withheld under section 3402, shall, in addition to any other penalty provided by law, upon conviction thereof, be fined not more than $1,000, or imprisoned not more than 1 year, or both.”
Source: http://www.law.cornell.edu/uscode/text/26/7205?quicktabs_8=1#quicktabs-8

Wheeljack
04-12-2012, 09:12 PM
Also, regarding the earlier SCOTUS quotes:

In: Evans v. Gore, 253 U.S. 245, 263 (1920)
http://supreme.justia.com/cases/federal/us/253/245/case.html#263

I do not think that quote is really relevant to anything relating to the populace. That case was about certain constitutional protections afforded judges, which at the time was being related to the unconstitutional taxing of their earnings; also if I recall that case has since been overturned, as judges are now taxed on their earnings.


In: Brushaber v. Union Pacific R. Co., 240 U.S. 1 (1916)
http://supreme.justia.com/cases/federal/us/240/1/case.html

None of this quote appears to be from that case: “Income has been taken to mean the same thing as used in the Corporation Excise Tax of 1909 (36 Stat. 112). The worker does not receive a profit or gain from his/her labors-merely an equal exchange of funds for services”


Weston,

As for the judges, a tax is not a diminishment of their earnings, therefore it was not unconstitutional to apply the tax to them.



The worker quote is a prime example of the misuse of the word "service".

It should have been worded as follows;

The worker does not receive a profit or gain from his/her labors-merely an equal exchange of funds for performing service.

Weston White
04-12-2012, 09:35 PM
As to the terms themselves, this is a bit gravy:

Many of the pertinent terms used within the Internal Revenue Code, that including its manuals, publications, and forms derives from H.R. 8928, the ‘Classification Act of 1923’ [CHAP. 265, 42 Stat. 1488, March 4, 1923, Public, No. 516].

Specifically, for 26 USC § 61(a)(1) – ‘Compensation for services’ and 26 USC § 32(c)(2)(A) – ‘Earned income’: “The term “compensation” means any salary, wage, fee, allowance, or other emolument paid to an employee for service in a position.”.

Specifically, for 26 USC § 3401(c) – ‘Employee’: “The term “employee” means any person temporarily or permanently in a position.”.

Specifically, for 26 USC § 3401(a) – ‘Wages’: “The term “service” means the broadest division of related offices and employments.”.

“The term “position” means a specific civilian office or employment, whether occupied or vacant, in a department other than the following: Offices or employments in the Postal Service; teachers, librarians, school attendance officers, and employees of the community center department under the Board of Education of the District of Columbia; officers and members of the Metropolitan police, the fire department of the District of Columbia, and the United States park police; and the commissioned personnel of the Coast Guard, the Pubic Health Service, and the Coast and Geodetic Survey.”

“The term “department” means an executive department of the United States Government, a governmental establishment in the executive branch of the United States Government which is not a part of an executive department, the municipal government of the District of Columbia, the Botanic Garden, Library of Congress, Library Building and Grounds, Government Printing Office, and the Smithsonian Institution.”

Wheeljack
04-12-2012, 09:57 PM
Wow, Wheeljack what a great thread. I must say that you are probably the first person I have come across that I agree with on all points -that is so far as federal income taxation is concerned.

To quickly add (at least to my current understanding), Mr. Schiff operated a business and moreover many of his charges involved off-shoring several million Dollars in profits; thus, he had as fact been engaging in a taxable activity and subsequently had committed serious crimes in attempting to conceal his realized wealth from the knowledge of the government.

I myself file a complete tax refund (a joint claim of refund) with the IRS (from TY-2007 to present). The IRS has in turn to date, and I add unlawfully, has or had:

(1) imposed over $30,000 in individual, ‘frivolous’ penalties against both me and my wife;
(2) issued a ‘lock-in letter’ at “single and zero” on me as of 2008;
(3) issued separate public liens on both me and my wife;
(4) issued separate levies on both me and my wife;
(5) began garnishing my pay since 2011;
(6) claimed that both me and my wife have yet to file any tax returns since TY-2007;
(7) denied me and my wife all administrative due process, while flagging our IRS accounts into an entirely automated “ACS-FRP” based out of both Ogden, UT and Fresno, CA;
(8) failed to reduce our already withheld amounts from whatever penalties imposed, and;
(9) has SFR both me and my wife, but only for TY-2008, and issued related penalty interested;
* This is just a general outline, there are many, many additional issues pertaining to both me and my wife’s classification within the IRS’ internal procedures and documents, assessments, certifications, etc.

Sorry to hear about this. I have to ask this, Are you filing using Henderickson's method?


Last I heard, the IRS had alleged in court testimony that over 10,000 individuals file for what they have (unlawfully) termed ‘frivolous refund filings’. We need to dramatically increase that sum to at least a very high six-figured number.

The IRS is not being unlawful in calling these frivolous return filings.

What we need to do is correct how these individuals present their info to the IRS.
To increase the number is simply to send more sheep to be slaughtered. I will not be a party to that.




Personally, I think this is what we all need to begin doing; we should all be calling out these conversionists for what they really are, by standing up to those tyrannous without any fear whatsoever, regardless of whatever type of sorted hullabaloo-scaremongering they devise or retort upon.


We do need to call out the employers, but to do so we need to be clear on what they are doing.

Weston White
04-12-2012, 09:59 PM
Weston,

As for the judges, a tax is not a diminishment of their earnings, therefore it was not unconstitutional to apply the tax to them.



The worker quote is a prime example of the misuse of the word "service".

It should have been worded as follows;

The worker does not receive a profit or gain from his/her labors-merely an equal exchange of funds for performing service.

Oh absolutely, one has to wonder why such arguments are even brought forth in the first place and of the impartiality of the courts as a reflection upon their own (self-serving) interests. It was not after all as if the tax in question was specifically imposed upon jurists and nobody else, which then there may be a valid constitutional issue to debate.

And yes, for clearly the writings of major legists in economy Turgot, Smith, and Gallatin, et al, undoubtedly crystallized that the ignoble, the bourgeois, etc., earn merely a livelihood, nothing more. Alexander Hamilton himself had clarified the concepts of one’s whole income (gross receipts) as only a direct tax and of the exemption of income-capital as personalty.

Wheeljack
04-12-2012, 10:11 PM
Specifically, for 26 USC § 61(a)(1) – ‘Compensation for services’ and 26 USC § 32(c)(2)(A) – ‘Earned income’: “The term “compensation” means any salary, wage, fee, allowance, or other emolument paid to an employee for service in a position.”.


Here again we have the word service used in two different contexts and you are equating them. They do not mean the same.

Weston White
04-12-2012, 11:27 PM
For my first few years filling, I filed very similar to CtC, though have recently amended my prior filings to reflect my present understanding and knowledge as to the federal income tax.

I now follow the procedures set forth within 26 CFR (26 CFR §§ 301.6401-1(b), 301.6402-(1-4), 601.102(b)(3), 601.103(c)(3), 601.105(a),(b), et seq.); including a IRS Forms 1040EZ, 4852, a notice of governmental duty, and a verified affidavit, I include only as taxable income the portions of me and my wife’s income that was received outside of our regular bi-weekly pay, e.g., holiday, vacation, sick, bonuses, etc.

I would have to disagree with you on the unlawfulness comment, under 26 U.S.C. § 6702(c) filing claims of refund are specifically excluded from inclusion on the IRS’ frivolous listing, being addressed instead within 26 U.S.C. §§ 6662, 6676.

More pointedly, being ‘frivolous’ requires a minimum of two conditions to first be met, the IRS can ever only quote the statute and never is able to identify one let alone two of the requirements for imposing penalties under that provision. In filing for a claim of refund it may only be ‘erroneous’, unless there is also the qualification of it being frivolous as well (but the mere fact that one has filed such a claim does not in itself render it frivolous); the IRS is simply to approve, adjust, deny, or dialog for further clarification concerning the claim, they are not to pretend that it was never filed, issue frivolous penalties (on officially non-existent tax documents), and then bury the filer in an entirely arbitrary process. Furthermore, it is a statutory requirement to first file such claims and to exhaust administrative remedy prior to filing an action against the IRS for any related tax matters, 26 U.S.C. § 7422(a); thus, the IRS cannot constitutionally forge what is a judicial requirement into a penalizing venture so as to circumvent whatever ramifications that may come about publicly.

I myself used to feel that the issue centered primarily on the employers, though have come to realize that it is well within an employers own right to impose withholding as part of their business model or contracting for employment so as to protect their own interests (especially with consideration to employee bargaining, etc.) Then the employees simply need to file for their appropriate refund at the close of each year, though it should also be noted that withholding costs employees the loss of interest bearing possession of whatever portion withheld (i.e. http://www.iwarrior.defendindependence.us/viewtopic.php?p=1151#p1151).

For more on frivolity, please see (a law review conducted by the Utah State Bar): http://www.iwarrior.defendindependence.us/viewtopic.php?p=630#p630

Weston White
04-12-2012, 11:35 PM
Here again we have the word service used in two different contexts and you are equating them. They do not mean the same.

Not sure what you mean; that is a quote from a statute, it is not something that I wrote myself.

Wheeljack
04-13-2012, 07:36 PM
For my first few years filling, I filed very similar to CtC, though have recently amended my prior filings to reflect my present understanding and knowledge as to the federal income tax.

I now follow the procedures set forth within 26 CFR (26 CFR §§ 301.6401-1(b), 301.6402-(1-4), 601.102(b)(3), 601.103(c)(3), 601.105(a),(b), et seq.); including a IRS Forms 1040EZ, 4852, a notice of governmental duty, and a verified affidavit, I include only as taxable income the portions of me and my wife’s income that was received outside of our regular bi-weekly pay, e.g., holiday, vacation, sick, bonuses, etc.

What the IRS is attacking you on is the 4852.

What I want you to tell me is how did you come to the realization that your regular bi-weekly pay is outside the taxing authority and that your holiday, vacation, and sick pay as well as bonuses and such is what the tax is truly targeting.

Did you include this information as an attachment to the 4852?

Did you support this information with a case law citation of the government's position.

Danke
04-13-2012, 07:43 PM
Whelljack, do you work for a company that has incorporated?

If so, how do you file?

Weston White
04-13-2012, 10:56 PM
I actually have (what I consider to be) an admission of willful culpability and wrongdoing from the Brookhaven IRS office out of New York; as one of the few personal responses we have actually ever received from the IRS, concerning our attempt at appealing the unsubstantiated charges (while having been denied all attempts at an in office interview, or to even have our case reviewed locally within our regional office in CA, as 26 CFR mandates), in the letter we received, being in answer to one of our many questions posed (with most questions entirely ignored), as to what legally validates the charges of 26 USC Sec. 6702 being imposed against us, the IRS caseworker stated (paraphrasing), “you wrote down zero income on your tax return, while your W-2 indicates that you did have income, thus a frivolous termination was made against you.” That was the only reason given; thus, even presuming that is a valid cause to impose the above penalty (which it is not, i.e., a claim of refund is not a “zero return” as described by Mr. Schiff), only one of the two returned ‘AND’ conditions had been met and thus it has no legal standing.

These are relatable facts: the IRS cannot render an individual tax advice (they are not licensed attorneys) and in fact hold no legal background in most all cases (CPA’ do not even qualify as possessing a legal background), nor may an individuals employer render tax advice, neither does an individuals employer dictate the taxable liabilities of their employees to the IRS that including the IRS W-3 and W-2 receipt forms that they forward to the SSA (who then passes along the W-2 information to the IRS). A W-2 does not establish one’s tax liabilities, only their tax return achieves this; a W-2 is merely an informational receipt depicting the related sums withheld for the various classes of individual income tax (including SSI and FICA) during a specific tax-year with respect to an aggregate sum (e.g., just because one has a receipt for a blender does not necessarily mean they own the described blender).

The IRS is authorized only to process and assess tax returns as submitted by the filer, 26 USC Sec. 6201(a)(1), if there are concerns about math errors, fraud, etc., then the IRS is really to dialog with the filer or otherwise submit the matter to CID or DOJ for legal review.

The truth is that IRS employees do not know one way or the other; they are merely doing what they have been instructed to do within their training meetings, internal memos, etc. Most IRS employees have never even seen an IRS regulation let alone know what the hell it is. And I am willing to bet that I myself have spent so much more time reading the IRS’ own Internal Revenue Manual (IRM) than even the most veteran of IRS employees. All IRS employees really understand it what forms and schedule are for what, how they should be filed out, where they should be filed at and by what date, where to look for the newest processing policy revision and tax table, what computer or routing code means what, etc.; that is really the extent of their knowledge.

I began realizing during the course of my researching that contracted benefits, perks, fringe benefits, and the like are justly a gain acquired from my laboring, being that such meets the burden of having positively derived from a source. While, clearly the core of my bi-weekly pay is itself not taxable as it is the source being described by the XVI Amendment; however, any gain I happen take in through the prudent or enterprising application of my bi-weekly pay is taxable, be it interest from a saving account, profit from an earlier investment in precious metal purchases, stocks or dividend returns, the selling of earlier purchased realty that has increased in value, etc.

Within my included affidavit (being verified) I numerate all aspects of what was withheld and what amounts of that are legally taxable as gross income, identifying each taxable category (I request a copy of my pay history from my work’s payroll department so that I have accurate information).

The whole of my understanding is run through the gauntlet fairly well in the following (PDF’):

The Crux of Federal ‘Taxation’ (CFT) [PDF] (http://www.iwarrior.defendindependence.us/download/file.php?id=91)
Points in Further Support of the CFT [PDF] (http://www.iwarrior.defendindependence.us/download/file.php?id=94)

Wheeljack
04-14-2012, 11:47 AM
I actually have (what I consider to be) an admission of willful culpability and wrongdoing from the Brookhaven IRS office out of New York; as one of the few personal responses we have actually ever received from the IRS, concerning our attempt at appealing the unsubstantiated charges (while having been denied all attempts at an in office interview, or to even have our case reviewed locally within our regional office in CA, as 26 CFR mandates), in the letter we received, being in answer to one of our many questions posed (with most questions entirely ignored), as to what legally validates the charges of 26 USC Sec. 6702 being imposed against us, the IRS caseworker stated (paraphrasing), “you wrote down zero income on your tax return, while your W-2 indicates that you did have income, thus a frivolous termination was made against you.” That was the only reason given; thus, even presuming that is a valid cause to impose the above penalty (which it is not, i.e., a claim of refund is not a “zero return” as described by Mr. Schiff), only one of the two returned ‘AND’ conditions had been met and thus it has no legal standing.

These are relatable facts: the IRS cannot render an individual tax advice (they are not licensed attorneys) and in fact hold no legal background in most all cases (CPA’ do not even qualify as possessing a legal background), nor may an individuals employer render tax advice, neither does an individuals employer dictate the taxable liabilities of their employees to the IRS that including the IRS W-3 and W-2 receipt forms that they forward to the SSA (who then passes along the W-2 information to the IRS). A W-2 does not establish one’s tax liabilities, only their tax return achieves this; a W-2 is merely an informational receipt depicting the related sums withheld for the various classes of individual income tax (including SSI and FICA) during a specific tax-year with respect to an aggregate sum (e.g., just because one has a receipt for a blender does not necessarily mean they own the described blender).

The IRS is authorized only to process and assess tax returns as submitted by the filer, 26 USC Sec. 6201(a)(1), if there are concerns about math errors, fraud, etc., then the IRS is really to dialog with the filer or otherwise submit the matter to CID or DOJ for legal review.

The truth is that IRS employees do not know one way or the other; they are merely doing what they have been instructed to do within their training meetings, internal memos, etc. Most IRS employees have never even seen an IRS regulation let alone know what the hell it is. And I am willing to bet that I myself have spent so much more time reading the IRS’ own Internal Revenue Manual (IRM) than even the most veteran of IRS employees. All IRS employees really understand it what forms and schedule are for what, how they should be filed out, where they should be filed at and by what date, where to look for the newest processing policy revision and tax table, what computer or routing code means what, etc.; that is really the extent of their knowledge.


Weston,

As I stated in my 2nd post, sending in your W-2 with your return is your validation that what is stated on that document is true and correct. If you enter zero on your return and submit a W-2 stating otherwise, then you are being frivolous.

If you submit a 4852 in place of the W-2, then you need to have documentation that supports it.

Specifically, you have to be able to dismantle this argument.

The issue presented in Rev. Ruling 2007-19 is;
"Whether Taxpayer A may avoid federal income tax liability by maintaining that the Internal Revenue Code does not tax wages or other compensation received in exchange for personal services."

I have read your PDF's and in the 28 pages you have compiled you have nothing that will dismantle this argument.


However, I will let you and anyone else try before I show you.


I began realizing during the course of my researching that contracted benefits, perks, fringe benefits, and the like are justly a gain acquired from my laboring, being that such meets the burden of having positively derived from a source. While, clearly the core of my bi-weekly pay is itself not taxable as it is the source being described by the XVI Amendment; however, any gain I happen take in through the prudent or enterprising application of my bi-weekly pay is taxable, be it interest from a saving account, profit from an earlier investment in precious metal purchases, stocks or dividend returns, the selling of earlier purchased realty that has increased in value, etc.

Within my included affidavit (being verified) I numerate all aspects of what was withheld and what amounts of that are legally taxable as gross income, identifying each taxable category (I request a copy of my pay history from my work’s payroll department so that I have accurate information).

The whole of my understanding is run through the gauntlet fairly well in the following (PDF’):

The Crux of Federal ‘Taxation’ (CFT) [PDF] (http://www.iwarrior.defendindependence.us/download/file.php?id=91)
Points in Further Support of the CFT [PDF] (http://www.iwarrior.defendindependence.us/download/file.php?id=94)

Weston White
04-14-2012, 03:20 PM
QUOTING: “If you enter zero on your return and submit a W-2 stating otherwise, then you are being frivolous.”

No that is not what frivolity is, such would only be either intentionally erroneous or fraudulent. To be frivolous is to meet the statutory requirements of having been frivolous, while also making arguments that have zero basis in law (e.g., claiming a complete exemption from all taxes under the “freeman on the land deduction”, “sovereign Creator tax deduction”, Bill of Rights doctrine, etc.) or are otherwise intended to threaten, harass, intimate, impersonate, etc., under the Omnibus Clause, 26 USC Sec. 7212 (see: http://www.iwarrior.defendindependence.us/viewtopic.php?p=324#p324).


QUOTING: “If you submit a 4852 in place of the W-2, then you need to have documentation that supports it.”

I don’t submit a W-2 with my returns, to do so would serve only to cause confusion and conflict. Additionally, (1) the IRS already has everybody’s W-2 data so providing it to them is merely a courtesy on the part of the filer (personally I still wonder why it is that the IRS pretends they do not already have access to that data), and (2) a 4852 serves to correct the W-2 and thereby serves to replace the W-2. The verified affidavit provides the purpose of substantiating the claim being made by the tax filing (1040 and 4852 Forms), if the claims laid therein fail to do so then the IRS is only to make the necessary adjustments or to correspond with the filer for clarification; this entire process is clearly set forth and prescribed within 26 CFR, the parts thereto I had cited in an earlier post and also within the PDF’. The problem is that the IRS is simply not training on this point, they are only taught that if the refund claim is larger than what the computer displays, then ACS-FRP the filer, end of story, period.

* On a related note, I was actually kicked out of my local IRS office last week by the manager, who had frivolously set off the duress alarm calling in their office security guards to remove me, all because I made the demand to speak her manager due to her utter disrespect and obtuseness of law for refusing to accept my tax filing because they did not include a W-2, first she told me it was the law, then after I demanded that she show me the statute for that “requirement”, she then said it was her office policy; I retorted that her interoffice policies cannot conflict with the very regulations she was charged with enforcing by the authority of Secretary of the Treasury for which she is subordinate to and that she was now acting entirely outside of all law and was suppressing my rights to hand in my return at my local IRS office and to file a complaint against her (I ended up mailing them certified which cost me $25), needless to say this did not make her happy at all. I plan on filing against her with TIGTA now and am seriously considering petitioning for mandamus against her personally and also include the IRS as a party to the action.


QUOTING: “The issue presented in Rev. Ruling 2007-19 is;”

See ref. http://www.irs.gov/irb/2007-14_IRB/ar12.html

Self-serving Revenue Rulings are not valid evidence in court; such rulings depend largely upon ineffectual trial court and tax court cases, along with a smattering of outer circuit appellate cases (which may serve to be advisory upon the courts). Revenue Rulings are primarily a concern only for the internal operations of IRS employees, but cannot ever trump federal statutes, regulations, or valid case law.

The context of that quote is a common misconception made by those that clearly do not possess a valid understanding of the IRC or hold a desire to ensconce the truth; such is a Subtitle C withholding argument, having only to do with ‘stoppage at the source’ and nothing to do with the lawful assessment of Subtitle A tax liabilities (with certain exemption to SSI and FICA, which are dependent upon both voluntary participation in such federal entitlements and/or Subtitle A taxable liabilities). Gross income is not a tax upon wages or salaries, but is rather a tax upon gains and provides emanating from wages or salaries, etc.


QUOTING: “I have read your PDF's and in the 28 pages you have compiled you have nothing that will dismantle this argument.”

Nor are they intended to, for if you are subject to federal income tax liabilities then whatever specified exemptions (including loopholes, etc.) provided for within the IRC itself are one’s only recourse in “avoiding federal income tax liability”. However, the mere fact that a worker has agreed to withholdings in the course of their occupation does not subjugate that worker to the automatic forfeiture of those monies withheld throughout the course of a respective tax period.

If you are looking for a SCOTUS case directly addressing the common laborer as to federal income taxation, you will not find it; SCOTUS ‘cert. denies’ all such cases, as to why exactly that is for you judge.

The objective is not to enigmatically “avoid federal income tax liability”; rather it is to address axiomatic principles concerning the federal government’s true authority and constraint of national taxation.


QUOTING: “However, I will let you and anyone else try before I show you.”

Sorry, what do you mean by: try what and before you show me what?

anaconda
04-14-2012, 07:56 PM
This is true.


Have you seen this site?

http://www.tax-freedom.com/index.htm

Wheeljack
04-14-2012, 10:41 PM
QUOTING: “If you submit a 4852 in place of the W-2, then you need to have documentation that supports it.”

I don’t submit a W-2 with my returns, to do so would serve only to cause confusion and conflict. Additionally, (1) the IRS already has everybody’s W-2 data so providing it to them is merely a courtesy on the part of the filer (personally I still wonder why it is that the IRS pretends they do not already have access to that data),

No, it is not a courtesy on the part of the filer. You are submitting a self-assessment. The W-2 is presented to you by the employer for your validation. The IRS in turn requires that you send them a copy to verify that you have seen what the employer reported and that by this submission you validate that it is true and correct.



and (2) a 4852 serves to correct the W-2 and thereby serves to replace the W-2. The verified affidavit provides the purpose of substantiating the claim being made by the tax filing (1040 and 4852 Forms), if the claims laid therein fail to do so then the IRS is only to make the necessary adjustments or to correspond with the filer for clarification; this entire process is clearly set forth and prescribed within 26 CFR, the parts thereto I had cited in an earlier post and also within the PDF’. The problem is that the IRS is simply not training on this point, they are only taught that if the refund claim is larger than what the computer displays, then ACS-FRP the filer, end of story, period.

* On a related note, I was actually kicked out of my local IRS office last week by the manager, who had frivolously set off the duress alarm calling in their office security guards to remove me, all because I made the demand to speak her manager due to her utter disrespect and obtuseness of law for refusing to accept my tax filing because they did not include a W-2, first she told me it was the law, then after I demanded that she show me the statute for that “requirement”, she then said it was her office policy; I retorted that her interoffice policies cannot conflict with the very regulations she was charged with enforcing by the authority of Secretary of the Treasury for which she is subordinate to and that she was now acting entirely outside of all law and was suppressing my rights to hand in my return at my local IRS office and to file a complaint against her (I ended up mailing them certified which cost me $25), needless to say this did not make her happy at all. I plan on filing against her with TIGTA now and am seriously considering petitioning for mandamus against her personally and also include the IRS as a party to the action.

Why didn't you simply say to her what you wrote in (2) above - The 4852 is a government form that serves as a substitute W-2.




QUOTING: “The issue presented in Rev. Ruling 2007-19 is;”

See ref. http://www.irs.gov/irb/2007-14_IRB/ar12.html

The context of that quote is a common misconception made by those that clearly do not possess a valid understanding of the IRC or hold a desire to ensconce the truth; such is a Subtitle C withholding argument, having only to do with ‘stoppage at the source’ and nothing to do with the lawful assessment of Subtitle A tax liabilities (with certain exemption to SSI and FICA, which are dependent upon both voluntary participation in such federal entitlements and/or Subtitle A taxable liabilities). Gross income is not a tax upon wages or salaries, but is rather a tax upon gains and provides emanating from wages or salaries, etc.

You Lose. We just had a discussion about judges being taxed on their salaries. The Executive and Legislative branches are also taxed on their salaries.
If you give me the line that the tax falls on all federal workers, then I will throw the B.S. card on you. The janitor in the Pentagon has the same protection as the janitor in a Mcdonald's.
The tax also falls on the salaries of executives of all corporations. It applies to the salaries of all small business owners.

You can not make the blanket statement that gross income does not include wages or salaries.




QUOTING: “I have read your PDF's and in the 28 pages you have compiled you have nothing that will dismantle this argument.”

Nor are they intended to, for if you are subject to federal income tax liabilities then whatever specified exemptions (including loopholes, etc.) provided for within the IRC itself are one’s only recourse in “avoiding federal income tax liability”. However, the mere fact that a worker has agreed to withholdings in the course of their occupation does not subjugate that worker to the automatic forfeiture of those monies withheld throughout the course of a respective tax period.

If you are looking for a SCOTUS case directly addressing the common laborer as to federal income taxation, you will not find it; SCOTUS ‘cert. denies’ all such cases, as to why exactly that is for you judge.

The objective is not to enigmatically “avoid federal income tax liability”; rather it is to address axiomatic principles concerning the federal government’s true authority and constraint of national taxation.

I do not need a SCOTUS case

Enforcer
04-15-2012, 08:33 AM
You can not make the blanket statement that gross income does not include wages or salaries. I do not need a SCOTUS case

So, you can present the position of the IRS, but if we present you with a RULING by the United States Supreme Court, it is essentially invalid?

May I draw you an analogy?

A few years ago, as a foster parent, I tried to report abuse of children at the hands of another foster care worker. DFACS would not act. I went to the police. They said they had no jurisdiction. I went to the Family Court judge who said he could not do anything. So, what I deduced from it all was that the judges (the executive branch) could only be a referee between DFACS and those in the system. The executive branch has no real authority in cases involving these private corporations that spring up at the government's behest. Both DFACS and the IRS are private corporations whose only client happens to be the government.

So, essentially, despite the intent of the legislatures and the words of the Constitution, etc. if you are a 14th Amendment citizen, you are subject to the POWER of the Federal / Legislative Democracy that is owned and controlled by a few, elite, multinational corporations.

Wheeljack
04-15-2012, 11:04 AM
So, you can present the position of the IRS, but if we present you with a RULING by the United States Supreme Court, it is essentially invalid?

That is not what i said.

If you look at what you responded to you will see that the first sentence was a reply to one question and the second sentence was a reply to a totally different question.

I believe that is because the reply function of this forum only pulls up what the previous poster wrote and not the quote I responded to.

Otherwise I would think that maybe you work for NBC and have a problem with editing.



May I draw you an analogy?

A few years ago, as a foster parent, I tried to report abuse of children at the hands of another foster care worker. DFACS would not act. I went to the police. They said they had no jurisdiction. I went to the Family Court judge who said he could not do anything. So, what I deduced from it all was that the judges (the executive branch) could only be a referee between DFACS and those in the system. The executive branch has no real authority in cases involving these private corporations that spring up at the government's behest. Both DFACS and the IRS are private corporations whose only client happens to be the government.

So, essentially, despite the intent of the legislatures and the words of the Constitution, etc. if you are a 14th Amendment citizen, you are subject to the POWER of the Federal / Legislative Democracy that is owned and controlled by a few, elite, multinational corporations.

I will take a shot in the dark. The DFACS is a state function. If you went to the local police I can see that they would say they don't have jurisdiction.
The Family Court Judge (the judicial branch) is just a referee. I am surprised that they could not send you in the direction of those who do have jurisdiction, such as the State Police or State Attorney General's office.

Enforcer
04-15-2012, 02:29 PM
That is not what i said.

If you look at what you responded to you will see that the first sentence was a reply to one question and the second sentence was a reply to a totally different question.

I believe that is because the reply function of this forum only pulls up what the previous poster wrote and not the quote I responded to.

Otherwise I would think that maybe you work for NBC and have a problem with editing.



I will take a shot in the dark. The DFACS is a state function. If you went to the local police I can see that they would say they don't have jurisdiction.
The Family Court Judge (the judicial branch) is just a referee. I am surprised that they could not send you in the direction of those who do have jurisdiction, such as the State Police or State Attorney General's office.

In the above instance I did contact the State Atty. Gen., but those letters fell on blind eyes since no response was forthcoming.

Back to the taxes for a moment. You and I know what the United States Supreme Court has stated relative to income tax. I'd like to point out something to all of you. Here is the alleged logic of those who say you have to pay an income tax:

The Tax Scam Artist's Lie: Wages, tips, and other compensation received for personal services are not income.

This argument asserts that wages, tips, and other compensation received for personal services are not income, because there is allegedly no taxable gain when a person "exchanges" labor for money. Under this theory, wages are not taxable income because people have basis in their labor equal to the fair market value of the wages they receive; thus, there is no gain to be taxed.

Some take a different approach and argue that the Sixteenth Amendment to the United States Constitution did not authorize a tax on wages and salaries, but only on gain or profit.

http://www.quatloos.com/taxscams/meaning_of_income.htm

Whatever the attraction of this economic theory of wages, Congress has taken a different view. Section 63 of the tax code, 26 U.S.C. § 63, defines your taxable income to be “gross income minus the deductions allowed” by the tax code. Section 61 of the tax code, 26 U.S.C. § 61 which defines “gross income,” provides:

[G]ross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items; . . .

http://docs.law.gwu.edu/facweb/jsiegel/Personal/taxes/wages.htm

In order for anything to be a lie, it must be false and it must be stated with the intent to deceive. MOST of the time, the powers that be allege something and it is accepted as fact, only because the average guy fears the POWER of big government.

The United States Supreme Court is supposed to be the final arbiters of what the law is. All I can do is tell you what they said. IF the IRS and their supporters want to disagree, they need more than name calling in order to prevail.

First off, what is income?


"The phraseology of form 1040 is somewhat obscure .... But it matters little what it does mean; the statute and the statute alone determines what is income to be taxed. It taxes only income "derived" from many different sources; one does not "derive income" by rendering services and charging for them... IRS cannot enlarge the scope of the statute." Edwards v. Keith, 231 F 110,113


"Income within the meaning of the Sixteenth Amendment and the Revenue Act, means 'gain'... and in such connection 'Gain' means profit...proceeding from property, severed from capital, however invested or employed, and coming in, received, or drawn by the taxpayer, for his separate use, benefit and disposal... Income is not a wage or compensation for any type of labor." Stapler v U.S., 21 F Supp 737 AT 739.


"Among these unalienable rights, as proclaimed in the Declaration of Independence is the right of men to pursue their happiness, by which is meant, the right any lawful business or vocation, in any manner not inconsistent with the equal rights of others, which may increase their prosperity or develop their faculties, so as to give them their highest enjoyment...It has been well said that, THE PROPERTY WHICH EVERY MAN HAS IS HIS OWN LABOR, AS IT IS THE ORIGINAL FOUNDATION OF ALL OTHER PROPERTY SO IT IS THE MOST SACRED AND INVIOLABLE..." Butchers' Union Co. v. Crescent City Co., 111 U.S. 746. 1883

Wheeljack, let me explain something to you:

In a famous court case in the early 1800s, Marbury v. Madison, the Supreme Court decided to hold itself out as the greatest branch of government... overruling the intent of the legislators and the will of the people. Their rulings are supposed to be the final word. The statutory law is supposed to be subject to the interpretations of the United States Supreme Court. Now, the courts DID rule as they did above and I've even highlighted the appropriate sections of the law.

I've noticed that those who profess to be exposing the alleged tax scamsters are using Tax Code Memos as if they carried the same weight as court rulings. In addition, I've noticed that these wannabe IRS groupies quote a lot of laws out of context. In order to figure out what the proper context is, we must ask ourselves IF I quoted the courts right and IF I did, what does it mean?

Additionally, the pro - IRS position asks us a very poignant question and I'd like to reproduce it here with an answer. They asked:

"If wages are not income because they are just an "equal exchange" -- if you really get zero gain or profit from your wages because what you give up is equal in value to what you get -- then why do you work? Why does anybody work?

No one works for the pure fun of it. No one would work for zero gain or profit. If people really believed that they were getting zero from working, they would stop. People work because they get income from working. That income is taxable."

http://www.quatloos.com/taxscams/meaning_of_income.htm

Here is my RESPONSE:

The overwhelming majority of the people work in order pay required taxes and insurance plus to have necessities. There is no profit in it. I cannot sell the tv I bought at a price higher than what I paid... ditto for my clothes, food, or car. That's why I work. This is in complete contradistinction to the guy I work for who trades me a set number of dollars for a portion of my time and then makes a profit off my time. In other words, he not only is the recipient of my time, but makes money off the mere fact that I generated more in value than the money he pays me.

If I invest in a house, that is mine. There is no profit there unless I sell that house and then the almighty state gets a portion of the difference between what I bought the house for and what I sold it for. If I sell for more than I bought the house for, then yes, there is a profit.

There is no profit in labor. Corporate interests generate wealth by virtue of what they will give you for your time and what they can charge an end user for the time you worked. WHEN the worker generates wealth, then they are fairly taxed. For instance, that portion of my wages used to pay for the basic necessities of life is not profit by any stretch of the imagination; however, that portion of my money put into investments or interest bearing accounts is making a profit and can be legitimately taxed.

The defenders of the income tax aren't honest with themselves much less those they attempt to deceive. The income tax does not fund government; it redistributes the wealth. Half of the American people do not pay and the other half carry those that don't. End it and you eliminate the IRS. The government still operates because profits are taxed. Today, the government has the POWER to enforce unjust laws. The government lacks the legitimate AUTHORITY to enforce a plank taken from the Communist Manifesto against us. So, one day a significant number of people are going to look this over and scrutinize it carefully. You and I know that an illegally ratified amendment that changes our form of government will not stand in the grand scheme of things.

I only hope that we will see the dismantling of the IRS and the evil it stands for in my life time.

Wheeljack
04-15-2012, 08:40 PM
Here is my RESPONSE:

The overwhelming majority of the people work in order pay required taxes and insurance plus to have necessities. There is no profit in it. I cannot sell the tv I bought at a price higher than what I paid... ditto for my clothes, food, or car. That's why I work. This is in complete contradistinction to the guy I work for who trades me a set number of dollars for a portion of my time and then makes a profit off my time. In other words, he not only is the recipient of my time, but makes money off the mere fact that I generated more in value than the money he pays me.

If I invest in a house, that is mine. There is no profit there unless I sell that house and then the almighty state gets a portion of the difference between what I bought the house for and what I sold it for. If I sell for more than I bought the house for, then yes, there is a profit.

There is no profit in labor. Corporate interests generate wealth by virtue of what they will give you for your time and what they can charge an end user for the time you worked. WHEN the worker generates wealth, then they are fairly taxed. For instance, that portion of my wages used to pay for the basic necessities of life is not profit by any stretch of the imagination; however, that portion of my money put into investments or interest bearing accounts is making a profit and can be legitimately taxed.

The defenders of the income tax aren't honest with themselves much less those they attempt to deceive. The income tax does not fund government; it redistributes the wealth. Half of the American people do not pay and the other half carry those that don't. End it and you eliminate the IRS. The government still operates because profits are taxed. Today, the government has the POWER to enforce unjust laws. The government lacks the legitimate AUTHORITY to enforce a plank taken from the Communist Manifesto against us. So, one day a significant number of people are going to look this over and scrutinize it carefully. You and I know that an illegally ratified amendment that changes our form of government will not stand in the grand scheme of things.

I only hope that we will see the dismantling of the IRS and the evil it stands for in my life time.

As I stated in an earlier post, the 16th amendment, regardless of being ratified, legally or illegally, changed absolutely nothing about our form of government, let alone what the government could tax, this is what the Supreme Court set forth in the Brushaber decision.

According to the court, the 16th Amendment simply keeps the income tax in the realm of indirect taxation where it inherently belongs. The 16th Amendment was put forth to detail a protection for the people, it granted no new power to the government.


You are correct in your analogy of working for someone else, but you fall short in asking that, if your employer provides you with money for time in which you do not work (vacation and holiday pay) or provides a year-end bonus; this money is paid to you in the form of a wage or salary, this money is taken from the wealth generated by your employer, thus you are sharing in the wealth generated and are receiving taxable income.

This is one of the reasons why you can not make the blanket statement that gross income does not include wages and salaries.

Weston White
04-16-2012, 11:07 AM
QUOTING: “No, it is not a courtesy on the part of the filer. You are submitting a self-assessment. The W-2 is presented to you by the employer for your validation. The IRS in turn requires that you send them a copy to verify that you have seen what the employer reported and that by this submission you validate that it is true and correct.”

No, a W-2 is not required to be submitted along with a 4852 Form, for that is the entire purpose of that specific form, to correct and replace it, or to outright substitute it in instances where no W-2 was ever provided to the filer. Moreover, as to status quo filings (and including all filings, in general), it is the information provided and attested to upon the face of the 1040 or similar form itself that completes one’s “self-assessment” and not a third-party W-2 copy.

As to your reasoning, the same would also be made true if the numbers match precisely upon both the 1040 and W-2. Neither is a there a statute or jurat that stipulates for the specified enclosure of the W-2 as a personal validation of the data contained upon it as being “true and correct” or anything to that effect (there is only a generalized jurat for whatever included schedules and attachments).

Also, I seem to recall that there are various lower court cases (district, tax court, etc.), finding that a filing is still valid even without a W-2 and that a 1040 form is not even a requirement in being used, i.e., the Beard Test. If there is a statute stipulating the legal requirement of certain forms and attachments to create a valid tax filing, I have yet to come across it and if you happen to know of it then please post it and correct my error in logic on this point. Thank you.


QUOTING: “Why didn't you simply say to her what you wrote in (2) above - The 4852 is a government form that serves as a substitute W-2.”

I did, in so many words (which clearly only upset her further as she picked up my small stack of papers and hastily slid them across the counter back at me telling me that they are not helping me with anything, not even a few other papers I was wanting to file that did not require a W-2), though she probably finds such filings atrocious and probably will get docked by her higher-ups for permitting such filings into her office, while she and her crew are most certainly instructed to keep all such filings out of her office at all costs.

I also had a similar problem last year (with the same manager and the same counter clerk) when I went to my local office to personally submit amended returns and to seek local aid in dealing with several unlawful aspects of my family’s current liens and levies. I was basically told they are not trained to handle any those types of things, they don’t want to hear about them, they will not try to contact or research my issues with anybody outside of their office, that they cannot even make the effort to help me because I have not even filed my tax returns yet (and when I questioned them as to this oddity that if I officially have no tax returns on file then how could I have penalties imposed upon me for those non-existing filings, they again simply did not care to get involved, that it just did not matter; ergo, it is, what it is –also to note: I do in fact have several FOIA replies showing that my returns are on file though the IRS to date is refusing to process them, and I am aware from the experiences of others that if you do send a copy of your original filing or draft a new one that is not status quo and submit either in an effort to comply with the IRS’ ACS request by letter or notice for a new return to be mailed to them, you will only be charged with a new frivolous penalty, talk about “entrapment”), and that I just need to start doing what the IRS instructs of me and to cooperate with them, and that I can either call the phone numbers on the notices I received for help (which I had many times over the years and they only ever state to arrange for payment of the penalties, to visit your local office for further help, or to file in tax court), or just pay the penalties and address the matter in tax court.


QUOTING: “You Lose. We just had a discussion about judges being taxed on their salaries. The Executive and Legislative branches are also taxed on their salaries.
If you give me the line that the tax falls on all federal workers, then I will throw the B.S. card on you. The janitor in the Pentagon has the same protection as the janitor in a Mcdonald's.
The tax also falls on the salaries of executives of all corporations. It applies to the salaries of all small business owners.”

Surely, it must be kept in mind, the present status quo misconception as to federal powers and purposes of taxation, be it in whatever mode or method, while perhaps it is incorrect (immoral, etc.) for such classes of workers to be taxed upon their labor as well, it would certainly seem justly a valid exercise of the federal power to impose such a tax; being in the form of an indirect excise, which is what the federal income tax truly is –within its proper core the income tax is merely a subset of excise taxation. To tax federal employees of whatever branch, class, or instrumentality would be merely a tax upon specific occupation. Just as to the federal income taxes imposed upon railroad, mining, and sea occupations; BATFE occupations; associations; corporations; joint-stocks; insurance companies; foreign employments; resident aliens; etc., for they had been directly mentioned (or targeted) within various Subtitles of the IRC.

Individuals engaged in operating a business entity are rightfully taxed under the federal income tax as they are in fact earning a ‘profit’, e.g., if you are an attorney charging $200 an hour for your ‘services’, you have traversed far beyond simply earning a livelihood; similarly, if you are selling a $5 at cost pair of fancy sneakers for $125.

Further to note, presuming that the janitor at the Pentagon is not a privately contracted out foreigner working for minimum wage without benefits, while in hopes of acquiring permanent citizenship someday, then those two employees are compensated very, very differently (e.g., the Pentagon employee -aside from owing his employment directly to the will of the federal government- is probably earning well above minimum wage, while enjoying a host of additional perks). Also many government employees work in a professional capacity requiring specialized certifications or licenses, or in unique fields that simply do not exist outside of the government itself. More pointedly, most all federal employees are compensated very differently from their “civilian” counterparts; while, also noticing that those working for the federal government subjugate themselves to that very will, this could mean the surrendering of certain individual rights or mandated participation in certain activities, concessions, programs, etc., as similarly this can to a certain degree apply to private employment just the same, although would be much more limited in degree.

Also noticing that such language is observed all throughout the IRC:


“employee” as: “… includes an officer, employee, or elected official of the United States, a State, Territory, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term "employee" also includes an officer of a corporation.”

“… any officer, employee, or elected official of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, …”

Page eight (8) of IRS Publication 15 – known widely as ‘Circular E’ and entitled: ‘Employer’s Tax Guide’, states [in part] the following with no further clarification other than referring to the statutory term “employers” throughout: “Federal Government employers. The information in this guide applies to federal agencies …” and closes the same paragraph by cross-referencing: ‘Treasury Financial Manual (I TFM 3-4000)’, for additional information.

Treasury Financial Manual – ‘I TFM 3-4000: Federal Income, Social Security, and Medicare Taxes’; Section 4080 – ‘Levy for Unpaid Tax Liability’, reiterates that only the ‘accrued salary or wages’ of “any officer, employee, or elected official of the United States or the District of Columbia” can be lawfully reached by a notice of levy. TFM Subsection 4080.20 – ‘Designation of Individuals to Receive Service of Notice of Levy’ clarifies that “Each Government agency should designate one or more persons on whom a levy may be served” for that agency’s employees. No levy provision is made for the salary or pay of private-sector or non-federally connected workers.


QUOTING: “You can not make the blanket statement that gross income does not include wages or salaries.”

Neither was I attempting to; for of course not, the IRC is so entirely expansively diverse and convoluted such would be an utter impossibility. The IRC has become a century old quagmire existent within a hotchpotch. I am merely addressing the menial labor as to their inherent right in achieving an honest and fruitful means of livelihood.

It must be recognized that indirectly taxing “compensation for services” is not the same as directly taxing wages or salaries; further noting that salaries are earned only by supervisors, managers, professionals, and the like, while wages are earned by their subordinate workers.

While the requirement of withholding might in fact be upon wages (and notice that never is “salaries” mentioned within Subtitle C) the assessment of the individual income tax is to be only upon the gains, profits, and incomes having derived from wages and salaries and not the wages and salaries themselves. “Withholding” itself does not establish one’s taxable liabilities; it only establishes a valid claim for credit or refund on whatever was overpaid after assessment, 26 USC §§ 31(a)(1), 6201(a)(1), 6401(c). Ergo, if no process of withholding took place that alone would not relieve one of whatever tax liabilities realized during a taxable period.


QUOTING: “I do not need a SCOTUS case”

Our United States of America is a common law republic, so why not? The fact that there are no such cases existing within the high court is to me very, very telling, indeed.

Weston White
04-16-2012, 11:56 AM
Nice post Enforcer, with many great points addressed!

I would only add (aside from what Wheeljack had also pointed out, concerning correctly taxable income), that if in fact an individual's laboring holds a zero-based value and all subsequently taken in is a pure gain, then to that respect should an individual be double-crossed and left unpaid they hold no legal basis in seeking damages for they lack the ability to establish a valid cause of action.

Also the “Quatloos!” claim (among many additional misstatements) that one owes federal income taxes as determined by the W-2' received by the IRS, regardless if the individual actually received those monies or not. So, really they only work to discredit themselves.

And it is worth noting the distinctions between income-as-gain-or-profit and income-as-capital, Alexander Hamilton had touched upon such aspects within his legal writings and arguments. So while it may be true that earning a livelihood produces income, the question as to if that income is taxable as a bona fide gain or profit remains inadequately addressed by the IRS and those “Quatloos”.

Wheeljack
04-16-2012, 08:27 PM
No, a W-2 is not required to be submitted along with a 4852 Form, for that is the entire purpose of that specific form, to correct and replace it, or to outright substitute it in instances where no W-2 was ever provided to the filer. Moreover, as to status quo filings (and including all filings, in general), it is the information provided and attested to upon the face of the 1040 or similar form itself that completes one’s “self-assessment” and not a third-party W-2 copy.

That is not what I meant. You never submit a W-2 along with a 4852. Either one or the other, never both.



QUOTING: “Why didn't you simply say to her what you wrote in (2) above - The 4852 is a government form that serves as a substitute W-2.”

I did, in so many words (which clearly only upset her further as she picked up my small stack of papers and hastily slid them across the counter back at me telling me that they are not helping me with anything, not even a few other papers I was wanting to file that did not require a W-2), though she probably finds such filings atrocious and probably will get docked by her higher-ups for permitting such filings into her office, while she and her crew are most certainly instructed to keep all such filings out of her office at all costs.

I also had a similar problem last year (with the same manager and the same counter clerk) when I went to my local office to personally submit amended returns and to seek local aid in dealing with several unlawful aspects of my family’s current liens and levies. I was basically told they are not trained to handle any those types of things, they don’t want to hear about them, they will not try to contact or research my issues with anybody outside of their office, that they cannot even make the effort to help me because I have not even filed my tax returns yet (and when I questioned them as to this oddity that if I officially have no tax returns on file then how could I have penalties imposed upon me for those non-existing filings, they again simply did not care to get involved, that it just did not matter; ergo, it is, what it is –also to note: I do in fact have several FOIA replies showing that my returns are on file though the IRS to date is refusing to process them, and I am aware from the experiences of others that if you do send a copy of your original filing or draft a new one that is not status quo and submit either in an effort to comply with the IRS’ ACS request by letter or notice for a new return to be mailed to them, you will only be charged with a new frivolous penalty, talk about “entrapment”), and that I just need to start doing what the IRS instructs of me and to cooperate with them, and that I can either call the phone numbers on the notices I received for help (which I had many times over the years and they only ever state to arrange for payment of the penalties, to visit your local office for further help, or to file in tax court), or just pay the penalties and address the matter in tax court.

I have to tell you if you submitted those 28 pages with your 4852, then I can understand why they had no interest in your case. Just looking through your reports made my head spin trying to keep it straight, and you are giving this to people who you say have no training. If you hope to convince people to your position you have to come up with a simpler explanation that they can absorb and not be overwhelmed by.

I use a three page attachment with my 4852. It contains most of what I put in my original post plus a cite from a federal case in which the government openly concedes to my position. I also cite as evidence the very existence of form SS-8 and then take the argument the IRS puts forth in their Rev. Ruling 2007-19 and I dismantle it in two sentences.

Weston White
04-16-2012, 09:21 PM
May I please PM you my email for you to send me a copy/copies of what you send the IRS (taking care to omit all personal information)? I would be interested in studying your references and arguments.

Also care should be kept in mind that whatever you submit to the IRS cannot later be denied evidentiary value in court should it be necessary to take action against the IRS or should they force action against you (as it then serves as part of your official tax filing); whereas otherwise the court will likely deny most all evidence submitted in your favor. Thus, so long as it remains prudent there is no harm in thoroughly “padding” your claim of refund; though it is also just as important to not overwhelm the IRS with one’s kitchen sink.

Wheeljack
04-22-2012, 04:30 PM
May I please PM you my email for you to send me a copy/copies of what you send the IRS (taking care to omit all personal information)? I would be interested in studying your references and arguments.

Also care should be kept in mind that whatever you submit to the IRS cannot later be denied evidentiary value in court should it be necessary to take action against the IRS or should they force action against you (as it then serves as part of your official tax filing); whereas otherwise the court will likely deny most all evidence submitted in your favor. Thus, so long as it remains prudent there is no harm in thoroughly “padding” your claim of refund; though it is also just as important to not overwhelm the IRS with one’s kitchen sink.


Weston,

No email. We will discuss references and arguments here for all involved.

What am I claiming that I need to file a 4852 for?
That my employer does not understand the difference between a "contract of service" and a "contract for services".

I found on the internet a write-up on this by a UK Human Resources company, which is what you see in the original post. It is truly disappointing to look this up and find what others have written and see that they can not even use the word service in its proper context.
They write a "contract of service" and a "contract for service". The singular form of services is "a service".

Service is used in the context of employment (for working) . Services is used in the context of business (for the result of the work).

If you look up service in Black's Law (I have the 6th Edition) you will find that it cites a Texas case. Googling this cite I uncovered a federal case in which the government made this statement.

U.S. v. Graham Mortgage Corp., 740 F.2d. 414
The problem with this argument is that, as the government concedes, the meaning of the term "service" varies depending upon the context in which the term is used. See, e.g., Central Power & Light Co. v. State, 165 S.W.2d 920, 925 (Tex.Civ.App.1942), appeal dismissed, 319 U.S. 727, 63 S.Ct. 1033, 87 L.Ed. 1691 (1943).

Now does the IRS know this? Yes they do.

This is where I assert that Form SS-8, Determination of Worker Status is evidence that this is so.

Any questions so far?

Weston White
04-23-2012, 08:30 PM
I would find it very interesting as to how the IRS responds to the submission of this form by an employee. Though the form appears to be somewhat of a paradox, namely to be submitted by an employer that wants to clarify if outside, temporary, or other such 3rd party hires are under their responsibility as to federal withholding or not; while it also does seems to touch lightly upon the topic of employees and W-2 receipts as well, i.e., “Worker; for services performed”. See at: http://www.irs.gov/pub/irs-pdf/fss8.pdf


I believe that I have also myself addressed a portion of this aspect in the context of the originally defined ‘net/gross income’, quoting various definitions from Black’s Law 3rd Edition at: http://www.iwarrior.defendindependence.us/viewtopic.php?p=589#p589

Weston White
04-23-2012, 08:39 PM
Also an amendment idea I had concerning the definition of 'gross income', 26 USC Sec. 61: http://www.iwarrior.defendindependence.us/viewtopic.php?p=692#p692

Wheeljack
04-24-2012, 06:52 PM
I believe that I have also myself addressed a portion of this aspect in the context of the originally defined ‘net/gross income’, quoting various definitions from Black’s Law 3rd Edition at: http://www.iwarrior.defendindependence.us/viewtopic.php?p=589#p589


I was going to comment on Sec. 22, especially the salaries, wages, or compensation for personal service.

Tell me, how do you distinguish between personal service and personal services.

Sonny Tufts
04-25-2012, 09:50 AM
Wheeljack:

In a case arising under Section 22(a) of the 1938 Revenue Act, the Supreme Court stated as follows:


Section 22(a) of the Revenue Act defines 'gross income' subject to the Act as including 'gains, profits, and income derived from salaries, wages, or compensation for personal service ..., of whatever kind and in whatever form paid ....'...Section 22(a) of the Revenue Act is broad enough to include in taxable income any economic or financial benefit conferred on the employee as compensation, whatever the form or mode by which it is effected. CIR v. Smith, 324 U.S. 177 (1945)

Are you suggesting that Congress intended to narrow the definition of gross income in the 1954 Code by excluding salaries and wages from the definition of gross income?

Weston White
04-26-2012, 06:26 PM
Well, most certainly, this Sonny Tufts (http://en.wikipedia.org/wiki/Sonny_Tufts) is nothing more than an utter Quatfool that has joined here as of just yesterday, after he/she must had read post (http://www.iwarrior.defendindependence.us/viewtopic.php?f=101&t=517) I made linking back to this article as of a couple of days ago. They, the “Quatloos!”, enjoy quoting/citing to this case all too frequently, which had to do with nothing other than employee awarded stock options. The case is moot on the core point, for earning merely a livelihood is nothing near considerable to be so “broad enough to include in taxable income any economic or financial benefit conferred on the employee as compensation”, while surely and justly, stock options (et cetera) received as such compensation would be appropriate as ‘taxable income’.

However, this is precisely why Title 26 will forever remain non-positive law, as otherwise it would force a properly overt representation of the statutes sum of parts. Whereby, instead leaving it in a perpetual status of prima facie (convolution and flux) the IRS can go about in blissful ignorance to its true scope, while continuously doling that gross misrepresentation onto the populace. Regardless, the fact remains, the Internal Revenue Code undeniably falls under the constructive principle of pari materia. 26 USC Sec. 22, clearly meant to ‘indirectly tax’ neither wages nor salaries, but rather all that had forthwith exuded out from such sources within a relative period of time.

‘Gross income’ may only consider as ‘taxable income’ all that is constitutionally considerable and nothing more. A 1945 SCOTUS case cannot simply toss out 32-years of very well established SCOTUS precedent (as neither can the thousands upon thousands of Circuit Court cases since heard). More pointedly, if such be the case than in 1988 that finding of CIR v. Smith case was made further irrelevant by South Carolina v. Baker, 485 U. S. 505, 522 (1988) [Footnote 13]: “… We disagree. The legislative history merely shows that the words “from whatever source derived” of the Sixteenth Amendment were not affirmatively intended to authorize Congress to tax state bond interest or to have any other effect on which incomes were subject to federal taxation, and that the sole purpose of the Sixteenth Amendment was to remove the apportionment requirement for whichever incomes were otherwise taxable. 45 Cong. Rec. 2245-2246 (1910); id. at 2539; see also Brushaber v. Union Pacific R. Co., 240 U. S. 1, 240 U. S. 17-18 (1916). …”

While, additionally, neither does the Congressional Research Service (CRS) agree with the position lent by the so-called “Sonny Tufts”. Plainly, in order for the presently devised ‘stoppage at the source’, mandatory (perpetually double-dipped) federal and individual state (to those states joined in this utter atrocity) income tax withholdings scheme to work, without arising much question or suspicion from those (namely, at the very least) within the tax profession, the term ‘gross income’ had to be entirely rewritten, so as to thereafter quietly omit certain aspects, thus ceasing any visibly apparent conflict with the then newly devised “collection at the source” provisions of Subtitle C.

Icymudpuppy
04-26-2012, 06:37 PM
I would love to do this. Which lawyer with a history of winning such cases is willing to defend me at my inevitable trial for tax evasion for only a cut of the back taxes I am owed, and a promise to support my family if he loses?

Wheeljack
04-26-2012, 06:53 PM
Wheeljack:

In a case arising under Section 22(a) of the 1938 Revenue Act, the Supreme Court stated as follows:



Are you suggesting that Congress intended to narrow the definition of gross income in the 1954 Code by excluding salaries and wages from the definition of gross income?


No,

If you read section 22 properly, you will see that salaries, wages or compensation for personal service is not included in the definition of gross income in the first place.

You must understand the difference between "from" and "for".

Compensation for employment is that part of your hourly wage or yearly salary paid to you for the time that you actually work.
Compensation derived from employment is that part of your hourly wage or yearly salary paid to you for any time that you do not work. (i.e. vacation, holiday and sick pay, yearly bonuses, attendance awards)

Why does the rewording of the IRC in 1954 change nothing from the wording of 1939 IRC?

Because compensation derived from employment is the same thing as compensation for services.


What I am trying to show you is that personal service as Congress used the term in sec. 22 is not the same as personal services.

Personal service is when one person places himself under the direction and control of another person. (employment)
Personal is a totally unnecessary adjective to use with service, as service is always a personal thing.


Personal services is when a person provides a service to someone for a price and then is the one who performs the work to complete the contract.
(self-employment)

Services is when a person (individual or corporate) provides a service for a price and then has an employee perform the work to complete the contract.

Weston White
04-26-2012, 07:01 PM
Wheeljack, your perspectives continues to impress. Great work!

Danke
04-26-2012, 07:15 PM
I would love to do this. Which lawyer with a history of winning such cases is willing to defend me at my inevitable trial for tax evasion for only a cut of the back taxes I am owed, and a promise to support my family if he loses?

Any lawyer will avoid taking on the IRS or cops/courts/judges with a ten foot pole.

Icymudpuppy
04-26-2012, 07:31 PM
Any lawyer will avoid taking on the IRS or cops/courts/judges with a ten foot pole.

Exactly my point. Show me someone who has successfully gotten away with this, and I'm on board. Until then, I will continue to think it's a bunch of bunk that will get me a one way ticket to a small US military installation on the island of Cuba.

Danke
04-26-2012, 07:37 PM
Exactly my point. Show me someone who has successfully gotten away with this, and I'm on board. Until then, I will continue to think it's a bunch of bunk that will get me a one way ticket to a small US military installation on the island of Cuba.

Oh, I see. To "get away" with following the Constitution, one needs a lawyer.

Icymudpuppy
04-26-2012, 08:07 PM
Oh, I see. To "get away" with following the Constitution, one needs a lawyer.

So tell me, are you paying income taxes?

Sonny Tufts
04-27-2012, 01:25 PM
If you read section 22 properly, you will see that salaries, wages or compensation for personal service is not included in the definition of gross income in the first place.

But this is inconsistent with the Supreme Court's statement in the Smith case that the statute includes any financial benefit that the employer bestows on the employee. Or, for that matter, with the Court's statement in Lucas v. Earl that "There is no doubt that the statute could tax salaries to those who earned them". Or with the many other cases holding that salaries, wages, and compensation for workingt is taxable, regardless of whether it's base pay or a bonus.

Weston White
04-27-2012, 04:49 PM
Exactly my point. Show me someone who has successfully gotten away with this, and I'm on board. Until then, I will continue to think it's a bunch of bunk that will get me a one way ticket to a small US military installation on the island of Cuba.

Actually, it is rather simple, compare this issue (the abuse of national powers of taxation) with that of the federal governments present view on say your individual right to bear arms (which they claim only applied to the militia –which is really every American anyway, but that federal bureaucrats claim it is only those in the “U.S. Military”, which is neither the organized/unorganized militia, but our “National Guard”); your I Amendment rights (which of now is protected only in “free speech zones” –conveniently located several blocks away outside of the fenced off event in some vacant parking lot); your right to travel freely (that is, at least, as determined by the DHS’ TSA goon-squad and in due course just so long as you do not owe any back taxes to the federal government); your right to remain as a part of a “American family” (that is presuming your name does not become mysteriously placed on some secretive “terrorist watch-list” –which if the case arbitrarily revokes your individual right to travel and to own or purchase firearms and/or bullets), etc., etc. I could easily go on, though I think the point has been made.


More pointedly, one aspect of federal taxation that is little addressed, is that under AI,S8,C1 the federal government may only impose its powers of general taxation under any of three very distinctive parameters (“…to pay the Debts and provide for the common Defence and general Welfare of the United States…”). And that if be such that the federal income tax was additionally intended to publicly levy taxes DIRECTLY upon the earnings of every individual (without regard as to apportionment of such taxes) than even still it becomes unconstitutional as for it was well debated by our Nation’s Framers that all forms of direct taxation would only be assessed under the most exigent (dire) of circumstances. As for the federal income tax it has -as by status quo methodology at least- been applied as both a forthright and perpetual means of pseudo DIRECT-INDIRECT taxation annually upon the masses since 1913 (now realizing the federal government well over $2.3-trillion in related forms of individual taxes per annum, which is to say the very least an utterly astronomically astonishing sum). Therefore, with all of the other the points of view, arguing, bickering, theorizing, debating, etc., aside, the federal income tax, regardless, is itself outright unconstitutional on those above two grounds alone, period.

Weston White
04-27-2012, 05:15 PM
So tell me, are you paying income taxes?

It is not such much a question of does one pay taxes or not, it is much about calling and then exposing the bluff. The magician’s trick has gone far past becoming old and now it is time to be put into an ever-resting slumber.

We all possess an inherent right to redress our government and to nullify its actions of public tyranny and that is what we need to start applying, we should not be cowards to their cause. They want to illegally seize 30% or more of your annual ability, we need to call them on that by learning what the fundaments to national taxation are really and truly about and pass and openly discuss our knowledge with others; they want to ban firearms and ammunitions from the population , we need to purchase our own in home weapons cache safes and encourage others to do the same; they want to make home gardens illegal, we need to begin growing our own home gardens and encouraging others to do the same; they want to outlaw all that is non-GMO, we need to start using and buying only organic sustenance and heirlooms seeds for our home gardens; they want to roll their eyes at the mention of your individual rights and protections and at their governmental limitations beset by our U.S. Constitutional and other fundamental documents, we collectively need to make utter asses out of them in eyes of the masses and get them either impeached, recalled, or otherwise voted right out from their offices or positions; etc., etc.

But mostly, we need to realize and value our gifted American birthright, our ever-ascending spirit and to replace whatever degree of cowardice now existent within us with forthcoming and unceasing petulance.


“I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant.” - H.L. Mencken

Weston White
04-27-2012, 05:58 PM
But this is inconsistent with the Supreme Court's statement in the Smith case that the statute includes any financial benefit that the employer bestows on the employee. Or, for that matter, with the Court's statement in Lucas v. Earl that "There is no doubt that the statute could tax salaries to those who earned them". Or with the many other cases holding that salaries, wages, and compensation for workingt is taxable, regardless of whether it's base pay or a bonus.

Certainly, that was to be taken to mean any financial benefit within the meaning what are “financial benefits”, while earning merely at a subsistence level is most definitely no such financial benefit. Moreover, the framing of the cases you referenced, may address only the subject at bar (viz., employee stock options and in Lucas the case was not so much addressing taxation as it was aspects of contract law), they may not subsequently pass inference upon all other matters not related to the pleadings of the case being heard. Conveniently, SCOTUS has never heard matters concerning “base pay” of the masses and national taxation, nor will it likely ever be willing to do so. The cases you continue to reference -while at the exact same time, yourself conveniently discounting about one-dozen much more relevant SCOTUS cases as they so completely annihilate the entirety of your now plainly exposed stance- are very weak on the discussion of national taxation, empirical evidence, American fundaments, maxims, etc.

Clearly, you willfully misread the core of the statute itself, Congress did not set forth what you are claiming that “…income includes wages, salaries, and compensation for services”, what it did do however, was what the XVI Amendment called upon it to only do, to include as income all that “derived out of wages, salaries, and compensation for services”. On a varied level Alexander Hamilton had much earlier argued the matter himself, thereafter crystalizing the distinction between whatever was to become income as a gain or profit and income as capital. It is very apparent that Congress meant only to impose income taxes, INDIRECTLY, upon the former. Plainly, you are outright incorrect “Sonny Jim”.

Wheeljack
04-27-2012, 06:50 PM
But this is inconsistent with the Supreme Court's statement in the Smith case that the statute includes any financial benefit that the employer bestows on the employee.

No, it is totally consistent. You better learn the difference between compensation and benefits.



Or, for that matter, with the Court's statement in Lucas v. Earl that "There is no doubt that the statute could tax salaries to those who earned them".

The statute does tax wages and salaries received for the performance of services.



Or with the many other cases holding that salaries, wages, and compensation for workingt is taxable, regardless of whether it's base pay or a bonus.


In all those cases, this argument was never raised, therefore the court has never addressed it.

When the IRS and the defendant issued their stipulation of facts in these cases and the defendant agreed they had received compensation for services, because they were under the impression that services includes being paid for working, without knowing the legal distinction between service and services, the court had no course but to rule against them. And in those cases in which the IRS and the defendant did not stipulate this as a fact, and because the defendant did not raise this argument, the court was left to it own impression, which is that services includes being paid for working.



Look at the how the IRS describes employment in this.






Internal Revenue Bulletin: 2007-14









April 2, 2007









Rev. Rul. 2007-19

ISSUE
Whether Taxpayer A may avoid federal income tax liability by maintaining that the Internal Revenue Code does not tax wages or other compensation received in exchange for personal services.

FACTS
Taxpayer A receives wages in exchange for personal services. Taxpayer A then does one or more of the following: (1) furnishes a Form W-4 to the employer on which Taxpayer A claims excessive withholding allowances or claims complete exemption from withholding; (2) fails to file a federal income tax return; (3) fails to report the wages on the federal income tax return; (4) claims a refund for any withheld income tax; or (5) claims deductions for personal, living and family expenditures to offset the wages reported on the federal income tax return. Taxpayer A claims that compensation received for personal services is not subject to federal income tax.


HOLDING
1. Wages fall within the definition of income set forth in section 61(a)(1) of the Internal Revenue Code. Taxpayer A’s wages and other compensation for services are income subject to federal income tax and must be reported on Taxpayer A’s federal income tax return.
2. The payment of wages and other compensation for personal services is not an equal exchange of property. The full amount of wages received by Taxpayer A is subject to federal income tax and must be reported on Taxpayer A’s federal income tax return.
3. Wages and other compensation received by Taxpayer A in exchange for personal services are subject to federal income tax without reduction of Taxpayer A’s personal living expenses.

Wheeljack
04-27-2012, 06:55 PM
Clearly, you willfully misread the core of the statute itself, Congress did not set forth what you are claiming that “…income includes wages, salaries, and compensation for services”, what it did do however, was what the XVI Amendment called upon it to only do, to include as income all that “derived out of wages, salaries, and compensation for services”.

Congress said, compensation for personal service, not services.

Weston White
04-27-2012, 08:04 PM
Congress said, compensation for personal service, not services.

Yes, however, under 26 USC Sec. 7701(p)(1)(1),(2), et seq., the plural is as the singular and visa versa, male is as the female, et cetera.

Wheeljack
04-27-2012, 10:41 PM
Yes, however, under 26 USC Sec. 7701(p)(1)(1),(2), et seq., the plural is as the singular and visa versa, male is as the female, et cetera.

Then you have missed the point of this thread. Use that Black's Law Dictionary and look up these two words. You will find two distinct definitions.

Service denotes a condition, the placement of oneself under the direction and control of another. A condition either is or it is not, there is no plural form. a person can not be in service to another person multiple times at the same time.

Services are things purchased that have no physical characteristics. The singular form of this word is "a" service.


Let's take the word good.

Good denotes a condition, means valid or effectual

Goods, on the other hand, means all forms of personal property. Is goods the plural of good. Hell no.

This is precisely the mindset that I pointed out to Sonny Tufts 3 posts back.

Weston White
04-28-2012, 01:30 AM
Alright, so let’s break it down a bit more (just as a primer on the issue):

Initially ‘net income’ was ratified as intending to in part include “…gains, profits, and income derived from salaries, wages, or compensation for personal service…”

Thereafter amended to be ‘gross income’ to mean (although maintaining that the former still to date bears strict statutory relevance), “all income from whatever source derived, including …Compensation for services, including fees, commissions, fringe benefits, and similar items…”


Thus, to the former we have singularity and to the latter we have multiplicity. So then to view a few interesting legal definitions in rendering out their various contexts:

GAIN. Profits; winnings; increment of value. [Citations omitted.]
Difference between receipts and expenditures; pecuniary gain. [Citations omitted.]


PROFIT. The advance in the price of goods sold beyond the cost of purchase. The gain made by the sale of produce or manufactures, after deducting the value of the labor, materials, rents, and all expenses, together with the interest of the capital employed. [Citations omitted.]
The excess of receipts over expenditures; that is, net earnings. [Citations omitted.]
The receipts of a business, deducting current expenses; it is equivalent to net receipts. [Citations omitted.]
An excess of the value of returns over the value of advances. The same as net profits. [Citations omitted.]
… In distinction from the wages of labor, it is well understood to imply the net return to the capital of stock employed, after deducting all the expenses, including not only the wages of those employed by the capitalist, but the wages of the capitalist himself for superintending the employment of his capital or stock. [Citations omitted.]

The benefit, advantage, or pecuniary gain accruing to the owner or occupant of land from its actual use; as in the familiar phrase “rents, issues and profits,” or in the expression “mesne profits.”



FEE. …
A reward, compensation, or wage given to one for the performance of official duties (clerk of court, sheriff, etc.) or for professional services, as in the case of an attorney at law or a physician;–frequently used in the plural form. [Citations omitted.] A recompense for an official or professional service or a charge or emolument or compensation for particular act or service. [Citations omitted.]

Fees differ from costs in this, that the former are a recompense to the officer for his service; and the latter, an indemnification to the party for money laid out and expended in his suit; [Citations omitted.] Fees are synonymous with charges; [Citations omitted.] and also with “percentage” or “commission”; [Citations omitted.]
“Salary,” as relating to the compensation of public officers, is generally regarded as a periodical payment dependent upon time, while “fees” depend on services rendered, the amount of which is fixed by law and payable when the judgment allowing them is entered. [Citations omitted.]


LABOR. Work; toll; service. Continued exertion, of the more onerous and inferior kind, usually and chiefly consisting in the protracted expenditure of muscular force, adapted to the accomplishment of specific useful ends.

“Labor,” “business,” and “work” are not synonyms. Labor may be business, but it is not necessarily so; and business is not always labor. Labor implies toll; exertion producing weariness; manual exertion of a toll some nature.


LABORER. One who, as a means of livelihood, performs work and labor for another. [Citations omitted.]
In English statutes, this term is generally understood to designate a servant employed in husbandry or manufactures, and not dwelling in the home of his employer. Wharton; Mozley & Whitley. A person without particular training, employed at manual labor under a contract terminable at will. [Citations omitted.]
As used in mechanics’ lien statute “laborer” is said to include all who work with their hands, crude implements, or teams in work demanding that character of service, [Citations omitted.] …
A laborer, as the word is used in the Pennsylvania act of 1872, giving certain preference of lien, is one who performs, with his own hands, the contract which he makes with his employer. …


PAY. Compensation. [Citation omitted.] A fixed and definite amount given by law to persons in military service in consideration of and as compensation for their personal services. [Citation omitted.]


SALARY. A reward or recompense for services performed.
In a more limited sense salary is a fixed periodical compensation paid for services rendered; a stated compensation, amounting to so much by the year, month, or other fixed period, to be paid to public officers and persons in some private employments, for the performance of official duties or the rendering of services of a particular kind, more or less definitely described, involving professional knowledge or skill, or at least employment above the grade of menial or mechanical labor. [Citations omitted.]

The word “salary,” is synonymous with “wages,” except that “salary” is sometimes understood to relate to compensation for official or other services, as distinguished from “wages,” which is the compensation for labor. [Citations omitted.]


WAGES. A compensation given to a hired person for his or her services; the compensation agreed upon by a master to be paid to a servant, or any other person hired to do work or business for him. [Citations omitted.]
Agreed compensation for services by workmen, clerks or servants–those who have served an employer in a subordinate or menial capacity and who are supposed to be dependent upon their earnings to pay their present support, whether they are to be paid by the hour, the day, the week, the month, the job, or the piece. …

In Political Economy
The reward paid, whether in money or goods, to human exertion, considered as a factor in the production of wealth, for its co-operation in the process.

“Three factors contribute to the production of commodities,–nature, labor, and capital. Each must have a share of the product as its reward, and this share, if it is just, must be proportionate to the several contributions. The share of the natural agents is rent; the share of labor, wages; the share of capital, interest. The clerk receives a salary; the lawyer and doctor, fees; the manufacturer, profits. Salary, fees, and profits are so many forms of wages for services rendered.” …

–Wage earner. One who earns his living by labor of a menial or mechanical kind or performed in a subordinate capacity, such as domestic servants, mechanics, farm hands, clerks, porters, and messengers. In the United States bankruptcy act of 1898, an individual who works for wages, salary, or hire, at a compensation not exceeding $1,500 [at current inflation is around $39,000] per year. [Citations omitted.]


COMPENSATION. Indemnification; payment of damages; making amends; making whole; giving an equivalent or substitute of equal value; that which is necessary to restore an injured party to his former position. An act which a court orders to be done, or money which a court or other tribunal orders to be paid, by a person whose acts or omissions have caused loss or injury to another, in order that thereby the person damnified may receive equal value for his loss, or be made whole in respect of his injury.

“Compensation” is a misleading term, and is used merely for lack of a word more nearly expressing the thought of the law which permits recovery for an imponderable and intangible thing for which there is no money equivalent. …

The word “compensation,” as used in Workmen’s Compensation Acts, means the money relief afforded an injured employee or his dependents according to the scale established and for the persons designated in the act, and not the compensatory damages recoverable in an action at law for wrong done or a contract broken. …
As used in Workman’s Compensation Acts, “compensation” is distinguishable from “benefits”; the former applying to an allowance where the employee is only injured, and the latter applying in case of death. … The term “compensation” may include funeral benefits. …
...
The remuneration or wages given to an employee or, especially, to an officer. Salary, pay, or emolument. [Citations omitted.]

The ordinary meaning of the term “compensation,” as applied to officers, is remuneration, in whatever form it may be given, whether it be salaries and fees, or both combined. It is broad enough to include other remuneration for official services; [Citations omitted]; such as mileage or traveling expenses; [Citations omitted]; and also the repayment of amounts expended; [Citations omitted.]
But the term is not necessarily synonymous with “salary.” [Citations omitted.]
A “reasonable compensation” is that which will fairly compensate the laborer when the character of the work and the effectiveness and ability entering into the service are considered. [Citations omitted.]
Compensation is not synonymous with “pension,” which is ordinarily a gratuity from the government or some of its subordinate agencies in recognition of, but not in payment for, past services. [Citations omitted.]


SERVICE.
In Contracts
The being employed to serve another; duty or labor to be rendered by one person to another, the former being bound to submit his will to the direction and control of the latter. [Citations omitted.] The act of serving; the labor performed or the duties required. [Citations omitted.]

“Service” and “employment” generally imply that the employer, or person to whom the service is due, both selects and compensates the employee, or person rendering the service. [Citations omitted.]

The term is used also for employment in one of the offices, departments, or agencies of the government; as in the phrases “civil service,” “public service,” “military service,” etc. [Citations omitted.]


PROFESSIONAL. A term applied in the Immigration Law, May 19, 1921, 2, subd. “d” (42 State. 6), to one undertaking or engaging for money as a means of subsistence in a particular art. It is opposed to amateur, and as used in the statute refers to one who pursues an art and makes his living therefrom. [Citations omitted.]


PROFESSIONAL EMPLOYMENT. Within the meaning of a statute authorizing actions for misconduct or neglect, professional services by an attorney are not limited to litigation, but include giving advice, managing a business, devising plans, and making collections, and the employment may be recognized as professional, although including services not ordinarily classed as professional services; whether the attorney is professionally employed depending on the relations and mutual understanding of what was said and done, and on all the facts and circumstances of the particular undertaking. …


EMPLOY. To engage in one’s service; to use as an agent or substitute in transacting business; to commission and intrust with the management of one’s affairs; and, when used in respect to a servant or hired laborer, the term is equivalent to hiring, which implies a request and a contract for a compensation, and has but this one meaning when used in the ordinary affairs and business of life. [Citations omitted.]


EMPLOYEE. This word “is from the French, but has become somewhat naturalized in our language. Strictly and etymologically, it means ‘a person employed,’ but, in practice in the French language, it ordinarily is used to signify a person in some official employment [NOTICE: this is noteworthy with consideration to the Classification Act quoted earlier], and is generally used with us, though perhaps not confined to any official employment, it is understood to mean some permanent employment or position.” The word may be more extensive than “clerk” or “officer,” and may signify any one in place, or having charge or using a function, as well as one in office. [Citations omitted.]
One who works for an employer; a person working for salary or wages; applied to anyone so working, but usually only to clerks, workmen, laborers, etc., and but rarely to the higher officers of a corporation or government or to domestic servants. [NOTICE: this is noteworthy with consideration to the IRC frequent referencing to corporate officers and federal employees and instrumentalities] [Citations omitted.]
“Employee” must be distinguished from “independent contractor,” “officer,” “vice-principal,” “agent,” etc. The term is often specially defined by statutes; and whether one is an employee or not will depend upon particular facts and circumstances even though the relation or master and servant, or some other form of contractual relation does or does not exist. [Citations omitted.]


OCCUPATION. …
A trade; employment; profession; business; means of livelihood. …

… The word “occupation” must be held to have reference to the vocation, profession, trade or calling which the assured is engaged in for hire or for profit. [Citations omitted.]
“Occupation” as used in Workmen’s Compensation Act means that particular business, profession, trade or calling which engages the time and efforts of an individual, the employment in which he regularly engages or the vocation of one’s life. [Citations omitted.]



WORKMAN. One who labors; one employed to do business for another; one engaged in some form of manual labor, whether skilled or unskilled. [Citations omitted.]
A “workman,” in the broad sense, is one who works in any department of physical or mental labor, but in common speech is one who is employed in manual labor, such as an artificer, mechanic, or artisan; while an “employee” in a broad sense is one who receives salary, wages, or other compensation from another, but the term is usually applied to clerks, laborers, etc., and not to the higher officers of a corporation. [Citations omitted.]

Under Workman’s Compensation Acts
The term “workman” in the Workman’s Compensation Act means, as the act states, one who engages to furnish services subject to the control of an employer, and the relation necessary to constitute one an employer and another a workman under the act is the relation of master and servant originating in a contract for personal services, subject to complete control of the details of work and the mode of its performance. [Citations omitted.]

Wheeljack
04-28-2012, 08:24 AM
Weston,

You are hitting this with your kitchen sink again.

Why didn't you post the definition of services?

Weston White
04-28-2012, 02:05 PM
I am only meaning to show the sum of related terms involved.

As to the term ‘services’ there is only the definition as pertaining to a tortfeaser coming between a husband and his wife.

As to the term ‘personal’ there is only the definition of being an individual and partaking in the enjoyments of human begins and of personalty.

As to the term ‘personal service’ there is only the discussion of establishing proper service of process.

As to the term ‘domestic’ it pertains only to those, servants, working within the home of those they serve and excludes workmen and laborers working outside of the home of those they serve.

And I updated ‘compensation’ to include a few more interesting paragraphs that were on the preceding page.

Wheeljack
04-28-2012, 03:55 PM
In my Black's 6th Ed. service is found on page 1368.

It covers these contexts:
Contracts
Domestic Relations
Feudal Law
Practice

Then there are seven more definitions Service charge, Service contract, Service establishment, Service Life, Service mark, Service occupation tax, and Service of process. After which I come to Services on page 1369.

Are you telling me that your Black's 3rd has no distinct definition for services?

Weston White
04-28-2012, 06:50 PM
Yes, mine edition covers everything under "service", with only brief mention of "services".

Wheeljack
04-28-2012, 09:46 PM
Maybe yours has services covered under "goods and services".

Weston White
04-29-2012, 08:56 AM
The closest match I found was "good of the service".

Wheeljack
04-29-2012, 09:44 AM
Well, in googling Black's Law dictionary I find that your edition was published in 1933. Thus, I would surmise that the definition of services came about in the 1939-1941 area as it was used in the Current Tax Payment Act of 1942 and then in the overhaul of the IRC in 1954.

So the first edition to have a distinct definition of services would have been the 4th published in 1951.

Weston White
04-29-2012, 04:21 PM
Though should not the focus be maintained upon the context of its distinct meaning rather than its specifically inclusive numerations, i.e., “all income from whatever source derived, including…”?

That being namely, “compensation for services”, including: (1) “fees” [which are earned only by business professionals as charges for their specifically expert knowledge or skill and by officials in the performance of their duties]; (2) “commissions” [which are, among other things, recompense or rewards for accomplishing one’s duties]; (3) “fringe benefits” [which would intend to cover all non-exempted compensation that is in addition to one’s base pay]; and (4) “similar items” [which would appertain wholly to the aforementioned fees, commissions, fringe benefits, etc.]

Noticing the consistent theme referencing likeness to: business officers and professionals, public officials and officers, governmental and military service, etc.

When we observe the definition of “compensation” (aside from the theme of righting the wrong and being made whole), we observe that it bears largely upon those working within an official capacity, earning a salary, to which “compensation” is itself not necessary synonymous nor is it synonymous to the receipt of “benefits”; and to those earning pay, which is defined as the means of compensation for those serving in the military for their “personal services”. The above, being largely on par with the definition of “service”. Although “compensation” generally considers employee remuneration as well; however, the surrounding theme of the Internal Revenue Code's own terms emphasizes support to the former descriptions.

Wheeljack
04-29-2012, 07:22 PM
Though should not the focus be maintained upon the context of its distinct meaning rather than its specifically inclusive numerations, i.e., “all income from whatever source derived, including…”?

That being namely, “compensation for services”, including: (1) “fees” [which are earned only by business professionals as charges for their specifically expert knowledge or skill and by officials in the performance of their duties]; (2) “commissions” [which are, among other things, recompense or rewards for accomplishing one’s duties]; (3) “fringe benefits” [which would intend to cover all non-exempted compensation that is in addition to one’s base pay]; and (4) “similar items” [which would appertain wholly to the aforementioned fees, commissions, fringe benefits, etc.]

Noticing the consistent theme referencing likeness to: business officers and professionals, public officials and officers, governmental and military service, etc.

When we observe the definition of “compensation” (aside from the theme of righting the wrong and being made whole), we observe that it bears largely upon those working within an official capacity, earning a salary, to which “compensation” is itself not necessary synonymous nor is it synonymous to the receipt of “benefits”; and to those earning pay, which is defined as the means of compensation for those serving in the military for their “personal services”. The above, being largely on par with the definition of “service”. Although “compensation” generally considers employee remuneration as well; however, the surrounding theme of the Internal Revenue Code's own terms emphasizes support to the former descriptions.

Getting there.

Business officers - Corporation paid from proceeds of sales or services
Professionals - Independent Contractors and Self-employed, again paid from proceeds of sales or services

Government and military has divisions just like private sector.
Public Officials - Offered their personal services to be elected, run their office as they see fit.
Bureaucrats - Commissioned by Executive, again run their office as they see fit

Government workers 8 hr. jobs just like private sector.

Military
Officers - Commissioned by Executive, run office as they see fit.
Enlisted - 24/7 job, under control and direction of officers.

Sonny Tufts
04-30-2012, 10:00 AM
Moreover, the framing of the cases you referenced, may address only the subject at bar (viz., employee stock options and in Lucas the case was not so much addressing taxation as it was aspects of contract law), they may not subsequently pass inference upon all other matters not related to the pleadings of the case being heard. Conveniently, SCOTUS has never heard matters concerning “base pay” of the masses and national taxation, nor will it likely ever be willing to do so. The cases you continue to reference -while at the exact same time, yourself conveniently discounting about one-dozen much more relevant SCOTUS cases as they so completely annihilate the entirety of your now plainly exposed stance- are very weak on the discussion of national taxation, empirical evidence, American fundaments, maxims, etc.

Notice the inherent contradiction in Mr. White's post. On the one hand, he faults me for citing the Smith and Lucas cases because they allegedly didn't deal with the taxation of "base pay", and in White's view they should be confined to their particular facts. On the other hand, he refers to "one-dozen" SCOTUS cases that supposedly destroy my position. But White also claims that SCOTUS has never decided a case involving base pay. Therefore, according to his jurisprudence, the "one-dozen" cases can be ignored and confined to their facts since they didn't deal with base pay.

The fact remains that anyone who argues that the pay one receives for working (regardless of the level of the pay or whether it's "base pay" or a bonus) isn't included in gross income is going to lose. And if he makes such a frivolous argument in court, he'll be lucky if he isn't fined.

Sonny Tufts
04-30-2012, 10:09 AM
When we observe the definition of “compensation” (aside from the theme of righting the wrong and being made whole), we observe that it bears largely upon those working within an official capacity, earning a salary, to which “compensation” is itself not necessary synonymous nor is it synonymous to the receipt of “benefits”; and to those earning pay, which is defined as the means of compensation for those serving in the military for their “personal services”. The above, being largely on par with the definition of “service”. Although “compensation” generally considers employee remuneration as well; however, the surrounding theme of the Internal Revenue Code's own terms emphasizes support to the former descriptions.

Mr. White, you're ignoring the Code's definition of "includes", which is to be interpreted in a non-limiting sense -- i.e., as in "including but not limited to" See Section 7701(c). People who have argued that compensation for work performed in a private, non-governmental capacity isn't taxable have consistently lost.

Weston White
04-30-2012, 04:06 PM
Notice the inherent contradiction in Mr. White's post. On the one hand, he faults me for citing the Smith and Lucas cases because they allegedly didn't deal with the taxation of "base pay", and in White's view they should be confined to their particular facts. On the other hand, he refers to "one-dozen" SCOTUS cases that supposedly destroy my position. But White also claims that SCOTUS has never decided a case involving base pay. Therefore, according to his jurisprudence, the "one-dozen" cases can be ignored and confined to their facts since they didn't deal with base pay.

The fact remains that anyone who argues that the pay one receives for working (regardless of the level of the pay or whether it's "base pay" or a bonus) isn't included in gross income is going to lose. And if he makes such a frivolous argument in court, he'll be lucky if he isn't fined.

Notice, however, Sonny Jim never stated that I was incorrect on the subject, only that I was being contradictory. While, Sonny Jim has conveniently left out mention of the following:

1. The “one-dozen” cases I made reference to had unlike the two mentioned above, actually bothered to substantiate the findings and positions taken within those cases, for the Justices therein respected the sum of empirical and legal evidence, they referenced prior case law, including legislative history, etc.
2. The referencing of case law is merely one aspect of many respective aspects holding much valid evidentiary and substantive value; personally, I opt not to outright discount one form or aspect over another, for to so would be sophomoric. But again the cases to which Sonny Jim has quoted/cited to are utterly ludicrous on the matter of national taxation, so much so that not even the CRS bothered making reference to them.
3. The few cases in which Sonny Jim has pinned all of his hopes and dreams upon are the equivalent of a dictum of findings; providing nothing absolutely specific therein save for scintilla positions manhandled by the Justices.

The fact remains that anyone leaning upon threats of frivolity and punishment is but a contrivance of a scaremonger and manufacturer favoring great injustices. The federal government has absolutely no legal prudence in imposing $2.3-trillion per annum upon its citizens that are themselves simply trying to pay their rent, buy groceries, etc., and make do from one week to the next. Such a tax levied upon the capital of the people would in fact be a personal tax and would therefore require apportionment, regardless as to the advent of the XVI Amendment, and even still would require necessity by way of impending circumstance in order to substantiate such a means of national taxation and would by no means be justified as an unceasing, ever-increasing tax.

Weston White
04-30-2012, 04:24 PM
Mr. White, you're ignoring the Code's definition of "includes", which is to be interpreted in a non-limiting sense -- i.e., as in "including but not limited to" See Section 7701(c). People who have argued that compensation for work performed in a private, non-governmental capacity isn't taxable have consistently lost.

Negative, I am not ignoring that as there is nothing to be ignored, for the entirety of the “includes and including” argument is wholly irrelevant, being a grossly moot point. What is being ignored by the Circuits (including the Quatfool people such as yourself), however, is much, much more prevalent and that is the intended breadth of the XVI Amendment itself, i.e., it clearly reads on “incomes, from whatever source derived,” and not on “income of whatever source,” or on “whatever income or source”.

Also, the “private, non-governmental capacity” reference is but a red-herring, which bears only upon the prospective of 'withholding at the source' that itself establishes no imposition within Subtitle A.

Sonny Tufts
05-01-2012, 08:38 AM
But again the cases to which Sonny Jim has quoted/cited to are utterly ludicrous on the matter of national taxation, so much so that not even the CRS bothered making reference to them.

It's strange that Mr. White would put so much trust in the Congressional Research Service, which stated the following regarding the taxation of the pay one receives for working:


For example, if John Doe works 5 hours for $5.00 per hour, is the $25.00 he receives taxable income to him? As we have seen in the above analysis, we must determine if there has been a gain which is realized and recognized. To see if there was a gain we do not look only to the fair market value of the labor, but rather we determine the difference between what was received and the basis (cost) in the labor. Generally one has a zero basis in one’s own labor. Therefore, Doe’s gain is $25.00 minus 0, or $25.00. This gain is realized when Doe is paid or has right to receive payment.

The gain is recognized specifically in IRC § 61(a)(1) (compensation for services) and there is no non-recognition section which is generally applicable to wages. Therefore, John Doe has $25.00 of taxable income.

"Frequently Asked Questions Concerning the Federal Income Tax", CRS Report January 7, 2005
http://webpages.charter.net/bhowe9320/lethal_lithics_20051001/government/Income%20Tax%20Constitutionality.pdf

Weston White
05-01-2012, 01:11 PM
It's strange that Mr. White would put so much trust in the Congressional Research Service, which stated the following regarding the taxation of the pay one receives for working:

Really, now a FAQ report written in 2005 by a single CRS attorney, so this is what is has come to for you, quoting the unsubstantiated opinions of one person, already clearly biased on the matter, quoting passages while providing no official reference? Clearly, the provided quotation is little else than pre-opinionated conjecture.

Goodness now, should anyone actually be so surprised at such a feeble act of desperation? Tell you what, be sure to give me a ring when there is actually something definitive on the matter (as you had quoted above), so as to be included within the Annotated Constitution.

The author’s sole argument, in constant reference to Pollock, fails on its face as for during that time-frame the federal income tax was never intended to be upon the whole of the populace but upon only a mere 3-8%, respectively. With consideration to the following quotation: “…and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations, and in that way what was intended as a tax on capital would remain in substance a tax on occupations and labor.”, which willfully the author has blissfully ignored many other prevailing and insightful passages included throughout the Pollock case. In any case the above passage fails to translate itself into just and proper indirect taxing of one’s capital, personalty, or livelihood, but only upon their professional and other such beneficial or enterprising engagements, e.g., occupation taxes, BATFE excises, professional licenses, gift and gambling taxes, etc.

Moreover, noticing that the federal income tax is at once “a tax on capital”, thus one must first acquire capital for whence it to be taxed upon its growth, while for the average individual they have no means of acquiring such capital until having first exchanged their personal exertion through their own ability in toiling; and even still upon such acquisitioning of capital, they must derive a realized increase, e.g., gain, thereto.

Also, the zero-basis (“pure gain”) in labor is further fallacy levied, waged, and piecemealed by proponents of tax strong-arming, for the cost basis in an individual’s laboring is as determined by their privately negotiated contract, be it by a measurement in relative time, effort exerted, or literal accomplishment.

Wheeljack
05-01-2012, 06:48 PM
It's strange that Mr. White would put so much trust in the Congressional Research Service, which stated the following regarding the taxation of the pay one receives for working:


For example, if John Doe works 5 hours for $5.00 per hour, is the $25.00 he receives taxable income to him? As we have seen in the above analysis, we must determine if there has been a gain which is realized and recognized. To see if there was a gain we do not look only to the fair market value of the labor, but rather we determine the difference between what was received and the basis (cost) in the labor. Generally one has a zero basis in one’s own labor. Therefore, Doe’s gain is $25.00 minus 0, or $25.00. This gain is realized when Doe is paid or has right to receive payment.

The gain is recognized specifically in IRC § 61(a)(1) (compensation for services) and there is no non-recognition section which is generally applicable to wages. Therefore, John Doe has $25.00 of taxable income.

"Frequently Asked Questions Concerning the Federal Income Tax", CRS Report January 7, 2005
http://webpages.charter.net/bhowe932...utionality.pdf


Weston,
There is nothing wrong with what is said in this example. What assaults our knowledge of what is right is the assumptions we draw from how this is worded.

It says John Doe works, but not for whom. Here we assume that it is for an employer, possibly because they worded it as 5 "hours".

Can we find out who John is working for? Yes, from the wording "in one's own labor". This tells us that John is working for himself (self-employed).
John has sold a service to a customer at the rate of $5.00/hr for 5 hours. Thus the $25 falls under compensation for services and is taxable income.

.

Weston White
05-01-2012, 08:04 PM
Well, certainly another great contextual perspective Wheeljack. I was primarily wanting to emphasize the utter lack of footnotes throughout the entirety of those couple of paragraphs, while the majority of all other arguments included within the report contain more than a few such footnotes.

Moreover, the argument alluded to within the report does not concatenate with the foundation set forth by the XVI Amendment. In quoting legislative draftsman for the Treasury Department, F. Morse Hubbard, (page 2580 of the March 27th, 1943, House Congressional Record) for Amendment XVI:

“… So the amendment made it possible to bring investment income within the scope of the general income tax law, but did not change the character of the tax. It is still fundamentally an excise or duty with respect to the privilege of carrying on any activity or owning any property which produces income.
The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax: it is the basis for determining the amount of tax. …”

Also noting that the IRC claims its authority entirely from the XVI Amendment (by the by, a misquoted version of the Amendment), never does it at any point state that it had already possessed the requisite powers to withstand the scope of the XVI Amendment. Additionally, if such were in fact the case, then the repeal of the XVI Amendment would be inconsequential (for all Congress would need to do is amend the statute to make the aforementioned method of the tax its primary subject (thus throwing off the reins and harness of the high court), for according to tax proponents Congress has limitless powers of taxation, as it were).

Sonny Tufts
05-02-2012, 08:32 AM
It says John Doe works, but not for whom. Here we assume that it is for an employer, possibly because they worded it as 5 "hours".

Can we find out who John is working for?

It's irrelevant from an income tax standpoint whether John is self-employed or working for someone else. In either case, his compensation is included in gross income.

Sonny Tufts
05-02-2012, 08:43 AM
Moreover, the argument alluded to within the report does not concatenate with the foundation set forth by the XVI Amendment. In quoting legislative draftsman for the Treasury Department, F. Morse Hubbard, (page 2580 of the March 27th, 1943, House Congressional Record) for Amendment XVI:

“… So the amendment made it possible to bring investment income within the scope of the general income tax law, but did not change the character of the tax. It is still fundamentally an excise or duty with respect to the privilege of carrying on any activity or owning any property which produces income.
The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax: it is the basis for determining the amount of tax. …”

Mr. Hubbard was a former IRS attorney whose duties lay in the area of drafting regulations; there is no evidence he had any expertise in the theoretical foundations of the income tax. Moreover, he was flat wrong.


Hubbard’s opinion in 1943 (30 years after the ratification of the 16th Amendment and the enactment of the first income tax under that amendment) about the nature of the income tax is flatly contradicted by a statement in 1913 by one of original authors of the income tax:

“Under the proposed measure income is both the subject and the measure of the tax.”

Representative Cordell Hull, Cong. Rec. (8/5/1913) (reprinted in Foster’s Income Tax.)

Cordell Hull (1871-1955) was a recognized expert in tax, commercial, and fiscal policies, and would have known what he was talking about. He served in Congress from 1907 to 1931 and served on the House Ways and Means Committee for eighteen years, where he was one of the principal authors of the income tax provisions of the 1913 Tariff Act, along with the Revised Act of 1916, and the federal estate tax that was enacted in 1916. (He was also elected as a U.S. Senator in 1931, but resigned in 1933 when President Franklin D. Roosevelt appointed him to serve as Secretary of State, a position he held for 12 years, which is the longest term in U.S. History.)

That Hubbard was wrong in his 1943 opinion is clear from the following footnote to the paragraph quoted above:

“If the tax should be construed as a tax on income as a specific fund the disappearance of the fund before the date of assessment would prevent the collection of the tax. (See Foster and Abbott, op. cit., p. 85.)”

Memorandum, note 4.

Hubbard seems to have been laboring under the misconception that, if Congress imposed a tax “on” income, and if the taxpayer spent the income before Congress could collect the tax, then Congress would be unable to collect the tax at all. But that is nonsense. As noted elsewhere, it is perfectly clear that the taxpayer who earns the income is personally liable for the tax, and I.R.C. section 6321 even imposes a lien for the amount of any tax that is assessed and unpaid on all of the property of the taxpayer, not just the income itself. So Hubbard’s semantic hair-splitting was completely unnecessary.

Hubbard also clearly believed that a tax measured by income would be an “income tax,” stating (for example) that the Corporate Tax Act of 1909 “was really an income tax.” But the Supreme Court flatly disagreed:

“As repeatedly pointed out by this court, the corporation tax law of 1909 ... imposed an excise or privilege tax, and not in any sense a tax upon property or upon income merely as income.”

U.S. v. Whitridge, 231 U.S. 144, 147 (1913).

“As has been repeatedly remarked, the corporation tax act of 1909 was not intended to be and is not, in any proper sense, an income tax law.”

Stratton’s Independence Ltd. v. Howbert, 231 U.S. 399, 414 (1913).

“As has been repeatedly pointed out by this court in previous cases [citations omitted] the act of 1909 was not in any proper sense an income tax law, nor intended as such, but was an excise upon the conduct of business in a corporate capacity, the tax being measured by reference to the income in a manner prescribed by the act itself.”

Anderson v. Forty-Two Broadway Co., 239 U.S. 69, (1915).

So Hubbard was wrong about the Corporate Tax Act of 1909 being an “income tax.” What about the idea that the income taxes enacted following the ratification of the 16th Amendment are not taxes “on” income but taxes on “certain activities and privileges”? The Internal Revenue Code does not identify any “activity or privilege” being taxed other than the receipt of the income itself. And the Supreme Court has confirmed that it is the realization (or receipt) of income that creates a tax liability:

“From the beginning the revenue laws have been interpreted as defining ‘realization’ of income as the taxable event rather than the acquisition of the right to receive it.”

Helvering v. Horst, 311 U.S. 112, 115 (1940).

To summarize, Hubbard’s characterization of the income tax is based on a faulty premise, is contradicted by one of the authors of the first income tax, and is inconsistent with the opinions of the Supreme Court. There is no getting around the fact that Hubbard was simply wrong.

http://evans-legal.com/dan/tpfaq.html#privileges

Sonny Tufts
05-02-2012, 09:09 AM
Incidentally, for those reading this thread who are truly interested in learning about the legality of the income tax, I highly recommend Dan Evans's website, The Tax Protestor FAQ, in which he comprehensively refutes many of the frivolous arguments made by those who think they don't have to pay income tax.

http://evans-legal.com/dan/tpfaq.html

I am not Mr. Evans, but I do admire the work he has done in creating his site. Not surprisingly, tax protestors despise it because it explodes many of their harebrained arguments, but none of them has ever been able to point out any inaccuracy in his discussion of the issues.

PaulConventionWV
05-02-2012, 09:18 AM
If that was true imagine all the back taxes the government would owe the people.

I think we have a figure for that. It's in the trillions.

Also, it's a good thing to point out that we are not obligated to pay income tax, but try telling the IRS that. The law doesn't make any bit of difference anymore. They are taking your money regardless just because most people have accepted the system, and now they can do whatever the hell they want as long as it's not outside of the norm. Then, they slowly move the norm even further down the road, regardless of the law. This knowledge won't change a thing because the IRS is an organization of theft; pure, unadulterated theft.

Weston White
05-02-2012, 05:47 PM
It's irrelevant from an income tax standpoint whether John is self-employed or working for someone else. In either case, his compensation is included in gross income.

No it is not, it is perfectly necessary in order to establish proper jurisdiction by the taxing statutes and to ensure proper application of the respective sections therein, e.g., foreign versus domestic, resident versus alien, liabilities as by Subtitle A or Subtitle C, exempt versus non-exempt, employee versus SB/SE, etc. Moreover, mere remuneration is neither “compensation” nor “incomes” as meant within the lawful breadth of the XVI Amendment nor 26 USC sec. 61. The federal income tax cannot constitutionally tax what is not constitutionally taxable as an indirect tax. Ergo, to tax one’s livelihood is to seek a personal tax as by capitation, thus requiring apportionment (as well that exigent events be present).

As for this is why the forms such as the SS-8 exist, see at: http://www.irs.gov/pub/irs-pdf/fss8.pdf

Wheeljack
05-02-2012, 08:00 PM
It's irrelevant from an income tax standpoint whether John is self-employed or working for someone else. In either case, his compensation is included in gross income.

Its completely relevant, Congress had a definition of wages which applied to employment as well as self-employment, already on the books, in Subtitle C, for Social Security. Tell us why, since you believe that the income tax applies to employment, the Congress did not use that definition for the Current Tax Payment Act, establishing withholding of tax at source, but found it necessary to create a new definition of wages based, not on employment itself, but on a circumstance of employment, services performed, by the employee, for the employer.


The Current Tax Payment Act was championed by Randolph E. Paul, General Counsel of the Treasury.

In an address to the Philadelphia Bar Association, on June 14,1943, Mr. Paul stated the following; (Copied from the text of his speech)

The duty to withhold an amount for income and victory taxes is net imposed on all persons making payments of compensation for personal services rendered. First, there must exist, as in the Social Security tax, the employer-employee relationship, as distinguished from the relationship of independent contractors. Then even where this relationship exists, wage payments in certain enumerated types of occupations, are excepted from the withholding requirement. The three main peacetime groups to which this exception applies are (1) agricultural laborers, (2) domestic servants in private homes, college clubs or fraternities, and (3) casual laborers not engaged in the course of the employer's trade or business.


As General Counsel of the Treasury and the Architect of the Current Tax Payment Act, I believe Mr. Paul to have been more than qualified to tell me how my paycheck is affected by the IRC.

Weston White
05-02-2012, 09:11 PM
Incidentally, for those reading this thread who are truly interested in learning about the legality of the income tax, I highly recommend Dan Evans's website, The Tax Protestor FAQ, in which he comprehensively refutes many of the frivolous arguments made by those who think they don't have to pay income tax.

Actually, for those reading this thread, who are truly interested in learning about the legality of the federal income tax, so far as such a means of taxation applies to the current topic of discussion that Webpage never before bothered to address such matters until a couple of years ago, when, during a related debate lasting several weeks, I had kept calling Mr. Evans (Quatlost! Forum member “LPC”-I shall leave it to your own imagination as to what that actually stands for…) on his avoidance of addressing the topic within his own “FAQ”, to which he then broke down and (finally) included a small update, mind you, all within about a very hasty 48-hour timeframe, thereafter displaying his very limited (and clearly preconceived) response to such matters of concern. Wherein, his then new addition, he merely cherry picked from a few sources, where he very conveniently quotes a small controlled paragraph, while omitting contextual portions that entirely conflict with the points-in-falsehood that he is trying to wrangle in an utmost fashion of stupidity and desperation. However, in reading his points and references with consideration to the arguments he is making, it becomes rather apparent that he neither understands the fundamental concepts to be applied to the various modes or methods of taxation nor does he hold reverence to his ethical considerations as a practicing ABA attorney. Moreover, he is not any such expert on tax law, but only upon the perpetuation of its presently misapplied status quo methodology.

While, much of this so-called “Tax Protestor FAQ” (noticing that even the title is as oxymoronic as it is unoriginal) is merely a case of Mr. Evans pontificating safely from his virtual rostrum that which has already been made apparent to the nth or is otherwise entirely obvious, being commonly known and well-understood. Clearly, he holds nothing but reproach and contempt to those daring to research public laws for themselves and opting to proactively seek respectful redress and protest against governmental abuses; to which he generically mislabels them as being paranoid, illogical, delusional, or otherwise as lunatic “tax protesters”.

Mr. Evans is a scamming huckster, who far exceeds being ridiculously dishonest in every respect. That Webpage representing an astronomical sum of words -over 250,000 to be more precise- and more than 10-years of updating, needless to say, it goes far beyond being a desperate work of complete overkill. Luckily for us all the most honest statement within the entirety of that exaggerated debacle is located within one of the first few sentences, stating: “Not all citations and quotations have been confirmed, and there are additional cases and arguments that may be added in the future.” However, should you, the reader, desire to continue being misled on such matters then by all means please enjoy the above link to the “FAQ”, though I highly doubt that it will find many willing readers.

Personally, how anybody can take anything or anybody from that awful, awful sham of a Website (“Quatloos!”) seriously is a miracle far beyond my own comprehension.

Weston White
05-03-2012, 01:43 AM
Mr. Hubbard was a former IRS attorney whose duties lay in the area of drafting regulations; there is no evidence he had any expertise in the theoretical foundations of the income tax. Moreover, he was flat wrong.

1. Your above quote is merely the paraphrasing of Mr. Evans’ own biased interpretations within his grossly misguided “Tax Protester FAQ”, clearly you had attempted to pass that entire quote off as if it were from some official legal resource, or other such public record (regardless as to the link at the bottom of the quote), or was the reflective quoting of Mr. Hull himself. Nobody ought to be surprised I assure you.
2a. Evidence you say, well, how about Mr. Hubbard’s official job position and title for one, how about his submitted Congressional testimony for two; moreover, is there any evidence to the contrary?
2b. From page 2579 of the same record: “A most informative statement in regard to the early history of the income-tax law was recently written by Mr. F. Morse Hubbard, formerly of the legislative drafting research fund of Columbia University, and a former legislative draftsman in the Treasury Department. This compilation of the information concerning our income-tax law is so well written that I am making it a part of my statement and the record: 1. THE INCOME TAX IS AN EXCISE TAX, AND IN-COME IS MERELY THE BASIS FOR DETERMINING ITS AMOUNT …”
3. Of course Sonny Jim misses the entire point of the testimony of Mr. Hubbard, which exists as legislative history (i.e., Congressional Record), making it admissible evidence for proper consideration by the court and that respective tax legislation had been affected and decided on based upon testimony such as by Mr. Hubbard.
4. Speaking of which, it would seem that Mr. Hull worked to devise the atrocious and overreaching United Nations; thus, clearly he was a trite progressive working from within the authority of our national government to procure his own covert agenda against core American fundaments and patrimony.
5. Your reference to a footnote of an entirely unrelated aspect disproves nothing as to the crux of the discussion, to quote (which itself appears to be making reference to a separate source “Foster and Abbott”): “If the tax should be construed as a tax on income as a specific fund the disappearance of the fund before the date of assessment would prevent the collection of the tax. (See Foster and Abbott, op. cit., p. 85.)”
6. Your provided quote incorrectly asserts mention of the 1909 Corporation Tax Act throughout so as to taint the testimony of Mr. Hubbard, for he was not addressing that Act of 1909, but he was addressing the XVI Amendment in discussion; thus your repetitive squabbling over the 1909 Act is wholly irrelevant.
7. Your reliance on the work of Mr. Evans fails, just as Mr. Evans’ work itself fails, for he argued only against a small closing portion of the entire testimony rendered by Mr. Hubbard.
8. Conveniently you omit reference to cases such as those included within fn. 3 and many others: Brushaber v. Union Pacific R. Co., 240 U. S. 1, 17-22 (1916); Stanton v. Baltic Mining Co., 240 U. S. 103, 112-114 (1916); Peck & Co v. Lowe, 247 U.S. 165, 172 (1918); Eisner v. Macomber, 252 U.S. 189, 202, 205-208 (1920); et al.
9. President Taft was himself well-versed on matters of taxation, though on the same note that you discount Mr. Hubbard to favor somebody else expressing your own points of view -presumably anyways as we cannot really know one way or the other what Mr. Hull had stated or had intended to state, as all we have is a single sentence excerpt from a record that nobody has ready access to, at any rate that singular sentence is most certainly out of context when presented by itself- you as well discount President Taft’s proposal for the XVI Amendment, which is not supportive to your dubious notions on federal income taxation; and moreover you discount the great works of others such as Albert Gallatin all the same, who himself was an economics genius on par with the analytical likes of Turgot, Smith, J. Adams, and Jefferson.
10. Most undoubtedly, there really is just no getting around it, Mr. Evans as by his accustomed discourse took no actual time in researching what he was writing about and instead blindly threw every single piece of moistened spaghetti against the wall that he could reach his grubby little fingers around.
11. Now, if you are not Mr. Evans, than who are you really? As we know that you cannot be Famspear/Jay Adkisson, being that he has unfortunately become mentally ill and no longer capable of writing even a simple sentence without displaying his varied form of Internet Tourette’s in volatile fashion (I suppose all those years of anonymously editing Wikipedia articles about rainbow parties, double penetration, bukakke, etc., etc., has finally caught up with him).



The Internal Revenue Code does not identify any “activity or privilege” being taxed other than the receipt of the income itself.

“From the beginning the revenue laws have been interpreted as defining ‘realization’ of income as the taxable event rather than the acquisition of the right to receive it.”

Helvering v. Horst, 311 U.S. 112, 115 (1940).

Most absolutely it does, for it is the realization of ‘gross income’ to ‘taxable income’, and not generalized ‘income’ that is representative of that very activity; as the “activity” clearly sets forth that very realization, while the “privilege” is whatever has been explicitly defined by statute to be so, be it any of a domestic or foreign individual, trust, estate, partnership, association, company, or corporation, etc., while taking on the privileged benefits of a “realized” ‘gain’ or ‘profit’ equating ‘gross income’. Whatever is not constitutionally taxable as ‘net income’ is auto-exempt from federal income taxation, withstanding the ratified breadth of the federal income tax.

Weston White
05-03-2012, 01:55 AM
“(3) casual laborers not engaged in the course of the employer's trade or business.”

So that would effectively mean not the employers subordinate employees, but those working in a sort of arranged partnership, or as an associate, or on a consultant basis, correct?

Sonny Tufts
05-03-2012, 08:34 AM
Congress had a definition of wages which applied to employment as well as self-employment, already on the books, in Subtitle C, for Social Security. Tell us why, since you believe that the income tax applies to employment, the Congress did not use that definition for the Current Tax Payment Act, establishing withholding of tax at source, but found it necessary to create a new definition of wages based, not on employment itself, but on a circumstance of employment, services performed, by the employee, for the employer.

For the simple reason that gross income includes many types of payments that aren't within the definition of "wages" for either Social Security or income tax withholding purposes. For example, money paid by a corporation to a person for serving on its board of directors isn't "wages" for Social Security or withholding purposes because a director isn't an "employee". But the payment is clearly includable in gross income under Section 61.

Sonny Tufts
05-03-2012, 08:38 AM
Mr. Evans is a scamming huckster, who far exceeds being ridiculously dishonest in every respect.

This is typical of tax deniers who, unable to point out with specificity any inaccuracy in Mr. Evans's analysis, resort to ad hominem insults.

Sonny Tufts
05-03-2012, 08:47 AM
the “privilege” is whatever has been explicitly defined by statute to be so, be it any of a domestic or foreign individual, trust, estate, partnership, association, company, or corporation, etc., while taking on the privileged benefits of a “realized” ‘gain’ or ‘profit’ equating ‘gross income’. Whatever is not constitutionally taxable as ‘net income’ is auto-exempt from federal income taxation, withstanding the ratified breadth of the federal income tax.

The point is that a privilege is not a necessary precondition for the taxation of income. In addition, as far as income earned by an individual or any non-governmental entity is concerned there is no constitutional exemption. All you have to do is read the Constitution -- if you do, you'll find that it lists exports as the only thing Congress can't tax.

Wheeljack
05-03-2012, 04:11 PM
For the simple reason that gross income includes many types of payments that aren't within the definition of "wages" for either Social Security or income tax withholding purposes. For example, money paid by a corporation to a person for serving on its board of directors isn't "wages" for Social Security or withholding purposes because a director isn't an "employee". But the payment is clearly includable in gross income under Section 61.

Of course a director's salary is includable in section 61. He is clearly being paid for his services. As you pointed out, he is not an employee because the corporation does not exercise control and direction over his actions, as he is the director.

Your going to have to do much better than that.

I've had my dealings with Ogden, and when I dropped my basis in law on them, they suddenly have nothing to say. I even had the Andover office (chief examinations) ask me for a copy of a return I had sent in three years earlier because they had no record of it. I gladly sent it to them. They accepted it, no questions.

Wheeljack
05-03-2012, 04:35 PM
“(3) casual laborers not engaged in the course of the employer's trade or business.”

So that would effectively mean not the employers subordinate employees, but those working in a sort of arranged partnership, or as an associate, or on a consultant basis, correct?

How do businesses make money. Sales and Service.


Examples of casual laborers engaged in the employer's trade or business would be:
Salesmen - paid commissions on the amount of the sales they create for their employer.
Service techs- example; cable tv installation cable company charges installation fee and may pay all or part of it to technician, faster tech works more fees he can attain.

Waiters and waitresses - paid tips by customers based on their performance, most times based on percentage of sales created for the employer.

Weston White
05-03-2012, 08:43 PM
This is typical of tax deniers who, unable to point out with specificity any inaccuracy in Mr. Evans's analysis, resort to ad hominem insults.

This is perhaps the funniest statement ever made by a “Quatloser!” At any rate, see my many prior posts within this thread, which, by the way, as your type usually do, have to date largely avoided responding to. Additionally, see:

Over 100-posts that I had very recently responded to within a Judge Napolitano “Freedom Watch” social Website: http://www.iwarrior.defendindependence.us/viewtopic.php?p=758#p758

The CFT: http://www.iwarrior.defendindependence.us/download/file.php?id=91

Supporting points to the CFT: http://www.iwarrior.defendindependence.us/download/file.php?id=94

As well, over the course of the last several years I have made (using my current username) over 500-posts debating against your type at your very own Quatloos! Forum.

Mr. Evans’ “analysis” on the matter presently held in debate is itself a fallacy fulfillment of inaccuracy. His “Tax Protester FAQ” is a contrivance of warped reckoning.

The fact remains, the mounts of readily available evidence is simply not supportive to the sum of your (“Quatloser!”) few and far between weakly devised arguments.

1. The federal income tax is not properly a tax on the acquisition of capital, but on its growth.
2. The federal government has no legal prudence in unyieldingly seizing $2.3-trillion in taxes from the general population, regardless of whatever classed guise the income tax is imposed upon, i.e., individual income, FICA, SSI, PPACA, etc.
3. The federal government is grossly and negligently abusing its powers of taxation through the enforcement of the federal income tax, for its constitutional empowerment for waging public taxation is only intended to pay its own debts in incurred in the process of providing for the nation’s general welfare or common defence, (taxing to upstart private companies such as Solyndra, or to ensure the continued growth of Boeing, Haliburton, Monsanto, General Electric, Google, Facebook, Planned Parenthood, Acorn, etc., or to protect the Legislature’s own Fannie Mae and Freddie Mac retirement fund, or to dole out one multi-billion Dollar bailout after another to protected corporations, or to pass about foreign aid money like candy for kids, while using its own military to police the activities of those and surrounding nations and spread about democracy onto their lands, etc., etc., etc. is entirely outside the purview of our national powers of taxation).
4. Presuming that the federal income tax was intended to tax the source as well as its growth, then it is still an unconstitutional method of taxation, as even though apportionment be not required, the requirement for exigent circumstances is withstanding under such a direct form of taxation upon such sources, aside from the indirect taxing of the source’s growth.

Weston White
05-03-2012, 09:33 PM
The point is that a privilege is not a necessary precondition for the taxation of income. In addition, as far as income earned by an individual or any non-governmental entity is concerned there is no constitutional exemption. All you have to do is read the Constitution -- if you do, you'll find that it lists exports as the only thing Congress can't tax.

1. The privilege in which you refer is written into the context of the taxation statute; you simply lack the analytics to comprehend this, e.g., direct versus indirect taxation.
2. The federal income tax statute is not taxing ‘income’, but ‘net income’, now amended to ‘gross income’.
3. The debate is not about outright constitutional blanket protection from all means of national taxation, it is about the requirement for apportionment upon the source being sought for taxation by the taxing powers, whatever configuration of ‘direct taxation’ that happens be; to which the proper application of the federal income tax was as a matter of fact appropriately crafted to consider, while the methodology brought about by the status quo seeks only to convolute that proper application.

Sonny Tufts
05-07-2012, 08:57 AM
1. The privilege in which you refer is written into the context of the taxation statute; you simply lack the analytics to comprehend this, e.g., direct versus indirect taxation.

What you mean is that you read into the statute whatever language is necessary to support your preconceived anti-tax position.


2. The federal income tax statute is not taxing ‘income’, but ‘net income’, now amended to ‘gross income’.

You are incorrect. The tax base is called "taxable income".


3. The debate is not about outright constitutional blanket protection from all means of national taxation, it is about the requirement for apportionment upon the source being sought for taxation by the taxing powers, whatever configuration of ‘direct taxation’ that happens be; to which the proper application of the federal income tax was as a matter of fact appropriately crafted to consider, while the methodology brought about by the status quo seeks only to convolute that proper application.

Income taxes are not direct taxes; they are excises. The only case that has ever held that an income tax was a direct tax was the 1895 Pollock case, and even there the Supreme Court limited its holding to investment income. Taxes on wages and personal earnings have never been held to be direct taxes. In any event the 16th Amendment did away with the apportionment requirement for all income taxes.

Sonny Tufts
05-07-2012, 09:02 AM
Mr. Evans’ “analysis” on the matter presently held in debate is itself a fallacy fulfillment of inaccuracy. His “Tax Protester FAQ” is a contrivance of warped reckoning.

Mr. White, you continue to fail to cite any inaccuracies on Mr. Evans' site. This isn't surprising, since there aren't any.


4. Presuming that the federal income tax was intended to tax the source as well as its growth, then it is still an unconstitutional method of taxation, as even though apportionment be not required, the requirement for exigent circumstances is withstanding under such a direct form of taxation upon such sources, aside from the indirect taxing of the source’s growth.

The Constitution doesn't require "exigent circumstances". Really, you should take time to actually read the language of the Constitution instead of trying to insert into it stuff that isn't there.

Weston White
05-07-2012, 07:39 PM
What you mean is that you read into the statute whatever language is necessary to support your preconceived anti-tax position.

1. No, that is not it at all, one need only to read the respective statutes, while you -a Mr. Skull & Bones wannabe- seem to be wanting a header entitled “Taxable Privileges” or something to that effect. That is simply not the case nor is it a necessity, as the taxable activities and such other privileges have been encoded within the federal income tax statutes, be they inclusive to such specifically enumerated/numerated items or not.
2. I am not “anti-tax”, I am hole-heartedly truth-in-taxation. I do not believe the IRS or the XVI Amendment, etc. need be abolished; only that employees of the IRS be mandated and personally held accountable through an empowered external oversight committee (that the public could readily file complaints with from within their regional service areas) to serve their public honestly, forthright, and with the upmost respect, while becomingly properly trained, and the XVI be enforced properly within its lawful scope. Because at this point in time none of the above is the case, e.g., IRS employees have zero knowledge about their agencies own regulatory procedures, don’t adhere to their own “Taxpayer Bill of Rights I/II” whatsoever, and aside from code processing under AMIS, IMF, etc., could care less what their own IRM states as to the fair, impartial, and unbiased treatment of individuals filing submissions with their myriad of offices.



You are incorrect. The tax base is called "taxable income".

Wrong, the starting point is in fact ‘gross income’, it is that ‘gross income’ less one’s ‘adjusted gross income’ that determines their ‘taxable income’; originally this process was simplified under ‘net income’.



Income taxes are not direct taxes; they are excises. The only case that has ever held that an income tax was a direct tax was the 1895 Pollock case, and even there the Supreme Court limited its holding to investment income. Taxes on wages and personal earnings have never been held to be direct taxes. In any event the 16th Amendment did away with the apportionment requirement for all income taxes.

1. Excises are not taxes upon individual right or necessity, but upon privilege and benefit, as public charges sought through powers of internal taxation. Neither, never have excise taxes been intended to impose tax upon livelihoods, laboring, subsistence earning, or any semblance thereof.
2. In England (from whence our entire legal system is based from) income taxes were understood to be a direct form of taxation.
3. Concerning Pollock you are being very dishonest, for the court had clarified that a tax levied upon real estate, or rents or incomes deriving from real estate, or upon personal property, or incomes deriving from personal property, were likewise ‘direct taxes’; thereby requiring apportionment.
4. It is quite clear that you hold neither any regard nor consideration as to the relational aspects between the source of the taxable activity (itself) and its taxable emanation, i.e., seeking to tax the “shadow” is indifferent than taxing the “source” from where it had derived, that is until that shadow has itself been severed from the source (by realizing its own increment in value through a bona fide ‘gain’ or ‘profit’).
5. No matter how you slice it, mince it, or dice it, or what shade of gray you desire to paint it, such a tax upon one’s essential livelihood, labor, or sustenance is and always has been correctly a personal tax (i.e., a capitation upon one’s personalty), and thereby requiring apportionment. There is simply no evidence providing exception to this rule in the ratification of the XVI Amendment or within any prior tax legislation. The context throughout Pollock clarifies this without a doubt, while your own falsehoods of what was meant by a few references here and there concerning professional employments, trades, occupations, etc., discredits only yourself; clearly the context was one of entrepreneurialism and not one of absolutely necessity in the continuance of life and family.

Weston White
05-07-2012, 08:11 PM
Mr. White, you continue to fail to cite any inaccuracies on Mr. Evans' site. This isn't surprising, since there aren't any.

No, rather I have exercised my right to do so within my own writings, indirectly. If you think I am going to read through a 250,000 Webpage of complete hullabaloo and break it down for you line by line, then you are most certainly insane -besides by Mr. Evans’ own disclaimer located at the very top of that Webpage, he himself holds little credence in his very own work. While not intending to appear too “braggy”, clearly and unequivocally I decimate many of the key points being argued pros by Mr. Evans within his contrived “Tax Protester FAQ”, so really you ought not to flatter yourself too much on that point.

But really, why are you so interested in his FAQ, are you in fact Quatloser! member “LPC” himself? Common admit to it, it’s alright, I promise to not look down on you anymore than I already do, really.



The Constitution doesn't require "exigent circumstances". Really, you should take time to actually read the language of the Constitution instead of trying to insert into it stuff that isn't there.

Heh, so you think I have not read our U.S. Constitution (including our respective-fundamental documents)? Reading something is one thing, while researching it and revering it is something entirely different.

Clearly you know less than I had originally given you credit for. The point in which you had feebly refuted was addressed in Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429, 566 (1895), therein while addressing the intended application of ‘direct taxes’, it was noted: “Id. 93. And John Adams, Dawes, Sumner, King, and Sedgwick all agreed that a direct tax would be the last source of revenue resorted to by Congress.” Reflected upon further at 157 U.S. 429, 574: “… That the original expectation was that the power of direct taxation would be exercised only in extraordinary exigencies…” And moreover noted at 157 U.S. 429, 564 and also in 158 U.S. 601, 606 (1895); 3 U.S. 171, 180 (1796). See also, Alexander Hamilton’s statements within Federalist Papers: No. 36, Para. 16 and No. 79, Para. 1.


Perhaps now might be an appropriate time for you to heed to ever-wise words:

“I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant.” - H.L. Mencken

Sonny Tufts
05-08-2012, 09:07 AM
the taxable activities and such other privileges have been encoded within the federal income tax statutes, be they inclusive to such specifically enumerated/numerated items or not.

The only "taxable activity" required to trigger the income tax is the receipt of income, whether it involves a privilege or not.


the starting point is in fact ‘gross income’, it is that ‘gross income’ less one’s ‘adjusted gross income’ that determines their ‘taxable income’; originally this process was simplified under ‘net income’.

Mr. White, you haven't a clue. Taxable income is gross income less allowable deductions and personal exemptions. Adjusted gross income is gross income minus what are called "above the line" deductions, such as moving expenses, student loan interest, and alimony paid. All other deductions are "below the line" and enter into the calculation of taxable income.


Excises are not taxes upon individual right or necessity, but upon privilege and benefit, as public charges sought through powers of internal taxation.

Balderdash. A person has the right to dispose of his property by gift -- that is one of the rights of private property. Yet the gift tax is an excise. There is no privilege involved whatsoever.


Neither, never have excise taxes been intended to impose tax upon livelihoods, laboring, subsistence earning, or any semblance thereof.

More balderdash. The law has never said that a tax on income needed for one's subsistence is a direct tax or that there is a floor above which the tax becomes an excise.


In England (from whence our entire legal system is based from) income taxes were understood to be a direct form of taxation.

Yes, and the Supreme Court has rejected this characterization in construing the direct tax clause in the Constitution.


Concerning Pollock you are being very dishonest, for the court had clarified that a tax levied upon real estate, or rents or incomes deriving from real estate, or upon personal property, or incomes deriving from personal property, were likewise ‘direct taxes’; thereby requiring apportionment.

No, it is you who are being dishonest in refusing to acknowledge that the Pollock decision recognized the validity of a tax on wages and personal earnings:


We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such...

According to the census, the true valuation of real and personal property in the United States in 1890 was $65,037,091,197, of which real estate with improvements thereon made up $39,544,544,333. Of course, from the latter must be deducted, in applying these sections, all unproductive property and all property whose net yield does not exceed $4,000; but, even with such deductions, it is evident that the income from realty formed a vital part of the scheme for taxation embodied therein. If that be stricken out, and also the income from all invested personal property, bonds, stocks, investments of all kinds, it is obvious that by a r the largest part of the anticipated revenue would be eliminated, and this would leave the burden of the tax to be borne by professions, trades, employments, or vocations; and in that way what was intended as a tax on capital would remain, in substance, a tax on occupations and labor. We cannot believe that such was the intention of congress. We do not mean to say that an act laying by apportionment a direct tax on all real estate and personal property, or the income thereof, might not also lay excise taxes on business, privileges, employments, and vocations. But this is not such an act, and the scheme must be considered as a whole. Pollock


a tax upon one’s essential livelihood, labor, or sustenance is and always has been correctly a personal tax (i.e., a capitation upon one’s personalty), and thereby requiring apportionment. There is simply no evidence providing exception to this rule in the ratification of the XVI Amendment or within any prior tax legislation.

Mr. White, no court in the history of the United States has ever made such a holding regarding the federal income tax. If you think there is such a case, I'd like to see it. The income tax taxes income; it does not tax labor. Under your theory, there is some magical dividing line between the amount of income needed for someone to subsist on and an surplus amount that is presumably subject to taxation. But there isn't anything in the Constitution or the statutes that says that there is such a dividing line or income level. The 16th Amendment means what it says -- income taxes needn't be apportioned, period.

Sonny Tufts
05-08-2012, 09:58 AM
While not intending to appear too “braggy”, clearly and unequivocally I decimate many of the key points being argued pros by Mr. Evans within his contrived “Tax Protester FAQ”, so really you ought not to flatter yourself too much on that point.

But really, why are you so interested in his FAQ, are you in fact Quatloser! member “LPC” himself? Common admit to it, it’s alright, I promise to not look down on you anymore than I already do, really.

Mr. White, you've decimated nothing. Your theories have no legal basis at all.

I referred to Mr. Evans's FAQ simply because others visiting this site might want to read about what the law really is. Mr. Evens (by the way, I am not he) is a tax attorney with far more legal experience and knowledge than you will ever have, and his site serves a valuable function by dispelling the various frivolous arguments that tax protestors have come up with from time to time. The arguments have been rejected time and again by the courts, not because the judges are part of some massive conspiracy to hide the "real" law, not because their salaries are paid by the government, not because they are afraid they'll get audited by the IRS, and not for some other paranoid reason, but because the arguments are WRONG.

I have read elsewhere on the Internet that you are pursuing a paralegal certificate. Do you honestly think this qualifies you to pontificate on tax law? Do you believe for one minute that you know more about tax law than the law professors and tax attorneys? Can you cite a single scholarly article that supports your arguments? Can you cite an instance where someone suceeded in avoiding taxes by using your theories?

Mr. White, you are a classic example of hubris.

Weston White
05-08-2012, 01:06 PM
ROFL, aww, it seems that I have gravely upset the poor lil' black sheep, or did a certain somebody wake up a little cranky this morning... hehehe.

Weston White
05-09-2012, 01:33 AM
The only "taxable activity" required to trigger the income tax is the receipt of income, whether it involves a privilege or not.

Negative, although I believe you had meant to state that under the individual income tax, the receipt of ‘gross income’ is the privilege to be taxed. Earning an honest livelihood is a core right to exist, while the participation in privileges and receipt of benefits are not.



Mr. White, you haven't a clue. Taxable income is gross income less allowable deductions and personal exemptions. Adjusted gross income is gross income minus what are called "above the line" deductions, such as moving expenses, student loan interest, and alimony paid. All other deductions are "below the line" and enter into the calculation of taxable income.

Oh really now, well in any case, the point you made is one that is very apparent. For if an individual has nothing to “adjust”, they then have no ‘adjusted gross income’; just the same if they are below the threshold of having ‘gross income’ then it stands they have no ‘taxable income’ to be reported either, save for their forced withholdings under bondage:

26 USC Sec. 62: “(a) General rule
For purposes of this subtitle, the term “adjusted gross income” means, in the case of an individual, gross income minus the following deductions: …”

26 USC Sec. 63: “(a) In general
Except as provided in subsection (b), for purposes of this subtitle, the term “taxable income” means gross income minus the deductions allowed by this chapter (other than the standard deduction).
(b) Individuals who do not itemize their deductions
In the case of an individual who does not elect to itemize his deductions for the taxable year, for purposes of this subtitle, the term “taxable income” means adjusted gross income, minus—
(1) the standard deduction, and
(2) the deduction for personal exemptions provided in section 151.”



Balderdash. A person has the right to dispose of his property by gift -- that is one of the rights of private property. Yet the gift tax is an excise. There is no privilege involved whatsoever.

This analogy of yours is perhaps one of the dumbest cockamamie things I have yet to have seen posted on the Internet. Geez, you should be embarrassed at yourself! Such is however, a benefit to the recipient, just the same as succession and gambling/wagering taxes, etc. Neither is the disposing of property inclusive of it being a gift unto another, while owning and possessing property is not the same as transferring ownership of that property and neither is the public use of that property, (e.g., driving one’s car around on public property or charging fares for rides to various public destinations, etc.) Otherwise, everybody could evade most all taxation simply by labeling it as a gift or bequest. Moreover, taxes upon gifts are not income taxes (that is at least until the gift has itself realized its possessor a bona fide gain or profit), they are just that “gift taxes”; so your comparison is ultimately a moot point, regardless.



More balderdash. The law has never said that a tax on income needed for one's subsistence is a direct tax or that there is a floor above which the tax becomes an excise.

More misdirection on your part as floor or ceiling sums, figures, and amounts have nothing to do with the given method or mode of the indirect income tax being sought. Moreover, it has never been the intention of any taxing statutes to tax at the ‘source’, that being one’s capital, principal, or stock; as it was stated in Pollock that contracts, personalty, occupations, and the like were never considered appropriate subjects of direct taxation, with slaves being the only exception under ‘capitation taxes’. Regardless, even if such was intended to be the case then it would stand that this very principle would apply to all citizens protected by the XIV Amendment and such other fundamental rights to life, liberty, and sought after happiness.

You seem to hold a grave desire to confabulate a non-existent connection between profiting from one’s occupation within a professional or enterprising capacity and acquiring a basic means of livelihood from one’s occupation within a subordinate-employee capacity. There is a crisp distinction between the two. By the by, the former very likely lives in a fanciful 5,000 sq. ft. house, hires weekly housekeeping, and drives a luxury import vehicle (or two) to and from work each day, while dressing in designer suits, and regularly enjoys fine dinning and extravagant vacations; while the latter lives their life always and forever dependant on credit and loan debt, rents a too small and overpriced apartment, townhouse, or condo, and drives a used domestic car that barely passes its smog test, while wearing clothing from whatever local outlet superstore that offers them the best savings, and considers dinner at Sizzler or IHOP a rare luxury and vacationing at all is but a distant dream.



Yes, and the Supreme Court has rejected this characterization in construing the direct tax clause in the Constitution.

If that had actually been the case then we would have no XVI Amendment. As however, such was in fact the case; for respective clarity had been realized within the Pollock case. Namely that a uniform tax being sought upon what had directly emanated from a source, which itself would have required apportionment (so being a direct tax) is correctly in either instance a tax thereby requiring apportionment -which consequently was the sole intent of the XVI Amendment, to cross-cancel that common law effect, by discarding all consideration to the source from whence the realization of the ‘net income’ hath emanated.

Also see:

direct tax - “A tax that cannot be shifted to others, such as the federal income tax.”
http://www.irs.gov/app/understandingTaxes/student/glossary.jsp#D

indirect tax - “A tax that can be shifted to others, such as business property taxes.”
http://www.irs.gov/app/understandingTaxes/student/glossary.jsp#I


19 CFR § 351.102 [Customs Duties] Definitions.

(b) Definitions. (1) Act. “Act” means the Tariff Act of 1930, as amended.

(16) Direct tax. “Direct tax” means a tax on wages, profits, interests, rents, royalties, and all other forms of income, a tax on the ownership of real property, or a social welfare charge.

(28) Indirect tax. “Indirect tax” means a sales, excise, turnover, value added, franchise, stamp, transfer, inventory, or equipment tax, a border tax, or any other tax other than a direct tax or an import charge.



No, it is you who are being dishonest in refusing to acknowledge that the Pollock decision recognized the validity of a tax on wages and personal earnings: …

Wrong, wrong, wrong, wrong, wrong… Wrong, wrong, wrong, wrong… You’re wrong! You’re wrong! You’re wrong!

1. That quotation is referring to gains and profits from business and enterprise, never does it refer to general wages, laboring, livelihood, or any such other thing or likeness as you have wrongfully asserted.
2. The quote clearly states “… gains or profits from business, privileges, or employments …”
3. Merely earning a livelihood is engaging none of: (1) a business, (2) a privilege, nor (3) “employments” within the very obvious context of the included paragraph.
4. Merely earning a livelihood does not, at least in most all instances, realize or bring in any of a ‘gain’ or ‘profit’, but merely sustenance or a livelihood.
5. As to the above quotation, during that entire reference in time the exemption amount was set so far beyond what the general populace could have possibly ever earned within a given tax period that the average day laborer would have never had to of worried or lent any consideration to the federal income tax, whatsoever, and so neither would the Justices have crossed such a notion within their own findings or their thoughts, while having rendered any portion of that quotation. Ergo, your reliance on that quotation renders itself absolutely moot, as the income tax upon the essential livelihoods of the masses was never intended to be its subject that is at least until the Federal Reserve withholding scheme began to root over the entirety of the federal income tax in the 1940’s. There simply could have been no foresight rendered by the Justices to such outright, damning, and coldhearted abuses by embedded progressives through the national taxing powers.



Mr. White, no court in the history of the United States has ever made such a holding regarding the federal income tax. If you think there is such a case, I'd like to see it. The income tax taxes income; it does not tax labor. Under your theory, there is some magical dividing line between the amount of income needed for someone to subsist on and an surplus amount that is presumably subject to taxation. But there isn't anything in the Constitution or the statutes that says that there is such a dividing line or income level. The 16th Amendment means what it says -- income taxes needn't be apportioned, period.

1. Simply that is because the taxing of labor or one’s means of establishing a basis in achieving livelihood is not nor has ever been the appropriate subject of the federal income tax.
2. The federal income tax does not tax “income”, it taxes ‘gross income’; if it were to tax one’s remuneration (i.e., income-capital) that would be no different from taxing that individual’s labor. Congress cannot convolute or end-run its designated powers of taxation (or whatever other powers) to bypass its constitutional constraints. Hence, to impose taxes on the shadow is to impose taxes directly on that shadow’s source; to impose taxes on a tree is to impose taxes directly on that tree’s roots.
3. Also see Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429, 581 (1895) in quoting from: Brown v. Maryland, 12 Wheat. 419, 25 U. S. 444; Weston v. Charleston, 2 Pet. 449; Dobbins v. Commissioners, 16 Pet. 435; Almy v. California, 24 How. 169; Railroad v. Jackson, 7 Wall. 262; Cook v. Pennsylvania, 97 U. S. 566; Philadelphia Steamship Co. v. Pennsylvania, 122 U. S. 326; Leloup v. Mobile, 127 U. S. 640; and Postal Telegraph Co. v. Adams, 155 U. S. 688, 698.
4. I have no “theory” as you assert in feeble desperation, simply a myriad of facts acquired from empirically timeless sources of evidence.
5. Once again, the present concern is not so much about the indirect taxing of ‘incomes’, or about dividing lines, sums, amounts, figures, floors, ceiling, etc., etc., etc. It is more about the still existing requirement for apportionment when directly taxing a person or their labor or livelihood, for such methods of taxation may only be accomplished through personal-capitation taxes, while meeting certain other constitutionally sound criteria. Pointedly, it is wholly improper for the federal government to snatch away $2.3-trillion without yield from its own people who are simply attempting to make a better life for themselves and their families (thereby resulting in the likely forfeiture of over 30% of most everybody’s annual ability); such a system breeds only lifelong agony, dependence, and peonage through and through, moreover, depriving our national posterity.
6. The XVI Amendment does not state that -well, gee, at least now we know who the harebrained author of IRS Pub. 2105 is, yea you, Sonny Jim-laugh; however, it does state the following: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived,…” Now most certainly, if congress had meant to directly tax the sources of income -as opposed to what had been derived therefrom- then they would have ratified an earlier version of the Amendment that would have as fact provided them with such power; but hey guess what, they did no such thing.

Weston White
05-09-2012, 01:33 AM
Mr. White, you've decimated nothing. Your theories have no legal basis at all.

Well to a certain extent, you are correct; being that Evans the esquire and his banal and sophomoric “Tax Protester FAQ” are of no real consequence, entailing a true work of absolute nothingness and to that end there really is nothing for which to decimate. In any event, my arguments are in fact supported by a score of valid evidence, possessing all of the legal basis afforded to such forms of acceptable evidence.



I referred to Mr. Evans's FAQ simply because others visiting this site might want to read about what the law really is. Mr. Evens (by the way, I am not he) is a tax attorney with far more legal experience and knowledge than you will ever have, and his site serves a valuable function by dispelling the various frivolous arguments that tax protestors have come up with from time to time. The arguments have been rejected time and again by the courts, not because the judges are part of some massive conspiracy to hide the "real" law, not because their salaries are paid by the government, not because they are afraid they'll get audited by the IRS, and not for some other paranoid reason, but because the arguments are WRONG.

Say what now! Not a one of you Quatfoolz! are even qualified Masters in Taxation, you are simply a short-order group of nominal JD’, CPA’, and the like all vying for that D.C. power play and hookup. And no, judges do so as to maintain their political funding for continuing their judgeship come voting time or to otherwise maintain backing for their appointment; they do so to get hired into extraordinarily high paying positions with companies such as Monsanto, Halliburton, H&R Block, Turbotax, Roche, Pfizer, Boeing, Bayer, etc., or to be hired by wealthy lobbying groups; they do so to upkeep the expectations of the status quo; they do it in support of the frivolous mantra wrought out of the “New Deal” because revering the socialist-progressive system is what they were taught all throughout their enrollment in academia; they do so as to maintain that $2.3-trillion annual gravy train with fluffy biscuit wheels; they do so as to upkeep the modernized game of the international stock and commodities markets, control commerce and GDP, enable limitless credit and loan debts, support both the federal PPT and the national Comprehensive Annual Financial Reports (CAFR); they do so to keep one of the most vast pure profit professions increasing their annual revenue potential, i.e., all of the scamming vulture tax law firms located throughout America, ensuring the continuous increase in IRS funding and other such endless and nonsensical bureaucratic expanding, churning the countless private tax return filing firms, paper and ink companies, mailing fees, etc., etc., etc. Those are just some of the key reasons that they really do it.

And if you truly and seriously believe that such was the original intent of the then proposed XVI Amendment, then you are so far past the point of being naivete that you're to the point of being fully inept. Just imagine what would have happened to the process of ratification for the XVI Amendment if during 1909-1913 the federal government went to the several states asking their residents to support this new Constitutional Amendment that will provide the national government (along with the individual states at their own accord) a new taxing power so that they might endlessly tax the private earnings and livelihoods of the entire working class as little as 1% and as much as 100%, to the sole discretion and enjoyment of Congress, all so that imposts could either be greatly decreased or outright eliminated. That Amendment would have been shot down so quickly that it would have never even seen the light of dawn.

And if you actually think that even for a moment, Ron Paul supporters are dumb enough to fall for such tact as spewed all throughout Mr. Evan’s “Tax Protester FAQ”, then perhaps it’s actually true what they say, one cannot fix another’s utter stupidity.



I have read elsewhere on the Internet that you are pursuing a paralegal certificate. Do you honestly think this qualifies you to pontificate on tax law? Do you believe for one minute that you know more about tax law than the law professors and tax attorneys? Can you cite a single scholarly article that supports your arguments? Can you cite an instance where someone suceeded in avoiding taxes by using your theories?

No, not really that so much, but what does qualify me to achieve such “pontification” (as referred to by you) is being a duty bound American citizen that has taken three separate oaths to uphold our Nation’s fundamental principles, and moreover simply being a proactive and patriotic citizen that has been studying federal taxing statutes and regulations on a near fulltime basis for the last several years.

Contrary to your above-insinuated misconceptions, our United States of America is no such aristocracy. Americans are not a people to be ruled over, while having their personal interests dictated and piecemealed by the likes of dukes, barons, knights, esquires, priests, oracles, and such others. And speaking to your earlier mention of “magic”, acquiring a diploma in higher education does not “magically” bestow super-human sorcerer type capabilities to the bearer of such a vastly overpriced and much overvalued fanciful wall-framed degree.

In fact, the reality is that earning a degree in higher education most likely signifies that one has opted to sellout their own imagination, creativity, and individual pride for monetary wealth and professional power by wholly and mindlessly conforming to status quo expectations by permitting oneself to be assimilated into the mindset of the socialist agenda; effecting the continuance of the globally structured progressive “system”. Being a lawyer simply means that you have met the necessary requirements for taking the Bar Exam and once passed, you then meet the necessary legal requirements for representing the valid legal causes of others within the venue(s) where qualified to practice, while being duty bound by the ABA Model Rules and Standards. Ergo, a paralegal can be just as skilled in researching a specific body of law as an attorney can, and even more so; just as a law librarian can and just as any other individual that puts forth an honest effort can. For an individual’s potential is not to be defined by scholarly degrees, as that is a gift to be molded according to one’s own desires, motivations, and personal abilities.

Tossing out the remainder of your smelly red herrings, I already have for this “Points in Support of the CFT” is power-packed full of relevant references and sources: http://www.iwarrior.defendindependence.us/download/file.php?id=94



Mr. White, you are a classic example of hubris.

No, this is not a valid assertion at all; you simply misconstrue knowledge, concern, and understanding for hubris. Meanwhile, you appreciate only absolute nothingness and nothing more.

Weston White
05-09-2012, 09:16 PM
Also to those that are for a bit of reading, here is very interesting work The Memorandum, as crafted by the now rather famous attorney Tommy Cryer:

http://www.iwarrior.defendindependence.us/download/file.php?id=102

Enforcer
05-10-2012, 12:40 PM
Mr. White, you've decimated nothing. Your theories have no legal basis at all.

I referred to Mr. Evans's FAQ simply because others visiting this site might want to read about what the law really is. Mr. Evens (by the way, I am not he) is a tax attorney with far more legal experience and knowledge than you will ever have, and his site serves a valuable function by dispelling the various frivolous arguments that tax protestors have come up with from time to time. The arguments have been rejected time and again by the courts, not because the judges are part of some massive conspiracy to hide the "real" law, not because their salaries are paid by the government, not because they are afraid they'll get audited by the IRS, and not for some other paranoid reason, but because the arguments are WRONG.

I have read elsewhere on the Internet that you are pursuing a paralegal certificate. Do you honestly think this qualifies you to pontificate on tax law? Do you believe for one minute that you know more about tax law than the law professors and tax attorneys? Can you cite a single scholarly article that supports your arguments? Can you cite an instance where someone suceeded in avoiding taxes by using your theories?

Mr. White, you are a classic example of hubris.

I disagree with your assumptions.

Attorneys are always beholden to the organizations certifying them. For example, the American Bar Association defines the standards (at least in Georgia) that would be lawyers must meet before "practicing" law as an occupation.

Secondly, attorneys are officers of the court FIRST. If something benefits the system, it is their sworn duty to do what is in the best interests of the courts and government agencies. The fact that lawyers that worked enforcing the tax laws (i.e. IRS employees) have come out and disputed the theories YOU espouse are good enough for me to look closer into the facts.

Just because someone holds the paperwork where bureaucrats "recognize" their ability to read and apply the law is not evidence that they can or will do so. Our system operates off of POWER not AUTHORITY. The system may have the POWER to enforce unconstitutional laws, but they lack the AUTHORITY.

Check this out:

http://video.google.com/videoplay?docid=-1656880303867390173

Sonny Tufts
05-10-2012, 01:16 PM
the latter lives their life always and forever dependant on credit and loan debt, rents a too small and overpriced apartment, townhouse, or condo, and drives a used domestic car that barely passes its smog test, while wearing clothing from whatever local outlet superstore that offers them the best savings, and considers dinner at Sizzler or IHOP a rare luxury and vacationing at all is but a distant dream.

Such a person pays no income tax under the current Code because of the standard deduction and personal exemptions and would very likely receive money in the form of the Earned Income Tax Credit. But there's nothing in the Constitution that requires that such be the case. Congress could constitutionally tax his income without regard to the EITC.


Also see:direct tax - “A tax that cannot be shifted to others, such as the federal income tax.”
http://www.irs.gov/app/understanding...glossary.jsp#D

indirect tax - “A tax that can be shifted to others, such as business property taxes.”
http://www.irs.gov/app/understanding...glossary.jsp#I


19 CFR § 351.102 [Customs Duties] Definitions.

(b) Definitions. (1) Act. “Act” means the Tariff Act of 1930, as amended.

(16) Direct tax. “Direct tax” means a tax on wages, profits, interests, rents, royalties, and all other forms of income, a tax on the ownership of real property, or a social welfare charge.

(28) Indirect tax. “Indirect tax” means a sales, excise, turnover, value added, franchise, stamp, transfer, inventory, or equipment tax, a border tax, or any other tax other than a direct tax or an import charge.

The IRS website is wrong. The estate tax, for example, can't be shifted, yet it's an excise. Regardless of who ends up with the property, the estate must pay the tax.

The definitions in 19 CFR are restricted to the topic of customs duties and have no bearing whatsoever on income or other taxes.


Congress cannot convolute or end-run its designated powers of taxation (or whatever other powers) to bypass its constitutional constraints. Hence, to impose taxes on the shadow is to impose taxes directly on that shadow’s source

Good grief, don't you know that this Pollock-type analysis is what was specifically rejected by the 16th Amendment?


This is the text of the Amendment:
'The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.'

It is clear on the face of this text that it does not purport to confer power to levy income taxes in a generic sense, -an authority already possessed and never questioned, -or to limit and distinguish between one kind of income taxes and another, but that the whole purpose of the Amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived. Brushaber v. Union Pacific R. Co., 240 U.S 1, 17 (1916)


judges do so as to maintain their political funding for continuing their judgeship come voting time or to otherwise maintain backing for their appointment

Mr White, I would suggest you consult a basic text on civics. Federal judges have lifetime appointments and have no need for such things.


Just imagine what would have happened to the process of ratification for the XVI Amendment if during 1909-1913 the federal government went to the several states asking their residents to support this new Constitutional Amendment that will provide the national government (along with the individual states at their own accord) a new taxing power so that they might endlessly tax the private earnings and livelihoods of the entire working class as little as 1% and as much as 100%, to the sole discretion and enjoyment of Congress, all so that imposts could either be greatly decreased or outright eliminated.

As the Brushaber decision pointed out, Congress already had the power to tax private earnings and livelihoods of the entire working class. If you want more, consider:


The Sixteenth Amendment declares that Congress shall have power to levy and collect taxes on income, ‘from whatever source derived’ without apportionment among the several states, and without regard to any census or enumeration. It was not the purpose or the effect of that amendment to bring any new subject within the taxing power. Congress already had the power to tax all incomes. But taxes on incomes from some sources had been held to be ‘direct taxes’ within the meaning of the constitutional requirement as to apportionment. [cites omitted] The Amendment relieved from that requirement and obliterated the distinction in that respect between taxes on income that are direct taxes and those that are not, and so put on the same basis all incomes ‘from whatever source derived.’”
Bowers, Collector v. Kerbaugh-Empire Co., 271 U.S. 170, 173-174 (1926).


a paralegal can be just as skilled in researching a specific body of law as an attorney can, and even more so; just as a law librarian can and just as any other individual that puts forth an honest effort can. For an individual’s potential is not to be defined by scholarly degrees, as that is a gift to be molded according to one’s own desires, motivations, and personal abilities.

No, Mr. White, you are profoundly wrong. Unless you understand the underlying body of law, you will not have the ability to distinguish between holdings and dictum or between cases that have a broad applicability and those that are to be confined to their specific facts. You have already demonstrated this inability in your posts. Good grief, you might as well argue that a nurse can do brain surgery just as well as a physician.

We aren't talking about potential, but by actual ability. I might have the greatest potential in the world for mathematics, but to suggest that with that alone I can solve calculus problems if I've never studied algebra or trigonometry is absurd.

I would put it to you, Mr. White, that the Ron Paul supporters who read this thread are too intelligent to think that you have discovered something in the law that has heretofore escaped the notice of all of the law professors, judges, lawyers, and CPA's; or that all of these people are part of some conspiracy. The plain, unvarnished truth is, Mr. White, that you are 100% wrong.

As far as Mr. Cryer's Memorandum is concerned, one would find better income tax advice in a treatise on 15th Century Bolivian pan flutes. For those who are not familiar with Mr. Cryer, he is currently facing income tax deficiencies, penalties, and interest of almost $2 million. His case is pending in the United States Tax Court, and it is a certainty that he will lose. The only issues are whether he will be sanctioned for making frivolous arguments (which his Memo is full of) and if so, how much.

Danke
05-10-2012, 03:43 PM
The plain, unvarnished truth is, Mr. White, that you are 100% wrong.



No he is not. I don't agree 100% with him, but I'd say he is 99% correct.

Weston White
05-10-2012, 08:13 PM
Enforcer, not to state that your thoughts are incorrect, though to solidify your point, our American system of adjudication is adversarial in nature, while one’s attorney has an obligated duty to serve their clients cause with complete impartiality and objectiveness, so being zealously motivated to defend their cause; it is simply that they are limited in their tactfulness and mobility by the rules of the court and the professional expectations as set by the ABA. That is to say that one’s attorney has just as much of a duty to bring forth evidence to the court that is contrary to the position that they represent as they do to bring forth evidence that is favorable to the position that they represent; needless to say, this is obviously something that the Internet attorneys at “Quatlosia!” (et al) disregard entirely.

For example, it would not be entirely accurate to state that a boxer or MMA fighter’s first obligations is to the referee observing their bout, but to themselves, while adhering to the “rules of the ring”; otherwise we end up with situations were overly creative people like Royce Gracie ceaselessly winning bout about prolonged bout.

Weston White
05-10-2012, 08:14 PM
No he is not. I don't agree 100% with him, but I'd say he is 99% correct.

If I might ask, on which points do you disagree and why? TIA

Wheeljack
05-10-2012, 08:26 PM
I would put it to you, Mr. White, that the Ron Paul supporters who read this thread are too intelligent to think that you have discovered something in the law that has heretofore escaped the notice of all of the law professors, judges, lawyers, and CPA's; or that all of these people are part of some conspiracy.



Sonny,

I have no problem with Mr. Evans' FAQ.

Let's look at the following cite.

Martin v. Commissioner, 756 F.2d 38, 40 (6th Cir. 1985), aff’g. T.C. Memo. 1983-473.

“Taxpayers’ argument that compensation for labor is not constitutionally subject to the federal income tax is without merit. There is no constitutional impediment to levying an income tax on compensation for a taxpayer’s labors. [Citations omitted] Furthermore, § 61(a) of the Code defines gross income as ‘all income from whatever source derived, including . . . compensation for services.’ In sum, the sixteenth amendment authorizes the imposition of a tax upon income without apportionment among the states, and under the statute, the term ‘income’ includes the compensation a taxpayer receives in return for services rendered. Taxpayers’ argument that wages received for services are not taxable as income is clearly frivolous.”

I wholeheartedly agree with the court because I understand what the court is saying.

Mr. Martin went before the court and made a blanket statement "that compensation for labor is not constitutionally subject to the federal income tax."

Which meant that if there was only one instance in which this was false, then his statement is without merit. And there is.

When a taxpayer labors for himself (self-employment), there is no constitutional impediment to levying an income tax on his compensation.

When a taxpayer labors for himself, he is at the same time selling a service or services to someone else. This is the only instance when compensation for labor equals compensation for services.

In most, if not all, the cases where a laborer went to the court it was as pro se. In all the cases where a lawyer, law professor, or CPA might be involved the defendant is usually self-employed or a business which can not use this defense. And that is how this escapes their notice because they have no need to know it.

Weston White
05-11-2012, 03:09 AM
Such a person pays no income tax under the current Code because of the standard deduction and personal exemptions and would very likely receive money in the form of the Earned Income Tax Credit. But there's nothing in the Constitution that requires that such be the case. Congress could constitutionally tax his income without regard to the EITC.

Wow, really now, this was your response? What planet do you happen live on because I can tell you right now it’s not planet Earth!

Respectively, that description I had written portrays the life of the average working American family, which by the status quo does in fact pay income taxes (amongst tons of other federal, state, and local taxes) contrary to your disconcerting disconnect on reality.

Also, so as to your response, you stated that (1) such a person would actually owe no income tax and (2) such a person would personally benefit from the individual income tax as they would likely qualify to receive free money that ultimately came out of the pockets of other hardworking people? Should I really be so surprised at your response? …Hmm, now that one is a tuffy -heh.

So I suppose that for individuals like you, the ongoing ACTC (Additional Child Tax Credit) abuse taking place is simply the grand result of our national taxing process coupled with progressivism desires for multicultural merging. See story at: http://endoftheamericandream.com/archives/millions-of-illegal-immigrants-are-using-a-massive-scam-to-get-much-bigger-tax-refunds-than-you-are

And no Congress cannot constitutionally tax an individual’s “income” without apportionment, but only their ‘incomes’ -the latter meaning their ‘net income’ (now referred to as ‘gross/taxable income’).



The IRS website is wrong. The estate tax, for example, can't be shifted, yet it's an excise. Regardless of who ends up with the property, the estate must pay the tax.

Yet another real brain-buster of a response, “[t]he IRS [W]ebsite is wrong”! Yuppers, and I suppose we should all just presume that during all these many years that the “wrong” you’re asserting has been intentionally left incorrect, since that “educational” Web-portal had been launched, now several years ago; all to what ends exactly, simply to confuse all of the many, many teachers and students that visit it on a daily basis, is that right? Your assertion is beyond laughable. That is simply your answer to everything, isn’t it; for if it conforms not to your own “Quatloser!” arguments than it most certainly must be wrong, even when the source of that information is the very government that you so feverishly hold in grossly stupefied admiration?

The estate tax is not a tax upon the “estate” itself, but upon the privilege of the government recognizing the transference of the estate, or if you like the benefit of one having received it (26 USC Sec. 2001). Moreover, the estate tax can be avoided by disclaiming it.

By the by, so efficiently elucidated in Knowlton v. Moore, 178 U.S. 41, 47 (1900): “… This view of the inheritance and legacy tax conforms to the official definition of indirect taxes, among which inheritance and legacy taxes are classed, which prevails in France at the present day. The definition is as follows: “Direct taxes bear immediately upon persons, upon the possession and enjoyments of rights; indirect taxes are levied upon the happening of an event or an exchange.”” See also: Tyler v. United States, 281 U.S. 497, 502 (1930); and the many arguments made on the matter by Alexander Hamilton, et al.



The definitions in 19 CFR are restricted to the topic of customs duties and have no bearing whatsoever on income or other taxes.

1. Those definitions were included in part within the 1930’ Tariff Act, which does bear on the federal income tax.
2. Congress cannot alter by statutory legalese core definitions of terms already in use, play, or described within our U.S. Constitution; hence, the Legislature cannot use public law to circumvent their breadth of grants and empowerments as afforded to them by their very power to legislate for those fundaments (there are literally dozens of SCOTUS cases addressing this very issue).
3. So according to you: (1) people like me have it wrong; (2) the IRS itself has it wrong; (3) even the Congress has gotten it wrong; and (4) people like you just always get it right. Thereby, according to you 2+2=5, up is down, black is white, direct is indirect, etc., etc., etc.

Gee, have you ever actually stopped to consider the very likely possibly that it is really you that has it wrong?



Good grief, don't you know that this Pollock-type analysis is what was specifically rejected by the 16th Amendment?

Exactly, see this is the precise aspect of ‘direct’ versus ‘indirect’ taxation that your lazy-legal brain fails to comprehend. Simply, there must be an existing source, i.e., a corpus that has borne the ‘incomes’ to be indirectly taxed. For the everyday laborer their basic, essential remuneration is to become -to serve as- that very source and not until that source has itself, derived its own realized gain (or profit) it is wholly outside the prescribed taxing powers of the XVI Amendment.

As to your quotation from Brushaber, the contextual limiter you overlooked, conveniently is: “…from a consideration of the source whence the income was derived.”



Mr White, I would suggest you consult a basic text on civics. Federal judges have lifetime appointments and have no need for such things.

Sorry, my error, I was writing generally; however, that was merely one of many other reasons that I had written, and in any case there are scores of more reasons.



As the Brushaber decision pointed out, Congress already had the power to tax private earnings and livelihoods of the entire working class. If you want more, consider: …

The words “personal”, “earning”, “livelihood”, or “working class” cannot be found anywhere within the Brushaber case, ergo, you’re a downright liar.

Moreover, that quotation represents precisely what I have been arguing you dimwitted numbskull. Of course the Congress already had powers to tax “income”, the question is and always has been is apportionment or uniformity required when doing so. As to income-capital apportionment is required, as to ‘incomes’ (notice in the plural), uniformity is required. Quoting: “… But taxes on incomes from some sources had been held to be ‘direct taxes’ within the meaning of the constitutional requirement as to apportionment. [cites omitted] The Amendment relieved from that requirement and obliterated the distinction in that respect between taxes on income that are direct taxes and those that are not, and so put on the same basis all incomes ‘from whatever source derived.”

However, much more enlightening on the subject-matter within Brushaber (240 U.S. 1, 19) it was stated: “… that is, the prevention of the resort to the sources from which a taxed income was derived in order to cause a direct tax on the income to be a direct tax on the source itself, and thereby to take an income tax out of the class of excises, duties, and imposts, and place it in the class of direct taxes.”

By the way, you seem to have forgotten to include the following sentences in that run-on paragraph within your above quotation, which serves to provide it with a nice and just context (really, you “Quatloser!” people seem to do that an awful lot): “… "Income" has been taken to mean the same thing as used in the Corporation Excise Tax Act of 1909, in the Sixteenth Amendment, and in the various revenue acts subsequently passed. … After full consideration, this Court declared that income may be defined as gain derived from capital, from labor, or from both combined, including profit gained through sale or conversion of capital. … In determining what constitutes income, substance rather than form is to be given controlling weight. …”

Also more on actually comprehending the Brushaber case can be found at: http://www.famguardian.org/Subjects/Taxes/CourtCases/BrushaberVUnionPacRR240US1.htm



No, Mr. White, you are profoundly wrong. Unless you understand the underlying body of law, you will not have the ability to distinguish between holdings and dictum or between cases that have a broad applicability and those that are to be confined to their specific facts. You have already demonstrated this inability in your posts. Good grief, you might as well argue that a nurse can do brain surgery just as well as a physician.

Wow, so I am not only wrong, but am “profoundly” wrong? Goodness me, you act like learning how to perform legal and investigatory research requires the kind of supreme “hands on” training that can only be acquired while attending a recognized university and that it must combined with some sort of rarely inherited personal skill and dedication. Newsflash, picking up on lawyerly basics is actually not all that difficult to achieve; largely entailing vast amounts of reading, memorizing (which essentially develops with passing time as to a respective focus of study), cross-referencing, confirming and validating (e.g., cites, sources, references, and even double-checking as appropriate for thoroughness), writing and editing, performing investigation and background checking, following up, updating, meeting filing and service deadlines, and the like. And are you actually comparing the profession of a lawyer to that of an artisan of the sciences and arts? Good grief, you might as well argue that a physician can develop, invent, or manufacture their own medications, tools, machinery, or procedures to treat the aliments of their suffering patients -the fact remains that attorneys only “practice” their profession from within the confined boundaries of their collegiate teachings just the same as the physician (e.g., the modernized medical profession is not trained, whatsoever, in the viable science of homeopathic remedies only in synthetic, technocratic treatments).

Actually I don’t think that even a physician could legally perform brain surgery as only surgeons are trained in that medical procedure. Regardless, as to your above example, save for the fact that there are laws prohibiting nurses from acting in the capacity of a doctor, could not a nurse (given their own personal confidence in accomplishing such an achievement) in fact learn the proper procedure for performing brain surgery just the same as the surgeon themselves had or is a nurse simply incapable of acquiring such an ability simply for that fact that he/she has been given the label of “nurse”?

In the obverse just because one has graduated from Sorbonne University majoring in the arts does not mean that they are going to become the next Claude Monet, or just because one has graduated from Harvard mastering English literature does not mean they will become the next Poe, Mencken, or King, etc.

The fact is that much of public law is purely subjective and nonessential or outright counterproductive in maintaining social cohesion, serving as benefactor to certain classes of individuals, while reigning disrepute upon all other classes; which is largely why the various forms of government ought not to interfere with the private affairs and arrangements of the masses. Simply put, it is largely uncalled for and completely inappropriate, e.g., crafting ten laws over a specific matter when just one would suffice, thereby ensuring multiple charges will be made against a wrongdoer that had actually committed only a singular act.

At any rate, what you are even talking about? As to you, for example, fail to grasp that the context of a case is “framed” by its pleadings and that one cannot argue by inferring from an inference (inferences are a one-shot deal being essential to drawing a reasonably determinable connection between point-A and point-B). Besides it is your type, who are controverting the present matter using moot cases such as Lucas, Glenshaw Glass, and others. And while orbiter dicta is not binding upon the courts it still has advisory relevance, just the same as the court’s dissenting opinions, and in that way, either can justly influence the course of a case -i.e., that information has been made apart of the “official” public record for a valid purpose and (contrary to your assertion) that purpose was not simply to confuse or throw off the non-attorney.

Regardless, I continuously show you up on point after point, to which you simply go mum and deviate.



We aren't talking about potential, but by actual ability. I might have the greatest potential in the world for mathematics, but to suggest that with that alone I can solve calculus problems if I've never studied algebra or trigonometry is absurd.

Really, an utterly moot point you’re making. As according to you, presuming your hypothetical were the case, no matter how many mathematics books I read on my own (from the local bookstore or library), it would matter not, because simply put, I would never be capable of learning how to complete an algebra or trigonometry problem without first receiving the proper aid of a professor (or teacher if you prefer). For you view the word “study” to only mean that one had been enrolled and has passed a course from an accredited university, as per your delusional mind, one cannot become self-taught or self-learned by reading books written by others highly advanced within their chosen field or profession (not at least to any notion meant to lend any serious consideration); because for you, it is not the individual that holds the “ability” to achieve such feats all on their own, but the accreditation of the university that bestows such gifts unto them through the awarding of their very specialized degrees. Complete bollocks!



I would put it to you, Mr. White, that the Ron Paul supporters who read this thread are too intelligent to think that you have discovered something in the law that has heretofore escaped the notice of all of the law professors, judges, lawyers, and CPA's; or that all of these people are part of some conspiracy. The plain, unvarnished truth is, Mr. White, that you are 100% wrong.

You relentlessly retorting that the THM (myself included) are entirely and completely wrong all because there is no this or that, or him or her, or this title or that title, holds no considerable validity or propriety. The fact is there are many such individuals that are aware of the negligent misapplication of the federal income tax and have come forward (many in fact holding their -then- new found beliefs so strongly that they had willfully forfeited their high paying positions to “go public”); that I am aware of there’s even one such individual (now retired) on this very forum. You however, self-righteously condemn them as being delusional loons, no longer worthy of their past life achievements and thereby discount them from the very social status you wage in question as verification on the matter you debate -oh the irony of it all is near dizzying! The fact remains that there are dozens upon dozens of such specialized individuals located all throughout America and there are dozens upon dozens of such sources of worthwhile evidence available, you simply refuse to accept such damning facts; for to do otherwise would actually bring challenge to your doorway and perhaps true enlightenment to your darkened way of life.



As far as Mr. Cryer's Memorandum is concerned, one would find better income tax advice in a treatise on 15th Century Bolivian pan flutes. For those who are not familiar with Mr. Cryer, he is currently facing income tax deficiencies, penalties, and interest of almost $2 million. His case is pending in the United States Tax Court, and it is a certainty that he will lose. The only issues are whether he will be sanctioned for making frivolous arguments (which his Memo is full of) and if so, how much.

And yet one more response filled throughout with unsubstantiated presumptions on your part, all the while avoiding the true substance of the matter. So was scaremongering the only thing you were actually taught while at Penn?

Weston White
05-11-2012, 04:41 AM
In most, if not all, the cases where a laborer went to the court it was as pro se. In all the cases where a lawyer, law professor, or CPA might be involved the defendant is usually self-employed or a business which can not use this defense. And that is how this escapes their notice because they have no need to know it.

That is yet another very interesting point, for it is highly convenient to advancing the desires of the national government in burdening and blighting the masses, knowing full well that only a very small percentage would dare step forward (and even less after distraint has been roused) and challenge them, and in doing so will be forced to argument pro per against a vast team of specialized attorneys possessing vast and endless resources (and not to mention “home team” advantage) for afterward the government will then in the future use such (weakly represented) cases only to further embolden and substantiate the continuation of its own greedy causes as if the matters held in debate had somehow become quintessential.

Sonny Tufts
05-11-2012, 08:35 AM
In all the cases where a lawyer, law professor, or CPA might be involved the defendant is usually self-employed or a business which can not use this defense. And that is how this escapes their notice because they have no need to know it.

What defense? With respect to what is included in gross income, the law has never distinguished between compensation earned through self-employment and that earned by working for someone else.

Sonny Tufts
05-11-2012, 09:11 AM
that description I had written portrays the life of the average working American family, which by the status quo does in fact pay income taxes (amongst tons of other federal, state, and local taxes) contrary to your disconcerting disconnect on reality.

I suggest you read up on the news. In 2009, 51% of U.S. households paid no income tax. That figure is estimated to be 46% for 2011.


Moreover, the estate tax can be avoided by disclaiming it.

You are confusing an estate tax with an inheritance tax. In the latter case, the tax is imposed on the recipient of the bequest, and he can indeed avoid the tax by disclaiming. An estate tax, however, is imposed on the estate itself and cannot be shifted or avoided.


By the by, so efficiently elucidated in Knowlton v. Moore, 178 U.S. 41, 47 (1900): “… This view of the inheritance and legacy tax conforms to the official definition of indirect taxes, among which inheritance and legacy taxes are classed, which prevails in France at the present day. The definition is as follows: “Direct taxes bear immediately upon persons, upon the possession and enjoyments of rights; indirect taxes are levied upon the happening of an event or an exchange.”” See also: Tyler v. United States, 281 U.S. 497, 502 (1930); and the many arguments made on the matter by Alexander Hamilton, et al.

The Knowlton dictum is no longer an accurate description of the law. In 1929 the Supreme Court upheld the constitutionality of the gift tax as an excise and in doing so stated "this Court has consistently held, almost from the foundation of the government, that a tax imposed upon a particular use of property or the exercise of a single power over property incidental to ownership, is an excise which need not be apportioned" Bromley v. McCaughn, 280 U.S. 124 (1929)


3. So according to you: (1) people like me have it wrong; (2) the IRS itself has it wrong; (3) even the Congress has gotten it wrong; and (4) people like you just always get it right. Thereby, according to you 2+2=5, up is down, black is white, direct is indirect, etc., etc., etc.

Yes, Mr. White, you are wrong. And others like you who have tried using frivolous arguments to avoid income taxation are wrong, which can be easily demonstrated by a survey of the cases. The IRS is wrong in stating that a direct tax (in the constitutional sense) is one that can't be shifted to others. In fact, that was the precise holding in Knowlton v. Moore (or did you miss that part?). I didn't suggest that Congress has gotten it wrong, or that I'm always right. But all of the cases say that I'm right and you are wrong about the law.


As to income-capital apportionment is required, as to ‘incomes’ (notice in the plural), uniformity is required.

There is no such thing as "income-capital", Mr. White. That is your problem -- you have invented this concept as a rationalization for not paying income tax, but it doesn't work. Income is income, and Congress can tax it without apportionment.


Newsflash, picking up on lawyerly basics is actually not all that difficult to achieve; largely entailing vast amounts of reading, memorizing (which essentially develops with passing time as to a respective focus of study), cross-referencing, confirming and validating (e.g., cites, sources, references, and even double-checking as appropriate for thoroughness), writing and editing, performing investigation and background checking, following up, updating, meeting filing and service deadlines, and the like.

Very good, Mr. White. Pray tell us, in your exhaustive review of scholarly references what tax treatises did you come across that confirmed your position? What authors agreed with you? Which of them said that there's some kind of income earned by an individual that can't constitutionally be taxed? Which said that what one earns for working isn't income? Can you cite them for us? Better yet, have you ever read a tax treatise?


You relentlessly retorting that the THM (myself included) are entirely and completely wrong all because there is no this or that, or him or her, or this title or that title, holds no considerable validity or propriety.

First of all, the term "Tax Honesty Movement" is an oxymoron. There is no honesty in relying on phony quotes (I don't know how many times I've seen tax protestors cite the losing party's brief in Lucas v. Earl and claim it was part of the Court's opinion), overruled cases (e.g., Evans v. Gore), or state court cases that have absolutely no application to federal tax law. Second, the fact that every frivolous argument has been shot down in court should tell you that they are wrong, but in your case it more likely feeds your paranoid delusion that the courts are simply part of a conspiracy of some kind.


You however, self-righteously condemn them as being delusional loons, no longer worthy of their past life achievements and thereby discount them from the very social status you wage in question as verification on the matter you debate -oh the irony of it all is near dizzying!

You are projecting, Mr. White. Such individuals are wrong about the law, but I've never said that whatever else they may have accomplished is unworthy.


The fact remains that there are dozens upon dozens of such specialized individuals located all throughout America and there are dozens upon dozens of such sources of worthwhile evidence available, you simply refuse to accept such damning facts; for to do otherwise would actually bring challenge to your doorway and perhaps true enlightenment to your darkened way of life.

Mr. White, the same can be said of your refusal to accept all of the cases that have rejected the various frivolous arguments tax protesters have put forth.


So was scaremongering the only thing you were actually taught while at Penn?

I didn't go to Penn, Mr. White. What sort of delusion are you experiencing now?

Sonny Tufts
05-11-2012, 11:04 AM
Secondly, attorneys are officers of the court FIRST. If something benefits the system, it is their sworn duty to do what is in the best interests of the courts and government agencies. The fact that lawyers that worked enforcing the tax laws (i.e. IRS employees) have come out and disputed the theories YOU espouse are good enough for me to look closer into the facts.

Oh, please. An attorney representing a private citizen in a tax matter has the duty to use every legal means to eliminate or minimize his client's taxes. The idea that they have a duty to throw their clients under a bus and maximize the Treasury's coffers is nonsense. As far as ex-IRS employees who have swallowed the tax denier koolaid are concerned, you might want to note that some have had their licenses revoked (e.g., Joe Banister) or have been convicted and served jail time (e.g., Sherry Jackson).


Check this out:

http://video.google.com/videoplay?docid=-1656880303867390173

I have. It's so full of lies and misrepresentations about the law, it's pitiful. At least 3 of the so-called experts interviewed in the film are convicted tax cheats.

Weston White
05-11-2012, 05:40 PM
What defense? With respect to what is included in gross income, the law has never distinguished between compensation earned through self-employment and that earned by working for someone else.

Yes it does, i.e. Subtitles A and B as opposed to Subtitles C, D, and E; just as Subtitle A distinguishes between residents and non-residents (citizens and aliens), etc. Also the IRS makes this very distinction on their own public forms, schedules, and internal processing procedures as well, i.e., employee, SB/SE, non-statutory employee, etc.

So, tell me do you actually, honestly, study tax law or do you simply make it up as you go along?

Wheeljack
05-11-2012, 05:50 PM
What defense? With respect to what is included in gross income, the law has never distinguished between compensation earned through self-employment and that earned by working for someone else.


Let's get this straight. With respect to what is included in gross income, the courts have never been asked to distinguish between compensation earned through self-employment and that earned by working for someone else.

The law clearly denotes the differences between self-employment and employment and manifests itself in Form SS-8 (Determination of Worker Status).



.

Uncle Emanuel Watkins
05-11-2012, 05:55 PM
Why do I state this?

Because the people of this nation have been conditioned to believe that employment (working for someone else) is the equivalent of providing a service. It is not.

This is where Ron Paul can win over the working people of this country, by showing that businesses have been giving away a portion of their paychecks to the government for the last 70 years.

This knowledge will have a dramatic impact on the Accounting industry, as well as, the Retirement Financial industry.


This from a Human Resources site on the internet:

Employment Status – Employed or Self-employed?

What is the difference between a “contract of service” and a “contract for services”?

These are common-law terms used to distinguish employees from persons who are self-employed.

The term:
-“contract of service” relates to a person in employment (as in the case of a domestic servant who is described as being “in service”.)
-“contract for services” relates to a person who is self-employed and who provides services to clients.

The term “contract of service” is referred to in employment and tax legislation. A person who works under a contract of service is:
-an “employee” for payroll purposes, and
-an “employee” for employment rights purposes, and
-a “worker” for other employment rights purposes.

In contrast, a person who works under a contract for services, i.e. a self-employed person, is neither an employee nor a worker. There is no requirement for an employer to put such a person on the payroll; rather payment may be made on invoice. There is no entitlement to any of the employment rights available to employees and workers.

How, then, are these terms to be distinguished? Traditionally, there are two key tests to identify an employee, i.e. a person who works under a “contract of service”.
These include:
-“mutuality of obligation”, i.e. both parties to the contract have obligations to each other, the employee to perform the work as directed, the employer to pay for the work performed.
-the “degree of control” exercised by the employer over the work performed by the employee.

Other factors, however, have been taken into consideration when courts and tribunals have endeavored to distinguish between employment and self-employment.
These include:
-whether the individual must perform the work personally, or is able to send a qualified substitute.
-the nature of the pay and benefits that are provided by the employer.
-whether or not the individual has a business structure.
-who decides on how the contract should be performed.
-the extent of the financial risk borne by the individual.
-who provides the materials and equipment necessary for the work.
The duration of the contract is also important, the longer the engagement, the more likely it is that the relationship is employment.

Another simple way of distinguishing employment from self-employment is to consider what it is that the employer is “buying”:
-if the employer is “buying” an employee, there will be a lengthy recruitment process in order to find just the right person.
-if the employer is “buying” a service, the person who will provide the service is likely to be selected by recommendation or simply by choosing an ad in the Yellow Pages.


The Internal Revenue Service has a form which is used for this purpose.
(Form SS-8, Determination of Worker Status)
This form is used to determine who is liable for the employer side of the Social Security and Medicare taxes, if either side questions who is liable.


If we go to the Internal Revenue Code (Title 26) we will find the following definitions, laid out in the Social Security Act of 1935.

TITLE 26 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26.html) > Subtitle C (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C.html) > CHAPTER 21 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C_20_21.html) > Subchapter C (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C_20_21_30_C.html) > § 3121
§ 3121. Definitions
(a) Wages
For purposes of this chapter, the term “wages” means all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash;

(b) Employment
For purposes of this chapter, the term “employment” means any service, of whatever nature, performed


Here we see that employment is defined as service, of whatever nature, thus either performing service (employment) or performing a service (self-employment) is liable to this taxation.




Now, we come to the crux of the matter.


In 1942, Congress passed the Current Tax Payment Act to collect federal income tax at source on wages. Let’s go to the Internal Revenue Code (Title 26) to find this definition from that Act.



TITLE 26 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26.html) > Subtitle C (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C.html) > CHAPTER 24 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_C_20_24.html) > § 3401
§ 3401. Definitions
(a) Wages
For purposes of this chapter, the term “wages” means all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remuneration (including benefits) paid in any medium other than cash;


Here we see that wages is not defined by employment, but by services.


As discussed earlier, employment (labor) is not a service. An employee is “in service” to his employer, he does not “provide a service or services” to his employer. An employee may perform services for the employer, but it should be clearly understood that these services are those provided by the employer to his customers.



All remuneration paid expressly for employment, such as hourly wages do not fall under the scope of this definition of wages.

On the other hand, when an employer provides a service or services to his clients, it is an employee who will perform this service. Now if the employee is paid compensation based on the performance of this service or services, usually in the form of a commission, a fee, and/or a tip, then the employee has received remuneration for services and this compensation is fully within the scope of this definition of wages.

Also an employee may receive fringe benefits, such as paid insurance, access to recreational facilities, sick leave, paid holidays and vacation, profit-sharing plans, year-end bonuses, etc. All these are funded through the profits of the employer and therefore fall under remuneration for services and are fully within the scope of this definition of wages.

However, holidays, vacation, sick leave and year-end bonuses may be paid in the form of an hourly wage. This does not make all hourly wages subject to, nor does it relieve fringe benefits from, the scope of this definition of wages.

Federal Income Tax

Section 61 of the Internal Revenue Code, also supports what I have stated.


TITLE 26 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26.html) > Subtitle A (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A.html) > CHAPTER 1 (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A_20_1.html) > Subchapter B (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A_20_1_30_B.html) > PART I (http://www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26_10_A_20_1_30_B_40_I.html) > § 61
§ 61. Gross income defined
(a) General definition
Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
Compensation for services, including fees, commissions, fringe benefits, and similar items;




I welcome your comments

Lawyers have so easily given away what has been worked and fought for in blood. If they are going to be so thoughtless, what makes you think they care anything about the interpretation of law?

Weston White
05-11-2012, 11:42 PM
Oh, please. An attorney representing a private citizen in a tax matter has the duty to use every legal means to eliminate or minimize his client's taxes. The idea that they have a duty to throw their clients under a bus and maximize the Treasury's coffers is nonsense. As far as ex-IRS employees who have swallowed the tax denier koolaid are concerned, you might want to note that some have had their licenses revoked (e.g., Joe Banister) or have been convicted and served jail time (e.g., Sherry Jackson).

Yes, let’s talk about “oh please”, shall we?

The plain and obvious fact is that most attorneys are going to “play along to get along” so as to remain part of the system and beneficiary thereto, while being perceived as professionally respected by their peers (and for comparison, as one example that readily comes to my mind, organic farmers or ranchers are not treated in the same favorable light by the federal government as GMO farmers and mass-processing ranchers are); otherwise as you have already repeatedly emphasized, they will become a professional or political outcast, having their licenses revoked and whatnot. Which subsequently, such is a massive risk (being legally denied to practice in one’s desired vocation) to take for somebody that has invested so much personal time, energy, training, and finances into acquiring such a license, (e.g., law, CPA, bookkeeper, et al).

At any rate, by large, attorneys are in their very nature lazy, vapid individuals, which is why they wanted to become an attorney in the first place (similarly as to why people with lifelong or ongoing personal or mental issues desire to become psychologists -or at least work in that field; or people who are overly controlling, have self-confidence, self-respect issues, etc., hold a desire to be in positions of authority such as law enforcement, judgeships, or leaders or managers of public offices; or people that suffer from pyromania desire to enter the firefighting profession; or how pedophiles desire to work in the CPS, child/foster care, or public educational fields, or like to involve themselves in juvenile sports and activities or work in the church -that is to mean hold positions of trust over minors; or people that are adrenaline junkies hold a desire to work in military, police, or firefighting professions; etc.), to position themselves as the proverbial Perry Mason, they wanted -without having to actually work long and hard for it, really only having to pass a short stint at whatever law school after first obtaining whatever BA/BS degree- to ascent into a respected position of trusted authority that pays them vast sums of money for actually doing very little, for it’s their hired non-legal staff doing the majority of the real work -besides that most all modern day legal documents are pre-drafted fill-in templates to be emailed/faxed to their adversaries and delivered to the court.

Ergo, most attorneys don’t really do any serious investigative research into the matter on their own, at least not anything beyond toeing the party line, fully accepting all preconceived notions on whatever matter being represented. At the end of each workday the majority of attorneys want three consistent things standing in their office’s foyer: (1) to pay their bills and reap profits, (2) to obtain consideration, while having exerted as little effort as possible, and (3) to generate repeat clients.

As has been made evident by your personal hero Jay D. Adkisson himself, being an attorney is really all about “Chasing the Money”. See the egomaniacal impossibility in all his self-elation and glory at: http://www.jayadkisson.com/



I have. It's so full of lies and misrepresentations about the law, it's pitiful. At least 3 of the so-called experts interviewed in the film are convicted tax cheats.

Not it’s not, not at all. Although, sure as with most popular works, documentaries, writings, etc., there are concerns here and there that present themselves for debate or open up positions for the taking on either side of the fence; however, much of what was represented within America: Freedom to Fascism is very deserving of serious consideration. There is a very good reason why Aaron Russo’s great work is so popular after all (and in case you missed it, it represented the contentions of all hardworking and life deserving Americans), and not even you can honestly discount that -no matter how hard you might try.

As for you and your “Quatlost!” comrades, you simply choose to ignore the evidence presented, in whole, and instead focus on guilty verdicts of a few as your frivolous justification in doing so. Hence you fail, for you avoid the true crux of the matter; you dismiss the foundation that has been laid, meanwhile building your wanting house of cards atop, never realizing that works such as Aaron Russo’s (any many others) have long since exposed your house of cards for what it really it, a quarter-millimeter thick fraud that is to be completely knocked to the ground at the slightest blow.

As to Mr. Schiff he was primarily convicted on multiple counts of off-shoring a couple of million Dollars that he profited from his business no? And Larkin Rose who himself made an interesting documentary, (although I don’t personally agree with his primary “861 argument”) from which I am sure he profited, had very publicly challenged the government to convict him, so of course they obliged -in any case he had a politically stacked deck right out of the gate. As for Sherry Jackson, didn’t she get caught up in some sort of tax seminar scheme, selling cruise line events costing its participants several thousand Dollars to attend, (I tend to agree that would be wrong on so many levels)?

Needless to say that just because the above individuals may not have fully understood their tax liabilities or may have even possibly desired to simply take advantage of what their cause represented for their own personal gain (as I do not personally know them so I cannot speak to their personal motives), does not mean the arguments they made are to be rendered incorrect, either in part or in whole, only that the arguments represented by them may not have, to whatever extent, necessarily applicable to them in their own situations during the periods of time in question.

Weston White
05-12-2012, 12:02 PM
I suggest you read up on the news. In 2009, 51% of U.S. households paid no income tax. That figure is estimated to be 46% for 2011.

OK, but what does that have to do with anything in the prior example? There is not any relative correlation between my prior (latter) example and either of your two responses.

Are you now stating that because only one-half of American’s pay federal income taxes -and related taxes, to the tune of $2.3-trillion per annum- the status quo’s taking of the remaining half is permissible or justified? Respectively, the numbers are out of 312-million Americans, about 113-million pay such taxes; so being forced under penalty threat to surrender 15% upwards to beyond 30% of their annual ability, so as to not be harassed or threatened by the overreaching “mission creep” of the despotic IRS.

Meanwhile, how many Americans no longer bother working because they have discovered that it is far simpler for them to take advantage of other hardworking Americans by abusing this progressive-socialist contrivance that has been laid out before them; meanwhile, the IRS knowingly turns a blind eye tax year after tax year? And what is it now, one out of every seven American’s have become dependent on EBT type programs? While what, about 50% of those now on unemployment have filed for permanent disability due to mental illness (which according to the federal governments own cooked figures indicates that over 10-million Americans have suddenly become mentally ill)? And what about those several million illegal/resident aliens getting annual tax refunds that far exceed what they had withheld throughout the preceding year; meanwhile, the IRS obtusely claims that they have no legal means to put an end to it? Do you get the picture yet? Well do you? Admit to it, you could give a rat’s ass, isn’t that the truth!



You are confusing an estate tax with an inheritance tax. In the latter case, the tax is imposed on the recipient of the bequest, and he can indeed avoid the tax by disclaiming. An estate tax, however, is imposed on the estate itself and cannot be shifted or avoided.

Aye, yes that must have been it, for I was simply confused, which is why I bothered to cite the statute for you. Man alive, I must have broken your brain. An ‘estate tax’ is synonymous to an ‘inheritance tax’. Here allow me to further break it down for you:

26 USC § 102 - Gifts and inheritances [EXEMPTED FROM GROSS INCOME]
(a) General rule
Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance.


26 USC § 2001 - Imposition and rate of tax [ESTATE TAX]
(a) Imposition
A tax is hereby imposed on the transfer of the taxable estate of every decedent who is a citizen or resident of the United States.


26 USC § 2031 - Definition of gross estate [ESTATE TAX]
(a) General
The value of the gross estate of the decedent shall be determined by including to the extent provided for in this part, the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated.


26 USC § 2501 - Imposition of tax [GIFT TAX]
(a) Taxable transfers
(1) General rule
A tax, computed as provided in section 2502 [RATE OF TAX], is hereby imposed for each calendar year on the transfer of property by gift during such calendar year by any individual resident or nonresident.


A dictionary definition of a “descendant” is: “a person or animal that is descended from a specific ancestor; an offspring”.

A dictionary definition of an “estate tax” is: “a tax in the form of a percentage of the taxable estate that is imposed on a property owner's right to transfer the property to others after his or her death — compare inheritance tax”

A dictionary definition of an “inheritance tax” is: “a tax on a decedent's net estate that is levied after the estate is transmitted to the inheritors; death tax; especially : estate tax”

So you say that I am the one confused? …How interesting. In any case historically such methods of taxation, regardless of what you label them, e.g., death, gift, inheritance, legacy, succession, etc., have always been understood to be excises and in America are correct to be taxed indirectly. To that end, I am not sure what you think you are gaining by wagering such silliness to defend your stance on the present issue.

You appear to be upholding your arguments by confabulating some convoluted disconnect and merger of what are otherwise constitutionally proper as either a direct or indirect method of taxation; essentially debating that for the (common law) established fact, there exists certain classes of indirect taxes that therefore it is meant there cannot exist any classes of direct taxes save for what has been made explicit or specific through legislation and subsequently addressed through common law. Clearly such notions are without any merit and are quite honestly downright ludicrous.



The Knowlton dictum is no longer an accurate description of the law. In 1929 the Supreme Court upheld the constitutionality of the gift tax as an excise and in doing so stated "this Court has consistently held, almost from the foundation of the government, that a tax imposed upon a particular use of property or the exercise of a single power over property incidental to ownership, is an excise which need not be apportioned" Bromley v. McCaughn, 280 U.S. 124 (1929)

Alright, first off, whoa, whoa, whoa, and whoa! Secondly, the quotation that I included was not mere dictum, it was below page-43 where the opinion of the court begins and that point of discussion directly pertained to the facts of the case; neither is the inclusion of a definition that relates to the issue at bar to be construed as such. Thirdly, yours is not a valid assertion as the points addressed within the Knowlton case are perfectly accurate, as much then as they still are now. Fourthly, if you want to play the overturned game, then still I gotcha beat as per Tyler v. United States, 281 U.S. 497, 502 (1930): “... A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax which Congress, in respect of some events not necessary now to be described more definitely, undoubtedly may impose. …”

And supra at 503: “The question here, then, is, not whether there has been, in the strict sense of that word, a "transfer" of the property by the death of the decedent, or a receipt of it by right of succession, but whether the death has brought into being or ripened for the survivor, property rights of such character as to make appropriate the imposition of a tax upon that result (which Congress may call a transfer tax, a death duty or anything else it sees fit), to be measured, in whole or in part, by the value of such rights.”

Finally, the Bromley case you have quoted did nothing to demise the answer effected within the Knowlton case; hence, you capriciously debating over gift or estate taxes and the like, bears no relatable discernment to the peculiarities of direct taxation. Moreover, as provided for by the Bromley case you had referenced, Bromley v. McCaughn, 280 U.S. 124, 136-140, (1929), the court intentionally acknowledged Knowlton -in addition to Pollock and a few others- as precedent that had already well-established the meaning of direct taxation (quoted below):


“The meaning of the phrase "direct taxes" and the historical background of the constitutional requirement for their apportionment have been so often and exhaustively considered by this Court, Hylton v. United States, 3 Dall. 171; Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429; 158 U. S. 158 U.S. 601; Knowlton v. Moore, 178 U. S. 41; Nicol v. Ames, 173 U. S. 509, 173 U. S. 515, that no useful purpose would be served by renewing the discussion here. Whatever may be the precise line which sets off direct taxes from others we need not now determine. ...”

“… While taxes levied upon or collected from persons because of their general ownership of property may be taken to be direct, Pollock v. Farmers' Loan & Turst Co., 157 U. S. 429, 158 U. S. 158 U.S. 601, this Court has consistently held, almost from the foundation of the government, that a tax imposed upon a particular use of property or the exercise of a single power over property incidental to ownership is an excise which need not be apportioned, and it is enough for present purposes that this tax is of the latter class. …”

“It is a tax laid only upon the exercise of a single one of those powers incident to ownership, the power to give the property owned to another. Under this statute, all the other rights and powers which collectively constitute property or ownership may be fully enjoyed free of the tax. So far as the constitutional power to tax is concerned, it would be difficult to state any intelligible distinction, founded either in reason or upon practical considerations of weight, between a tax upon the exercise of the power to give property inter vivos [meaning to gift another while alive] and the disposition of it by legacy, upheld in Knowlton v. Moore, supra, the succession tax in Scholey v. Rew, … the tax upon the manufacture and sale of colored oleomargarine in McCray v. United States, … the tax upon sales of grain upon an exchange in Nicol v. Ames, … the tax upon sales of shares of stock in Thomas v. United States, … the tax upon the use of foreign built yachts in Billings v. United States, … the tax upon the use of carriages in Hylton v. United States, …; compare Veazie Bank v. Fenno, …; Thomas v. United States …”

“It is true that, in each of these cases, the tax was imposed upon the exercise of one of the numerous rights of property, but each is clearly distinguishable from a tax which falls upon the owner merely because he is owner, regardless of the use of disposition made of his property. See Billings v. United States, supra; cf. Pierce v. United States, 232 U. S. 290. The persistence of this distinction and the justification for it rest upon the historic fact that taxes of this type were not understood to be direct taxes when the Constitution was adopted and, as well, upon the reluctance of this Court to enlarge by construction, limitations upon the sovereign power of taxation by Article I, § 8, so vital to the maintenance of the national government. Nicol v. Ames, supra, 173 U. S. 514-515.”

“It is said that, since property is the sum of all the rights and powers incident to ownership, if an unapportioned tax on the exercise of any of them is upheld, the distinction between direct and other classes of taxes may be wiped out, since the property itself may likewise be taxed by resort to the expedient of levying numerous taxes upon its uses; that one of the uses of property is to keep it, and that a tax upon the possession or keeping of property is no different from a tax on the property itself. Even if we assume that a tax levied upon all the uses to which property may be put, or upon the exercise of a single power indispensable to the enjoyment of all others over it, would be in effect a tax upon property …, and hence a direct tax requiring apportionment, that is not the case before us.”

“The power to give cannot be said to be a more important incident of property than the power to use, the exercise of which was taxed in Billings v. United States, and, even though differences in degree may be carried to a point where they produce distinctions in kind, the present levy falls so far short of taxing generally the uses of property that it cannot be likened to the taxes on property itself which have been recognized as direct. It falls, rather, into that category of imposts or excises which, since they apply only to a limited exercise of property rights, have been deemed to be indirect, and so valid although not apportioned.”

“MR. JUSTICE SUTHERLAND (dissenting).

… And though we understand generally what is a direct tax and what taxes have been declared to be direct, we are still as incapable of formulating an exact definition as were those who wrote the taxation clauses into the Constitution. Since the Pollock case, however, we know that a tax on property, whether real or personal, or upon the income derived therefrom, is direct, and that to levy a tax by reason of ownership of property is to tax the property. …

... By repeated decisions of this Court, it has become axiomatic that it is the substance, and not the form, that controls in such matters.

Brown v. Maryland, 12 Wheat. 419, involved the validity of a state statute which exacted a license fee of $50 of importers of foreign goods and other persons selling the same by wholesale, bale, or package, etc. The act was held void as imposing a duty on imports. It was argued that the tax was not upon the article, but upon the person; that the state had the power to tax occupations, and this was nothing more. To this, Chief Justice Marshall replied (. 25 U. S. 444) in words that have been repeatedly approved in subsequent decisions of this Court:

"It is impossible to conceal from ourselves that this is varying the form without varying the substance. It is treating a prohibition which is general as if it were confined to a particular mode of doing the forbidden thing. All must perceive that a tax on the sale of an article, imported only for sale, is a tax on the article itself. "”

And continuing -although slightly off topic as to addressing points on various excises- the above quotation of Justice Marshall from which it will be noticed that such was very similarly stated by Dr. Adam Smith within his Wealth of Nations (Book Five, Chapter II, Article III – “Taxes upon the Wages of Labour”]); now quoting from Brown v. Maryland, 25 U.S. 419, 444 (1827): “… It is true the state may tax occupations generally, but this tax must be paid by those who employ the individual or is a tax on his business. The lawyer, the physician, or the mechanic must either charge more on the article in which he deals or the thing itself is taxed through his person. This the state has a right to do because no constitutional prohibition extends to it. So a tax on the occupation of an importer is in like manner a tax on importation. It must add to the price of the article and be paid by the consumer or by the importer himself in like manner as a direct duty on the article itself would be made. This the state has not a right to do, because it is prohibited by the Constitution.”

Directly quoting Adam Smith, LL.D, from his great work An Inquiry into the Nature And Causes of the Wealth of Nations [1776]: “The wages of the inferior classes of workmen, … While the demand for labour and the price of provisions, therefore, remain the same, a direct tax upon the wages of labour can have no other effect than to raise them somewhat higher than the tax.
...
A direct tax upon the wages of labour, therefore, though the labourer might perhaps pay it out of his hand, could not properly be said to be even advanced by him; …”

Now that is what I call delightfully enlightening!



Yes, Mr. White, you are wrong. And others like you who have tried using frivolous arguments to avoid income taxation are wrong, which can be easily demonstrated by a survey of the cases. The IRS is wrong in stating that a direct tax (in the constitutional sense) is one that can't be shifted to others. In fact, that was the precise holding in Knowlton v. Moore (or did you miss that part?). I didn't suggest that Congress has gotten it wrong, or that I'm always right. But all of the cases say that I'm right and you are wrong about the law.

1. No, I am correct, while still to date other than your own ranting and raving you have consistently failed to demonstrate anything to the contrary. In fact the only thing you have shown is your own inability to correctly read the cases you cite or quote to; either that or you’ve not even bothered to actually read through them, figuring that nobody else would exert the effort to either.
2. No, the arguments that I and others have similarly raised have not been deemed by the courts (and neither the IRS) to be frivolous. In fact the core of the matter as pertaining to the general masses is still pending consideration for establishing precedent (i.e., even though these particular issues in every sense present a federal question and do meet the primary concern for petitioning SCOTUS (for writ of certiorari), the Court seems not to want to adjudicate such cases, stamping all that come before with ‘cert. denied’).
3. No, this is not about avoiding federal income taxes; it is about correcting the gross misinterpretation concerning the improper and unjust modern day misapplication of such form of taxation, it is about putting a final deathblow to the presently out of control and ramped abuses being commenced by the IRS, and it is about ensuring that the correct implementation of the national taxing powers is secured indelibly.
4. No, neither the IRS nor the CFR definitions are incorrect in the distinctions made between ‘direct’ and ‘indirect’ taxes; it is rather so much more likely that you are seemingly incapable of comprehending the pointed distinction (as was just proven “to the nines” by the above).
5. I see nowhere in Knowlton offering such a holding as you’re suggesting. In fact it referenced a proposed act of legislation from 1797 calling for (supra at 50): “… 2, the imposition of "a duty of two percentum ad valorem . . . on all testamentary dispositions, descents, and successions to the estates of intestates, excepting those to parents, husbands, wives, or lineal descendants," …”; hence, the confusion you’re attempting to kindle over this matter never at any point in our Nation’s history actually existed.
6. The CFR definitions are based upon legislation ratified by Congress; thus, if those are wrong so was Congress.
7. And again incorrect, for there are many cases and sources that oppose you, as shown throughout: Points in Further Support of the CFT (http://www.iwarrior.defendindependence.us/download/file.php?id=94).



There is no such thing as "income-capital", Mr. White. That is your problem -- you have invented this concept as a rationalization for not paying income tax, but it doesn't work. Income is income, and Congress can tax it without apportionment.

Well I must say, whoever you really are, you most certainly suffer from keyboard-in-mouth disease.

Quoting Alexander Hamilton from within Pollock v. Farmers' Loan & Trust Company, 157 U.S. 429, 591; 158 U.S. 601, 626 (1895) [3 Hamilton’s Works, 34]: “This principle, which seems critically correct, would exempt as well the income as the capital of the property. It protects the use as effectually as the thing. What, in fact, is property but a fiction without the beneficial use of it? In many cases, indeed, the income or annuity is the property itself.”

Furthermore, the below quotation wholly substantiates my assertions as from supra (Rehearing) at 158 U.S. 601, 628 (1895):

“... There can be but one answer, unless the constitutional restriction is to be treated as utterly illusory and futile, and the object of its framers defeated. We find it impossible to hold that a fundamental requisition, deemed so important as to be enforced by two provisions, one affirmative and one negative, can be refined away by forced distinctions between that which gives value to property and the property itself.

Nor can we perceive any ground why the same reasoning does not apply to capital in personalty held for the purpose of income or ordinarily yielding income, and to the income therefrom. All the real estate of the country, and all its invested personal property, are open to the direct operation of the taxing power if an apportionment be made according to the Constitution. The Constitution does not say that no direct tax shall be laid by apportionment on any other property than land; on the contrary, it forbids all unapportioned direct taxes, and we know of no warrant for excepting personal property from the exercise of the power, or any reason why an apportioned direct tax cannot be laid and assessed, as Mr. Gallatin said in his report when Secretary of the Treasury in 1812, "upon the same objects of taxation on which the direct taxes levied under the authority of the State are laid and assessed."”



Very good, Mr. White. Pray tell us, in your exhaustive review of scholarly references what tax treatises did you come across that confirmed your position? What authors agreed with you? Which of them said that there's some kind of income earned by an individual that can't constitutionally be taxed? Which said that what one earns for working isn't income? Can you cite them for us? Better yet, have you ever read a tax treatise?

First of nobody here is stating that the government cannot tax an individual’s labor, livelihood, or remuneration, only that apportionment is necessary to the assessment and that the circumstances involved be emergent.

Secondly, off the top of my head: Christian (KJV) Bible, Locke, Paine, Adams, Jefferson, Hamilton (and the rest of those, you know, “domestic terrorists”), Turgot, Smith, Gallatin, Bastiat, Black, Marx and Engels, et al.

Thirdly, yes, a several years back I had read Cooley’s Treatise on Taxation, Black’s Treatise on Income Taxation, and have read a bit about taxation in general from a legal encyclopedia; which I have been meaning to read them again, although much, much more thoroughly.
* Speaking of which the above and other great writings are available for reading in PDF at my Learning Resource & Discovery Center (LRDC) (http://www.lrdc.defendindependence.us/?t=historical_library).



First of all, the term "Tax Honesty Movement" is an oxymoron. There is no honesty in relying on phony quotes (I don't know how many times I've seen tax protestors cite the losing party's brief in Lucas v. Earl and claim it was part of the Court's opinion), overruled cases (e.g., Evans v. Gore), or state court cases that have absolutely no application to federal tax law. Second, the fact that every frivolous argument has been shot down in court should tell you that they are wrong, but in your case it more likely feeds your paranoid delusion that the courts are simply part of a conspiracy of some kind.

No, the Tax Honesty Movement is about demanding honesty in taxation not about demanding honesty within itself; which is not to say that any of the goals of the THM is to be willfully dishonest or destructive, but that the generic name THM is certainly no oxymoron.

Also, at least for the most part it is not that those within the THM are intending to mislead, but that they are simply (and perhaps enthusiastically or even over zealously) disseminating the vast sums of information they come across from many available sources (be they public or private); being that most all of us researching the cause within the THM are learning as we go -and with time comes experience, with experience comes knowledge, and with knowledge comes wisdom- and as such many of those errors can be chalked up to rumors being spread around or more appropriately can be viewed as training in progress or otherwise newbie error.

However, as to you being an attorney that chastises others for their unwitting mistakes makes you incongruous and apathetic to both your own affirmed duties and professional pro bono/volunteerism obligations.

Meanwhile, you seem to overlook that most all court cases are filed (and litigated) by esquires, yet somehow in all such cases at least one of those esquires is determined to be wrong, which means that one out of every two or more opposing attorneys are incorrect in their allegations or defenses. So I ask you (rhetorically), where exactly does that place your logic of never being incorrect?

And not it is not a paranoid delusion to think that the courts are not impartial to anything that’s outside the “safe” bounds of the status quo, it is a very real concern; just as is the government’s failure to disclose the dangers of water sodium fluoridation; vaccinating; chem-trailing; consuming GMO, hormones, pesticides, and synthetics; cell-phone use and exposure to full-body scanners; including their own involvement in conjuring up: “domestic extremism/terrorism”, Fast and Furious, countless forms of TSA abuse, the entirety of 9/11, OKC Bombing, Waco, 93’ WTC Bombing, Ruby Ridge, Gulf of Tonkin, Tuskegee, secretive domestic CIA experiments conducted on the unknowing public, ongoing FBI entrapments, global warming, etc.; and hiding the truth behind such things as our fraudulent form of inflationary currency and the Federal Reserve System, and the true agenda behind Planned Parenthood (i.e., The American Birth Control League and Margaret Sanger), etc. Simply put, you are an outright fool to think otherwise.



You are projecting, Mr. White. Such individuals are wrong about the law, but I've never said that whatever else they may have accomplished is unworthy.

And exactly what is wrong with projecting, isn’t that was public forums are designed for?

Well that’s quite pompous of you to throw a blanket statement out there like that.

And yes, because the two perspectives are coupled to the individual, each on a level personally and professionally, while you have gone to lengths to insinuate that they are no longer worthy of their professional accolades, you have consequently invalidated their former (more intimate) perspective.



Mr. White, the same can be said of your refusal to accept all of the cases that have rejected the various frivolous arguments tax protesters have put forth.

Save for the fact that your type purposefully misrepresent those cases (e.g., Glenshaw Glass, Helvering, Lucas, Springer, and now Bromley), this is of course discounting all of the thousands upon thousands of circuit cases that have (for whatever selective reasoning) failed to uphold the closely-related precedent set by SCOTUS and as well the entirety of our national fundaments.



I didn't go to Penn, Mr. White. What sort of delusion are you experiencing now?

Pardon me I must have missed something, now how exactly would the question I posed make me delusional?

Anyways, one down, so that leaves two, now which is it then? Please be sure to answer honestly now:

1. Chapel Hill
2. University of Oklahoma

Weston White
05-13-2012, 08:39 PM
With further respects to various types of “income” or ‘incomes’ (as addressed in the above and prior posts), the following is highly noteworthy to that point (also noting that the prior point addressed concerning the originating term ‘gross income’ under Section 22 of the 1939 IRC -and preceding statutes- still holds valid effect, and also under the pari materia principle so applicable to the Internal Revenue Code):

H.R. 1337, Internal Revenue Code of 1954, House of Representatives Report of the Committee on Ways and Means:

“Section 61. Gross income defined

This section corresponds to section 22(a) of the 1939 Code. While the language in existing section 22(a) has been simplified, the all-inclusive nature of statutory gross income has not been affected thereby. Section 61(a) is as broad in scope as section 22(a).
Section 61(a) provides that gross income includes “all income from whatever source derived.” This definition is based upon the 16th Amendment and the word “income” is used in its constitutional sense. …”


H.R. 1622, Internal Revenue Code of 1954, Senate Report of the Committee on Finance:

“Section 61. Gross income defined

This section corresponds to section 22(a) of the 1939 Code. While the language in existing section 22(a) has been simplified, the all-inclusive nature of statutory gross income has not been affected thereby. Section 61(a) is as broad in scope as section 22(a).
Section 61(a) provides that gross income includes “all income from whatever source derived.” This definition is based upon the sixteenth Amendment and the word “income” is used as in section 22(a) in its constitutional sense. It is not intended to change the concept of income that obtains under section 22(a). …”


Merchants' Loan & Trust Co. v. Smietanka, 255 U.S. 509, 518-519 (1921): “It is obvious that these decisions in principle rule the case at bar if the word "income" has the same meaning in the Income Tax Act of 1913 that it had in the Corporation Excise Tax Act of 1909, and that it has the same scope of meaning was in effect decided in Southern Pacific Co. v. Lowe, 247 U. S. 330, 247 U. S. 335, where it was assumed for the purposes of decision that there was no difference in its meaning as used in the Act of 1909 and in the Income Tax Act of 1913. There can be no doubt that the word must be given the same meaning and content in the Income Tax Acts of 1916 and 1917 that it had in the Act of 1913. When to this we add that, in Eisner v. Macomber, supra, a case arising under the same Income Tax Act of 1916 which is here involved, the definition of "income" which was applied was adopted from Stratton's Independence v. Howbert, supra, arising under the Corporation Excise Tax Act of 1909, with the addition that it should include "profit gained through sale or conversion of capital assets," there would seem to be no room to doubt that the word must be given the same meaning in all of the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act, and that what that meaning is has now become definitely settled by decisions of this Court.”


Senate Subcommittee Hearing of the Committee on Finance on the Withholding Tax, August 21 and 22, 1942:


[Pages 104-105]

Senator CLARK. “Of course, you withhold not only from taxpayers but nontaxpayers.”

Mr. HARDY. “Yes. To my mind that is the great argument in favor either of this plan or of a straight sales tax, that the income tax misses, and particularly the withholding feature misses a considerable fraction of consuming power in the country. I think this point is frequently overlooked and greatly underestimated, and that is the people who are living off capital rather than off of current income. It is often assumed that that consists of just a few very rich people. It is not just a few very rich people. If you are very rich you can live off the income of your capital[u], but then there are people who have retired, who are living off of their lifetime savings, who may show an income of $5,000 but who are spending several hundred thousand dollars a year because they have saved a good many years to provide their expenditures.

Then you have people who are living off the proceeds of insurance policies, people who are unemployed but who are well enough fixed so they do not worry about it, about being unemployed, and that group is totally exempt under [u]any such income-tax scheme, whether it is levied at the source or levied in the usual way. …”

Mr. HARDY. “To close the point I was making in regard to the advantage of assessing the tax or loan, whatever you use, assessing it on the basis of consumption, I point out that there are certain people living off of capital. You also have to account for the fact that there are a good many people who, in a given year, show losses, capital losses that are wipe out their tax liability and who, nevertheless, may be maintaining their ordinary standards of living out of capital. I made some study of the incomes of the people who report losses, and it would appear that on the average people who have negative in-come for tax purpose but have to report, with gross income large enough so they have to report, probably have $20,000 or $30,000 [which from 1942 to present (due to monetary inflation) equals: $281,463 to $422,194] normal income just on the basis of the proportion of rent and dividends, and other types of income in the gross.

You also have got the case of farmers whom it is notoriously difficult to reach on income taxes, unless they are very well-to-do farmers, or the small businessman whose bookkeeping methods and the difficulties of auditing them on the part of the Treasury are such that he may be paying very much less than his income justifies, along with the notoriously difficulty of reaching skilled labor if it changes jobs often enough so as not to appears in forms reported to the Treasury. You have got a big class of consumption here. …

The thing may be summed up in saying that the purpose of your fiscal system is directly to regulate, curtail, or restrict consumption. The logic that is in favor of it relates directly to the consumers’ expenditures rather than indirectly to the income which throws light on his ability to consume and not on his actual consumption. …

I will come to the objection to it, and that is that it tends to fall most heavily on very low incomes, because a higher proportion of those incomes is spent for consumption, which is the thing that I think has stood in the way of a broad use of this method of assessment in Federal taxes. …”

[Page-119]

Mr. PAUL: “… We are just afraid, without collection at the source, with our present rate and present spread of the incidence of taxation, that the system will break down. I do not think I put it too strongly when I say not only Bureau prestige is involved but the future of the income tax may be involve.”

[Page-222]

Mr. PAUL: “… In fact, this is about our last clear chance to get the system in the statute.”


Also interesting for notation is the only definition of the term ‘income’ included within all of 26 USC, located within Sec. 643(b) ‘Income’[ESTATES, TRUSTS, AND BENEFICIARIES]:

“For purposes of this subpart and subparts B, C, and D, the term “income”, when not preceded by the words “taxable”, “distributable net”, “undistributed net”, or “gross”, means the amount of income of the estate or trust for the taxable year determined under the terms of the governing instrument and applicable local law. Items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, determines to be allocable to corpus [the principal] under the terms of the governing instrument and applicable local law shall not be considered income.”

PierzStyx
05-13-2012, 09:14 PM
Ron Paul says the U.S. is slipping into fascism. He is correct, but he is 70 years behind the fact.

The U.S. slipped into fascism in 1942 when the Congress gave the reporting of the peoples wages into the hands of business and the people of this country perfected this fiction by allowing themselves to become ignorant of their own laws.


You need to go back farther than that. The Presidency of Woodrow Wilson saw fascism on a level that would only be repeated again by Mussolini in the 30s. There were entire governmental agencies whose job was to suppress free speech, arrest "undesirables", regulate the economy, seize property, and so much more. FDR wasn't even that scary compared to Wilson. FDR just managed to make some of his lesser immediately scary programs last.

Sonny Tufts
05-14-2012, 04:12 PM
Yes it does, i.e. Subtitles A and B as opposed to Subtitles C, D, and E; just as Subtitle A distinguishes between residents and non-residents (citizens and aliens), etc. Also the IRS makes this very distinction on their own public forms, schedules, and internal processing procedures as well, i.e., employee, SB/SE, non-statutory employee, etc?

Mr. White, Subtitle B deals with gift, estate, and generation-skipping taxes, none of which has anything to do with what is included in gross income, which is an income tax concept. Similarly, nothing in Subtitles C through E has anything to do with what is included in gross income. While there are certain differences in treatment between self-employment income and compensation earned by working for someone else, nothing the IRS has published and nothing in the law suggests that one is included in gross income but the other isn't.


So you say that I am the one confused? …How interesting. In any case historically such methods of taxation, regardless of what you label them, e.g., death, gift, inheritance, legacy, succession, etc., have always been understood to be excises and in America are correct to be taxed indirectly. To that end, I am not sure what you think you are gaining by wagering such silliness to defend your stance on the present issue.

You are extremely confused. Yes, the estate tax is an excise, but since it can't be shifted (i.e., the executor must pay the tax out of the estate assets and can't shift it to someone else), it disproves the contention that excises are taxes that can be shifted.


I see nowhere in Knowlton offering such a holding as you’re suggesting. In fact it referenced a proposed act of legislation from 1797 calling for (supra at 50): “… 2, the imposition of "a duty of two percentum ad valorem . . . on all testamentary dispositions, descents, and successions to the estates of intestates, excepting those to parents, husbands, wives, or lineal descendants," …”; hence, the confusion you’re attempting to kindle over this matter never at any point in our Nation’s history actually existed.

You really should read the case before displaying such ignorance.


But it is asserted that it was decided in the income tax cases that, in order to determine whether a tax be direct within the meaning of the Constitution, it must be ascertained whether the one upon whom by law the burden of paying it is first cast can thereafter shift it to another person. If he cannot, the tax would then be direct in the constitutional sense, and, hence, however obvious in other respects it might be a duty, impost, or excise, it cannot be levied by the rule of uniformity, and must be apportioned. From this assumed premise it is argued that death duties cannot be shifted from the one on whom they are first cast by law, and therefore they are direct taxes requiring apportionment.

The fallacy is in the premise. It is true that in the income tax cases the theory of certain economists by which direct and indirect taxes are classified with reference to the ability to shift the same was adverted to. But this disputable theory was not the basis of the conclusion of the court. The constitutional meaning of the word direct was the matter decided. Considering that the constitutional rule of apportionment had its origin in the purpose to prevent taxes on persons solely because of their general ownership of property from being levied by any other rule than that of apportionment, two things were decided by the court: First, that no sound distinction existed between a tax levied on a person solely because of his general ownership of real property, and the same tax imposed solely because of his general ownership of personal property. Secondly, that the tax on the income derived from such property, real or personal, was the legal equivalent of a direct tax on the property from which said income was derived, and hence must be apportioned. These conclusions, however, lend no support to the contention that it was decided that duties, imposts and excises which are not the essential equivalent of a tax on property generally, real or personal, solely because of its ownership, must be converted into direct taxes, because it is conceived that it would be demonstrated by a close analysis that they could not be shifted from the person upon whom they first fall. The proposition now relied upon was considered and refuted in Nicol v. Ames, 173 U.S. 509 , 43 L. ed. 786, 19 Sup. Ct. Rep. 522, where the court said ( p. 515, L. ed. p. 791, Sup. Ct. Rep. p. 525):
'The commands of the Constitution in this, as in all other respects, must be obeyed; direct taxes must be apportioned, while indirect taxes must be uniform throughout the United States. But while yielding implicit obedience to these constitutional requirements, it is no part of the duty of this court to lessen, impede, or obstruct the exercise of the taxing power by merely abstruse and subtle distinctions as to the particular nature of a specified tax, where such distinction rests more upon the differing theories of political economists than upon the practical nature of the tax itself.
'In deciding upon the validity of a tax with reference to these requirements, no microscopic examination as to the purely economical or theoretical nature of the tax should be indulged in for the purpose of placing it in a category which would invalidate the tax. As a mere abstract, scientific, or economical problem, a particular tax might possibly be regarded as a direct tax, when as a practical matter pertaining to the actual operation of the tax it might quite plainly appear to be indirect. Under such circumstances, and while varying and disputable theories might be indulged as to the real nature of the tax, a court would not be justified, for the purpose of invalidating the tax, in placing it in a class different from that to which its practical results would consign it. Taxation is eminently practical, and is, in fact, brought to every man's door, and for the purpose of deciding upon its validity a tax should be regarded in its actual, practical results, rather than with reference to those theoretical or abstract ideas whose correctness is the subject of dispute and contradiction among those who are experts in the science of political economy.'


Secondly, off the top of my head: Christian (KJV) Bible, Locke, Paine, Adams, Jefferson, Hamilton (and the rest of those, you know, “domestic terrorists”), Turgot, Smith, Gallatin, Bastiat, Black, Marx and Engels, et al.

Thirdly, yes, a several years back I had read Cooley’s Treatise on Taxation, Black’s Treatise on Income Taxation, and have read a bit about taxation in general from a legal encyclopedia; which I have been meaning to read them again, although much, much more thoroughly.
* Speaking of which the above and other great writings are available for reading in PDF at my Learning Resource & Discovery Center (LRDC).

The individuals in the first cited paragraph never wrote on the federal income tax, and although Mr. Cooley (writing in 1886) referred to the Civil War income tax, he never really discussed it nor did he cite the Supreme Court case that upheld its constitutionality as an excise or duty. But let's see what Mr. Black had to say in Section 229:


A salary accruing to the taxpayer, whether payable annually or at shorter intervals, is taxable as a part of his income, and it is immaterial (except in so far as the statute makes express exceptions) whether he earns it in the capacity of a public officer or as an employe of a private corporation, or a partnership, or an individual…

Nor does it make any difference that the amount of the salary is uncertain or varies from time to time, or that it depends on the extent of services actually rendered or the amount of business transacted, or that it may include commissions on sales. Whatever is received in the course of the year in the way of salary, wages, or compensation constitutes a part of that year's income… And it is immaterial by what name such earnings may be called, or whether they take the form of a fixed periodical compensation or accrue in each instance in consideration of particular services rendered. And the same is true of the wages or earnings of mechanics and artisans, if sufficient in annual amount to come within the purview of the statute, as may easily be the case under some of the state laws. And in all ordinary cases, whatever accrues to the taxpayer as compensation for his personal exertion or endeavor will be taxable as income, no matter what may be the nature of the employment or pursuit which he follows, since the terms of the statutes are broad enough to cover almost every conceivable kind of activity.(emphasis added)

I guess you missed that part, Mr. White.


Anyways, one down, so that leaves two, now which is it then? Please be sure to answer honestly now:

1. Chapel Hill
2. University of Oklahoma

Neither. Don't bother listing every university in the country in the hopes of finding out which I attended. I'm not playing that game anymore.

Sonny Tufts
05-14-2012, 04:49 PM
Let's get this straight. With respect to what is included in gross income, the courts have never been asked to distinguish between compensation earned through self-employment and that earned by working for someone else.

Nor have they been asked to distinguish between compensation earned on odd numbered days and that earned on even numbered days, for the obvious reason that the statute doesn't make such a distinction. Similarly, both types of compensation are obviously included in gross income under Section 61(a).

Look at it this way: if compensation received for working for someone else really isn't includable in gross income, what in the world is the purpose of Subchapter 24, the income tax withholding provisions? I think you would agree that the tax to be withheld under Chapter 24 is upon compensation received for working for someone else, right? So why would Congress draft an entire chapter covering withholding if the withheld tax is simply going to be refunded because it's not part of the income tax base?

If Section 61(a)(1) ["compensation for services"] refers only to self-employment income, why do we also have Section 61(a)(2) ["gross income derived from business"]? Self-employment income is gross income derived from business, so why did Congress also include subsection (1)?

If compensation earned for working for someone else isn't includable in gross income, why for the last 99 years has nobody in Congress jumped up and said, "Hold it! That type of compensation isn't covered by the statute!" Why has no professor written a law review article putting forth your interpretation of the statute? Why has no big-dollar athlete not hired a top tax attorney to make your argument so as to avoid tax on the $25 million in compensation he gets for working for his team?

Wheeljack
05-14-2012, 08:15 PM
Look at it this way: if compensation received for working for someone else really isn't includable in gross income, what in the world is the purpose of Subchapter 24, the income tax withholding provisions? I think you would agree that the tax to be withheld under Chapter 24 is upon compensation received for working for someone else, right? So why would Congress draft an entire chapter covering withholding if the withheld tax is simply going to be refunded because it's not part of the income tax base?

If Section 61(a)(1) ["compensation for services"] refers only to self-employment income, why do we also have Section 61(a)(2) ["gross income derived from business"]? Self-employment income is gross income derived from business, so why did Congress also include subsection (1)?

Sonny,

Compensation received for working for someone else is not included in gross income. (hourly wages)

Compensation received for the result of the work done for someone else is included in gross income. This is what Section 61(a)(1) ["compensation for services"] refers to and includes Commissions, Fees, Tips, and Fringe Benefits. These are things that employees can receive besides hourly wages.



If compensation earned for working for someone else isn't includable in gross income, why for the last 99 years has nobody in Congress jumped up and said, "Hold it! That type of compensation isn't covered by the statute!" Why has no professor written a law review article putting forth your interpretation of the statute? Why has no big-dollar athlete not hired a top tax attorney to make your argument so as to avoid tax on the $25 million in compensation he gets for working for his team?

Why did everyone believe that the Sun revolved around the Earth for centuries. Because the powers that be said so.

No professor has written an article putting forth my interpretation because no professor has been presented with my interpretation.

The big dollar athelete is not an employee of the team. Why would he hire an attorney to make an argument he hasn't even formulated in his own head.

Weston White
05-15-2012, 06:47 AM
Mr. White, Subtitle B deals with gift, estate, and generation-skipping taxes, none of which has anything to do with what is included in gross income, which is an income tax concept. Similarly, nothing in Subtitles C through E has anything to do with what is included in gross income. While there are certain differences in treatment between self-employment income and compensation earned by working for someone else, nothing the IRS has published and nothing in the law suggests that one is included in gross income but the other isn't.

And so, the point of these distinctions actually flies over your head? Do you really fail to realize the various classes of taxes levied throughout the IRC? Those Subtitles represent various considerations and exceptions to the federal income tax as a whole, each calling for specified treatment as to whatever means of being taxed or not taxed; which is vastly important to realize because you keep making the asinine argument that any object (including anything at all of whatever form or shape or value) you receive is taxable unless specifically exempted. As to the various classifications, see below:

Class 0: EPMF; Class 1: Withholding, SSI & FICA; Class 2: Individual Income, Fiduciary, Partnership; Class 3: Corporation Income; Class 4: Excises; Class 5: IRP, Estates & Gifts; Class 6: NMF; Class 7: RRT; Class 8: FUTA; Class 9: Mixed; et al.

And that’s not correct; SSI and FICA (including FUTA) are determined by the sum already established within Subtitle A. SSI, FICA, and PPACA (including FUTA) are taxes coupled in monetary proportion to the individual income tax. See: 26 USC Sects. 1 and 3402(n)(1),(2).

Finally, neither does the law nor the IRS have to, for the IRC considers only constitutionally ‘taxable income’ as being within its legal jurisdiction. It is not for the Legislature to preordain the constitutionally of its public laws; that function is reserved for the courts once the matter reaches ripeness, while refraining mootness.



You are extremely confused. Yes, the estate tax is an excise, but since it can't be shifted (i.e., the executor must pay the tax out of the estate assets and can't shift it to someone else), it disproves the contention that excises are taxes that can be shifted.

My goodness, after all that work I put into my original reply, you are still so utterly lost on the issue. And more than that you outright avoid the fact that within your prior response you were stating that an ‘estate tax’ was not the same thing as an ‘inheritance tax’. At any rate your comparison is faulty and deserving of no further debate. Simply put, the notion that an ‘estate tax’ (or whatever other similar tax) is even remotely comparable to a ‘direct tax’ is entirely unjustified; and yes such taxes can be avoided simply by refusing to accept it, which then it passes onto the next in-line heir -ergo, if you don’t want the benefit of the gift simply refuse to accept it (either way it is of no direct loss to the would be receiver, they stand only to gain from the exchange). This matter cannot be made any clearer than it already has been made, period, end of discussion.



You really should read the case before displaying such ignorance.

Which is in regards to your prior response: “… The IRS is wrong in stating that a direct tax (in the constitutional sense) is one that can't be shifted to others. In fact, that was the precise holding in Knowlton v. Moore (or did you miss that part?). …”

Well, you seem to have missed the point, quoting from above: “… that duties, imposts and excises which are not the essential equivalent of a tax on property generally, real or personal, solely because of its ownership, must be converted into direct taxes, because it is conceived that it would be demonstrated by a close analysis that they could not be shifted from the person upon whom they first fall. …

“… a particular tax might possibly be regarded as a direct tax, when as a practical matter pertaining to the actual operation of the tax it might quite plainly appear to be indirect. Under such circumstances, and while varying and disputable theories might be indulged as to the real nature of the tax, a court would not be justified, for the purpose of invalidating the tax, in placing it in a class different from that to which its practical results would consign it. …”

Concluding, then, that the tax under consideration is not direct within the meaning of the Constitution, but, on the contrary, is a duty or excise, we are brought to consider the question of uniformity.”

And to quote from your own source Mr. Henry Black from within Pollock at 157 U.S. 429, 625 (1895):


“Black, writing on Constitutional Law, says: “But the chief difficulty has arisen in determining what is the difference between direct taxes and such as are indirect. In general usage, and according to the terminology of political economy, a direct tax is one which is levied upon the person who is to pay it, or upon his land or personalty, or his business or income, as the case may be. An indirect tax is one assessed upon the manufacturer or dealer in the particular commodity, and paid by him, but which really falls upon the consumer, since it is added to the market price of the commodity which he must pay. …””

Making the distinction between direct and indirect taxation, so as to the former being one that cannot be shifted away from its subject, serves only as a generality; otherwise that would be exactly the same as labeling the ‘sales tax’ a direct tax because it had been shifted onto the consumer -who is the one that ultimately pays the tax (that is, at least, in most all cases). This distinction is but merely one aspect that may be the case given the circumstances of the taxing method, there are in fact other factors to be considered. Matters involving taxation are not always so “black and white”; they involve many facets, many intricacies. That a more practical distinction for direction taxation is to be realized when the tax is imposed upon the source itself, i.e., capital, principal, stock, personalty, individual, etc.

Ergo, a tax that does not meet the historic context of an ‘indirect tax’ or that is otherwise clearly directed at the subject is a tax imposed directly upon the subject and is properly a DIRECT TAX; while a tax that does meet the historic context of an ‘indirect tax’ or that its directness is questionable (being otherwise externally affluent as to its subject) is an INDIRECT TAX. Direct taxes require an assessment, indirect taxes only a partaking. In other words, generally, if the method of taxation imposes an unavoidable loss to or upon the subject it is functioning as a method of direct taxation.



The individuals in the first cited paragraph never wrote on the federal income tax, and although Mr. Cooley (writing in 1886) referred to the Civil War income tax, he never really discussed it nor did he cite the Supreme Court case that upheld its constitutionality as an excise or duty. But let's see what Mr. Black had to say in Section 229:

No you are again completely incorrect the federal income tax was not crafted to destroy all other preexisting methods of direct and/or indirect taxation:


Both the writings of Locke and Paine greatly inspired the awesome fundaments for our United States of America.

Adams, Jefferson, Hamilton, and others had exerted great efforts to solidify those very ideals and fundaments into our Nation’s own history for both their posterity and all of ever advancing mankind.

Around that same timeframe, Turgot, Smith, Hamilton, and Gallatin had provided great philosophical insight into the subjects of economy and taxation.

And additionally to take into consideration are:

The Bible as to a few examples:

Genesis 47:24: “And it shall come to pass in the increase, that ye shall give the fifth part unto Pharaoh, and four parts shall be your own, for seed of the field, and for your food, and for them of your households, and for food for your little ones.”

Matthew 21:12: “And Jesus went into the temple of God, and cast out all them that sold and bought in the temple, and overthrew the tables of the moneychangers, and the seats of them that sold doves,”

The Law - Bastiat: “The Fatal Idea of Legal Plunder”:

“But on the other hand, imagine that this fatal principle has been introduced: Under the pretense of organization, regulation, protection, or encouragement, the law takes property from one person and gives it to another; the law takes the wealth of all and gives it to a few — whether farmers, manufacturers, ship owners, artists, or comedians. Under these circumstances, then certainly every class will aspire to grasp the law, and logically so.

The excluded classes will furiously demand their right to vote — and will overthrow society rather than not to obtain it. Even beggars and vagabonds will then prove to you that they also have an incontestable title to vote. They will say to you:

"We cannot buy wine, tobacco, or salt without paying the tax. And a part of the tax that we pay is given by law — in privileges and subsidies — to men who are richer than we are. Others use the law to raise the prices of bread, meat, iron, or cloth. Thus, since everyone else uses the law for his own profit, we also would like to use the law for our own profit. We demand from the law the right to relief, which is the poor man's plunder. To obtain this right, we also should be voters and legislators in order that we may organize Beggary on a grand scale for our own class, as you have organized Protection on a grand scale for your class. Now don't tell us beggars that you will act for us, and then toss us, as Mr. Mimerel proposes, 600,000 francs to keep us quiet, like throwing us a bone to gnaw. We have other claims. And anyway, we wish to bargain for ourselves as other classes have bargained for themselves!"”


And finally:

1. Concerning Section 229 of your above quotation, the context of Section 229 is: “Salaries and Earnings from Professions and Trades”, see further quotations disproving your notion below.
2. Your excuses against Cooley on Taxation are not valid, for according to your own arguments the government always has had the power to tax an individual’s livelihood without apportionment and hence is withstanding the XVI Amendment; so the timeframe is not relevant.
3. While, interesting to realize is that a SCOTUS search on Black’s treatise returns only one result within Pollock and its rehearing -which was included above- (even though Mr. Black began publishing his legal dictionaries in 1891), while Pollock in 1895 did look to Cooley several times for consideration, (as well as others, i.e., Story, Blackstone, et al).
4. Additionally to be considered, for example is (Pollock v. Farmers' Loan & Trust Company, 158 U.S. 601, 708-709 (1895):


“6th. Attention was previously called to the fact that practically all the theoretical and philosophical writers on the Constitution since the carriage tax act was passed and the Hylton case was decided have declared that the word "direct" in the Constitution applies only to taxes on land and capitation taxes. The list of writers formerly referred to, with the addition of a few others not then mentioned, includes Kent, Story, Cooley, Miller, Bancroft, the historian of the Constitution, Pomeroy, Hare, Burroughs, Ordroneaux, Black, Farrar, Flanders, Bateman, Patterson, and Von Holst. How is this overwhelming consensus of publicists, of law writers, and historians answered? By saying that their opinions ought not to be regarded because they were all misled by the dicta in the Hylton case into teaching an erroneous doctrine. How, if the Hylton case did not decide this question of direct taxation, it could have misled all these writers -- among them some of the noblest and brightest intellects which have adorned our national life -- is not explained. In other words, in order to escape the effect of the act and of the decision upon it, it is argued that they did not, by necessary implication, establish that direct taxes were only land and capitation taxes, and, in the same breath, in order to avoid the force of the harmonious interpretation of the Constitution by all the great writers who have expounded it, we are told that their views are worthless because they were misled by the Hylton case.

7th. If, as is admitted, all these authors have interpreted the Hylton case as confining direct taxes to land and capitation taxes, I submit that their unanimity, instead of affording foundation for the argument that they were misled by that case, furnishes a much better and safer guide as to what its decision necessarily implied than does the contention now made, unless we are to hold that all these great minds were so feeble as to be led into concluding that the case decided what it did not decide, and unless we are to say that the true light in regard to the meaning of this word "direct" has come to no writer or thinker from that time until now.”



I guess you missed that part, Mr. White.

Not so much as you are taking that passage out of its context and reading far too much into it. More pointedly I suppose that you simply overlooked the few proceeding sections that are within the context you are insinuating:


Section 218 - “Statutes in Pari Materia.”: “…”


Section 219 - “Associated Words and Phrases.”: “It is another ancient and fundamental rule in the construction of statutes that the meaning of a doubtful word or phrase may be ascertained by reference to the meaning of other words or phrases with which it is associated, and that, where several things are referred to, they are presumed to be of the same class, when connected by a copulative conjunction, unless a contrary intent plainly appears. For example, all the acts of Congress on the subject of income taxation, from 1862 to the present time, have associated together the words “gains,” “profits,” and “income” as descriptive of the subject taxed, and the same is true of the income tax laws of some of the states. These words may be traced far back in the history of English taxation. The original income tax law of that country, enacted in 1799, imposed a tax on “income” by that name, but the acts of 1842 and 1853 introduced the associated terms “profits and gains,” whence they were apparently borrowed by Congress in framing the act of 1862, and have since persisted in use. Applying the rule above stated, we are justified in asserting the following principles as applicable to the interpretation of the phrase in question: If it is doubtful whether or not a particular fund or acquisition is taxable as “income,” under the statute, it is not taxable unless it is income in the nature of “gain” or “profit.” If any item is clearly included in the description of “gains” yet it is not taxable unless it is a gain in the nature of “income” or “profit.” And although the disputed item may be certainly a “profit,” in one sense of the word, yet it is not taxable unless it be a profit accruing by way of “gain” or “income.””


Section 221 - “General Definitions of “Income.””: “…Again, as this term is used in statutes relating to the nature and ownership of property, it includes the rents and profits of real estate, interest on money, dividends on stock, and other produce of personal property. Particularly, when applied to a sum of money, or to money invested in public or corporate securities, income means interest.
But an important distinction must be noted in the signification of this word, according as it is used in the ordinary business affairs of the community (or in statutes relating thereto) or in a tax statute. In the former case, it is understood to mean “net” income or profit; in the latter case, it is equivalent to “gross” income or “gross receipts,” unless otherwise specified in the statute. Thus, it is said that the word “income,” as used in commerce and trade, means the balance of gain over loss in the fiscal year or other period of computation, or it is the ultimate profit of a business or trade, ascertained by placing the sum total of gains over against the sum total of losses. So, “the income of an estate means nothing more than the profit it will yield after deducting the charges of management, or the rent which may be obtained for the use of it. The rents and profits of an estate, the income or the net income of it, are all equivalent expressions.” …
But on the other hand, in a statute imposing taxes, “income” means gross receipts, not net profits, unless it is so specified. Whenever the law means to tax the clear profits arising from the employment of capital or otherwise, the expression used is “net income” or “net annual income.” And especially the phrase “whole income” means the aggregate of all receipts without any deduction for expenses or losses, that is, it means gross receipts and not net profits. But, as stated in an earlier section, if this word is associated with the term “profits,” as in the phrase “gains, profits, and income,” it may take color from the more restricted term and be limited by it. That is to say, in the phrase quoted, the word “income” should not be taken in its most extensive signification, but as meaning income which is in the nature of a profit, in other words, net income. …
… When a bond which was purchased at a discount reaches par in the market, the owner cannot properly be said to have made a profit; he is in a position where he can realize a profit if he sells the bond, but not otherwise. If he sells, then the sum gained may constitute a part of his income, but it cannot be so described while he continues to hold the security. So, the farmer’s crop is not his income; it is the source from which his income will be derived when it is converted into cash. … but it is not properly described as income until it is received, that is, it is “income” when it comes in, but not while it remains outstanding. … But the principle is, as ruled in an English case, that nothing is to be considered as income except what represents value in money, that is, either money or something that is equivalent to money because it can be converted into money and the proceeds expended in any way the recipient may please. In this case, speaking of the income tax of that country, it was said: “It is a tax on income in the proper sense of the word. It is a tax on what comes in, on actual receipts, not on what saves his pocket, but on what goes into his pocket.” Of course it is entirely within the power of a legislature having jurisdiction to lay an income tax to make the word “income” include items which are not at all proper to be described under that name. But then those items are taxed, not because they constitute income, but because the legislature has said that they shall be taxed. And on the other hand, when the word “income” is clearly defined in the act imposing the tax, it cannot be taken to include anything which is not within that definition.
We conclude therefore that, for the purpose of an income tax, a proper definition of the word “income” would be all that a man receives in cash during the year, except such sums as are merely capital or principal in a changed form, that is, excluding sums which are merely the proceeds of some other form of capital converted into cash. This last point is emphasized in a recent decision of one of the federal courts, in which it was said: “What does the word ‘income’ mean? In ordinary speech, people recognize a difference between capital and income. I believe that the ordinary meaning attached to income, when it is not derived from personal exertion, is that it is something produced by capital without impairing that capital, and which leaves the property intact, and that nothing can be called income, for the purpose of this act, which takes away from the property itself. If it does, then it ceases to be income and amounts to a sale of capital assets.” … And where a traveling salesman is allowed a certain sum per month by his employers to cover his expenses, the money is properly included by the assessor as part of his taxable income.”


Section 224 - “”Profits” and “Gains” Compared and Distinguished.”: “… Or, according to a fuller description given by the Supreme Court of California, the word “profits” signifies an excess of the value of returns over the value of advances; the excess of receipts over expenditures, that is net earnings. In commerce it means the advance in the price of goods sold beyond the cost of purchase. In distinction from the wages of labor, it is well understood to imply the net return to the capital or stock employed after deducting all the expenses, including not only the wages of those employed by the capitalist, but the wages of the capitalist himself for superintending the employment of his capital stock. Profits are divided by writers on political economy into gross and net; the former being the entire difference between the value of advances and the value of returns, and the latter so much of this difference as arises exclusively from the capital employed. Profits cannot consist of earnings never yet received. …
It is said, and with truth, that this term is often used as synonymous with “income” and as meaning the same thing, and particularly where the two words are couple in the same phrase. And one court has remarked that, when they are thus joined together, there is no difference in the meaning of the words, and the use of them both is only due to a lawyer-like fondness for using several words where one would be sufficient. But this is scarcely correct. There is a substantial difference in the meaning of the two words. And it is more accurate to say that, when they are joined together in the same phrase, the word “profits” is used to particularize and point out one kind of income, or income derived from a particular source; and it would generally be found that their joinder is easily explained from their correlation with other descriptive words in the same sentence, as, for example, where “gains” may be correlated with “sales or dealing in property,” “income” with such words as “salaries” and earnings from “professions and vocations,” and “profits” with “business, trade, and commerce.” Besides, “income” is clearly a word of larger import than “profits.” The former may very properly include such items as the rent of houses, interest on investments, the earnings, of a professional man, or the salary of an officer of a corporation, but none of these could with any propriety be called “profits.” In effect, the latter term is more appropriately confined to gains resulting from the operations of trade or commerce, and especially from mercantile or manufacturing business or transportation. Moreover, it is important not to lose sight of the distinction that, while “income” means that which comes in or is received from any business or investment of capital, without reference to the outgoing expenditures, “profit” means the gain which is made upon any business or investment when both receipts and payments are taken into account. … But it may properly be said that when a tax law employees the phrase “gains, profits, and income,” to describe what is taxable, the term “gains” is inserted out of abundant caution, and intended to include an acquisition of the taxpayer which is not to be described as a “profit,” and which might not be included in the term “income” if that word were taken in a narrow sense. Properly speaking, “gain” means that which is acquired or comes as a benefit, and in a statute laying an income tax it may mean money received within the year which is not the fruit of a business transaction nor of the labor or exertion of the individual, but something arising from fortuitous circumstances or conditions which he does not control. In this signification, the term would include money received as a legacy or money won on a wager.”


Section 225 - “Income Derived from “Any Source Whatever.””: “… In defense to an action by the state against a certain attorney at law, to recover a tax on his income derived from the practice of his profession, it was contended that the clause quoted came within the doctrine of “ejusdem generis,” and therefore must be limited to incomes derived from sources of the same kind as those enumerated in the previous clauses of the schedule, and that it did not include incomes from licensed professions, trades, or businesses. But the Supreme Court of the state held … it … to apply to the professional incomes of lawyers as well as those specifically enumerated.”


Section 226 - “Change or Substitution of Capital Distinguished.”: “Both in popular and legal parlance, “income” is distinguished from “capital” or “principal.” Capital is the source of income. Income is the fruit of capital. … But it would be a misnomer to reckon the whole of each such return as “income” simply because it is so much money coming into the possession of the owner. Out of the fund so returning there must first be deducted, in case there has been no loss, a sum sufficient to replace the capital originally invested, and the balance, in any, will be income. …”


Section 228 - “Rental Value of Residence.”: “… But the Supreme Court of the state saw nothing in this provision to invalidate the statute. “It is said,” observed the court, “that this is not income, and that calling it income does not make it income. It may be conceded that things which are not in fact income cannot be made such by mere legislative fiat, yet it must also be conceded, we think, that income in its general sense need not necessarily be money. Clearly it must be money or that which is convertible into money.” … ”



Neither. Don't bother listing every university in the country in the hopes of finding out which I attended. I'm not playing that game anymore.

Then you’re most certainly a liar, as you have just ruled out the only three possibilities of the last few remaining henchmen of “Quatsville!” So why not come clean then, why are you hiding, is it because you are so utterly ashamed of yourself, of what you do, or of the disgraceful manner in which you earn a paycheck? So which is it then? You liar, who lies!

Sonny Tufts
05-15-2012, 08:36 AM
Compensation received for working for someone else is not included in gross income. (hourly wages)

Compensation received for the result of the work done for someone else is included in gross income. This is what Section 61(a)(1) ["compensation for services"] refers to and includes Commissions, Fees, Tips, and Fringe Benefits. These are things that employees can receive besides hourly wages.

No, 61(a)(1) encompasses all compensation for work, including hourly wages.


No professor has written an article putting forth my interpretation because no professor has been presented with my interpretation.

Then why don't you write an article and submit it to a law review for publication? You'd become famous -- you would have discovered something that has eluded the best minds in the legal community for the last 100 years. And you didn't even have to go to law school to do it.


The big dollar athelete is not an employee of the team.

Of course he is. Whom in heaven's name do you think his contract is with?

Sonny Tufts
05-15-2012, 08:51 AM
you keep making the asinine argument that any object (including anything at all of whatever form or shape or value) you receive is taxable unless specifically exempted.

Mr. White, I have never made such a claim, and you know it.


SSI and FICA (including FUTA) are determined by the sum already established within Subtitle A.

No, Mr. White, for the simple reason that there are some types of income includable in gross income under Subtitle A (e.g., directors' fees) that are not taxable as "wages" for FICA purposes.


Simply put, the notion that an ‘estate tax’ (or whatever other similar tax) is even remotely comparable to a ‘direct tax’ is entirely unjustified; and yes such taxes can be avoided simply by refusing to accept it, which then it passes onto the next in-line heir -ergo, if you don’t want the benefit of the gift simply refuse to accept it (either way it is of no direct loss to the would be receiver, they stand only to gain from the exchange). This matter cannot be made any clearer than it already has been made, period, end of discussion.

It can be made much clearer because you still haven't grasped the difference between an estate tax and an inheritance tax. Wioth the former type, the executor must pay the tax out of the estate's assets. He cannot refuse to accept the property of the estate, as it is his duty to administer it for the benefit of the beneficiaries. While a beneficiary may disclaim a testamentary bequest, this will not change the executor's duty to pay the estate tax.


Then you’re most certainly a liar, as you have just ruled out the only three possibilities of the last few remaining henchmen of “Quatsville!” So why not come clean then, why are you hiding, is it because you are so utterly ashamed of yourself, of what you do, or of the disgraceful manner in which you earn a paycheck? So which is it then? You liar, who lies!

Where is it written that there are only three possibilities? Who the heck do you think I am? And what difference does it make? That you have such an obsessive fixation on my identity is reason enough for me to remain anonymous. I don't suffer fools or crackpots gladly.

Weston White
05-15-2012, 09:57 AM
Nor have they been asked to distinguish between compensation earned on odd numbered days and that earned on even numbered days, for the obvious reason that the statute doesn't make such a distinction. Similarly, both types of compensation are obviously included in gross income under Section 61(a).

Yes, though SCOTUS has been presented with many such cases pertaining to common day labors and to date the Court will hear no such case!

Neither is earning a livelihood any such “compensation” for which to be imposed a tax upon.

As a sprinkling of honestly was unleashed within 26 CFR § 1.61-2 – ‘Compensation for services, including fees, commissions, and similar items.’: “…compensation for services on the basis of a percentage of profits…”



Look at it this way: if compensation received for working for someone else really isn't includable in gross income, what in the world is the purpose of Subchapter 24, the income tax withholding provisions? I think you would agree that the tax to be withheld under Chapter 24 is upon compensation received for working for someone else, right? So why would Congress draft an entire chapter covering withholding if the withheld tax is simply going to be refunded because it's not part of the income tax base?

The IRS withholding provisions were marketed as a forced loan. Imagine just how much interest is borne annually out of $2.3-trillion… Which is ultimately a (an additional) lifelong expense incurred by every single taxpayer, see for example the loss incurred throughout an individual’s work career: http://www.iwarrior.defendindependence.us/viewtopic.php?p=1151#p1151

Nobody is claiming that compensation is not includable in the term ‘gross income’. However, as to your question, the IRC withholding provisions are very clearly mandated for certain classes of individuals or employees, such as military personnel; federal officers, officials, or instrumentalities; corporate officers; nonresident aliens and foreign corporations; salesmen, for example. Additionally, withholding is voluntary for others. See 26 USC Sects: 3401(c), 3121(d), 3402(p)(3)(B), 1441, 1442.

For common day laborers, “compensation” includes things such as (given to certain exemption either in-whole or in-part to certain items or circumstances): “fees and commissions; tips; bonuses and benefits; termination or severance pay; rewards; jury fees; marriage fees; child care pay; retired pay of employees; pensions; retirement allowances; trusts; meals; accommodations; stock; property; cash; gifts; prizes; awards; accident, injury, or sickness pay; scholarship and fellowship grants; employee time-bank payouts; holiday and vacation pay; etc.”



If Section 61(a)(1) ["compensation for services"] refers only to self-employment income, why do we also have Section 61(a)(2) ["gross income derived from business"]? Self-employment income is gross income derived from business, so why did Congress also include subsection (1)?

As to your point, there are two separate numerations for precisely the following reasons:

26 USC Sec. 61(a)(1) ‘Compensation for services, including fees, commissions, fringe benefits, and similar items’
26 USC Sec. 61(a)(2) ‘Gross income derived from business’


26 USC Sec. 61(a)(1) would address in addition to that referred to above (in your earlier question), partnerships, fiduciaries, etc. Hence, class-2 taxes.
26 USC Sec. 61(a)(2) would address namely manufacturing, merchandising, mining and business investments, contracts, etc. Hence, class-3 taxes.



If compensation earned for working for someone else isn't includable in gross income, why for the last 99 years has nobody in Congress jumped up and said, "Hold it! That type of compensation isn't covered by the statute!" Why has no professor written a law review article putting forth your interpretation of the statute? Why has no big-dollar athlete not hired a top tax attorney to make your argument so as to avoid tax on the $25 million in compensation he gets for working for his team?

Well, why doesn’t Congress come clean about the true nature and reason behind our nonconvertible paper currency and the Federal Reserve System; or about the myriad of farces they committed at Waco, the Alfred P. Murrah Building, on 9/11/2001, et al, and the subsequent the Patriot Acts and who the “terrorists” that they are after really are (i.e., American citizens); why is Congress now attempting to take total control of the Internet; why does Congress remain mum on the known falsehoods of “global warming” and continues to play stupid on the issue of “chem-trailing” all over our nation, or for that matter over other continents; why did they let the cigarette charade continue for so long; why are they not aware or of even concerned over the dangers of sodium fluoride in the public water supply (surely they know full well that both Stalin and Hitler implemented this tactic over those they ultimately murdered), and what about the over use of half-life pesticides, GMO, and genetically modified fish being released into the wild; what about the hidden conspiracy behind plastic syringes and the original “safety needle” or how about the unexplainable pull-out of America’s electric vehicles during the 1990’s; what about the Deepwater Oil Rig/BP/Corexit cover-up or for that matter the government’s virtual takeover of New Orleans ever since Katrina came and passed; how about the unexplainable increase in various human diseases, ailments, dysfunctions, etc., and reliance on big-pharma medications and vaccinations; what about the push for “Codex Alimentarious” and the banning of vitamins and minerals; and why doesn’t anybody in Congress stand up and challenge Barry Soetoro as to all of these simultaneous undeclared wars; etc., etc., etc.

There have been many individuals with such accolades that have come forward about the true nature of either taxation in general or the federal income tax (both in the past and the present); it is more correctly for you state that you and those similar to you, all simply refuse to acknowledge their work or efforts; similarly as to top scientists that have publicly rebuked the threat of “global warming”, thereafter they are shunned, their funding pulled, terminated from their positions, outright ignored by the major news media, etc.

Don’t movie stars, singers, athletes operate or contract as an LLC or similar? At any rate, I would think those classes of individuals are much more concerned about their next big party or shindig, or whatnot than about they are about political issues, e.g., Brittany Spears, Charlie Sheen and his buddy Lenny Dykstra comes to mind. However, such individuals are, aside from their general performance contracts, largely paid through endorsements, royalties, commissions, percentage of overall profits, etc.; moreover, such a means of earning a living -or more appropriately living a life of grand privilege- can hardly be comparable to that of a common day laborer, struggling from one week onto the next.

Sonny Tufts
05-15-2012, 10:39 AM
Yes, though SCOTUS has been presented with many such cases pertaining to common day labors and to date the Court will hear no such case!

The Court has a limited amount of time that it doesn't need to waste on frivolous arguments. It has already made its feelings known on numerous occasions:


“The definition of gross income under the Internal Revenue Code sweeps broadly. Section 61(a), 26 U.S.C. 61(a), provides that ‘gross income means all income from whatever source derived,’ subject only to the exclusions specifically enumerated elsewhere in the Code. As this Court has recognized, Congress intended, through 61(a) and its statutory precursors, to exert ‘the full measure of its taxing power,’ [citation omitted] and to bring within the definition of income any ‘accessio[n] to wealth.’ [citation omitted] There is no dispute that the settlement awards in this case [for ‘back wages’ to compensate for sex discrimination] would constitute gross income within the reach of 61(a).” United States v. Burke, 504 U.S. 229, 233 (1992). Later in the same opinion, the Supreme Court referred to the compensation received by the taxpayers as “the wages properly due them - wages that, if paid in the ordinary course, would have been fully taxable.” 504 U.S. at 241.

“It [I.R.C. section 104, relating to compensation for personal injuries] also excludes from taxation those damages that substitute, say, for lost wages, which would have been taxed had the victim earned them.” O’Gilvie v. United States, 519 U.S. 79 (1996).

“It was therefore error to instruct the jury to disregard evidence of Cheek’ s understanding that, within the meaning of the tax laws, he was not a person required to file a return or to pay income taxes and that wages are not taxable income, as incredible as such misunderstandings of and beliefs about the law might be.” Cheek v. United States, 498 U.S. 192, 204 (1991), (emphasis added).


As a sprinkling of honestly was unleashed within 26 CFR § 1.61-2 – ‘Compensation for services, including fees, commissions, and similar items.’: “…compensation for services on the basis of a percentage of profits…”

And a veritable deluge of dishonesty was unleashed by your omission of the following from the regulation:


(a) In general.

(1) Wages, salaries, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses (including Christmas bonuses), termination or severance pay, rewards, jury fees, marriage fees and other contributions received by a clergyman for services, pay of persons in the military or naval forces of the United States, retired pay of employees, pensions, and retirement allowances are income to the recipients unless excluded by law.


26 USC Sec. 61(a)(2) would address namely manufacturing, merchandising, mining and business investments, contracts, etc.

Subsection 2 by its clear and unequivocal terms encompasses all income derived from business, which may obviously include a business conducted by a self-employed person.


Don’t movie stars, singers, athletes operate or contract as an LLC or similar?

They do not. They used to back in the 30's in an effort to escape taxes, so Congress closed the loophole by passing the Personal Holding Company provisions of Sections 541-547.

Wheeljack
05-15-2012, 08:47 PM
No, 61(a)(1) encompasses all compensation for work, including hourly wages.

Believe what you want. My correspondence with the IRS, the State of New York and the Commonwealth of Pennsylvania tells me differently.




Then why don't you write an article and submit it to a law review for publication? You'd become famous -- you would have discovered something that has eluded the best minds in the legal community for the last 100 years. And you didn't even have to go to law school to do it.

Eluded!?! Ha!
Show me any article from these so-called legal geniuses in which they have even contemplated such an idea and then I shall accept your statement that it has eluded them. They certainly can't discover something they have never even looked for, even when the evidence is right under their nose.





Of course he is. Whom in heaven's name do you think his contract is with?

And what type of contract does he have?
Is it a contract of service? No.
Is it a contract for services? Yes.

He is an independent contractor.


.

Weston White
05-16-2012, 12:14 AM
No, 61(a)(1) encompasses all compensation for work, including hourly wages.

That is incorrect, it, ‘gross income’, takes into account only the “gains, profits, and income” which have been derived from an individual’s salaries or wages, including whatever additional work related compensation received, save for sums that are below whatever deductions granted or have otherwise been made exempt from federal income taxation; and with certain exception given to certain types or classes of individuals or employments.



Then why don't you write an article and submit it to a law review for publication? You'd become famous -- you would have discovered something that has eluded the best minds in the legal community for the last 100 years. And you didn't even have to go to law school to do it.

Wow, real good, showing your true colors I see. Could you possibly be any more of a complete jackass? “Legist”, so called, I think you have officially topped yourself.



Of course he is. Whom in heaven's name do you think his contract is with?

That would largely be dependant on the team being owned by its own franchise within its league or by the league itself, which most all professional sports teams are the former; although, for example, the teams of the no longer existing XFL were owned by its league and their players paid much less than those in the “big four”.

Regardless, being an athlete or entertainer is hardly comparable to the mother saddled with two-three daily jobs for six days out of the seven, being necessary to provide for her and her family, as but just one common example (since holding a single fulltime job nowadays is a literal godsend -which is the end result of never-ending meddling and corruption by the federal government).



Mr. White, I have never made such a claim, and you know it.

Oh yes you have that is exactly what you are alleging all throughout each one of your posts addressing income taxes. As a few examples that come to mind:


You claim the federal government has always held the power to uniformly tax income of whatever type, in whatever form, and of whatever source.
You claim the national taxing powers are limited only by legislation.
You claim that there is no legal distinction between the source and the income to be realized from its source.
You claim that ‘gross income’ (including ‘taxable income’) really just means income.
You claim that there is no legal significance between ‘income’ and ‘incomes’.
You claim that taxes only qualify as being direct when they are made on reality or property.
You claim that there is no constitutional distinction between one class of income and another.
You claim that gains and profits are legally relatable to all arrangements, without exception, where one has received cash or bartered.




No, Mr. White, for the simple reason that there are some types of income includable in gross income under Subtitle A (e.g., directors' fees) that are not taxable as "wages" for FICA purposes.

You are referring to specified exceptions, and your point is what exactly? The point I had made is withstanding your response, the sums would only need to be adjusted accordingly so as to take into account whatever such applicable considerations -such as for those that do not pay into SSI, for example.



It can be made much clearer because you still haven't grasped the difference between an estate tax and an inheritance tax. Wioth the former type, the executor must pay the tax out of the estate's assets. He cannot refuse to accept the property of the estate, as it is his duty to administer it for the benefit of the beneficiaries. While a beneficiary may disclaim a testamentary bequest, this will not change the executor's duty to pay the estate tax.

Dingbat, those taxes are synonymous; ergo, potato, pa-tot-o. Nor can one be forced to be an executor and in some jurisdictions the person may need to qualify for the position with the county clerk, and as well an executor does not have to be a beneficiary to the will, for example, it can be a family friend or a paid professional in the probate or estate planning fields or provided by the court. The executor is a trust, a fiduciary, for the decedent’s estate (the testator), authorized to act through power of attorney. And to state that because the executor is also a recipient of the estate that they are effectively being forced to tax themselves (or their property) is the most damned foolish comparison to be made.



Where is it written that there are only three possibilities? Who the heck do you think I am? And what difference does it make? That you have such an obsessive fixation on my identity is reason enough for me to remain anonymous. I don't suffer fools or crackpots gladly.

Why, you’re “Legist” from over at the Freedom Watch show tips Website. And it makes a big difference because it is impossible to trust such an astute professional, as you so obviously are, when all you do is hide in anonymity. I am just trying to help you out Sonny Jim, that’s all.



The Court has a limited amount of time that it doesn't need to waste on frivolous arguments. It has already made its feelings known on numerous occasions:

The primary goal of SCOTUS is to address federal questions, and the content as provided for within this thread (including many others), meets every single objective of being just such a question. And no the Court has not rendered consideration to such matters as herein addressed.

Yet what the Court has continued to do, at least from time to time, is to hear other cases which are clearly without merit, such as whether punitive damages are taxable; or whether a spouse can avoid taxation for their partner by creating a contract stipulating to that; or whether a tax upon the gains realized from investments, or that estate taxes, etc., are actually a direct tax; etc.



And a veritable deluge of dishonesty was unleashed by your omission of the following from the regulation:

Do try to keep up with the conversation, will you? The context of the post you are referencing was addressing the sole aspect of what was considerable as “compensation” -that was all.

As to what is intended by wages and salaries within ‘gross income’, which is a global term used in many different contexts throughout the IRC; certainly, while the wages and salaries of some classes of individuals are legally taxable under ‘gross income’, the general masses are not. More aptly, the subject of ‘gross income’ has been timelessly embodied in the statute’s original form, which had been crafted in purposeful support for the XVI Amendment; stating not that salaries and wages are income but that capital (or corpus) derives income.

Ergo, an individual’s common livelihood and laboring are exempt from income taxation under our Nation’s fundamental laws. Such can only be taxed through apportionment and while circumstances are emergent and in no other instance.



Subsection 2 by its clear and unequivocal terms encompasses all income derived from business, which may obviously include a business conducted by a self-employed person.

Only if they are setup as a corporation, otherwise they would file a 1040 from along with a Schedule-SE form; while corporations would file a 1120/1120-S form and whatever other related forms.

Sonny Tufts
05-16-2012, 11:33 AM
Believe what you want. My correspondence with the IRS, the State of New York and the Commonwealth of Pennsylvania tells me differently.

There is no way to verify your claim unless you post all such correspondence, which I don't expect you to do.


Eluded!?! Ha!
Show me any article from these so-called legal geniuses in which they have even contemplated such an idea and then I shall accept your statement that it has eluded them. They certainly can't discover something they have never even looked for, even when the evidence is right under their nose.

If they've never contemplated it, it means it's eluded them. The reason they've never contemplated it is because it's a ludicrous idea.


He is an independent contractor.

Guess again. He meets all of the criteria for a common-law employee.

Sonny Tufts
05-16-2012, 12:10 PM
Oh yes you have that is exactly what you are alleging all throughout each one of your posts addressing income taxes. As a few examples that come to mind:


You claim the federal government has always held the power to uniformly tax income of whatever type, in whatever form, and of whatever source.
No, because after the Pollock case and before the 16th Amendment, a tax on investment income had to be apportioned.
You claim the national taxing powers are limited only by legislation.
No, I've stated that the Constitution prohibits federal taxes on exports, and Supreme Court decisions have indicated that Congress can't tax some operations of state and local governments.
You claim that there is no legal distinction between the source and the income to be realized from its source.
No, I've said that the things listed in Section 61(a) are items of income, not sources. There's an obvious distinction, for example, between dividend income and the source of dividend income (i.e., the stock).
You claim that ‘gross income’ (including ‘taxable income’) really just means income.
No, because (a) certain kinds of income in the generic sense are not part of gross income, and (b) taxable income is gross income less deductions.So neither gross income nor taxable income is equivalent to plain vanilla income.
You claim that there is no legal significance between ‘income’ and ‘incomes’.
One is singular and one is plural.
You claim that taxes only qualify as being direct when they are made on reality or property.
You mean "realty", not reality. But no, direct taxes also include capitations.
You claim that there is no constitutional distinction between one class of income and another.
Except for income earned by a state or local government, there is no such distinction.
You claim that gains and profits are legally relatable to all arrangements, without exception, where one has received cash or bartered.

If by "legally relatable to all arrangements" you mean "includable in gross income in all types of transactions", no -- because there are many types of gain resulting from exchanges that the law excludes from gross income. But the law is clear that gross income needn't be in the form of cash.

In short, Mr. White, your claim that I have said that "any object (including anything at all of whatever form or shape or value) you receive is taxable unless specifically exempted" is a lie. I may receive a repayment of a loan, but it's not taxable.


to state that because the executor is also a recipient of the estate that they are effectively being forced to tax themselves (or their property) is the most damned foolish comparison to be made.

Which is beside the point, because I never said any such thing. Look, I'll make it so simple that even you might be able to understand: Assume a taxable estate of $10 million and a federal estate tax of $3.5 million. There is also a state inheritance tax of 10%. There is a single beneficiary, someone other than the executor (although that's quite irrelevant). The executor has to pay the U.S. the $3.5 million, and there's no way to shift this burden to someone else. After the estate tax is paid, the beneficiary's share is $6.5 million, but there's an inheritance tax of $650,000 to pay. So the beneficiary nets $5.85 million. The beneficiary may avoid the inheritance tax by disclaiming; the estate can't avoid the estate tax at all.


Only if they are setup as a corporation, otherwise they would file a 1040 from along with a Schedule-SE form; while corporations would file a 1120/1120-S form and whatever other related forms.

Mr. White, the form used to report the gross income is irrelevant. A corporation with business income uses an 1120. An estate or trust with business income uses a 1041. A partnership with business income uses a 1065. An individual with business income uses a 1040 and a Schedule C. But in all four cases, the filer is reporting gross income includable under 61(a)(2).

Wheeljack
05-16-2012, 07:05 PM
If they've never contemplated it, it means it's eluded them. The reason they've never contemplated it is because it's a ludicrous idea.

You have as much trouble understanding eluded as you do with service.
If the police are not looking for me, then I am not eluding them. If they are looking for me and I escape their notice, then I have eluded them.

If an idea was judged as ludicrous, then it must have been contemplated.





Guess again. He meets all of the criteria for a common-law employee.

A common law employee can walk away from a job without liability. The employer can unilaterally change the remuneration for employment. The employee has placed himself in service to the employer, thus the employer directs and controls how the work is done.

Your athlete can not walk away from his contract without being sued for breach of contract. The Team can not unilaterally change the terms of the contract. The team signed the athlete based on his ability to achieve a desired result. How that result is achieved is in the hands of the athlete.

He is an independent contractor. He may be treated as an employee because of the exclusivity of his contract. This would be the perfect example for Form SS-8, if the team did not pay the employer share of Social Security and Medicare.

Weston White
05-17-2012, 12:53 PM
If they've never contemplated it, it means it's eluded them. The reason they've never contemplated it is because it's a ludicrous idea.

It is by no means a ludicrous idea, it is a grand idea. It is an idea for which serves as the basis of our imbued American heritage, our very birthright. It’s as magnificent a concept as is governmental redress, due process, suffrage, equal protection, and as individual religion, thought, expression, privacy, and defense are.

It is an idea that ensures the government maintains accountability in its actions over the people for which it exists to serve. It provides that ownership in property and personalty is to be both protected and respected by all governing entities and that the individual’s right to pursue happiness through their own Creator granted rights (which are unalienable), is limited only by their own propensities; to the extent that their individual life and liberty are not otherwise degraded or desisted by governmental hegemony or by democratic pomp. The fundaments of life, liberty, and happiness are not malleable objects for which to be reshaped by the decrees of whichever ideology happening to hold a public office at whatever point in time.

Moreover, such ideals have in fact been contemplated, so being realized all throughout the worldly writings of great statesmen and economists alike, i.e., Turgot, Smith, Locke, Paine, Hamilton, Jefferson, Gallatin, et al. However, and quite sadly, in our present timeframe honesty no longer equates to recognition or profitability; for, you do of course realize that America -and most all other nation-states- has been taken over by elitist-eugenicist aristocrats, right?


Declaration of Independence:

“… We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed … He has refused his Assent to Laws, the most wholesome and necessary for the public good. … He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation: … For imposing Taxes on us without our Consent: … We, therefore, ... appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People … solemnly publish and declare … That these united Colonies are, and of Right ought to be Free and Independent States … — And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.”

Additionally to consider:

“America is a land of taxation that was founded to avoid taxation.” - Laurence J. Peter, D.Ed.

“What at first was plunder assumed the softer name of revenue.” - Thomas Paine

“If, from the more wretched parts of the old world, we look at those which are in an advanced stage of improvement, we still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping the spoil of the multitude. Invention is continually exercised, to furnish new pretenses for revenues and taxation. It watches prosperity as its prey and permits none to escape without tribute.” - Thomas Paine

“Collecting more taxes than is absolutely necessary is legalized robbery.” - Calvin Coolidge

“Unquestionably, there is progress. The average American now pays out twice as much in taxes as he formerly got in wages.” - H.L. Mencken



Guess again. He meets all of the criteria for a common-law employee.

Well, actually that is to some extent debatable; regardless, it proves nothing to the present discussion and is in all truth a moot point:

http://edd.ca.gov/UIBDG/Total_and_Partial_Unemployment_TPU_4154.htm

http://en.wikipedia.org/wiki/Independent_contractor



No, because after the Pollock case and before the 16th Amendment, a tax on investment income had to be apportioned.

Then I will rephrase my prior statement: You claim that up until the findings of Pollock the federal government had always held the power to uniformly tax income of whatever type, in whatever form, and of whatever source; after which it had only the above restriction placed on such methods of taxation, that is until the XVI Amendment was ratified.



No, I've stated that the Constitution prohibits federal taxes on exports, and Supreme Court decisions have indicated that Congress can't tax some operations of state and local governments.

Then I will rephrase my prior statement: You claim the national taxing powers, so far as they are applicable to the common livelihoods of the populace (or to the general populace), are limited only by legislation.



No, I've said that the things listed in Section 61(a) are items of income, not sources. There's an obvious distinction, for example, between dividend income and the source of dividend income (i.e., the stock).

If that be true then you have undoubtedly generated a fallacy by your own argument, being that (according to you at least) an individual’s remuneration is such an item of ‘gross income’, which is ultimately notwithstanding any source for the tax to be indirectly measured by. Ergo, your notion is founded in falsehoods that are wholly incompatible with the statutes restrictive prescriptions as set forth by Subsection (a) of 26 USC Sec. 61.

You cannot justly argue that by your example there is the stock as the source and its realized dividends as its income, but then to the question of remuneration (of the common day laborer), postulate that no such source is required that yet somehow it traverses itself into the realm of income, or even that the remuneration (of the common day laborer) is both simultaneously the source and its income.

Plainly, the reference to “salaries and wages” was removed from the amended version of the term ‘gross income’ because it would have otherwise continued exposing a truth that was at the time overt, though was intended to become covert.



No, because (a) certain kinds of income in the generic sense are not part of gross income, and (b) taxable income is gross income less deductions.So neither gross income nor taxable income is equivalent to plain vanilla income.

Great, so then you do acknowledge that: (1) there are in fact varied classifications of “income”, and (2) of those there are certain types that are -aside from having been statutorily exempted- naturally excludable (i.e., by organic or fundamental law) from the statutory term ‘gross income’ and hence the entirety of the IRC.

Oh and that “generic sense, plain vanilla income” in which you spoke of, is correctly called either ‘nontaxable income’ or ‘unconstitutionally taxable income’, or is otherwise the ‘source’ to later be taxed as ‘gross income’ upon “realization”.



One is singular and one is plural.

And, for which is distinctly relevant to the constitutional breadth of the XVI Amendment. Hence, the income tax is not merely a tax upon income as a generality, but is a tax upon one classification of income emanating another classification of income; or perhaps more clearly, it is a tax not upon the branches of a tree, but upon the fruit borne by the tree’s branches.



You mean "realty", not reality. But no, direct taxes also include capitations.

Wow, I must say that I am utterly impressed, being that typos usually trip you up so very easily -just like a wooden stake through a vampire’s heart. Your therapist prescribed Paxil and Abilify combo must be starting to finally take effect (just don’t go too crazy on that stuff though, being that a main compound in all psychotropics is fluorine, which is a toxic compound derived from fluoride), other than that great work buddy! You’re certainly progressing right along.

And yes, as well as “other direct” taxes, at any rate, you discount precisely what ‘capitations’ signify; otherwise we would not even be having this discussion.



Except for income earned by a state or local government, there is no such distinction.

Then I will rephrase my prior statement: Excluding all consideration to the incomes of whatever jurisdiction of governments, while lending consideration only to the livelihoods of the populace (or to the general populace), you claim that there is no constitutional distinction between one class of income and another.
* However, as provided above you do now realize such distinctions.

Also to note, governments do not “earn income”, they generate revenue. All forms of government are budgetary non-profits by their nature.



In short, Mr. White, your claim that I have said that "any object (including anything at all of whatever form or shape or value) you receive is taxable unless specifically exempted" is a lie. I may receive a repayment of a loan, but it's not taxable.

Not exactly, because the above statement that I made follows fairly well to the several responses you have made above, with obvious exception to your new admission that there are various classifications of income that may not be taxable (regardless if such items were intentionally exempted); with reference to your above “generic sense, plain vanilla income” example.

And no, of course a loan repayment would not be taxable it is respective to an outstanding debt (as to why neither is the borrower taxed upon their loan, that is unless it becomes CODI), and even if it were to be taxed the incurred loss from the original loan would cancel out the subsequent gain -that is with exception to whatever interest was realized by the lender.



Which is beside the point, because I never said any such thing. Look, I'll make it so simple that even you might be able to understand: Assume a taxable estate of $10 million and a federal estate tax of $3.5 million. There is also a state inheritance tax of 10%. There is a single beneficiary, someone other than the executor (although that's quite irrelevant). The executor has to pay the U.S. the $3.5 million, and there's no way to shift this burden to someone else. After the estate tax is paid, the beneficiary's share is $6.5 million, but there's an inheritance tax of $650,000 to pay. So the beneficiary nets $5.85 million. The beneficiary may avoid the inheritance tax by disclaiming; the estate can't avoid the estate tax at all.

No the executor does not have to pay the tax (as in out of their own funds); however, what the executor does have to do is to pay the tax on behalf of the estate that they are executing (such is but one of many duties to be performed by the executor). The will of the estate is merely to be executed (by the executor) on behalf of the deceased (the till then owner), ultimately passing each article onto a beneficiary, be it a heir, a charity, or is otherwise donated or ceded over to whatever government possessing jurisdiction.

Once an individual is deceased their last remaining rights is to receive a proper ceremony and burial, and to have their will lawfully executed. Such decedent’s “estate” cannot itself claim constitutional protections, nor may the executor claim to be acting as a proxy-personality of the decedent that is to be granted identical rights as the now departed.



Mr. White, the form used to report the gross income is irrelevant. A corporation with business income uses an 1120. An estate or trust with business income uses a 1041. A partnership with business income uses a 1065. An individual with business income uses a 1040 and a Schedule C. But in all four cases, the filer is reporting gross income includable under 61(a)(2).

False, each IRS form, schedule, table, or whatever is representative to a specific tax class, including the various numerations of ‘gross income’; to wit, such forms, schedules, and tables detail the relationally distinctive aspects and procedures of those tax classifications.

And yes, ‘gross income’ pertaining to business activities is addressed as you had cited above.

Sonny Tufts
05-17-2012, 05:24 PM
It is by no means a ludicrous idea, it is a grand idea. It is an idea for which serves as the basis of our imbued American heritage, our very birthright. It’s as magnificent a concept as is governmental redress, due process, suffrage, equal protection, and as individual religion, thought, expression, privacy, and defense are.

Mr. White, it's ludicrous for the very simple reason that the types of income listed in subsections (1) through (15) of Section 61(a) are not exclusive -- they are not the only things that are included in gross income. So even if Wheeljack is correct in interpreting subsection (1) as encompassing only self-employment income, it wouldn't change the fact that compensation for working for someone else is included in gross income as well. Why? Because Section 61(a) says that ALL income is included in gross income unless specifically excluded, and such compensation is clearly income.



Then I will rephrase my prior statement: You claim that up until the findings of Pollock the federal government had always held the power to uniformly tax income of whatever type, in whatever form, and of whatever source; after which it had only the above restriction placed on such methods of taxation, that is until the XVI Amendment was ratified.

Not quite, because before Pollock the Supreme Court held that Congress couldn't constitutionally tax the income of a state employee, a rule which the Court abandoned in 1938. There might have been other isolated instances as well, but today it's quite clear that there's no type of income earned by an individual that's constitutionally exempt.


Then I will rephrase my prior statement: You claim the national taxing powers, so far as they are applicable to the common livelihoods of the populace (or to the general populace), are limited only by legislation.

No, because Congress is bound by due process and equal protection considerations. For example, Congress couldn't provide that dividends received by white people were excluded from gross income, but all others were not.



You cannot justly argue that by your example there is the stock as the source and its realized dividends as its income, but then to the question of remuneration (of the common day laborer), postulate that no such source is required that yet somehow it traverses itself into the realm of income, or even that the remuneration (of the common day laborer) is both simultaneously the source and its income.

Mr. White, the source of the laborer's compensation is his job and the labor he puts into it. The argument that before an item of income can be taxed its source must be determined is nonsense and has been rejected by the courts.


Great, so then you do acknowledge that: (1) there are in fact varied classifications of “income”, and (2) of those there are certain types that are -aside from having been statutorily exempted- naturally excludable (i.e., by organic or fundamental law) from the statutory term ‘gross income’ and hence the entirety of the IRC.

Oh and that “generic sense, plain vanilla income” in which you spoke of, is correctly called either ‘nontaxable income’ or ‘unconstitutionally taxable income’, or is otherwise the ‘source’ to later be taxed as ‘gross income’ upon “realization”.

Wrong again, Mr. White. There is no kind of income earned by an individual that's "naturally excludable (i.e., by organic or fundamental law)". And when I referred to plain vanilla income, I was referring to income as characterized by the Supreme Court: an undeniable accession to wealth, clearly realized, over which one has control. A particular instance of such income may or may not be included in gross income. For instance, a dividend is but a gift is not.


Then I will rephrase my prior statement: Excluding all consideration to the incomes of whatever jurisdiction of governments, while lending consideration only to the livelihoods of the populace (or to the general populace), you claim that there is no constitutional distinction between one class of income and another.

Wow, you finally said something that's correct.

Weston White
05-18-2012, 02:31 AM
Mr. White, it's ludicrous for the very simple reason that the types of income listed in subsections (1) through (15) of Section 61(a) are not exclusive -- they are not the only things that are included in gross income. So even if Wheeljack is correct in interpreting subsection (1) as encompassing only self-employment income, it wouldn't change the fact that compensation for working for someone else is included in gross income as well. Why? Because Section 61(a) says that ALL income is included in gross income unless specifically excluded, and such compensation is clearly income.

1. No, it is rather that you are functioning in blatant ignorance to the true substance of the issue; while, it is that very substance which dominates the form, including sacking your entire argument.
2. No, Wheeljack is not saying that ONLY self-employment income is to be includable in ‘gross income’, be it Subsection (a)(1) or (a)(2), only that so far as remuneration has been received by a self-employed individual is it then within the context of being ‘gross income’; although, Subsection (a)(1) does factually include many other forms of “compensation” received, regardless of the context of being a self-employed individual or not.
3. Receiving compensation is not synonymous to earning a livelihood.
4. No, 26 USC Sec. 61(a) states no such thing; in its proper context, it states however, that all constitutionally taxable income, which has been derived from a source, then meets the requirement of being ‘gross income’ and is to be taxed as ‘taxable income’, unless otherwise stipulated. Ergo, ‘gross income’ is indicative of the realized ‘gain’ or ‘profit’ reciprocating from a fountainhead.
5. While it is true that 26 USC Sec. 61(a), et seq., is not expressio unius est exclusio alterius; it is however, ejusdem generis.
6. The fact remains that the context of ‘gross income’ was intentionally amended to be ambiguous, thereby its contextual application must remain in favor of the would be subject, respective of its originating form, i.e., clear statement rule, noscitur a sociism, generalia specialibus non derogant.



Not quite, because before Pollock the Supreme Court held that Congress couldn't constitutionally tax the income of a state employee, a rule which the Court abandoned in 1938. There might have been other isolated instances as well, but today it's quite clear that there's no type of income earned by an individual that's constitutionally exempt.

Wasn’t the year 1939, as in The Collector v. Day, 78 U.S. 113 (1870); Graves v. New York ex rel. O'Keefe, 306 U.S. 466 (1939)? Regardless you can debate all sorts of such exclusions spanning the decades, be they for “officials”, judges, government entities or instrumentalities, or whatever, but save for those exceptions, the above statement is clearly what you believe and are intent on believing; and as such you are entirely incorrect.

Although, in making such references, as above, what you are actually arguing over is the total cessation of all federal taxation over the individual versus a cessation of only specific considerations of federal taxation over the individual. While, the former discards all prudence and objectivity the latter maintains those vital essences and ethical considerations over the individual.

Moreover, you are further incorrect in that all income that is not constitutional income is wholly auto-exempted from federal income taxation, regardless if made statutorily exempt or not; that is entirely irrelevant to the matter.



No, because Congress is bound by due process and equal protection considerations. For example, Congress couldn't provide that dividends received by white people were excluded from gross income, but all others were not.

Your response is a poorly conceived red herring. Even still, yes Congress could in fact pass such legislation if they so desired; for there would be nothing to stop them, save for acquiring the necessary (bicameral) house votes to pass the law onto the President’s desk for signing into public law. Then, once ratified, under the ripeness doctrine, it would simply be a matter for the courts to recognize such constitutional considerations and issue whatever orders, injunctions, and whatnot after a complaint has been brought forth.

At any rate, your point serves only to further sack your argument for the fact that certain subjects of the federal income tax are permitted to record their actual ‘net income’, e.g., deducting expenses, losses, amortization, theft, etc.; while other subjects are allotted only a static amount that may be either for some too generous, while for others too punishing, and regardless is for the most part in both cases totally unrealistic.

Additionally, favored businesses are consistently allowed to reduce their taxes through off-shoring their profits into foreign subsidiaries within tax favorable nations, or by rebates, or are subsidized; certain class of occupations are taxed at a set rate regardless of how much they make, such as those living on investment income, having to surrender only a whopping 15% of their six or seven figured annual gains.

As a generic example, say your average Joe works for Mucky Irrigation Services in exchange for only $1,000 worth of Apple stock, which then quickly increases in value to $10,500 so your average Joe sells it for $10,000 and is happy. Meanwhile, over in Pleasantville you have the wealthy stock-player Pete, who during this same timeframe purchased $1,000 worth of Apple stock and who sold that stock right behind your average Joe, also for $10,000 -for this is how he maintains his now expected extravagance. Now according to you, and with consideration to both subjects, what was in essence the same exact arrangement qualifies your average Joe for $10,000 worth of ‘gross income’ at whatever tax rate he falls under (15% or more), yet for stock-player Pete he qualifies for the lesser sum of $9,000 worth of ‘gross income’ at a locked in tax rate of just 15%. I do not know about you, but to me that absolutely avoids all sense of equal protection.
* And that is not to mean that 15% isn’t an unethical tax rate, because it most certainly is.



See also:

http://blogs.suntimes.com/sweet/2011/03/ten_giant_us_companies_avoidin.html

http://www.reuters.com/article/2011/11/03/us-usa-tax-corporate-idUSTRE7A261C20111103

http://www.huffingtonpost.com/2012/04/10/fortune-500-companies-tax-break_n_1413263.html

http://www.thefiscaltimes.com/Articles/2012/02/02/Federal-Tax-Dodgers-Owe-Billions.aspx#page1



Mr. White, the source of the laborer's compensation is his job and the labor he puts into it. The argument that before an item of income can be taxed its source must be determined is nonsense and has been rejected by the courts.

1. False, as was previously noted, a source is to mean a constitutional source, having been summarized so well: “capital is the source of income; and income is the fruit of capital” [Black].
2. Either of ‘gains’ or ‘profits’ are “in distinction from the wages of labor” [Black].
3. Quoting Black’s Constitutional Law Treatise within Pollock at 157 U.S. 429, 625 (1895): “… a direct tax is one which is levied upon the person who is to pay it, or upon his land or personalty, or his business or income, as the case may be. …”
4. Quoting Alexander Hamilton [7 Hamilton’s Works, 848] within Pollock 158 U.S. 601, 625 (1895): “A tax upon one's whole income is a tax upon the annual receipts from his whole property, and as such falls within the same class as a tax upon that property, and is a direct tax in the meaning of the Constitution.” See also: 247 U.S. 179, 185 (1918); 247 U.S. 330, 335 (1918).
5. Quoting Black’s Income Tax Treatise: “… nothing is to be considered as income except what represents value in money, that is, either money or something that is equivalent to money because it can be converted into money and the proceeds expended in any way the recipient may please.”
6. A tax levied on an individuals “job” would still require apportionment being a capitation tax assessed on general occupations or otherwise a poll tax assessed on a specific caste of society, save for occupations that are deem privileged under excise taxes. Regardless, common law has well established that an individual’s labor is their personal property as is their ability to privately contract the same.
7. Furthermore, you sack your own argument for the obviousness that even if the individual’s job or their labor is considerable as the capital severing the remuneration in that exchange, there is still not any gain or profit for which to be realized, for there was only a conversion of human capital evenly expended into monetary capital, (e.g., “…and that nothing can be called income, for the purpose of this act, which takes away from the property itself. If it does, then it ceases to be income and amounts to a sale of capital assets.” [Turgot; Black]).
8. Any tax imposed upon an individual, that including their personalty or livelihood requires apportionment as a ‘personal tax’ [Black; viz., Wharton].
9. Income in its constitutional sense requires a conversion of capital, resulting in a severed positive sum or value, and in that way there must first exist a corpus; when one labors for their livelihood there is only an equal exchange respective to the accepted value set forth by the labor’s own personal capabilities, confidence, and ability to negotiate -also given to various external influences that are largely beyond their control.
10. False, aside from the IRC requiring that a certified assessment of taxes due be made (and made available upon request -and no the statute does not make any mention therein about this only being a requirement when the power is out at whatever IRS Office conducting such assessments, as the IRS so claims), the answer as to what does or does not constitute ‘gross income’ is not nonsense, it is requisite, see: Eisner v. Macomber, 252 U.S. 189, 206 (1920); Postal Telegraph Cable Co. v. Adams, 155 U.S. 688, 698 (1895).



Wrong again, Mr. White. There is no kind of income earned by an individual that's "naturally excludable (i.e., by organic or fundamental law)". And when I referred to plain vanilla income, I was referring to income as characterized by the Supreme Court: an undeniable accession to wealth, clearly realized, over which one has control. A particular instance of such income may or may not be included in gross income. For instance, a dividend is but a gift is not.

And here I had thought you were finally making a bit of process, then you just had to go and back-peddle -heh. Oh well, such is your loss, not mine.

1. False, source-income is the corpus for which to obtain that “undeniable accession to wealth” that you speak of and it may only be taxed through apportionment.
2. Earning a livelihood is not any such “undeniable accession to wealth”; it realizes only the continuation of subsistence.
3. Legislation cannot be used to creatively devise avoidances to constitutional stipulations on taxation (nor anything else for that matter).
4. Quoting Coppage v. Kansas, 236 U.S. 1, 14 (1915): “The principle is fundamental and vital. … Chief among such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property. If this right be struck down or arbitrarily interfered with, there is a substantial impairment of liberty in the long established constitutional sense. The right is as essential to the laborer as to the capitalist, to the poor as to the rich, for the vast majority of persons have no other honest way to begin to acquire property save by working for money.” See also: Olmstead v. United States, 277 U.S. 438, 478-479 (1928).



Wow, you finally said something that's correct.

What you mean to state is that you are finally in agreement with that statement (as provided above); however, which is wholly incorrect and that you -nor any other “Quatloser!”- are capable of even remotely substantiating.

Sonny Tufts
05-18-2012, 08:37 AM
As a generic example, say your average Joe works for Mucky Irrigation Services in exchange for only $1,000 worth of Apple stock, which then quickly increases in value to $10,500 [I think you meant $10,000] so your average Joe sells it for $10,000 and is happy. Meanwhile, over in Pleasantville you have the wealthy stock-player Pete, who during this same timeframe purchased $1,000 worth of Apple stock and who sold that stock right behind your average Joe, also for $10,000 -for this is how he maintains his now expected extravagance. Now according to you, and with consideration to both subjects, what was in essence the same exact arrangement qualifies your average Joe for $10,000 worth of ‘gross income’ at whatever tax rate he falls under (15% or more), yet for stock-player Pete he qualifies for the lesser sum of $9,000 worth of ‘gross income’ at a locked in tax rate of just 15%. I do not know about you, but to me that absolutely avoids all sense of equal protection.

Mr. White, you should really stop trying to discuss tax law because it's quite clear you haven't the foggiest clue what you're talking about. Joe received compensation in the form of $1000 of stock, and he would have included that amount in gross income in the year of receipt. His basis in the stock is therefore $1000 so that when he sells it later on for $10,000 he has a gain of $9000 that will be eligible to be taxed at the capital gains rate in effect at the time. Pete's basis in his stock is also $1000, and his gain is $9000. Just like Joe, his gain qualifies as capital gain. The only difference in the two scenarios is the fact that Joe had to include the initial $1000 in income because it was received as compensation. Pete used money he already had.

Weston White
05-18-2012, 09:49 AM
Mr. White, you should really stop trying to discuss tax law because it's quite clear you haven't the foggiest clue what you're talking about. Joe received compensation in the form of $1000 of stock, and he would have included that amount in gross income in the year of receipt. His basis in the stock is therefore $1000 so that when he sells it later on for $10,000 he has a gain of $9000 that will be eligible to be taxed at the capital gains rate in effect at the time. Pete's basis in his stock is also $1000, and his gain is $9000. Just like Joe, his gain qualifies as capital gain. The only difference in the two scenarios is the fact that Joe had to include the initial $1000 in income because it was received as compensation. Pete used money he already had.

Well now, that is precisely the point, isn't it! The federal income tax, at least according to you and those of your caliber, does not provide equal protection to those of a lesser caste.

The above example was intended only to serve as a vessel for you to display your utter disdain towards the laboring class -as it would not have mattered what it actually entailed, because your response would have been vastly consistent to the above). Thank you for making my point.

Sonny Tufts
05-18-2012, 11:39 AM
The federal income tax, at least according to you and those of your caliber, does not provide equal protection to those of a lesser caste.

I don't know what point you were trying to make, Mr. White, but it apparently galls you that Joe has to pay tax on his compensation. Would it make you feel any better if Joe's taxable income (including the $1000 of Apple stock he received) was low enough so that he didn't have to pay any income tax? After all, he might be in that 45-50% of U.S. families that pay no income tax. He also might have qualified for the earned income tax credit, so he not only paid no income tax, he actually got cash from the government.

Would it make you happier if you knew that Pete's $1000 that he used to buy the Apple stock was what was left over from $1538 in income he received and on which he had to pay an income tax of $538?

Weston White
05-18-2012, 06:21 PM
I don't know what point you were trying to make, Mr. White, but it apparently galls you that Joe has to pay tax on his compensation. Would it make you feel any better if Joe's taxable income (including the $1000 of Apple stock he received) was low enough so that he didn't have to pay any income tax? After all, he might be in that 45-50% of U.S. families that pay no income tax. He also might have qualified for the earned income tax credit, so he not only paid no income tax, he actually got cash from the government.

Would it make you happier if you knew that Pete's $1000 that he used to buy the Apple stock was what was left over from $1538 in income he received and on which he had to pay an income tax of $538?

Better still, thank you again for further proving my point, by publicly expressing your progressive ideologies and discontent concerning the individual property rights of the laboring class.

As you are one that undoubtedly believes that the entire throng of the working class society should be ecstatic and unquestioning whenever they receive a refund back on the perpetual loan that has forced upon their own property by the federal government (including most all states) each subsequent year. Consider yourself, using only arbitrary tables and figures to be so conveniently manipulated in support of your wanton ideals. How contrived and shameful; so utterly desperate, yet still so utterly deplorable.

Weston White
05-18-2012, 07:43 PM
* To those that are a bit confused on what the point that I was making was, the point (for the most part) was that the $1,000 of Apple stock could of just as well been any of: a stock of apples valued at $1,000, a $1,000 golden apple, 1,000 Dollars, or whatever else. Here, Sonny Jim’s response would have been near identical to the above.

Sonny Tufts
05-19-2012, 09:42 AM
Surprisingly, Mr. White has once again said something that's accurate. Like the old saying goes, even a blind hog rooting under an oak tree is bound to come up with an acorn now and then.

It is irrelevant in what form an employee's compensation is paid. Treasury Regulation 1.61-2(d) provides:


(d) Compensation paid other than in cash.

(1) In general. Except as otherwise provided in paragraph (d)(6)(i) of this section (relating to certain property transferred after June 30, 1969), if services are paid for in property, the fair market value of the property taken in payment must be included in income as compensation. If services are paid for in exchange for other services, the fair market value of such other services taken in payment must be included in income as compensation.

The Supreme Court agrees:


[The tax code] is broad enough to include in taxable income any economic or financial benefit conferred on the employee as compensation, whatever the form or mode by which it is effected. C.I.R. v. Smith, 324 U.S. 177 (1945)

Mr. White, you have made an error common to many tax protesters: you assume that my describing the law means I must somehow be in favor of it. This is nonsense. There are many parts of the law that I don't like. But those who would like to see a different tax policy in place are not well served by crackpot legal theories that are churned out by people with no legal training and that are either touted as some kind of magic bullet that will stop the IRS or presented as evidence that the entire legal and governmental community is part of a huge conspiracy to hide the "real law".

Wheeljack
05-19-2012, 10:04 AM
Mr. White, it's ludicrous for the very simple reason that the types of income listed in subsections (1) through (15) of Section 61(a) are not exclusive -- they are not the only things that are included in gross income. So even if Wheeljack is correct in interpreting subsection (1) as encompassing only self-employment income, it wouldn't change the fact that compensation for working for someone else is included in gross income as well. Why? Because Section 61(a) says that ALL income is included in gross income unless specifically excluded, and such compensation is clearly income.

As I stated previously subsection(1) includes any compensation received for working for someone else that is paid for the result of the work.

Commissions, Fees, Tips, Bonuses and Fringe Benefits.







Mr. White, the source of the laborer's compensation is his job and the labor he puts into it. The argument that before an item of income can be taxed its source must be determined is nonsense and has been rejected by the courts.

Wrong again, Mr. White. There is no kind of income earned by an individual that's "naturally excludable (i.e., by organic or fundamental law)". And when I referred to plain vanilla income, I was referring to income as characterized by the Supreme Court: an undeniable accession to wealth, clearly realized, over which one has control. A particular instance of such income may or may not be included in gross income. For instance, a dividend is but a gift is not.

It is generally accepted that if you have capital and invest that capital into buying stock, or purchasing property, that when you sell that stock or property, then the return of the original value of that capital, also known as cost, also known as the return of investment, is not taxable. However, any increase in value received over the return of the original value is the gain or profit, also known as the return on investment, which is what is taxable.


What is an employer asking for when he creates a job? For the employee-candidate to make an investment in his business.

That investment is the presentment of the candidate's ultimate capital, his physical and mental being, to be employed at the control and direction of the employer. This means the investment is in time. Can the employer return the investment in the form of time? No. Thus, the employer establishes the value of this investment in time, at the outset, as the hourly wage.

So on payday, the employee has invested 40 hours of time and the employer pays back the predetermined value of that time.

What is truly a ludicrous idea is that you want say that the cost to the laborer for those 40 hours was nothing, thus the employers payback is all gain.

The cost to the laborer in this transaction is the 40 hours served.

When you invest money as capital do you come back to ask what did it cost you to acquire the original capital in the first place and then use that as the cost for this investment. That would be ridiculous, but that is exactly what you are doing with regard to labor.

You are treating laborers as if they are self-employed.

A self-employed individual sells a service, which is the result of the work. So the money he receives is from his customers. Which is one transaction.
How does he pay for the time he invests to do his own work? Can he take the money out of his right pocket and put it in his left pocket and call it a transaction? No. Therefore the cost to this individual for his own labor is nothing.

Sonny Tufts
05-19-2012, 12:28 PM
Mr. Wheeljack, if someone working for others has a cost basis in his labor, then it follows that a self-employed person also has a cost basis in the services he is selling, similar to the cost of goods sold deduction for a seller of goods. But neither of these notions has any legal basis.


[Taxpayers'] principal argument is that Congress, by denying deductions for personal, living, and family expenses in the computation of taxable income, has exceeded its authority under the Sixteenth Amendment to the Constitution to lay and collect taxes on "incomes." The cornerstone of petitioners' argument is the definition of income stated by the Supreme Court in Eisner v. Macomber, 252 U.S. 189, 207 (1920), as "the gain derived from capital, from labor, or from both combined." They argue that the "gain" from labor cannot be determined until the "cost of doing labor," i.e., their expenditures at issue, has been subtracted from the amount received from the sale of labor. Petitioners attempt to support their method of arriving at the figure reflecting "income" which may constitutionally be taxed by analogizing the "living expenses" of one who depends upon the sale of his services for his livelihood to the "cost of goods sold" concept in certain business contexts...Appeal is made to history and philosophy and to analysis of legal, social, and economic concepts, none of which leads, however, to the result they seek.

It is difficult, if not impossible, to respond to arguments such as petitioners have put forth without becoming embroiled in a game of semantics. The logical force requiring rejection of their arguments -- apart from their assertions of personal political philosophy which do not provide a basis for us, a Court sitting to interpret the law, to decide the questions dispositive of this case -- is essentially a matter of the definition of terms. Thus, should we hold that "gain" is an essential element of income, compare Conner v. United States, 303 F. Supp. 1187 (S.D. Tex. 1969), affd., revd., and remanded 439 F.2d 934 (5th Cir. 1971), with McGuire v. United States, an unreported case ( N.D. Cal. 1970, 25 AFTR2d 1127, 70-1 USTC par. 9384), we would still face the problem of defining what constitutes "gain." Compare Conner v. United States, supra, with McCabe v. Commissioner, 54 T.C. 1745, 1748 (1970). It is in situations like this that one can truly admire the wisdom of Mr. Justice Holmes, in particular, as he expressed in United States v. Kirby Lumber Co., 284 U.S. 1 (1931), "We see nothing to be gained by the discussion of judicial definitions." n4
n4
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n4 That petitioners place too much reliance upon the words used to define income in Eisner v. Macomber, 252 U.S. 189, 207 (1920), is aptly demonstrated by Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), where, at page 431, the Court rejected those words as "a touchstone to all future gross income questions."

- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -

Nevertheless, accepting the conclusion that some kind of "gain" must be realized for there to be income, the flaw in petitioners' analogy of what they call the "cost of doing labor" to the "cost of goods sold" concept -- essentially its failure to acknowledge the difference between people and property -- may be shown. The "cost of goods sold" concept embraces expenditures necessary to acquire, construct or extract a physical product which is to be sold; the seller can have no gain until he recovers the economic investment that he has made directly in the actual item sold...Labor, on the other hand, is, in the current context, behavior performed by human beings in exchange for compensation. One's living expenses simply cannot be his "cost" directly in the very item sold, i.e., his labor, no matter how much money he spends to satisfy his human needs and those of his family. Of course we recognize the necessity for expenditures for such items as food, shelter, clothing, and proper health maintenance. They provide both the mental and physical nourishment essential to maintain the body at a level of effectiveness that will permit its labor to be productive. We do not even deny that a certain similarity exists between the "cost of doing labor" and the "cost of goods sold" concept. But the sale of one's labor is not the same creature as the sale of property, and whether the distinction comports with petitioners' philosophical rationalization for their argument, it is recognized for Federal income tax purposes...One's gain, ergo his "income," from the sale of his labor is the entire amount received therefor without any reduction for what he spends to satisfy his human needs.

Without constitutional backing for their position concerning the definition of income, petitioners are left with a bald assertion that section 262 [which denies a deduction for personal living expenses] is unconstitutional. However, it has long been established that "Congress has power to condition, limit, or deny deductions from gross income in order to arrive at the net that it chooses to tax." Helvering v. Independent Life Ins. Co., 292 U.S. 371, 381 (1934). And, as the Supreme Court has also stated:

For income tax purposes Congress has seen fit to regard an individual as having two personalities: "one is [as] a seeker after profit who can deduct the expenses incurred in that search; the other is [as] a creature satisfying his needs as a human and those of his family but who cannot deduct such consumption and related expenditures." [Fn. ref. omitted.] United States v. Gilmore, 372 U.S. 39, 44 (1963).

Reading v. Commissioner, 70 T.C. 730 (1978)


When you invest money as capital do you come back to ask what did it cost you to acquire the original capital in the first place and then use that as the cost for this investment. That would be ridiculous, but that is exactly what you are doing with regard to labor.

But if I invest something other than money, I have to ask what it cost me to acquire the capital. For example, if you and I form a partnership with you contributing $100,000 and my contributing land worth $100,000 for which I paid $10,000, my cost basis in my partnership interest is only $10,000. Since the laborer paid nothing for his time, he has no cost basis in it.

This kind of argument has been rejected so often by the courts that people making it risk being sanctioned.


The taxpayer next argues that wages are not income but an exchange of property. As money is property and labor is property, so his argument goes, his work for wages is a non-taxable exchange of property. Wrong again. Wages are income. See, e.g., Schiff v. Commissioner, 751 F.2d 116, 117 (2d Cir. 1984). The argument that they are not has been rejected so frequently that the very raising of it justifies the imposition of sanctions.” Connor v. Commissioner, 770 F.2d 17, 20 (2nd Cir. 1985), (the court not only ruled against the taxpayer, but also imposed sanctions of $2,000 for making a frivolous appeal).

“Appellant’s contention that the amounts he received from his employers constituted an equal, nontaxable exchanges of property rather than taxable income is clearly without merit. This court specifically rejected this argument in United States v. Lawson, 670 F.2d 923, 925 (10th Cir. 1982), as did the Tax Court in Rowlee v. Commissioner, 80 T.C. 1111, 1119-22 (1983).... Merely raising the argument that value received for labor does not constitute taxable income, but rather constitutes a nontaxable exchange of property, justifies the imposition of sanctions.” Casper v. Commissioner, 805 F.2d 902, 906 (10th Cir. 1986).

“According to Buras, income must be derived from some source. Wages cannot be taxed because the wage earner enjoys no gain from that source. Since the wage earner exchanges his labor and personal time for its equivalent in money, he derives no gain and therefore cannot be taxed. ... Appellant’s argument is refuted by one of the cases he cites. In Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415, 34 S.Ct. 136, 140, 58 L.Ed. 285 (1913), the Court did define income as gain derived from labor. The Court went on to explain, however, that ‘the earnings of the human brain and hand when unaided by capital’ are commonly treated as income.” United States v. Buras, 633 F.2d 1356, 1361 (9th Cir. 1980).

“Furthermore, Olson’s attempt to escape tax by deducting his wages as ‘cost of labor’ ... illustrate the frivolous nature of his position. This court has repeatedly rejected the argument that wages are not income as frivolous....” Olson v. United States, 760 F.2d 1003, 1005 (9th Cir. 1985).

"Even if wages are, in effect, an exchange of equal value for value, they are nevertheless taxable income. Rowlee v. Commissioner, 80 T.C. 1111, 1121-1122 (1983); Rice v. Commissioner, T.C. Memo. 1982-129. And even if we apply section 1001 to determine petitioner’s gain, his basis is defined under sections 1011 and 1012 as his cost, not fair market value. Since he paid nothing for his labor, his cost and thus his basis are zero. Rice v. Commissioner, supra. Consequently, even under section 1001, his taxable income from his labor is his total gain reduced by nothing, i.e., his wages. ... Petitioner’s argument fails for the same reason that other protesters’ arguments fail; the worker’s cost for his services--and thus his basis--is zero, not their fair market value.” Talmage v. Commissioner, T.C. Memo. 1996-114, aff’d 101 F.3d 695 (4th Cir. 1996).

“[A] review of the pleadings indicates that Mr. Ledford bases his entitlement to this relief on his view that the federal tax code does not tax compensation received for personal labor. Mr. Ledford’s view of the tax law is mistaken, as the tax code quite plainly defines income to include amounts received in compensation for services rendered. 26 U.S.C. § 61(a) (2000) (“[G]ross income means all income from whatever source derived including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items . . . .”). Indeed, every court that has considered the matter has found this argument to be wholly without merit -- so much so that merely raising it is considered sanctionable.” Ledford v. United States, 297 F.3d 1378, 1381, 2002 TNT 153-6, No. 02-5027 (Fed. Cir. 8/6/2002).

“In an attachment, entitled ‘Formal Tax Return Protest With Memorandum of Law,’ the petitioners argued that a portion of their wages was not taxable under the Sixteenth Amendment because it was a return on human capital, i.e., the ‘human machine.’ ... [W]e reject the argument that wages are not completely taxable because they are a return on human capital. This is a variation on an argument repeatedly rejected by courts that wages are not income because they are in equal exchange for labor.” Gary Boggs et ux. v. Commissioner, 569 F.3d 235 (6th Cir. 2009) (affirming sanctions of $10,000 imposed by the Tax Court and imposing additional sanctions of $8,000 imposed for a frivolous appeal).

Weston White
05-19-2012, 01:35 PM
Surprisingly, Mr. White has once again said something that's accurate. Like the old saying goes, even a blind hog rooting under an oak tree is bound to come up with an acorn now and then.

...

Mr. White, you have made an error common to many tax protesters: you assume that my describing the law means I must somehow be in favor of it. This is nonsense. There are many parts of the law that I don't like. But those who would like to see a different tax policy in place are not well served by crackpot legal theories that are churned out by people with no legal training and that are either touted as some kind of magic bullet that will stop the IRS or presented as evidence that the entire legal and governmental community is part of a huge conspiracy to hide the "real law".

Simply, you are confusing the common day laborer with the activities of the business itself. Laboring by bartering, or as an even exchange, is not akin to providing (professional) services to another. You’re taking “compensation” completely out of its rightful context in order to justify your mischievous notions. “Services” by no means, entails the consideration of exchanging whatever personal items (that including money) or receiving aid from (that including lending a hand to) your neighbors, friends, family, or coworkers, for example, (e.g., Hey Joe will you give me a hand cutting down this large oak in my side-yard? Most certainly Pete, if you will help me prep and paint my toolshed next weekend. Or even, hey boss my car won’t start could you use your pickup with that tow trailer you had told me about last month to pull my vehicle to the service station down the way? Alright Billy-Bob, just make sure that you include whatever the standard tow fee would have been on your tax return this year as a gain to you.)

The larger problem for you (including others like you) is that you’re entirely blinded by your own prejudices, as a trite racist would be, being neither capable nor caring to observe or appreciate the humanity and potential in the object that so disgusts and disdains you; in this instance that object being us lowly “tax protesting” crackpots.

Clearly, you far exceed going beyond merely “describing the tax laws”, and as to whatever portion of such laws that you do not like, the individual income tax (to wit, livelihoods), SSI, FICA, PPACA, stoppage at the source, and the entire IRS’ mechanics of FRP-ACS and distraint are certainly not on any such hate-list of yours; for you and your “Quatlost!” peoples revere the “awesomeness” powers of the IRS well above the individual protections provided to America’s citizens by its own core fundaments, at least when the matter turns to anything directing national taxation.

False, what is nonsense however is you pretending that the courts would never dare play part to any such vastly momentous conspiracy (by the by, Jay Adkisson had himself played such a role as co-counsel in a survivor’s lawsuit filed against the Republic of Iraq regarding the OKC Bombing morphing into some hokey international terrorist conspiracy plot); but, sure just as never would any agency of law enforcement, right (yea, and Oswald and Sirhan were both just back-to-back loner Kennedy family hating nut-jobs, with Jack Ruby ending up being crazier than both of them combined; and John Hinckley’s family was not longtime friends with the Bushes prior to him deciding to shoot President Reagan, while George Bush Sr. was his VP)? Historically, this assertion of yours proves itself to be utterly false, bearing past mere ineptness. So why don’t you go ahead and save that higher than mighty/superior calling speech for those asleep at their own brain-helm.

As to the courts not being a willing player to such conspiracies, one simply need to look toward President Barry Soetoro (moniker: Barack H. Obama) himself; as for whatever little remains of Mr. Soetoro’s creditability it’s being ever rapidly destroyed by Breitbart from beyond the grave. See for example at: http://www.breitbart.com/Big-Journalism/2012/05/19/Obama-For-America-Attacks-breitbart-Lit-Story

Weston White
05-19-2012, 01:52 PM
Such notions (regarding the top post on this page by Sonny Jim) can be easily summarized, when one is involved in business activities they are participating in a privilege, which is and has always been indirectly taxable though excises, otherwise they are participating in an unalienable right to life and as such they require subsistence and provisions to accomplish that, and therefore often take on a livelihood in order to meet that objective.

The distinction is one clearly involving gains or profits versus a mere exchange, e.g., while the employed security guard earns say $11.50 an hour and perhaps pays into a partial coverage health care plan and receives a few other small perks here and there, their employer, that is to say the one that is actually proving the service is being paid many times that by those that hire the security guard for private protection. In this case the employee merely earns a living to the greater benefit of their employer, who even after paying all of their respective business expenses, insurance coverage, etc., still affords a nice profit; which is often why the employee drives home in a Honda, while their employer drives home in a Lexus.


* And this also plays a very large part as to why the IRS marks you down in their internal AMIS computer program as being SB/SE and not as an employee (even though they know that you are in fact an employee), it is necessary in order to get around the restrictive commands of the program. Ergo, the IRS has to treat you as if you are a business owner.

Weston White
05-19-2012, 02:08 PM
But if I invest something other than money, I have to ask what it cost me to acquire the capital. For example, if you and I form a partnership with you contributing $100,000 and my contributing land worth $100,000 for which I paid $10,000, my cost basis in my partnership interest is only $10,000. Since the laborer paid nothing for his time, he has no cost basis in it.

So then if the land is lost in the course of the partnership due to a lawsuit, do you argue in court that the petitioner may only seek a claim on $10,000 worth of the partnership’s land, because the remaining $90,000 worth of your land had no “cost basis” in establishing the partnership?

No, the truth is that the cost basis is the value of whatever object you apply to the start up capital for the business, which can even include your own labor, e.g., a partner that is knowledgeable on setting up Websites could use that skill at whatever agreed upon price to setup and maintain a Website for their new company as part of their contribution; which according to you would be an impossibly simply because there is no “cost basis” in that partner's laboring.

And where within the IRC does “cost basis” theory come into play, meaning is there some statutory reference to that point or is this yet another red-herring you're tossing out there?

Moreover, according to your theory, employers should just take advantage of their employees and/or that employees should just work for free. Simply in that the employee is not really giving up anything; because they have established no “cost basis” in their labor, save for when they are actually paid or otherwise compensated. And to that end, employees could never win any lawsuits against employers that fail to pay or compensate them, for the fact that they have established no “cost basis” and thereby they hold no valid claim to a cause of action, save for a breach of contract to which bears no actual value in damages (noting that a sustained loss would be one of several requirements in filing suit) as no “cost basis” had yet been established, thus this contrived theory -however, insulting and ultimately bogus it might be- should bring about a brand new affirmative defense protecting the rights of employers from such as you say “frivolous claims”.

The totality of the fact is it that it’s the contract itself that establishes the “cost basis”, for it is wholly representative of the value that the individual laborer holds in their own, time, effort, skill, knowledge, locality, and required tools; whereas one employee for the same task may value their pay at $20 an hour another perhaps $12 an hour and an extended lunch at Chipotle.

And just the same, should an employee discover that their coworker is earning $2 more an hour than they, cannot take their employer to court and sue them, or if they did the judge would look only toward that employees own agreed upon contract to determine the proper amount of their pay and compensation and nothing else (that is aside from whatever minimum wage laws and whatnot).

Wheeljack
05-19-2012, 03:21 PM
Mr. Wheeljack, if someone working for others has a cost basis in his labor, then it follows that a self-employed person also has a cost basis in the services he is selling, similar to the cost of goods sold deduction for a seller of goods. But neither of these notions has any legal basis.

I am not claiming expenses as is the case in Reading.

And the only cost basis a self-employed person has is for supplies used in his business.





But if I invest something other than money, I have to ask what it cost me to acquire the capital. For example, if you and I form a partnership with you contributing $100,000 and my contributing land worth $100,000 for which I paid $10,000, my cost basis in my partnership interest is only $10,000. Since the laborer paid nothing for his time, he has no cost basis in it.

As you point out cost denotes that you acquired something. The capital in question is the laborer himself. He exists in time. He does not acquire himself or time.

The market determines what the value of this capital is worth, not the laborer himself.

In the case of a self-employed individual, he determines the value of his services, which can include what the taxes may be for the income he receives and therefore he has passed all or a part of his income tax onto his customer.







This kind of argument has been rejected so often by the courts that people making it risk being sanctioned.


Because, As I pointed out in my original post these people did not establish that working for someone else is not a service or services.

Look at Ledford, the court notes personal labor, if this describes him laboring to fulfill a contract for services sold to a customer (self-employment), then he deserved to get whacked.



“According to Buras, income must be derived from some source. Wages cannot be taxed because the wage earner enjoys no gain from that source. Since the wage earner exchanges his labor and personal time for its equivalent in money, he derives no gain and therefore cannot be taxed. ... Appellant’s argument is refuted by one of the cases he cites. In Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415, 34 S.Ct. 136, 140, 58 L.Ed. 285 (1913), the Court did define income as gain derived from labor. The Court went on to explain, however, that ‘the earnings of the human brain and hand when unaided by capital’ are commonly treated as income.” United States v. Buras, 633 F.2d 1356, 1361 (9th Cir. 1980).

The court in Stratton's defined income as gain derived from labor, not as the payment for labor.

The earnings of the human brain and hand applies to the money received for ideas and things done or made by hand. The laborer is not paid for his thoughts and does not own anything that is made by his labor. Therefore he doesn't receive any earnings of the human brain and hand.

Weston White
05-19-2012, 07:46 PM
Wheeljack, I would say that your last couple of posts truly boils down the effervescences of the underlying matter. Very well stated.

To that I would only add, yet again, that earning a livelihood is relationally incomparable to the motivations or intentions of acquiring a 'gain'.

Sonny Tufts
05-21-2012, 08:52 AM
when one is involved in business activities they are participating in a privilege, which is and has always been indirectly taxable though excises, otherwise they are participating in an unalienable right to life and as such they require subsistence and provisions to accomplish that, and therefore often take on a livelihood in order to meet that objective.

A specious distinction, Mr. White. The mom and pop who run a corner bakery are involved in business activities that provide the wherewithal for their subsistence.


And where within the IRC does “cost basis” theory come into play, meaning is there some statutory reference to that point or is this yet another red-herring you're tossing out there?

Mr. White, this is such a basic concept that your ignorance of it merely demonstrates that you shouldn't attempt to discuss tax law. Section 1012(a) of the Code provides,


The basis of property shall be the cost of such property, except as otherwise provided in this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses).

In my partnership example, my contribution of land worth $100,000 that I paid $10,000 for means that my basis in the land is $10,000. When I contribute it to the partnership, I do not recognize the built-in gain, because Section 721(a) says so: "No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership." It is because I don't recognize gain that Section 722 says my basis in my partnership interest is $10,000:


The basis of an interest in a partnership acquired by a contribution of property, including money, to the partnership shall be the amount of such money and the adjusted basis of such property to the contributing partner at the time of the contribution increased by the amount (if any) of gain recognized under section 721(b) to the contributing partner at such time.



No, the truth is that the cost basis is the value of whatever object you apply to the start up capital for the business

No, Mr. White, it's the cost of what you contribute, not its value. Section 722 states the rule for contributions to partnerships. Section 358 states a similar rule for contributions to corporations controlled by the transferor. Again, the reason is simple: because you don't recognize built-in gain when you contribute appreciated property to a business, your basis isn't increased to the value of the property. The law allows you to make a tax-free exchange of appreciated property in certain circumstances -- e.g., exchanging land for a partnership interest or for corporate stock. But the basis of what you receive is the same as your basis in the property given up in the exchange. Any other rule would allow you to escape being taxed on the built-in gain, and life ain't like that. In other words, Mr. White, there is no free lunch.


employees could never win any lawsuits against employers that fail to pay or compensate them, for the fact that they have established no “cost basis” and thereby they hold no valid claim to a cause of action, save for a breach of contract to which bears no actual value in damages (noting that a sustained loss would be one of several requirements in filing suit) as no “cost basis” had yet been established, thus this contrived theory -however, insulting and ultimately bogus it might be- should bring about a brand new affirmative defense protecting the rights of employers from such as you say “frivolous claims”.

Mr. White, you're as hopeless at contract law as you are at tax law. The measure of damages is what the employer promised to provide: the employee's wages. Cost basis is a tax law concept that can't be taken out of that context and inserted somewhere else.

aksmith
05-21-2012, 09:27 AM
I can't know the motivations of the posters in this thread. But it is important to remember that we live in a lawless country. Yes, you may get a fair shake in court if you sue Joe Blow. And maybe even if you sue Joe Blow Corporation, although that's less likely. But if the government charges you for failure to file or failure to pay taxes, you are toast. You have a judge, the prosecutor, and most likely your own attorney working against you. And if you are defending yourself, you're an idiot.

I have watched Irwin Schiff be put away twice now, this time probably for the rest of his useful life. I have had friends who somehow believe that words on paper can protect them from the ravenous beast of government spend years in prison.

By not paying or filing, you put a noose around your neck, throw the rope over a branch, and hand the government the other end. You will be made an example of and you'll be left wondering just how it happened. Do not follow this advice. Minimize what you pay in taxes by all means legally possible. But do not waste your life over a few dollars. Make a Ron Paul president instead and force those taxes to be as small as possible. But your life is not worth making a point that nobody will pay attention to. I do not say this happily. I would love the non-payers and non-filers to be left alone and live happy lives. But they do not and it's just a matter of time.

Weston White
05-21-2012, 01:04 PM
I can't know the motivations of the posters in this thread. But it is important to remember that we live in a lawless country. Yes, you may get a fair shake in court if you sue Joe Blow. And maybe even if you sue Joe Blow Corporation, although that's less likely. But if the government charges you for failure to file or failure to pay taxes, you are toast. You have a judge, the prosecutor, and most likely your own attorney working against you. And if you are defending yourself, you're an idiot.

I have watched Irwin Schiff be put away twice now, this time probably for the rest of his useful life. I have had friends who somehow believe that words on paper can protect them from the ravenous beast of government spend years in prison.

By not paying or filing, you put a noose around your neck, throw the rope over a branch, and hand the government the other end. You will be made an example of and you'll be left wondering just how it happened. Do not follow this advice. Minimize what you pay in taxes by all means legally possible. But do not waste your life over a few dollars. Make a Ron Paul president instead and force those taxes to be as small as possible. But your life is not worth making a point that nobody will pay attention to. I do not say this happily. I would love the non-payers and non-filers to be left alone and live happy lives. But they do not and it's just a matter of time.

The main problem with your argument is that Irwin Schiff was engaging in rightfully taxable activities and more than that he was acting willfully criminal by trying to hide his very large bag of money in off-shore accounts. Other than that I could only say to you:

“Contemplate the mangled bodies of your countrymen, and then say “what should be the reward of such sacrifices?” Bid us and our posterity bow the knee, supplicate the friendship and plough, and sow, and reap, to glut the avarice of the men who have let loose on us the dogs of war to riot in our blood and hunt us from the face of the earth? If ye love wealth better than liberty, the tranquility of servitude than the animated contest of freedom — go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, and may posterity forget that you were our countrymen!” - Samuel Adams

Weston White
05-21-2012, 10:19 PM
A specious distinction, Mr. White. The mom and pop who run a corner bakery are involved in business activities that provide the wherewithal for their subsistence.

And thus your point would be…? Oh yes, I had forgotten, you never had one.


Mr. White, this is such a basic concept that your ignorance of it merely demonstrates that you shouldn't attempt to discuss tax law. Section 1012(a) of the Code provides, …

Alright, now that is wonderful news. Guess what here, Sonny Jim you have painted yourself into yet another corner on that one!

1. 26 USC Sects. 1011 and 1012, that is your “cost basis”, is respective only to affairs of business, property, and enterprise for the purposes of distinguishing the corpus from the gain or profit. The use of this term has nothing to do with determining the worth of contracts, labor, or livelihoods.
2. You are attempting to morph the term “cost basis” out from its appropriate application and into the private affairs of non-businesses and non-professionals. For that you are the one in the wrong, not me.



In my partnership example, my contribution of land worth $100,000 that I paid $10,000 for means that my basis in the land is $10,000. When I contribute it to the partnership, I do not recognize the built-in gain, because Section 721(a) says so: "No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership." It is because I don't recognize gain that Section 722 says my basis in my partnership interest is $10,000: …

No, Section 721(a) is speaking to the gain or loss of the transferred object as a contribution to the partnership, not the gain or loss to the partner prior to the formation of the partnership and subsequent contribution. For example, in your scenario I could opt to dump stocks (or whatever else) onto the partnership as my contribution that I purchased for $75,000 though have since been devalued to $2,500, which would be great for me, but a very bad deal for my partners. Moreover, nobody in their right mind would dare risking their $100K investment for a contribution that is to be valued at only 1/10 of that. And remember this is all in the context of 26 USC Sects. 1011 and 1012 (i.e. “The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis…”), otherwise what is ultimately going to happen is that $10K increase to $100K is going to end up getting taxed all over again, should it be sold or transferred or whatever else, and that contributing partner is going to suffer a massive loss in the process.

As well, I am fairly certain that Section was meant only to keep partners from both demanding more contributions from another partner whenever what they had contributed losses its value at the time of the contribution and also to prevent a partner from demanding more of a stake in the partnership whenever their contribution increases in value from the time of the contribution.

Also see, 26 USC Sec. 723: “The basis of property contributed to a partnership by a partner shall be the adjusted basis of such property to the contributing partner at the time of the contribution increased by the amount (if any) of gain recognized under section 721 (b) to the contributing partner at such time.”

Regardless, it seems more correct that the above statutes have much more to do with business related sales, transfers, purchase, and windup/disposition than with the actual startup arrangements of the business. Additionally, the initial basis in the value of the property would be determined by the value as set forth by the contractual contribution.



No, Mr. White, it's the cost of what you contribute, not its value. Section 722 states the rule for contributions to partnerships. Section 358 states a similar rule for contributions to corporations controlled by the transferor. Again, the reason is simple: because you don't recognize built-in gain when you contribute appreciated property to a business, your basis isn't increased to the value of the property. The law allows you to make a tax-free exchange of appreciated property in certain circumstances -- e.g., exchanging land for a partnership interest or for corporate stock. But the basis of what you receive is the same as your basis in the property given up in the exchange. Any other rule would allow you to escape being taxed on the built-in gain, and life ain't like that. In other words, Mr. White, there is no free lunch.

Negative, that entire Subchapter is in the context of the “Gain or Loss on Disposition of Property”. You are merely attempting to confuse the real issue, e.g., whereas the partners “cost basis” might have very well been $10K that is not to mean they are permitted to claim only $10K of their property valued at $100K as their respective contribution. Also it should be noticed that the of filing tax returns are well-founded on honesty in one’s one self-assessment. If somebody really wants to refrain the reporting of certain sums they will, regardless of what rules any given statute has set forth, at any rate that is on them should they be audited they run the risk of additional penalty taxes and interest. However, as to your example you are presuming that the partner has yet to have paid taxes upon their realized gain, when in most cases they already had; and at any rate the transaction was very likely reported to the IRS by the other or another party. Additionally, the scenarios you are attempting to raise create a host of problems (e.g., passing a $90,000 fictitious gain the partnership from was what actually the startup capital, creating the potentiality for a double-taxation scenario, generating a massive loss to the affected partner, etc.)

And no, what you stated is without merit; what is withstanding is that you had transferred an item valued at $100K for a respective slice of “the action”, what you had originally invested or had done to obtain that item is of no direct consequence to the consideration of the contract (e.g., an inherited Babe Ruth baseball card, a variety of bullion purchased and held in possession since 1995, etc.)



Mr. White, you're as hopeless at contract law as you are at tax law. The measure of damages is what the employer promised to provide: the employee's wages. Cost basis is a tax law concept that can't be taken out of that context and inserted somewhere else.

Geez, Sonny Jim, you must have crashed your brain-ship into a reef and your brain-crew hath abandoned you!

What are you even talking about, you jabbering crack-monster! It was you that had originally insinuated that labors hold no “cost basis” in their labor and thereby all that they take in is pure gain and 100% taxable, given only to certain statutory exemption. I was only pointing out your utter lunacy on the issue. However, I am happy that you have finally come clean about your grave error -now just a few more remaining points for you to also clean up on.

Sonny Tufts
05-22-2012, 09:16 AM
And thus your point would be…?

That your distinction between earning a living and running a business is meritless.


26 USC Sects. 1011 and 1012, that is your “cost basis”, is respective only to affairs of business, property, and enterprise for the purposes of distinguishing the corpus from the gain or profit. The use of this term has nothing to do with determining the worth of contracts, labor, or livelihoods.

Mr. White, let me preface this by saying that you're in way over your head. You pretend to understand the Code, but you really haven't a clue about what it says.

That said, Section 1001 et seq. are the general rules for determining gain or loss from the sale or exchange of peroperty, and it is not restricted to sales and exchanges occurring in business affairs.


No, Section 721(a) is speaking to the gain or loss of the transferred object as a contribution to the partnership, not the gain or loss to the partner prior to the formation of the partnership and subsequent contribution.

Read the section again, Mr. White. It says just what I said it did. The partner contributing property to a partnership is making an exchange -- he is giving up the property in exchange for a partnership interest. Normally, such an exchange would be a taxable event, but Section 721 creates an exception and says that the contributor recognizes no gain.


Additionally, the initial basis in the value of the property would be determined by the value as set forth by the contractual contribution.

No, Mr. White, that is precisely what the statutes do not say. While a partner's capital account is based on the fair market value of contributed property, basis is not. Basis and capital accounts are entirely different concepts.


whereas the partners “cost basis” might have very well been $10K that is not to mean they are permitted to claim only $10K of their property valued at $100K as their respective contribution.

Exactly -- you are beginning to understand. If you contribute $100,000 cash and I contribute land worth $100,000 with a basis of $10,000, we each start out with capital accounts of $100,000 each. But the partnership's basis in the land is only $10,000, the same amount as my basis in my partnership interest.


Additionally, the scenarios you are attempting to raise create a host of problems (e.g., passing a $90,000 fictitious gain the partnership from was what actually the startup capital, creating the potentiality for a double-taxation scenario, generating a massive loss to the affected partner, etc.)

No, Mr. White. If the partnership sells the land for $100,000 two days after its formation, the law requires that the pre-contribution built-in gain of $90,000 be allocated to the contributing partner. There is no double tax, because partnerships don't pay federal income tax; they are flow-through entities. You really don't know any of this stuff, do you?


It was you that had originally insinuated that labors hold no “cost basis” in their labor and thereby all that they take in is pure gain and 100% taxable, given only to certain statutory exemption. I was only pointing out your utter lunacy on the issue.

Mr. White, it is the ignorant tax protesters (yes, that's redundant) who are trying to analyze compensation-for-work in terms of a sale or exchange. I do not, for the simple reason that Section 61(a) distinguishes between pay-for-work and gain from dealings in property and says that both are includable in gross income unless exempted. But even if one were to view pay-for-work as the amount received from an exchange of labor, the gain would be measured by the difference between the amount received (the pay) and the cost basis in the labor that was exchanged. Since the worker paid nothing for his labor, the entire amount of pay is gross income. Any argument to the contrary is frivolous and will likely result in sanctions for the one making it.


“The taxpayer next argues that wages are not income but an exchange of property. As money is property and labor is property, so his argument goes, his work for wages is a non-taxable exchange of property. Wrong again. Wages are income. See, e.g., Schiff v. Commissioner, 751 F.2d 116, 117 (2d Cir. 1984). The argument that they are not has been rejected so frequently that the very raising of it justifies the imposition of sanctions.” Connor v. Commissioner, 770 F.2d 17, 20 (2nd Cir. 1985), (the court not only ruled against the taxpayer, but also imposed sanctions of $2,000 for making a frivolous appeal).

“Appellant’s contention that the amounts he received from his employers constituted an equal, nontaxable exchanges of property rather than taxable income is clearly without merit. This court specifically rejected this argument in United States v. Lawson, 670 F.2d 923, 925 (10th Cir. 1982), as did the Tax Court in Rowlee v. Commissioner, 80 T.C. 1111, 1119-22 (1983).... Merely raising the argument that value received for labor does not constitute taxable income, but rather constitutes a nontaxable exchange of property, justifies the imposition of sanctions.” Casper v. Commissioner, 805 F.2d 902, 906 (10th Cir. 1986).

“According to Buras, income must be derived from some source. Wages cannot be taxed because the wage earner enjoys no gain from that source. Since the wage earner exchanges his labor and personal time for its equivalent in money, he derives no gain and therefore cannot be taxed. ... Appellant’s argument is refuted by one of the cases he cites. In Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415, 34 S.Ct. 136, 140, 58 L.Ed. 285 (1913), the Court did define income as gain derived from labor. The Court went on to explain, however, that ‘the earnings of the human brain and hand when unaided by capital’ are commonly treated as income.”
United States v. Buras, 633 F.2d 1356, 1361 (9th Cir. 1980).

“Furthermore, Olson’s attempt to escape tax by deducting his wages as ‘cost of labor’ ... illustrate the frivolous nature of his position. This court has repeatedly rejected the argument that wages are not income as frivolous....” Olson v. United States, 760 F.2d 1003, 1005 (9th Cir. 1985).

“DeMoss contends that the compensation he received from his employers is not taxable because his basis in his labor is equal to the amount of compensation he received. The tax court properly rejected this frivolous contention. See Carter v. Commissioner, 784 F2d 1006, 1009 (9th Cir. 1986); Olson v. United States, 760 F.2d 1003, 1005 (9th Cir. 1985).” DeMoss v. Commissioner, 1995 U.S. App. LEXIS 2672, 75 A.F.T.R.2d 841 (9th Cir. 1995), (unpublished; sanctions imposed for filing a frivolous appeal).

“Appellant’s second argument is that his compensation in exchange for labor is property, not income. ... Again, he is wrong. The Third Circuit unequivocally has stated that ‘wages are income within the meaning of the Sixteenth Amendment.’ United States v. Connor, 898 F.2d 942, 944 (3rd Cir. 1990). The Third Circuit then warned that ‘[u]nless subsequent Supreme Court decisions throw any doubt on this conclusion, we will view arguments to the contrary as frivolous, which may subuect the party asserting them to appropriate sanctions.’ Id. Such authority is neither cited nor found, and appellant’s arguments will be dismissed as frivolous. Wages are income.”
Angstadt v. Internal Revenue Service, 84 AFTR2d ¸99-5455, 1999 WL 820866, at 2 (U.S.D.C. E.D.Pa. 1999).

“[Peth] states that the income taxes are directed to taxable gain. Because he receives a paycheck for his labor, and because the paycheck is equal to the fair market value of his labor, he argues there is no gain. No court has ever accepted this argument for the purpose of determining taxable income. Indeed, it has always been rejected. For once and for all, wages are taxable income.” Peth v. Breitzmann, 611 F. Supp. 50, 53 (E.D.Wis. 1985), 1985 U.S. Dist. LEXIS 21509, 85-1 U.S.T.C. ¶9321, 55 AFTR2d 1280 (complaints dismissed and sanctions imposed for filing frivolous actions “brought in bad faith”).

“Even if wages are, in effect, an exchange of equal value for value, they are nevertheless taxable income. Rowlee v. Commissioner, 80 T.C. 1111, 1121-1122 (1983); Rice v. Commissioner, T.C. Memo. 1982-129. And even if we apply section 1001 to determine petitioner’s gain, his basis is defined under sections 1011 and 1012 as his cost, not fair market value. Since he paid nothing for his labor, his cost and thus his basis are zero. Rice v. Commissioner, supra. Consequently, even under section 1001, his taxable income from his labor is his total gain reduced by nothing, i.e., his wages. ... Petitioner’s argument fails for the same reason that other protesters’ arguments fail; the worker’s cost for his services--and thus his basis--is zero, not their fair market value.” Talmage v. Commissioner, T.C. Memo. 1996-114, aff’d 101 F.3d 695 (4th Cir. 1996).

“Petitioner submitted to the Internal Revenue Service documents purporting to be 1995 and 1996 Federal income tax returns. The documents reported petitioner’s compensation earned in each year and then deducted the equivalent amount as ‘Property (money) exchanged for property (labor not subject to tax).” ... The only dispute that petitioner raised with respect to the amounts of compensation is his frivolous arguments that his wages are not taxable. These arguments, as petitioner was advised in the District Court order, citing United States v. Studley, 783 F.2d 934, 937 (9th Cir. 1986), have been consistently and thoroughly rejected and may be the basis for sanctions.” Wheelis v. Commissioner, T.C. Memo 2002-102, 2002 TNT 74-14, (sanctions of $10,000 imposed for frivolous arguments raised primarily for delay); aff’d 2003 TNT 108-7, No. 02-73119 (9th Cir. 5/16/2003).

“In effect, Ms. Sumter attempts to claim that the deduction (her total salary) was a necessary expense for the production of that same salary. She provides no support or credible justification for her untenable position. Ms. Sumter tries to cite case law in support of her “even exchange” argument; however, none of the cases she cites justify her position. In fact, the cases are contrary to her .position. [Discussion of cases omitted] Thus, courts have clearly rejected the “even exchange” argument, which erroneously asserts that no taxes are owed on employment wages, since the income from the services rendered was a fair market value and, therefore, no profit or gain occurred as a result of the work performed.” Sumter v. United States, 61 Fed. Cl. 517, 518 (2004).

“[A] review of the pleadings indicates that Mr. Ledford bases his entitlement to this relief on his view that the federal tax code does not tax compensation received for personal labor. Mr. Ledford’s view of the tax law is mistaken, as the tax code quite plainly defines income to include amounts received in compensation for services rendered. 26 U.S.C. § 61(a) (2000) (“[G]ross income means all income from whatever source derived including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items . . . .”). Indeed, every court that has considered the matter has found this argument to be wholly without merit -- so much so that merely raising it is considered sanctionable.” Ledford v. United States, 297 F.3d 1378, 1381, 2002 TNT 153-6, No. 02-5027 (Fed. Cir. 8/6/2002).

Wheeljack
05-22-2012, 09:26 PM
Mr. White, it is the ignorant tax protesters (yes, that's redundant) who are trying to analyze compensation-for-work in terms of a sale or exchange. I do not, for the simple reason that Section 61(a) distinguishes between pay-for-work and gain from dealings in property and says that both are includable in gross income unless exempted. But even if one were to view pay-for-work as the amount received from an exchange of labor, the gain would be measured by the difference between the amount received (the pay) and the cost basis in the labor that was exchanged. Since the worker paid nothing for his labor, the entire amount of pay is gross income. Any argument to the contrary is frivolous and will likely result in sanctions for the one making it.

Weston, it is easy to see why the following people got whacked.

1. They claimed their wages as compensation for services on their 1040.

2. They then attempted to claim a deduction of compensation for labor from their claim of compensation for services.

Remember why we file a 4852. We do not include compensation for labor in compensation for services in the first place.

You can't claim it as one thing and then try to deduct it as another.



“The taxpayer next argues that wages are not income but an exchange of property. As money is property and labor is property, so his argument goes, his work for wages is a non-taxable exchange of property. Wrong again. Wages are income. See, e.g., Schiff v. Commissioner, 751 F.2d 116, 117 (2d Cir. 1984). The argument that they are not has been rejected so frequently that the very raising of it justifies the imposition of sanctions.” Connor v. Commissioner, 770 F.2d 17, 20 (2nd Cir. 1985), (the court not only ruled against the taxpayer, but also imposed sanctions of $2,000 for making a frivolous appeal).

“Appellant’s contention that the amounts he received from his employers constituted an equal, nontaxable exchanges of property rather than taxable income is clearly without merit. This court specifically rejected this argument in United States v. Lawson, 670 F.2d 923, 925 (10th Cir. 1982), as did the Tax Court in Rowlee v. Commissioner, 80 T.C. 1111, 1119-22 (1983).... Merely raising the argument that value received for labor does not constitute taxable income, but rather constitutes a nontaxable exchange of property, justifies the imposition of sanctions.” Casper v. Commissioner, 805 F.2d 902, 906 (10th Cir. 1986).

“According to Buras, income must be derived from some source. Wages cannot be taxed because the wage earner enjoys no gain from that source. Since the wage earner exchanges his labor and personal time for its equivalent in money, he derives no gain and therefore cannot be taxed. ... Appellant’s argument is refuted by one of the cases he cites. In Stratton’s Independence, Ltd. v. Howbert, 231 U.S. 399, 415, 34 S.Ct. 136, 140, 58 L.Ed. 285 (1913), the Court did define income as gain derived from labor. The Court went on to explain, however, that ‘the earnings of the human brain and hand when unaided by capital’ are commonly treated as income.”
United States v. Buras, 633 F.2d 1356, 1361 (9th Cir. 1980).

“Furthermore, Olson’s attempt to escape tax by deducting his wages as ‘cost of labor’ ... illustrate the frivolous nature of his position. This court has repeatedly rejected the argument that wages are not income as frivolous....” Olson v. United States, 760 F.2d 1003, 1005 (9th Cir. 1985).

“DeMoss contends that the compensation he received from his employers is not taxable because his basis in his labor is equal to the amount of compensation he received. The tax court properly rejected this frivolous contention. See Carter v. Commissioner, 784 F2d 1006, 1009 (9th Cir. 1986); Olson v. United States, 760 F.2d 1003, 1005 (9th Cir. 1985).” DeMoss v. Commissioner, 1995 U.S. App. LEXIS 2672, 75 A.F.T.R.2d 841 (9th Cir. 1995), (unpublished; sanctions imposed for filing a frivolous appeal).

“Appellant’s second argument is that his compensation in exchange for labor is property, not income. ... Again, he is wrong. The Third Circuit unequivocally has stated that ‘wages are income within the meaning of the Sixteenth Amendment.’ United States v. Connor, 898 F.2d 942, 944 (3rd Cir. 1990). The Third Circuit then warned that ‘[u]nless subsequent Supreme Court decisions throw any doubt on this conclusion, we will view arguments to the contrary as frivolous, which may subuect the party asserting them to appropriate sanctions.’ Id. Such authority is neither cited nor found, and appellant’s arguments will be dismissed as frivolous. Wages are income.”
Angstadt v. Internal Revenue Service, 84 AFTR2d ¸99-5455, 1999 WL 820866, at 2 (U.S.D.C. E.D.Pa. 1999).

“[Peth] states that the income taxes are directed to taxable gain. Because he receives a paycheck for his labor, and because the paycheck is equal to the fair market value of his labor, he argues there is no gain. No court has ever accepted this argument for the purpose of determining taxable income. Indeed, it has always been rejected. For once and for all, wages are taxable income.” Peth v. Breitzmann, 611 F. Supp. 50, 53 (E.D.Wis. 1985), 1985 U.S. Dist. LEXIS 21509, 85-1 U.S.T.C. ¶9321, 55 AFTR2d 1280 (complaints dismissed and sanctions imposed for filing frivolous actions “brought in bad faith”).

“Even if wages are, in effect, an exchange of equal value for value, they are nevertheless taxable income. Rowlee v. Commissioner, 80 T.C. 1111, 1121-1122 (1983); Rice v. Commissioner, T.C. Memo. 1982-129. And even if we apply section 1001 to determine petitioner’s gain, his basis is defined under sections 1011 and 1012 as his cost, not fair market value. Since he paid nothing for his labor, his cost and thus his basis are zero. Rice v. Commissioner, supra. Consequently, even under section 1001, his taxable income from his labor is his total gain reduced by nothing, i.e., his wages. ... Petitioner’s argument fails for the same reason that other protesters’ arguments fail; the worker’s cost for his services--and thus his basis--is zero, not their fair market value.” Talmage v. Commissioner, T.C. Memo. 1996-114, aff’d 101 F.3d 695 (4th Cir. 1996).

“Petitioner submitted to the Internal Revenue Service documents purporting to be 1995 and 1996 Federal income tax returns. The documents reported petitioner’s compensation earned in each year and then deducted the equivalent amount as ‘Property (money) exchanged for property (labor not subject to tax).” ... The only dispute that petitioner raised with respect to the amounts of compensation is his frivolous arguments that his wages are not taxable. These arguments, as petitioner was advised in the District Court order, citing United States v. Studley, 783 F.2d 934, 937 (9th Cir. 1986), have been consistently and thoroughly rejected and may be the basis for sanctions.” Wheelis v. Commissioner, T.C. Memo 2002-102, 2002 TNT 74-14, (sanctions of $10,000 imposed for frivolous arguments raised primarily for delay); aff’d 2003 TNT 108-7, No. 02-73119 (9th Cir. 5/16/2003).

“In effect, Ms. Sumter attempts to claim that the deduction (her total salary) was a necessary expense for the production of that same salary. She provides no support or credible justification for her untenable position. Ms. Sumter tries to cite case law in support of her “even exchange” argument; however, none of the cases she cites justify her position. In fact, the cases are contrary to her .position. [Discussion of cases omitted] Thus, courts have clearly rejected the “even exchange” argument, which erroneously asserts that no taxes are owed on employment wages, since the income from the services rendered was a fair market value and, therefore, no profit or gain occurred as a result of the work performed.” Sumter v. United States, 61 Fed. Cl. 517, 518 (2004).

“[A] review of the pleadings indicates that Mr. Ledford bases his entitlement to this relief on his view that the federal tax code does not tax compensation received for personal labor. Mr. Ledford’s view of the tax law is mistaken, as the tax code quite plainly defines income to include amounts received in compensation for services rendered. 26 U.S.C. § 61(a) (2000) (“[G]ross income means all income from whatever source derived including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items . . . .”). Indeed, every court that has considered the matter has found this argument to be wholly without merit -- so much so that merely raising it is considered sanctionable.” Ledford v. United States, 297 F.3d 1378, 1381, 2002 TNT 153-6, No. 02-5027 (Fed. Cir. 8/6/2002).

Weston White
05-23-2012, 05:52 AM
That your distinction between earning a living and running a business is meritless.

False, this is not, as you acclaim, my “distinction”; for it is Subtitle A itself that makes such distinctions, between individuals, businesses, nonresident aliens, foreign corporations, et al. More than this, it is our U.S. Constitution that provides such distinctiveness between the various means of direct and indirect taxation.

Clearly, there is at virtually every level, a vast distinction between earning a livelihood and operating a business.



Mr. White, let me preface this by saying that you're in way over your head. You pretend to understand the Code, but you really haven't a clue about what it says.

The above is not worthy of any response on my part, mine and others research is wholly capable of standing on its own merits. Moreover, SCOTUS has made it more than clear what constitutional income means and it is not all that comes in, neither is it the source nor the corpus. Therefore, whatever was in fact the original intention of the IRC that intent has since been greatly solidified by the precedent of SCOTUS. Besides all of that, not even Black’s treatise agrees with your silly notions respective of common laborers. It is all good though, may you live eternally to continually blast holes into your own feet.



That said, Section 1001 et seq. are the general rules for determining gain or loss from the sale or exchange of peroperty, and it is not restricted to sales and exchanges occurring in business affairs.

Planet Earth to Sonny Jim, do you realize all that you are arguing about a generic procedure on how to determine the gain or loss from the originating investment or purchase or cost? Ergo, it is a common sense term, whereas, the action of its definition is just as applicable to the gains and profits of the individual as to the businessperson or entrepreneur. In other words, a big who cares!

And false, an “exchange” is not indicative of a “transfer”; for the latter is what those sections are addressing, you are yet again attempting to murky the waters in order to hide your apparent deceptiveness.

The fact remains that “cost basis” is an accounting/financial term pertaining to taxation, just as is “amortization” (as well as scores of other such industry jargon), both terms have little to nothing to do with the common engagements of the American masses.

Also to be kept in mind is that 26 USC Sec. 1011 derives from Section 113(b) of the 1939 IRC, now when you go review those surrounding sections you will notice that there is an awful lot of discussion about corporate activities, stocks, mergers, reorganizations, affiliations, distributions, liquidations, etc. (excerpt below), thereby hinting to the intended context of the surrounding sections. So yes, those sections clearly have to do with both business and entrepreneurial activities. If you do not want to admit to that, I could honestly care less. Simply put, none of this has anything at all to do with earning a living and is meant only to debase the underlying point and purpose of this thread.

Sec. 113(b) of the 1939 IRC:


(b) ADJUSTED BASIS.—The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis determined under subsection (a), adjusted as hereinafter provided.
(1) GENERAL RULE.—Proper adjustment in respect of the property shall in all cases be made—
(A) For expenditures, receipts, losses, or other items, properly chargeable to capital account, including taxes and other carrying charges on unimproved and unproductive real property, but no such adjustment shall be made for taxes or other carrying charges for which deductions have been taken by the taxpayer in determining net income for the taxable year or prior taxable years;
(B) in respect of any period since February 28, 1913, for exhaustion, wear and tear, obsolescence, amortization, and depletion, to the extent allowed (but not less than the amount allowable) under this chapter or prior income tax laws. Where for any taxable year prior to the taxable year 1932 the depletion allowance was based on discovery value or a percentage of income, then the adjustment for depletion for such year shall be based on the depletion which would have been allowable for such year if computed without reference to discovery value or a percentage of income;
(C) in respect of any period prior to March 1, 1913, for exhaustion, wear and tear, obsolescence, amortization, and depletion, to the extent sustained;
(D) in the case of stock (to the extent not provided for in the foregoing subparagraphs) for the amount of distributions previously made which, under the law applicable to the year in
which the distribution was made, either were tax-free or were applicable in reduction of basis (not including distributions made by a corporation, which was classified as a personal service corporation under the provisions of the Revenue Act of 1918, Feb. 24, 1919, c. 18, 40 Stat. 1057, or the Revenue Act of 1921, Nov. 28, 1921, c. 136, 42 Stat. 227, out of its earnings or profits which were taxable in accordance with the provisions of section 218 of the Revenue Act of 1918 or 1921);
(E) to the extent provided in section 337 (f) in the case of the stock of United States shareholders in a foreign personal holding company; and
(F) to the extent provided in section 28 (h) in the case of amounts specified in a shareholder's consent made under section 28.
...
SOURCE: http://www.defenderone.net/LRDC/SAL/1939_IRC.PDF


To be rather frank, I would compare your newest argument regarding “cost basis”, as to the same tact implemented by those arguing over Section 861 of the IRC. Sonny Jim, to that you are misguided in your reasoning.



Read the section again, Mr. White. It says just what I said it did. The partner contributing property to a partnership is making an exchange -- he is giving up the property in exchange for a partnership interest. Normally, such an exchange would be a taxable event, but Section 721 creates an exception and says that the contributor recognizes no gain.

No you are commingling the exceptions to be rendered for partnerships (including other engagements) with the otherwise general context of Subchapter O. The correct term as used in the IRC is “transfer”, not “exchange”; ergo, one transfers their contribution onto the partnership in order to become a partner. To exchange is to guarantee the receipt of something of a relative or equal value given to the circumstances or events involved. One’s contribution to a partnership may result in a negative loss, a total loss, a partial loss, or a greater gain or profit, however, in any instance it could not be properly said to have been equal or even to the originating investment put forth -hence the entire purpose of “investing”, as a risk worth the reward. As stated in general:

26 USC § 1001 - Determination of amount of and recognition of gain or loss
(a) Computation of gain or loss
The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess of the adjusted basis provided in such section for determining loss over the amount realized.
(b) Amount realized
The amount realized from the sale or other disposition of property shall be the sum of any money received plus the fair market value of the property (other than money) received. In determining the amount realized—

(c) Recognition of gain or loss
Except as otherwise provided in this subtitle, the entire amount of the gain or loss, determined under this section, on the sale or exchange of property shall be recognized.


26 USC § 1011 - Adjusted basis for determining gain or loss
(a) General rule
The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis (determined under section 1012 or other applicable sections of this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses)), adjusted as provided in section 1016.


26 USC § 1012 - Basis of property—cost
(a) In general
The basis of property shall be the cost of such property, except as otherwise provided in this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses).

Which is (as noted above) respective of 26 USC 1016 (and is virtually identical to the above 1939 IRC Sec. 113(b) quotation): http://www.law.cornell.edu/uscode/text/26/1016

And no becoming a partner is itself not a taxable event; such would only become taxable whenever a partner receives distributions or whatever from the partnership as a gain or profit to them (neither would becoming a partner aid an individual in escaping their prior obligations for taxes, save for if they were intent on being dishonest form the outset), and I would tend to think that neither would startup capital be considered taxable.

Though as I have stated in the past, I do not study other aspects of the IRC; in other words, so far as I am concerned everything related to businesses and business activities, etc., meaning any and all realized gains and profits are correctly the target of the federal income tax and I care not to debate it, for to otherwise do so is ultimately moot.



No, Mr. White, that is precisely what the statutes do not say. While a partner's capital account is based on the fair market value of contributed property, basis is not. Basis and capital accounts are entirely different concepts.

Then we are arguing over nothing, as you had initially gave the appearance that you were saying a partner could only invest their original purchase cost as the value of their contribution, with whatever actual loss or gain being absorbed into the partnership itself. To which I argued that such an assertion was completely illogical and would amount to conversion, aside from being entirely disadvantageous to that contributing partner.

However, my true concern was the debate over the common laborer, a position to which I more than successively defended.



Exactly -- you are beginning to understand. If you contribute $100,000 cash and I contribute land worth $100,000 with a basis of $10,000, we each start out with capital accounts of $100,000 each. But the partnership's basis in the land is only $10,000, the same amount as my basis in my partnership interest.

Then to that point there was apparently a misunderstanding as to your initial comment.



No, Mr. White. If the partnership sells the land for $100,000 two days after its formation, the law requires that the pre-contribution built-in gain of $90,000 be allocated to the contributing partner. There is no double tax, because partnerships don't pay federal income tax; they are flow-through entities. You really don't know any of this stuff, do you?

But the partners receive allotted distributions to be paid out, respective to the remaining gains/profits of their partnership, so in that way the partnership entity (as a whole) would have incurred those additional taxes, be it directly or indirectly through whichever partner’s prior losses or gains, having been passed onto the partnership during its initialization -that is, as its invested startup capital.

And yes that is correct, as I have said to you before when you were running around on the Internet as “Legist”, I do not research the IRC as it applies to or effects businesses. To me that subject is irrelevant -however, so far as such subjects of taxation are concerned the only aspects that I really disagree with are the tax rates, as they are all set way too high; and all of the tax loopholes that are permitted for conglomerations to entirely avoid taxation and to receive vast sums in refunds, or rebates, or whatever else their highly paid lobbyists dream up.



Mr. White, it is the ignorant tax protesters (yes, that's redundant) who are trying to analyze compensation-for-work in terms of a sale or exchange. I do not, for the simple reason that Section 61(a) distinguishes between pay-for-work and gain from dealings in property and says that both are includable in gross income unless exempted. But even if one were to view pay-for-work as the amount received from an exchange of labor, the gain would be measured by the difference between the amount received (the pay) and the cost basis in the labor that was exchanged. Since the worker paid nothing for his labor, the entire amount of pay is gross income. Any argument to the contrary is frivolous and will likely result in sanctions for the one making it.

False, “compensation” has already been distinctly addressed within the derivation of 26 USC Sec. 61, having been enumerated apart from salaries and wages. This was not simply intentional surplusage. It was crafted so as to maintain the breadth of what is to be considerable as constitutional income; hence, the realized increase ascending out from its source.

False, SCOTUS has since 1913 developed (via common law precedence) the strict meaning of ‘gross income’, by stripping the contextual vagueness out from its global application; thus, whatever the statute attempts to continue postulating is legally irrelevant.

False, “cost basis” is respective only to the selling or other final disposition of tangible, transferable property; as to its exacting losses, gains, or profits, something which is not at all relatable to livelihoods alone.

False, such would be no different than one neighbor exchanging a small bag of homegrown organic tomatoes with their neighbor for a whole homegrown organic watermelon, for example -this is nothing more than an enjoyable exchange as equally beneficial to the respective agreement of both private parties.

False, neither may an individual’s toiling nor livelihood superimpose itself as a realized gain from capital or posture itself as the source thereof.

False, the statutory definition states not that labor or remuneration results in the realization of income, but that the realization of income derives from the increases brought about by applied salaries or wages (which are the common requites of laboring), or otherwise through “compensation” in whatever form received. The statutory definition states not that labor is as in the course of common livelihoods, but that labor is in the context of: “professions, vocations, businesses, trade, commerce, or sales, or dealings in property”.

False, even if your scenario were the case, it is the labor contract itself that sets forth the legal value, the worth, or the cost of that labor, which is to be thusly performed and once completed the receipt of payment, is in obligation and accord to that prearrangement. Therefore, no realized gain or profit has yet transpired, only a reciprocating conversion designated to yield a relationally equal effort or value; that is not until something additional has been received by the laborer, be it a bonus, tip, reward, special pay, etc., or otherwise a return on subsequent investments resulting from the prudent external application of the payments prior received.

While, the determination of “cost basis” may be apropos for the employer in relation to the operating of their business, such is not the case for the employee in relation to their earning a livelihood.

Simply, when one labors they are doing so with the positive goal of establishing the capital for which to serve as the source of their future taxable arrangements; however, it is not until they have first obtained that financial corpus that they begin entering into the realm of “ascended wealth” (to which you had prior spoke of), being that until that point they had possessed nothing of transferable, exchangeable value for which to procure that ascension and for which they are still in need of realizing a gain in order to do so.

Weston White
05-23-2012, 06:01 AM
Weston, it is easy to see why the following people got whacked.

1. They claimed their wages as compensation for services on their 1040.

2. They then attempted to claim a deduction of compensation for labor from their claim of compensation for services.

Remember why we file a 4852. We do not include compensation for labor in compensation for services in the first place.

You can't claim it as one thing and then try to deduct it as another.

Oh yes, absolutely. Additionally, it is (that is I find it to be), very telling that SCOTUS will not pickup the ball on this or similarly related matters.

Exiled_LFOD
05-23-2012, 07:03 AM
Dear Employer,

It has come to my attention that I am getting fucked over. Last year the company testified that I earned income in the form of a W-2. Since science has proven it takes energy in order to perform work and energy is not created out of thin air, the company is a lying sack of shit omitting any costs associated with producing or converting energy in order to perform work when making income assertions. I have decided to rectify the matter this year.

Labor contracts have value. Presently all work performed is paid at a future date. Since I am a creditor loaning the company value until it is paid I have decided to stipulate new billing terms. In the future all work performed shall be due and payable upon delivery. I have attached a schedule of fees for late payments and the rate of interest unpaid work that has been performed shall accrue.

Since I anticipate I will be receiving a nice return on labor loans, I am excited that I might actually realize a gain this year.

Sincerely,
Employee

Sonny Tufts
05-23-2012, 11:52 AM
Weston, it is easy to see why the following people got whacked.

1. They claimed their wages as compensation for services on their 1040.

2. They then attempted to claim a deduction of compensation for labor from their claim of compensation for services.

That's not quite accurate. In the Casper, Buras, Angstadt, Talmage, and Ledford cases, the taxpayer either never filed a return or never reported the amounts received.

Wheeljack
05-23-2012, 05:43 PM
That's not quite accurate. In the Casper, Buras, Angstadt, Talmage, and Ledford cases, the taxpayer either never filed a return or never reported the amounts received.


But under examination they admitted to receiving wages and claimed the wages are not income line.

Weston White
05-24-2012, 04:42 AM
But under examination they admitted to receiving wages and claimed the wages are not income line.

Yes, and that would be in clear cut violation of 26 USC Sec. 3502. See at: http://www.law.cornell.edu/uscode/text/26/3502

That being stated, the employee is saved from IRS W-4 entrapment via: 26 USC Sects. 3503, 6401(d), 6402(a),(l), 31(a)(1), et seq.

Sonny Tufts
05-24-2012, 12:08 PM
Yes, and that would be in clear cut violation of 26 USC Sec. 3502. See at: http://www.law.cornell.edu/uscode/text/26/3502


Horsefeathers, Mr. White; once again, you have absolutely no understanding of what the Code says. 3502 simply says that Social Security and Railroad Retirement taxes aren't deductible in computing taxable income and that neither the employer nor the employee can deduct income tax withheld under Chapter 24 in computing taxable income. There is no "violation", and the statute has nothing whatsoever to do with what's includable in gross income.

Weston White
05-24-2012, 12:14 PM
Horsefeathers, Mr. White; once again, you have absolutely no understanding of what the Code says. 3502 simply says that Social Security and Railroad Retirement taxes aren't deductible in computing taxable income and that neither the employer nor the employee can deduct income tax withheld under Chapter 24 in computing taxable income. There is no "violation", and the statute has nothing whatsoever to do with what's includable in gross income.

Yes, I know perfectly well what it states, I was the one that read it and posted the reference to it. I think it is you that failed to grasp the reference, which is about par with the likes of you.

Even still you are incorrect (supra):

(a) The taxes imposed by section 3101 of chapter 21, and by sections 3201 and 3211 of chapter 22 shall not be allowed as a deduction to the taxpayer in computing taxable income under subtitle A.
(b) The tax deducted and withheld under chapter 24 shall not be allowed as a deduction either to the employer or to the recipient of the income in computing taxable income under subtitle A.

Weston White
05-24-2012, 12:14 PM
Double Post...

Sonny Tufts
05-24-2012, 01:16 PM
Yes, I know perfectly well what it states, I was the one that read it and posted the reference to it.

Indeed you did, but it's obvious you didn't understand it. Wheeljack's reference to someone admitting receiving wages but maintaining that they aren't income is not only not a "violation" of 3502, it has no connection to 3502.

A violation of 3502 would consist of someone to try to deduct the withheld taxes from gross income (which, by the way, wouldn't necessarily eliminate his tax liability). Wheeljack is talking about someone who says what he received isn't included in gross income. Once you say that, there's no need to consider your deductions because your gross income is zero.

Weston White
05-24-2012, 10:10 PM
Indeed you did, but it's obvious you didn't understand it. Wheeljack's reference to someone admitting receiving wages but maintaining that they aren't income is not only not a "violation" of 3502, it has no connection to 3502.

A violation of 3502 would consist of someone to try to deduct the withheld taxes from gross income (which, by the way, wouldn't necessarily eliminate his tax liability). Wheeljack is talking about someone who says what he received isn't included in gross income. Once you say that, there's no need to consider your deductions because your gross income is zero.

No, if you recall, Wheeljack had prior to stated the following (regarding all those case quotations):

“They then attempted to claim a deduction of compensation for labor from their claim of compensation for services.”

“You can't claim it as one thing and then try to deduct it as another.”

Which does have direct bearing on the statutory context of the “nondeductibility of taxes in computing taxable income”. Call it whatever you want, give it whatever name or label your heart desires, but that statute makes it clear that you cannot do that for the purposes of nullifying the equation respective to gross income in determination of its taxable income.

Sonny Tufts
05-25-2012, 08:07 AM
Call it whatever you want, give it whatever name or label your heart desires, but that statute makes it clear that you cannot do that for the purposes of nullifying the equation respective to gross income in determination of its taxable income.

Mr. White, you need to lean the difference between deducting compensation and deducting the tax on the compensation. When you deduct the compensation you reduce gross income to zero (assuming you have no other income). This is what some of the people in the cited cases were trying to do. 3502 does not address this in any way, shape, or form.

3502 deals with deducting taxes, not deducting compensation. Unlike the situation in which you deduct compensation, when you deduct the tax on the compensation you do not eliminate gross or taxable income because the tax rate isn't 100%. If an employee makes $100,000 on which his employer withholds 7.65% in FICA and Medicare taxes and 25% in income tax, he would still have $67,350 in gross income even if he could deduct the withheld taxes. This is not what the tax protesters were trying to do. 3502 is therefore irrelevant to the discussion.

Weston White
05-25-2012, 10:38 AM
Mr. White, you need to lean the difference between deducting compensation and deducting the tax on the compensation. When you deduct the compensation you reduce gross income to zero (assuming you have no other income). This is what some of the people in the cited cases were trying to do. 3502 does not address this in any way, shape, or form.

3502 deals with deducting taxes, not deducting compensation. Unlike the situation in which you deduct compensation, when you deduct the tax on the compensation you do not eliminate gross or taxable income because the tax rate isn't 100%. If an employee makes $100,000 on which his employer withholds 7.65% in FICA and Medicare taxes and 25% in income tax, he would still have $67,350 in gross income even if he could deduct the withheld taxes. This is not what the tax protesters were trying to do. 3502 is therefore irrelevant to the discussion.

Look, I am not going to debate this matter with you, you are beyond silliness now:

1. Such taxes in the context of 26 USC Sect. 3502 are the inevitable result of receiving “compensation”.

2. It clearly goes without saying that if you deduct your “compensation” you also deduct your taxes upon that “compensation”, just the same as if you have no “compensation”, then neither will you incur any respective taxes; which is in fact the resulting effect when you attempt to apply your laboring, pay, related costs, or whatever else in an effort to reduce your taxes (the actual percentage of this feat is of little relevance).

3. 26 USC Sect. 3502 additionally considers Chapter 24 withholdings, so it also pertains to other taxes being withheld besides SSI and FICA, ergo “wages”, a la 'gross income'.

4. E.g., “Olson’s attempt to escape tax by deducting his wages as ‘cost of labor’ .”; “Petitioner submitted to the Internal Revenue Service documents purporting to be 1995 and 1996 Federal income tax returns. The documents reported petitioner’s compensation earned in each year and then deducted the equivalent amount as ‘Property (money) exchanged for property (labor not subject to tax).””; and “In effect, Ms. Sumter attempts to claim that the deduction (her total salary) was a necessary expense for the production of that same salary.”

And as to your example, isn’t it 28% on the excess for that large sum, (but really it is 31%, although has been reduced by way of 26 USC Sec. 1(i)(2))?

Weston White
05-26-2012, 01:07 AM
For everybody (that is all RPF members) keeping up on this thread, please be sure to cast you votes in the following two related polls (thank you):

http://www.ronpaulforums.com/showthread.php?377770-16th-amendment

http://www.ronpaulforums.com/showthread.php?378349-Does-Title-26-(i.e.-IRC)-need-to-be-amended-to-support-status-quo-methodology

Weston White
06-02-2012, 03:16 AM
RESOLVED.


The status quo and its Sonny Jim, the logic to their foundations are fundamentally flawed for the following:

1. They correctly argue that the determination of the Pollock case was largely to the object being conjoined with its source, so far that either, as a subject of taxation require such to be laid by the rule of apportionment, as to the former, just as the latter; to which all consideration to the latter (ergo, the source) was subsequently nullified by the XVI Amendment. However, in that very breath they also argue that, the principles found by Pollock applied only to the investment of property, be it by rents, realty, stock, etc., and not whatsoever to laboring, livelihood, recompense, subsistence, or the right to live, itself.

2. Incorrectly, they argue that the federal government has always possessed the power to indirectly tax at the source of one’s laboring, livelihood, recompense, or subsistence without apportionment, and hence such powers of taxation withstand the XVI Amendment -but that the federal government had conveniently just never opted to do so, that is at least not until around the 1940’s and then on.

3. Analytically, they fail to grasp the construct that it does not get anymore “direct” than to take directly from one’s own property, capital, or stock -viz., personalty; that utterly, it would be political suicide to perpetually inhibit or delimit the productiveness, self-sufficiency, or sustainability of the American family unit; that historically it had been considered improper (such was so copiously noted within Pollock’ dicta, as well as through legislative avoidance prior to the 1940’s, which is right around the time when progressives, including both the Socialist Party of America (SP/SPA) and Communist Party USA (CPUSA) had well-enrooted themselves in American politics -see: 50 USC Sect. 841, et seq.) to take from the source, e.g., the American families subsistence, capital, or ability; that such a means of taxation is at its core a hindrance against private contract rights; that they deny what national income taxation is truly, actually, effectually all about.

4. Logically, by way of the Pollock case, it was deduced in principal that a tax upon an object, firstly having emanated from its source that itself would have demanded apportionment (if so taxed), would as well require apportionment, for the object and its source would be coalesced; that is until the object has realized a “severing” by following its own inherited distinctions.

5. In consequence, both the U.S. Department of the Treasury and its bureau the Internal Revenue Service (IRS), attest that their core power of national ‘income taxation’ derives from the XVI Amendment.

6. The auspices of the XVI Amendment take into account only the context of the findings on the pleadings of Pollock; to wit, nothing newly devised, as a taxing scheme, was intended to come within the objectives or parameters of the Internal Revenue Code (IRC).

7. Quintessentially, ‘indirect taxes’ are the antithesis of ‘direct taxes’.

8. Indirect taxation pertains to taxes levied on the beneficial receipt of tangible (i.e., convertible, exchangeable, or transferable), inherently valuable property, e.g., items, objects, realty, things, etc.; including taxes levied upon the privileges and benefits of participation, permission, profession, purchase, engagement, arrangement, transfer, business, trade, entrepreneurship, profit, gain, etc.

9. Direct taxation pertains to ‘taxation’ in general, whereas its imposition is accorded through assessment -that is to mean an official valuation, determination, or charge. While, indirect taxes do no necessitate such stringent requirements.

10. The crisply timeless distinction is that a direct tax is one in which its assessment invariably falls upon its subject; while indirect taxes are determinable by its subjects to be paid either at the subject’s own expense or through transference onto a third-party by respectively increasing costs, charges, fees, etc., and in either case, including other similar instances or arrangements, may ultimately be willfully avoided by all parties involved (e.g., by selective non-participation).

11. Thereby, in the course of indirect taxation the subject is always permitted the opportunity to recover the costs associated with the tax, while in the course of direction taxation the subject is always left to sustain an unrecoverable loss.


SEQUITUR. Even when adhering to the methodologies espoused by the status quo and its Sonny Jim, the federal income tax still invalidates itself from constitutionality for (1) it is a perpetual tax that is levied in a manner that can only be construed as a direct tax being so assessed upon its source, while without any emergent presence being manifest, and (2) it attributes an outright abuse of the national powers of taxation, being neither for any valid causation of (i) national debt, (ii) national defense, or (iii) national welfare, while levying trillions, upon trillions, unyieldingly from the populace, and still yet it encourages the federal government to rely upon borrowing trillions more from foreign nations who certainly will during a later date demand that certain actions be taken, state secrets be released, and technologies surrendered, to which ultimately, will serve only to undermine the core of American fundaments; therefore, placing the United States of America, as whole, in a very precarious situation, as we are left only to capitulate to the demands so made by the many foreign nations we have become permanently indebted to.

Yet in reality such a method of federal income taxation, may only be established as being legitimately (constitutionally) proper when taxed through a method of direct taxation, as by caste, laboring, livelihood, recompense, subsistence, or otherwise the right to live, so by the empirical berthing of capitations, polls, and personal taxation.

Weston White
06-03-2012, 01:21 AM
At this point it is important to note that the (federal) ‘income tax’ is considered to be a ‘progressive tax’ (notice the use of the term “progressive”) because the rates of the tax increase in conjunction with the growth of its bracketed or baseline figures; however, the aspects of what attributes to the necessity for this process are conveniently omitted from this contrived little equation. Hence, its purpose-at-large is to decouple the resulting inflationary damage being caused, relentlessly so, by the Federal Reserve System’s credit-into-debt rationed borrow-to-lend by way of our nonconvertible fiat currency (that is to mean that so long as the good times are rolling the “rationing” is set to monetize mode -i.e., money and credit remain in abundance for all, but devaluing the currency in the process, subsequently causing the costs of goods, rates, and services to steadily rise (with recompense for working left trailing behind in disproportion), so much, until inevitably those good times begin heading South that the “rationing” switches into demonetize mode -i.e., money and credit now exist only for the privileged few, effecting a total monetary recoil), i.e., Dollar devaluation by way of amassed-monetization. Ultimately, the income tax manufactures a “locked-in” borrow-to-buy dependant society; meanwhile, self-realization becomes but a distant dream.


Now, to add an additional aspect for consideration, so as to point out the utter lunacy in all of this, historically (as provided below), Congress has greatly fluctuated the tax rates, through bracketed amounts varying between the greater sum of $10,000 to $250,000 and above from 1913 to present: 1%, 2%, 3%, 5%, 6%, 7%, 10%, 11%, 12%, 14%, 15%, 16%, 17%, 18%, 19%, 21%, 22%, 23%, 24%, 25%, 26%, 27%, 28%, 31%, 32%, 33%, 34%, 35%, 36%, 37%, 38%, 39%, 39.6%, 41%, 42%, 43%, 44%, 45%, 49%, 50%, 51%, 53%, 54%, 55%, 56%, 58%, 59%, 60%, 62%, 64%, 66%, 68%, 70%, 72%, 75%, 76%, 78%, 80%, 81%, 85%, 88%, 89%, 90%, 91%, 92%, and 94%.
* Data compiled from Wikipedia (https://en.wikipedia.org/wiki/Income_tax_in_the_United_States).

Thus, to emphasize this point, Congress could in effect levy income taxes at whatever percentage rates they desired, whenever they desired, for as long as they desired, simply by implementing their crafty scale from 1% all the way to 100%, and in actuality they could even exceed those if so desired; for example, say they called for a tax rate of 125%, what would be there to stop them from doing so (aside, from the very real consequences that the higher the rate is set, the less motivation or reward there is to attempt earning within whatever determined sums)?

To better depict this notion, say that during the first quarter of each tax period the rate was set at the above mentioned 125% and then reduced to 20% throughout the remaining three quarters, while lending only a special caveat during that first quarter, which would be, for example: during the first quarter of each tax period everything earned (be it by overtime or by holding additional jobs) beyond an individual’s first full 40-hour workweek is exempt from taxation under this proposed system, though such excess could be voluntarily contributed by the individual to go towards paying their remaining 25% tax obligation to be due by the end of that current tax period.

So, say that you earn $8,000 throughout that first quarter from your fulltime job to cover your own national “fair share” tax obligations (being a patriotic American and all) and another $4,000 in excess to cover your own subsistence during this strenuous period of time in overtime pay and additional work from a secondary job that you’re holding.

So now, during the remaining three quarters you still owe another $2,000 (on that remaining portion of 25% from the above $8,000) in taxes in addition to your now reduced 20% tax rate on all earning still yet to be received throughout the remaining year, therefore, you better get to work my patriotic friend, because you have a lot of taxes still to be paid!

In closing, I hope that the point I was attempting to make has been well taken.

Sonny Tufts
06-04-2012, 08:30 AM
However, in that very breath they also argue that, the principles found by Pollock applied only to the investment of property, be it by rents, realty, stock, etc., and not whatsoever to laboring, livelihood, recompense, subsistence, or the right to live, itself.

That's because that's what the Pollock court said.


We have considered the act only in respect of the tax on income derived from real estate, and from invested personal property, and have not commented on so much of it as bears on gains or profits from business, privileges, or employments, in view of the instances in which taxation on business, privileges, or employments has assumed the guise of an excise tax and been sustained as such.


Incorrectly, they argue that the federal government has always possessed the power to indirectly tax at the source of one’s laboring, livelihood, recompense, or subsistence without apportionment, and hence such powers of taxation withstand the XVI Amendment -but that the federal government had conveniently just never opted to do so, that is at least not until around the 1940’s and then on.

False. Pay for work was taxable under the first federal income tax law passed in 1861 and under all its amendments, as well as under the 1913 act. In fact, the latter even had a withholding provision.


Direct taxation pertains to ‘taxation’ in general, whereas its imposition is accorded through assessment -that is to mean an official valuation, determination, or charge. While, indirect taxes do no necessitate such stringent requirements.

Nonsense. A capitation is a direct tax that requires no valuation. Moreover, indirect taxes often involve valuation issues.


The crisply timeless distinction is that a direct tax is one in which its assessment invariably falls upon its subject; while indirect taxes are determinable by its subjects to be paid either at the subject’s own expense or through transference onto a third-party by respectively increasing costs, charges, fees, etc., and in either case, including other similar instances or arrangements, may ultimately be willfully avoided by all parties involved (e.g., by selective non-participation).

Crisp it may be, but this argument has been specifically rejected by the Supreme Court in the Knowlton and Nicol decisions.


for example, say they called for a tax rate of 125%, what would be there to stop them from doing so (aside, from the very real consequences that the higher the rate is set, the less motivation or reward there is to attempt earning within whatever determined sums)?

This was answered by Chief Justice John Marshall almost 200 years ago:


is admitted that the power of taxing the people and their property is essential to the very existence of Government, and may be legitimately exercised on the objects to which it is applicable, to the utmost extent to which the Government may choose to carry it. The only security against the abuse of this power is found in the structure of the Government itself. In imposing a tax, the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation. McCullouch v. Maryland, 17 U.S. 316 (1819)

Wheeljack
06-04-2012, 07:11 PM
False. Pay for work was taxable under the first federal income tax law passed in 1861 and under all its amendments, as well as under the 1913 act. In fact, the latter even had a withholding provision.






On April 26, 1913, Cordell (Judge) Hull, a Representative from Tennessee who had helped draft the legislation, explained the "new" income tax law adopted by Congress following the adoption of the Sixteenth Amendment:

"In any event, the proposed tax is measured by net profits or gains, and is not imposed upon gross income nor capital nor other property. If a citizen has not been successful in his efforts to accumulate profits he is not required to pay the tax, but if he has prospered he is required to contribute to his Government, not the scriptural tithe, but a small percentage of his net profits."

Mr. Hull went on to state:

"The proposed law should be construed as similar laws have been construed by the courts with respect to the application of the tax [Corporation Excise Tax Act of 1909], and that is that the income in question shall be the measure of the tax and not the specific fund out of which the tax is necessarily payable; the bill takes as the measure of the tax the net income of the proceeding year. Paragraph B defines the net income of a taxable individual or person. Income as thus defined does not embrace capital or principle, but only such gains or profits as may be realized from rent, interest, salaries, trade, commerce, or sales of any kind of property, and so forth, or profits or gains derived from any other source."

Source for Hull's quotes: Congressional Record, Volume 50: Part 1, pp. 505-506.

Sonny,

Is your physical and mental being your ultimate form of capital? Yes or No.

Weston White
06-04-2012, 07:45 PM
Sonny, in case you have failed to noticed (obviously so), you have already long past lost this debate, you are finished here, washed out; you're self-destructive. Pointedly, your newest anonymous attempts at a cover-up and reply are fronted and egregious.

And no that is not what Knowlton intended to state (Knowlton v. Moore, 178 U.S. 41, 47 (1900)): “… The definition is as follows: “Direct taxes bear immediately upon persons, upon the possession and enjoyments of rights; indirect taxes are levied upon the happening of an event or an exchange.”” And moreover in Tyler v. United States, 281 U.S. 497, 502 (1930): “.... A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax...”

Thereby, it is only to be concluded that if the result of a tax is to bear immediately upon a person, or the enjoyments of their inalienable rights to exist as such an individual, or their resulting personalty or corpus as their capital, principal, or stock in holding, even while the tax might be championed to be upon an exchange or an event, the tax must concede to the former method and reveal its true nature as a direct tax (for such being DIRECTLY upon its subject or object without first the instance of a “severing”), and thus, it is to require apportionment. As such is historically the case, being an instance of capitation taxes or personal taxes.

And again, no that is an entirely incorrect assertion of Pollock, pay for work, had always intended to include only professional and vocational employments (e.g., SB/SE), occupations in business and excisable activities, public service within the national government and its instruments of holdings, structured business affairs and arrangements, employments of general entrepreneurialism, etc. The federal income tax had never, ever, never touched the common day laborer until after the progressive’s 1940’ withholding schemed presented itself. America is a Creator granted republic and not a communist’s pipedream turned reality.

Simply, you are reading that paragraph completely out of context, as there are easily a dozen other statements, and from as many sources, within Pollock that completely counter such illusionist dreams of yours (and the status quo that owns you), to which you are attempting to perpetuate as a false-reality, and desperately so; for contriving is the chosen way of the progressive and its status quo mechanisms.

As to your citing Nicol v. Ames, in a prior debate, I had destroyed your weakly plotted reliance there as well, see why you are wrong on that reference at (Sonny Jim, go ahead and refresh your infinitesimal, yet happily fluoridated, memory cells): http://www.iwarrior.defendindependence.us/viewtopic.php?f=101&t=255&p=1162#p1162


1. The proper subject of ‘income taxation’ is neither upon the right to subsist nor earn a livelihood, but only upon the benefits of newly achieved wealth.

2. If subsistence or livelihoods were in fact such wealth acquired, then the act of merely “earning a living” (i.e., working from one week onto the next as an effort to cover the accumulating costs of personal expense and necessity throughout the many individual weeks of subsequent years, until retirement has been achieved) would truly serve to be inconsequential.

3. And hence, the now vastly present problem, the national government no longer serves their constituents, but only elitist cabals, rather only their covert interests and agendas, including those of the Council on Foreign Relations (CFR), Bilderberger, United Nations (UN), Israel, China, et al.

4. If the prior federal taxing statutes in fact already possessed a withholding provision in the context that you are attempting to allude, then there would have been no need or call for one in the 1940’. So to that point you are completely and grossly arrogant.



Nonsense. A capitation is a direct tax that requires no valuation. Moreover, indirect taxes often involve valuation issues.

This is evidence that you have not a single clue, whatsoever, of what you are even talking about. While you may be knowledgeable in the area of completing IRS tax documents and referencing United States Codes (USC) and its regulations (yet utterly failing (intentionally) in the area of comprehending common law), you hold zero understanding as to the historical aspects of the means, modes, and methods of taxes and taxation. As you have just show by your above reply.

Weston White
06-04-2012, 11:13 PM
On April 26, 1913, Cordell (Judge) Hull, a Representative from Tennessee who had helped draft the legislation, explained the "new" income tax law adopted by Congress following the adoption of the Sixteenth Amendment:

"In any event, the proposed tax is measured by net profits or gains, and is not imposed upon gross income nor capital nor other property. If a citizen has not been successful in his efforts to accumulate profits he is not required to pay the tax, but if he has prospered he is required to contribute to his Government, not the scriptural tithe, but a small percentage of his net profits."

Mr. Hull went on to state:

"The proposed law should be construed as similar laws have been construed by the courts with respect to the application of the tax [Corporation Excise Tax Act of 1909], and that is that the income in question shall be the measure of the tax and not the specific fund out of which the tax is necessarily payable; the bill takes as the measure of the tax the net income of the proceeding year. Paragraph B defines the net income of a taxable individual or person. Income as thus defined does not embrace capital or principle, but only such gains or profits as may be realized from rent, interest, salaries, trade, commerce, or sales of any kind of property, and so forth, or profits or gains derived from any other source."

Source for Hull's quotes: Congressional Record, Volume 50: Part 1, pp. 505-506.


Sonny,

Is your physical and mental being your ultimate form of capital? Yes or No.


Further supporting Wheeljack's notion is depicted at: http://www.taxhistory.com/cor/disdirect.html

Summarizing the greatness of the included subject-matter: “Congress has the power and authority to take 100% of income, however they have limited themselves to "taxable income". So what is the effect on each "person"? In the case of corporations (artificial persons) there is no adverse effect, in that they retain their capital and their ability to continue to operate, as the tax is levied only upon their "profits". In the case of "business, trades and professions (independent contractors), there is no adverse effect upon the business entity (net-income), so long as the owner has sufficient capital to support themselves. What about the laborer, the "employee’ under the master-servant relationship, common law? A tax of 100% of taxable income would be devastating. Does the 16th Amendment allow Congress to take 100% of the "employee’s" (labor for hire, common law) wages, while at the same time prohibit them from taking anything more than the "net-income" or profits acquired by other "persons"?”

See also: http://www.taxhistory.com/congrecord.html

Sonny Tufts
06-05-2012, 07:54 AM
Sonny,

Is your physical and mental being your ultimate form of capital? Yes or No.

In a way, it is. But that's not what's taxed. What is taxed is the income your capital generates in the form of compensation for work. Or did you miss the part where Hull refers to "salaries"?

Sonny Tufts
06-05-2012, 08:21 AM
And no that is not what Knowlton intended to state

Mr. White, that is precisely what Knowlton stated. You, the executor in Knowlton, and the taxpayer in Nicol all argued that a direct tax is one that can't be shifted to someone else. This argument was rejected:


But it is asserted that it was decided in the income tax cases that, in order to determine whether a tax be direct within the meaning of the Constitution, it must be ascertained whether the one upon whom by law the burden of paying it is first cast can thereafter shift it to another person. If he cannot, the tax would then be direct in the constitutional sense, and, hence, however obvious in other respects it might be a duty, impost, or excise, it cannot be levied by the rule of uniformity, and must be apportioned. From this assumed premise it is argued that death duties cannot be shifted from the one on whom they are first cast by law, and therefore they are direct taxes requiring apportionment.

The fallacy is in the premise. It is true that in the income tax cases the theory of certain economists by which direct and indirect taxes are classified with reference to the ability to shift the same was adverted to. But this disputable theory was not the basis of the conclusion of the court. The constitutional meaning of the word direct was the matter decided. Considering that the constitutional rule of apportionment had its origin in the purpose to prevent taxes on persons solely because of their general ownership of property from being levied by any other rule than that of apportionment, two things were decided by the court: First, that no sound distinction existed between a tax levied on a person solely because of his general ownership of real property, and the same tax imposed solely because of his general ownership of personal property. Secondly, that the tax on the income derived from such property, real or personal, was the legal equivalent of a direct tax on the property from which said income was derived, and hence must be apportioned. These conclusions, however, lend no support to the contention that it was decided that duties, imposts and excises which are not the essential equivalent of a tax on property generally, real or personal, solely because of its ownership, must be converted into direct taxes, because it is conceived that it would be demonstrated by a close analysis that they could not be shifted from the person upon whom they first fall. The proposition now relied upon was considered and refuted in Nicol v. Ames, 173 U.S. 509 , 43 L. ed. 786, 19 Sup. Ct. Rep. 522, where the court said ( p. 515, L. ed. p. 791, Sup. Ct. Rep. p. 525):
'The commands of the Constitution in this, as in all other respects, must be obeyed; direct taxes must be apportioned, while indirect taxes must be uniform throughout the United States. But while yielding implicit obedience to these constitutional requirements, it is no part of the duty of this court to lessen, impede, or obstruct the exercise of the taxing power by merely abstruse and subtle distinctions as to the particular nature of a specified tax, where such distinction rests more upon the differing theories of political economists than upon the practical nature ofth e tax itself.

'In deciding upon the validity of a tax with reference to these requirements, no microscopic examination as to the purely economical or theoretical nature of the tax should be indulged in for the purpose of placing it in a category which would invalidate the tax. As a mere abstract, scientific, or economical problem, a particular tax might possibly be regarded as a direct tax, when as a practical matter pertaining to the actual operation of the tax it might quite plainly appear to be indirect. Under such circumstances, and while varying and disputable theories might be indulged as to the real nature of the tax, a court would not be justified, for the purpose of invalidating the tax, in placing it in a class different from that to which its practical results would consign it. Taxation is eminently practical, and is, in fact, brought to every man's door, and for the purpose of deciding upon its validity a tax should be regarded in its actual, practical results, rather than with reference to those theoretical or abstract ideas whose correctness is the subject of dispute and contradiction among those who are experts in the science of political economy.'"


indirect taxes are levied upon the happening of an event or an exchange.”” And moreover in Tyler v. United States, 281 U.S. 497, 502 (1930): “.... A tax laid upon the happening of an event, as distinguished from its tangible fruits, is an indirect tax...”

Indeed. And the event that triggers the income tax is the realization of income. The fact remains is that there is one and only one case in the history of the country that has held that a federal tax was invalid as an unapportioned direct tax -- Pollock. And that case (a) specifically limited itself to the issue of a tax on investment income, and (b) had its reasoning overruled by the 16th Amendment. Every other court has consistently held that a tax on pay for work needn't be apportioned, rejecting idiotic arguments such as the ones you throw against the wall in the vain hope that something will stick.


pay for work, had always intended to include only professional and vocational employments (e.g., SB/SE), occupations in business and excisable activities, public service within the national government and its instruments of holdings, structured business affairs and arrangements, employments of general entrepreneurialism, etc. The federal income tax had never, ever, never touched the common day laborer until after the progressive’s 1940’ withholding schemed presented itself.

Unfortunately for you, Mr. White, the statutes have never distinguished between the income earned by a common day laborer and that earned by others.


there are easily a dozen other statements, and from as many sources, within Pollock that completely counter such illusionist dreams of yours (and the status quo that owns you), to which you are attempting to perpetuate as a false-reality, and desperately so; for contriving is the chosen way of the progressive and its status quo mechanisms.

Aside from your continual mangling of the English language, you fail to recognize the undeniable fact that no court has ever held that a tax on pay for work has to be apportioned; tio the contrary, every single time this moronic argument has been made, the idiot making it has lost and has frequently been fined for wasting the court's time with such a frivolous claim.



If the prior federal taxing statutes in fact already possessed a withholding provision in the context that you are attempting to allude, then there would have been no need or call for one in the 1940’. So to that point you are completely and grossly arrogant.

Mr. White, you continue to display your abysmal ignorance of history. The withholding feature was added in the 1913 Act, but it was repealed a few years later.

Wheeljack
06-05-2012, 12:18 PM
In a way, it is. But that's not what's taxed. What is taxed is the income your capital generates in the form of compensation for work. Or did you miss the part where Hull refers to "salaries"?

What is taxed is the income your capital generates in the form of compensation for work.
Exactly.

As I said a laborer makes an investment in a business. If that investment is used to push a broom for 8 hours has that investment generated any income for that business.
If that business sells airplanes, then his investment has not generated any income whatsoever.
If that business is a cleaning service, then his investment has generated income, however is he being paid from the income generated. If he receives an hourly wage, then he is being paid from the capital of the business and not from the income generated. The employer is deducting the payment of wages as a capital expense.

If that investment is used to convince people to buy a product or service, then it has generated income. If the employee is paid a commission, based on a percentage of the sales generated, then the employee has received income generated from the investment of his capital.


A salary is what is paid to a principle of a business. A principle is one who capitalizes a business. A principle can not be paid from his own capital. If a principle is receiving income from a business then he is reaping profits.

Did you miss the part where Mr. Hull did not refer to "wages". I do think that he knew the difference between salaries and wages.

Sonny, answer this question.

If section 61 includes all wages, then why is it that the bureaucrats can't openly print that? And we all know that if they could, they would.

There is only one answer. Because it would be a violation of the Law.

Sonny Tufts
06-05-2012, 03:29 PM
If section 61 includes all wages, then why is it that the bureaucrats can't openly print that? And we all know that if they could, they would.

There is only one answer. Because it would be a violation of the Law.

There is no need to amend Section 61 to have it apply to "wages" because it already does. The section uses the term "Compensation for services", which has consistently been held by the courts, without exception, to include wages, salaries, and every other kind of pay-for-work.

There is no violation of the law, unless you think there's something in the Constitution that prohibits an unapportioned tax on compensation received for working for someone else. If you do, please cite the specific provision that says so or a case that says so.

Wheeljack
06-05-2012, 08:20 PM
There is no need to amend Section 61 to have it apply to "wages" because it already does. The section uses the term "Compensation for services", which has consistently been held by the courts, without exception, to include wages, salaries, and every other kind of pay-for-work.

There is no violation of the law, unless you think there's something in the Constitution that prohibits an unapportioned tax on compensation received for working for someone else. If you do, please cite the specific provision that says so or a case that says so.

As I pointed out in my previous post, if you receive compensation for services in the form of a wage then Section 61 does apply to your income. There is not one court case that raised the question that employment is or is not a service, therefore the courts have never held that Section 61 applies to compensation for employment received in the form of a wage.

Now the IRS knows that employment is not a service, but that under certain conditions a service can qualify as employment.
This is why Form SS-8 exists.

The specific provision is the 16th Amendment which Mr. Hull correctly points to as having no application to the return of capital or principle.

.

Weston White
06-06-2012, 01:51 AM
In a way, it is. But that's not what's taxed. What is taxed is the income your capital generates in the form of compensation for work. Or did you miss the part where Hull refers to "salaries"?

1. No your logic exists in pure fallacy, the “capital” (viz., the source) must first exist in a tangible form; the breadth of the income tax cannot implant itself under any other mode than a capitation, poll, or personal tax, to which each mode still demands apportionment, a legitimate intent for the imposition of the tax, and exigent circumstance.

2. The breadth of the income tax is not in consideration of human capital; it is in consideration of physical capital that possesses the capacity of being inherently valued through transference, exchange, or conversion.

3. Earning a living by way of laboring is not by any means taxable as a gain or profit, but is simply a conversion, being an output of human exertion in exchange for a respectively equal value in physical capital (be it in money, items, or objects); to which the income tax is then dependent upon that newly acquired physical capital in realizing a bona fide gain or profit, thusly, itself becoming subsequently taxable.

4. The income tax is not a tax upon a mere conversion of capital; it is a tax upon a realized gain or profit arising (deriving) through a systematic conversion.

5. The income tax is not a tax upon all income received (gross income); it is a tax upon income deriving form a source (net income), i.e., constitutional income.

6. Again, wages and salaries are in reference to the various methods of professional business and the like, and not to laboring or toiling in and of itself. The federal income tax is only upon constitutional income, such had been explicitly stated in public bills; such had been explicitly stated within federal tax statutes; as just the same that such had been explicitly and intentionally stated to indicate that very breadth and intent as by its respective legislative history.

7. The Legislature cannot justly conceal what a given mode of taxation actually is beneath the exterior that is being marketed (propagandized) upon the affected populace, simply by labeling it something other than what it logically is; hence, without exception, it is what it is, period (e.g., until so severed, a shadow is of its source).

Weston White
06-06-2012, 01:52 AM
Mr. White, that is precisely what Knowlton stated. You, the executor in Knowlton, and the taxpayer in Nicol all argued that a direct tax is one that can't be shifted to someone else. This argument was rejected:

Wow, this again, really? Sonny Jim, I had already destroyed your arguments on this point, which you are yet again attempting to raise, your prior reply to that was just as weak then as it is at present (and for that matter succession, gift, and similar taxes cannot be reasonably conceived as being anything remotely comparable to a mode of ‘direct taxation’, and neither is such a method of taxation to be assessed directly (personally) upon the executor; ergo, the case is entirely inapplicable to the present debate), you may review prior comments and retorts at:

1. http://www.ronpaulforums.com/showthread.php?360238-There-is-no-federal-or-state-income-tax-on-working-wages-by-law-in-this-country.&p=4418498&viewfull=1#post4418498

2. http://www.ronpaulforums.com/showthread.php?360238-There-is-no-federal-or-state-income-tax-on-working-wages-by-law-in-this-country.&p=4426439&viewfull=1#post4426439



Indeed. And the event that triggers the income tax is the realization of income. The fact remains is that there is one and only one case in the history of the country that has held that a federal tax was invalid as an unapportioned direct tax -- Pollock. And that case (a) specifically limited itself to the issue of a tax on investment income, and (b) had its reasoning overruled by the 16th Amendment. Every other court has consistently held that a tax on pay for work needn't be apportioned, rejecting idiotic arguments such as the ones you throw against the wall in the vain hope that something will stick.

And most certainly, such is in fact the case so far as determining ‘taxable income’ when qualifying as a bona fide gain or profit through the process of conversion, such by that which is tangible; and not so, when existent as a source unto itself, i.e., capital, corpus, or personalty.

Ergo, the core of consideration providing the XVI Amendment was in reflection to the already existent breadth of ‘incomes’, having been so beset in consequence to the ‘1909 Corporation Excise Tax Act’, i.e., constitutional income.

You are exhibiting emotional appeals, while relying solely upon lower courts that are themselves malfunctioning in outrageous arrogance to SCOTUS precedence, and all the while, discounting literal mountains of contrary and vastly superior evidence. People that debate largely through emotional appeals, do so because they have no true argument to be raised, and moreover they realize they have nothing else consequential to fallback upon and argue for.



Unfortunately for you, Mr. White, the statutes have never distinguished between the income earned by a common day laborer and that earned by others.

Neither are the statutes required to. You appear to have a failing grasp of comprehending contextual logic and analytical deduction. For example, according to your flawed notions, the IRC needs to explicitly exempt all nationality of persons and all nation-states, otherwise through one means of reasoning or another they somehow fall unwittingly subject to the IRC’ definition of ‘person’, and that should space-aliens ever land and visit in America they would to become the taxable subjects of the IRC.

While, correctly, general recompense (pay, remuneration, etc.) for such common day labors is not itself taxable by the IRC, any compensation or whatever other forms of ‘gross income’ they should receive is.



Aside from your continual mangling of the English language, you fail to recognize the undeniable fact that no court has ever held that a tax on pay for work has to be apportioned; tio the contrary, every single time this moronic argument has been made, the idiot making it has lost and has frequently been fined for wasting the court's time with such a frivolous claim.

Oh my, you must be jaundiced. As to the rest of your posted bollock, refer to my above response addressing your emotional appeals.



Mr. White, you continue to display your abysmal ignorance of history. The withholding feature was added in the 1913 Act, but it was repealed a few years later.

My goodness me! Never was withholding (stoppage at the source) or the federal income tax intended to be imposed upon the whole of the population in the manner that it is at present, and since the 1940’. The federal income tax is, as an undeniable fact, being intentionally misapplied so as to perpetuate internationalism, while providing cover for the scheming “police state” agenda of the Federal Reserve System and its elitist-eugenicist-corporatist fat cats.

And to further note on this aspect, even though the population of the United States of America has since 1913 increased only by a multiple of 3.2. Presently, economists mostly agree that the federal government could reasonable function on between $400-$600-billion per year; now if you take the revenue generated by the national income tax back in 1913 (during which was the time that World War I was beginning to take shape), while adjusting for inflation to our present Dollar value and multiply that figure by a factor of about two-dozen, you respectively come up with a sum of 325-billion. Clearly, the national individual income tax (and its coupled, hidden taxes, e.g., SSI, FICA, etc.) is, as a fact, bringing in vastly too large a sum per annum, which is now at a fairly steady $2.3-trillion. The federal government, as a whole, remains dizzily intoxicated, guzzling from their public punch bowl, while the public stands back watching, themselves stupefied and poisoned.

Weston White
06-06-2012, 01:52 AM
There is no need to amend Section 61 to have it apply to "wages" because it already does. The section uses the term "Compensation for services", which has consistently been held by the courts, without exception, to include wages, salaries, and every other kind of pay-for-work.

There is no violation of the law, unless you think there's something in the Constitution that prohibits an unapportioned tax on compensation received for working for someone else. If you do, please cite the specific provision that says so or a case that says so.

Negative, generally speaking, 26 USC, Sect. 61 (et seq.), does not include within its scope “wages” or “salaries”, but only to the ‘incomes’ emanating (i.e., “deriving”) therefrom.

For 26 USC, Sect. 61 to actually include what you’re wrongfully insinuating, it would need to be amended similarly to as proposed at: http://www.ronpaulforums.com/showthread.php?378349-Does-Title-26-(i.e.-IRC)-need-to-be-amended-to-support-status-quo-methodology&p=4451413&viewfull=1#post4451413

Until that has actually been accomplished under our public law, 26 USC, Sect. 61 in no way includes nor intended to include what you, your lower -and in most all instances merely advisory or otherwise inapplicable- court decisions, or the U.S. Department of the Treasury and its IRS have been so wrongfully insinuating.

Other than that one need only to look toward our IX Amendment: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” In other words, it was never intended for the national government to become so intimately involved in the daily affairs and private arrangements of the masses; that is to the effect of controlling (without any yield or reservation) anywhere from 1%-100% of their ability or productivity.

Sonny Tufts
06-08-2012, 12:21 PM
The specific provision is the 16th Amendment which Mr. Hull correctly points to as having no application to the return of capital or principle..

But the authority to levy a tax on pay-for-working-for-someone-else comes from Article I, Section 8, Clause 1. Where do you see that Congress is prohibited from imposing such a tax without apportionment?

Weston White
06-08-2012, 03:08 PM
But the authority to levy a tax on pay-for-working-for-someone-else comes from Article I, Section 8, Clause 1. Where do you see that Congress is prohibited from imposing such a tax without apportionment?

By way of the very definition of capitations, polls, and such other direct taxes, e.g., personal taxation; including but not limited to America's great Charter, the Federalist Papers, the entire legislative history concerning national taxing statutes, early set SCOTUS precedence on the subject of national taxation in its surrounding and intended entirety, that income taxation is merely a scheme devised to benefit the Federal Reserve System, that income taxation is itself entirely unnecessarily when using controlled market rates and fiat currency, and that the modernized crafting of income taxation had remained an utter failure even after William Pitt's (the Younger of Britain) failed 1799-1802 attempt.

Wheeljack
06-09-2012, 01:15 PM
But the authority to levy a tax on pay-for-working-for-someone-else comes from Article I, Section 8, Clause 1. Where do you see that Congress is prohibited from imposing such a tax without apportionment?



The Congress was given two options for imposing direct taxes.
1. On the States directly in Article 1, Section 2, Clause 3. and the bill for each state (apportionment) is dependant on the census. How the states raise the funds is left to their discretion.

2. On the people directly in Article 1, Section 9, Clause 4. and the bill is figured on the census and each person pays the same.


The 16th Amendment did not empower the Congress with the ability to tax the States or the people directly, in a new way. It simply established that a tax on income, derived from a source, is not subject to apportionment through the census because it is not a direct tax on a person or his capital. The Supreme Court said this when it upheld the Amendment.


Look at it this way. The cost of an investment is the return of the capital.

If as an employer, you want me, a laborer, to invest 40 hours of my time, my capital, into building widgets for you.
How do you intend to return my capital? Will you come over to my home and perform 40 hours of service to me? No way!!!

So what did society do? We monetized labor by creating the hourly wage. The hourly wage is the return of a laborer's capital.

And since we all agree that the return of capital is not subject to the federal income tax, then the hourly wage paid to a laborer is not subject to the federal income tax.


.

Weston White
06-09-2012, 08:48 PM
Precisely! In fact, the only way that such a tax could even remotely be construed as being constitutional, is if it followed the maxim noted by Dr. Smith, in that effectively, such a means of taxation would either need to be paid by the employer on behalf of the employee or otherwise the employer would need to increase the employee’s agreed upon (contractually obligated) pay in relation to the sum of tax that is to be assessed upon whatever amount of recompense so received by the employee, and then additionally that sum of provided coverage, would also need to be increased so as to cover the resulting increase in the sum of tax that is to be assessed upon itself, that is until its amount is no longer capable of increasing the sum of tax to be incurred.

However, as to the payment of wages such would prove to be an impossible burden to track for both employers and employees, while the payment of salaries would be much easier though still difficult. Especially, when considering employees that work multiple jobs or receive additional forms of income; for employers would have to keep track of the total sum paid out within a respective tax period and then adjust those sums in consideration and additionally would have to go back and apply the difference between the tax rates to what had previously been paid out using lower tax rates. The employee would then at the close of the year, have to determine the proper allotment of their refund for each of their employers, including themselves, in order to return the excess of refund to its rightful owner (or otherwise determine the amount of their deficiency, properly proportion it and bill the respective employer for the amount outstanding). Either that or employers could otherwise withhold at the prior tax rate for whatever the expected annual sum is to be, however that still result in creating problems for a respective employer, whenever employees do not work throughout the entire year; are sick or use time off; are promoted, demoted or terminated; receive other types of compensation or external income; etc.

In fact is there anything presently in the IRC that precludes employers/businesses from providing this as a viable option for their employees and then themselves passing it off as a necessary expense or loss, so as to decrease their tax liabilities, or otherwise by relationally increasing their service fees, costs, or product prices or whatever, so as to increase their profits?

Sonny Tufts
06-10-2012, 06:22 PM
If as an employer, you want me, a laborer, to invest 40 hours of my time, my capital, into building widgets for you.
How do you intend to return my capital? Will you come over to my home and perform 40 hours of service to me? No way!!!

The employer will pay you cash with which you can hire someone to work 40 hours, assuming the market rate for your services is the same as that for the services you wish to have performed for you.


The hourly wage is the return of a laborer's capital.

No, it is not. It is the amount a laborer receives in exchange for something for which he paid nothing. It is income, not a return of capital.

Moreover, there is no economic distinction between the labor performed by an employee and that performed by an independent contractor. In each case, under your argument, the person is investing his labor; yet in the case of the independent contractor you have admitted that the compensation he earns is subject to the income tax. If a tax on the compensation earned by an employee is a direct tax, then the same analysis applies to the compensation earned by an independent contractor.

In addition, there is no constitutional impediment to Congress' imposing an unapportioned tax on a return of capital. For example, it would be well within Congress' taxing power to impose an excise on the making of loans. Realizing that some loans go bad and aren't repaid, however, such a law could provide that it would be imposed only when the loan is repaid, and that the tax would be measured by the amount of the principal that is repaid.

Sonny Tufts
06-10-2012, 06:31 PM
By way of the very definition of capitations, polls, and such other direct taxes, e.g., personal taxation; including but not limited to America's great Charter, the Federalist Papers, the entire legislative history concerning national taxing statutes, early set SCOTUS precedence [sic] on the subject of national taxation in its surrounding and intended entirety, that income taxation is merely a scheme devised to benefit the Federal Reserve System

What ignorant bilge. First, the income tax is not a capitation or any other kind of direct tax. Indeed, a tax on pay-for-work has NEVER been considered a direct tax by any Supreme Court or other court decision. Second, the income tax came in 52 years before the Federal Reserve, so your notion that it's a scheme to benefit the Fed simply reveals your uninformed paranoia.

Professor8000
06-10-2012, 07:22 PM
What ignorant bilge. First, the income tax is not a capitation or any other kind of direct tax. Indeed, a tax on pay-for-work has NEVER been considered a direct tax by any Supreme Court or other court decision. Second, the income tax came in 52 years before the Federal Reserve, so your notion that it's a scheme to benefit the Fed simply reveals your uninformed paranoia.

The 16th Amendment to the Constitution of the United States of America was (allegedly) ratified on February 3, 1913.
The Federal Reserve Act was enacted December 23, 1913.

Wheeljack
06-10-2012, 07:53 PM
The employer will pay you cash with which you can hire someone to work 40 hours, assuming the market rate for your services is the same as that for the services you wish to have performed for you.

In which case it's not my capital that is being invested. That's why it's called employment because I can not hire someone to take my place.

To do what you suggest is to turn my employer, into my customer, and then makes me, the employer, in which case I would then be selling the result of my employees labor, which would then be the capital invested.





Moreover, there is no economic distinction between the labor performed by an employee and that performed by an independent contractor. In each case, under your argument, the person is investing his labor; yet in the case of the independent contractor you have admitted that the compensation he earns is subject to the income tax. If a tax on the compensation earned by an employee is a direct tax, then the same analysis applies to the compensation earned by an independent contractor.

You are confused, there is an economic distinction between the two.

The laborer is investing his labor because the employer controls how it is utilized. That is the nature of an investment.

The independent contractor, on the otherhand, is selling the result of his labor. It is not an investment because he controls how his own labor is utilized and if he chooses, he can hire someone else to perform the labor.



In addition, there is no constitutional impediment to Congress' imposing an unapportioned tax on a return of capital. For example, it would be well within Congress' taxing power to impose an excise on the making of loans. Realizing that some loans go bad and aren't repaid, however, such a law could provide that it would be imposed only when the loan is repaid, and that the tax would be measured by the amount of the principal that is repaid.

That is your opinion, take it to your Congressional representative and have it passed by their legal eagles if you believe in it.

My opinion on that is that they will come back and tell you that you are blowing smoke.

Wheeljack
06-10-2012, 07:55 PM
The 16th Amendment to the Constitution of the United States of America was (allegedly) ratified on February 3, 1913.
The Federal Reserve Act was enacted December 23, 1913.

Professor8000,

Sonny was referring to the first income tax which was enacted in 1862.

Weston White
06-11-2012, 01:03 AM
The employer will pay you cash with which you can hire someone to work 40 hours, assuming the market rate for your services is the same as that for the services you wish to have performed for you.

Really, that is your response? Should I be so shocked at Sonny’s answer? No, not so much.

At any rate, how will you sustain you and your family in the meantime? Oh, let me conject on that point; each of those American’s (i.e., that 65% of the population) that do not pay any federal income taxes, yet still receive refunds from the IRS will be king enough to give you a helping hand, by tossing some of their WIC, EBT, or whatever other government cheese your way?

Again, you are being completely illogical, while you are fabricating an entirely false association between general day laborers, earning a mere livelihood, and those that are SB/SE.

The point you entirely miss upon (even by your own above example), which is centralizing, is that the 40-hours of pay you had received is nothing more than tangible capital received through another form of personalizing capital, which subsequently converts into the source wherein derives your taxable gains and/or profits when financial prudence has been realized -this process it is truly no different than converting your bank statement, baseball card or coin collection, or whatever else into its cash value equivalent.

Simply, you and your status quo are straining to uphold utterly flawed logic that holds absolutely zero basis, whatsoever, in reality.



No, it is not. It is the amount a laborer receives in exchange for something for which he paid nothing. It is income, not a return of capital.

No, it is not.

1. It is the amount a laborer had received in consideration of their contractual arrangement; the cost to the laborer is their contractual obligation (their right to privately contract without interference), along with the consideration to the time, equipment or tools, energy, exertion, and dedication they had personally expended in the process.

2. The laborer is not themselves acting in a privileged SB/SE capacity, while their employer, as fact, is.

3. It is income in the form of capital, not income in the form of a gain or profit.

4. As such it does not equate to being constitutionally ‘taxable income’, but is rather a conversion of capital, specifically a non-taxable event, from human (or personal) capital into tangible (inherent) capital; to which, may then at a later time, realize its own constitutionally ‘taxable income’ -for which can no longer, due to the XVI Amendment, be alleged to require apportionment.

5. Again, the fallacy of you and your status quo is that structured businesses are permitted to apply their true ‘net income’ in order to reduce their tax liabilities, while individuals are not afforded this benefit.



Moreover, there is no economic distinction between the labor performed by an employee and that performed by an independent contractor. In each case, under your argument, the person is investing his labor; yet in the case of the independent contractor you have admitted that the compensation he earns is subject to the income tax. If a tax on the compensation earned by an employee is a direct tax, then the same analysis applies to the compensation earned by an independent contractor.

No, you are wrong on that point as well. The difference is engaging in a human right to live versus a governmental sanction (i.e., privilege) to profit, e.g., being SB/SE. The day laborer invests in only themselves for recompense, while the contractor invests in their business for profit. Again, structured businesses are lawfully allowed to apply their realized ‘net income’ throughout the year to diminish their income tax liabilities for each tax period, while individuals are not.



In addition, there is no constitutional impediment to Congress' imposing an unapportioned tax on a return of capital. For example, it would be well within Congress' taxing power to impose an excise on the making of loans. Realizing that some loans go bad and aren't repaid, however, such a law could provide that it would be imposed only when the loan is repaid, and that the tax would be measured by the amount of the principal that is repaid.

So far as the individual is concerned, you are yet incorrect again. Capital is a form of personalty and thereby requires apportionment to assess a tax upon it. You cannot hid what the tax is merely by calling it other than what it naturally exists as, see (quoted from Pollock): http://www.iwarrior.defendindependence.us/viewtopic.php?p=1047#p1047; and also, http://www.iwarrior.defendindependence.us/viewtopic.php?p=1162#p1162

However, such a method of indirect taxation would only be the case if the lender, as a structured business, were permitted to reduce their tax liabilities on unpaid loans or the loan in fact resulted in realizing the lender a bona fide profit, e.g., Congress could not constitutionally tax me simply for loaning my friend $2,000 to help them during a time of need.

At any rate, the lender would simply adjust their loan rates in accordance with the amount of the tax, just as they do presently in consideration of the income tax, which is a benefit not afforded to private individuals.

Weston White
06-11-2012, 01:04 AM
What ignorant bilge. First, the income tax is not a capitation or any other kind of direct tax. Indeed, a tax on pay-for-work has NEVER been considered a direct tax by any Supreme Court or other court decision. Second, the income tax came in 52 years before the Federal Reserve, so your notion that it's a scheme to benefit the Fed simply reveals your uninformed paranoia.

1. “SCOTUS precedence [sic]”, we are not submitting courtroom briefs here; both precedence and precedent hold the same meaning for the purposes of general conversation (while yes, precedent is the correct selection for lawyer-speak). However, this is further evidence that you are in fact the poster “Legist”, who by the way has admitted in the past that they are not even a practicing litigator.

2. Yes, that is correct the federal income tax is not in any way a mode of direct taxation, so you really should cease pimping it as such. In doing so, you present yourself only as, a fool.

3. The subject-matter of assessing income taxes upon common day laborers or their means of livelihood remains to be addressed by SCOTUS and to that precedent has yet to have been set.

4. Save for establishing the legislative intent besetting national income taxation, the earlier Revenue Acts of 1861, 1862, and 1894 are of little relevance to the presently structured IRC of 1913. For further, see:
Sect. 49 of Act of 1861: http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=012/llsl012.db&recNum=340
Sect. 86 of Act of 1862: http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=012/llsl012.db&recNum=503
Sects. 89 and 90 of Act of 1862: http://memory.loc.gov/cgi-bin/ampage?collId=llsl&fileName=012/llsl012.db&recNum=504

5. If you seriously deny that there is a very clear and beneficial connection between the necessity for status quo nationalized income taxation and the monstrous Federal Reserve System, then you truly are oblivious to reality. No matter though, for the point has already been well-made by President Reagan through his authorized: Private Sector Survey on Cost Control (PSSCC)—The Grace Commission Report.

6. Moreover (as but one example), that very clear and beneficial connection came to its fruition back in 1942, while marketing ‘stoppage at the source’ as a forced loan upon all of its subjects, by way of the since declassified Senate Subcommittee Hearing of the Committee on Finance on the Withholding Tax, August 21 and 22, 1942.

7. Regardless, never were any federal Revenue Acts assessed upon individuals in the manner that it was morphed into from 1942 and thereon.

8. It remains that none of this serves to make any such status quo method of income taxation any more constitutional, necessary, appropriate, prudent, or justified.

Indy Vidual
06-11-2012, 04:08 AM
I know about too many people in jail over this topic.


I think we have a figure for that. It's in the trillions.

Also, it's a good thing to point out that we are not obligated to pay income tax, but try telling the IRS that. The law doesn't make any bit of difference anymore. They are taking your money regardless just because most people have accepted the system, and now they can do whatever the hell they want as long as it's not outside of the norm. Then, they slowly move the norm even further down the road, regardless of the law. This knowledge won't change a thing because the IRS is an organization of theft; pure, unadulterated theft.

+1984
This thread jumped the shark even before services failed to be a simple plural of service. :o

Weston White
06-11-2012, 04:37 AM
I know about too many people in jail over this topic.

+1984
This thread jumped the shark even before services failed to be a simple plural of service. :o

So you are saying that we should simply act as does the Ravenous Bugblatter Beast of Traal? Personally, I hardly think that is an appropriately valid action to be taken. Rather instead we should perspicaciously go after governmental corruption -in all of its varying forms- Chiklis, "Shield" style.

Sonny Tufts
06-11-2012, 08:15 AM
The laborer is investing his labor because the employer controls how it is utilized. That is the nature of an investment.

The independent contractor, on the otherhand, is selling the result of his labor. It is not an investment because he controls how his own labor is utilized and if he chooses, he can hire someone else to perform the labor.

Who has the right of control is irrelevant to the economics of the situation. In both cases, the person is providing the work-- either his own labor or the labor of someone else (for which he presumably paid something). The independent contractor is making just as much of an "investment" as the employee.


That is your opinion, take it to your Congressional representative and have it passed by their legal eagles if you believe in it.

My opinion on that is that they will come back and tell you that you are blowing smoke.

The issue isn't whether Congress would pass such a law but whether they have the constitutional power to do so. The point is that even if the compensation an employee receives were a return of capital, it would still be taxable because Congress has the power to impose an excise on the employment relationship (this is why Social Security taxes were held to be constitutional). Look at it this way: Congress could clearly pass a law that said, "There is hereby imposed a tax on each person who enters into a contract of employment with another under which the latter agrees to pay compensation to the former. The tax shall be calculated and collected in the same manner as if the compensation were includable in the gross income of the person receiving same."

Ah, you say, but Section 61 doesn't read that way. No, but it doesn't have to. Saying that pay-for-work is includable in gross income is the functional equivalent of my hypothetical statute. Let me give you another example: Section 7872 of the Code says that (subject to certain exceptions) when a lender makes a loan and charges less than a specified rate of interest, the foregone interest is deemed to have been transferred by the lender to the borrower and then retransferred by the borrower to the lender as interest. In other words, the lender has to include in gross income the interest the statute imputes to him. Now it's clear that in an economic sense the lender hasn't received income at all. In fact, he has deliberately structured the deal so as to not receive the income represented by the foregone interest.* Yet that law says he has income anyway. Can Congress create and tax such phantom income? Yes, because it has the power to impose an excise on the making of loans that bear a below-market rate of interest.


although the “Congress cannot make a thing income which is not so in fact,” Burk-Waggoner Oil Ass'n v. Hopkins, 269 U.S. 110, 114, 46 S.Ct. 48, 70 L.Ed. 183 (1925), it can label a thing income and tax it, so long as it acts within its constitutional authority, which includes not only the Sixteenth Amendment but also Article I, Sections 8 and 9. See Penn Mut. Indem. Co. v. Comm'r, 277 F.2d 16, 20 (3d Cir.1960) (“Congress has the power to impose taxes generally, and if the particular imposition does not run afoul of any constitutional restrictions then the tax is lawful, call it what you will”) (footnote omitted).   Murphy v. IRS, 493 F. 3d 170 (D.C. Cir. 2007)

*Why would a lender do this? As just one example, if the lender were a parent and the borrower were a child the parent might not charge any interest; in such a case, the imputed transfer of the foregone interest by the parent to the child would be treated as a gift.

Weston White
06-11-2012, 10:06 AM
Who has the right of control is irrelevant to the economics of the situation. In both cases, the person is providing the work-- either his own labor or the labor of someone else (for which he presumably paid something). The independent contractor is making just as much of an "investment" as the employee.

The issue isn't whether Congress would pass such a law but whether they have the constitutional power to do so. The point is that even if the compensation an employee receives were a return of capital, it would still be taxable because Congress has the power to impose an excise on the employment relationship (this is why Social Security taxes were held to be constitutional). Look at it this way: Congress could clearly pass a law that said, "There is hereby imposed a tax on each person who enters into a contract of employment with another under which the latter agrees to pay compensation to the former. The tax shall be calculated and collected in the same manner as if the compensation were includable in the gross income of the person receiving same."

Ah, you say, but Section 61 doesn't read that way. No, but it doesn't have to. Saying that pay-for-work is includable in gross income is the functional equivalent of my hypothetical statute. Let me give you another example: Section 7872 of the Code says that (subject to certain exceptions) when a lender makes a loan and charges less than a specified rate of interest, the foregone interest is deemed to have been transferred by the lender to the borrower and then retransferred by the borrower to the lender as interest. In other words, the lender has to include in gross income the interest the statute imputes to him. Now it's clear that in an economic sense the lender hasn't received income at all. In fact, he has deliberately structured the deal so as to not receive the income represented by the foregone interest.* Yet that law says he has income anyway. Can Congress create and tax such phantom income? Yes, because it has the power to impose an excise on the making of loans that bear a below-market rate of interest.

*Why would a lender do this? As just one example, if the lender were a parent and the borrower were a child the parent might not charge any interest; in such a case, the imputed transfer of the foregone interest by the parent to the child would be treated as a gift.

Man alive, can you not be honest about a single thing?

Nope, the employer-contractor is making an excess of what the actual cost of the labor or the general costs involved would have otherwise been, while the laborer does not, e.g., if you were to hire a professional lawn care service to upkeep your surrounding yard, you will likely end up paying them $100, plus expenses, while the 2-3 laborers performing all of the work are likely to be paid only $10 apiece for that job and the rest of that going into the business bank account; or otherwise you could hire the active kid next door for around $15, plus expenses.

The contractor is realizing a much greater return than the laborer, e.g., the burger flipper or frenchfry watcher is not getting rich working at Howdy’s Greasy Burger Joint but the owner, Howdy, most certainly is. Moreover, Howdy can pass their business expenses and taxes onto their customers, while his/her laborers cannot.

Also, that is not correct, Congress may only generally tax contracts as applicable to individuals by way of capitation taxes; while they could rightfully go after privileged businesses or professions through specified excises or duties, so far as such being appropriate within their powers of generating necessary revenue.

No, SSI and FICA are entirely voluntary (as socialistic entitlement programs) for most all Americans; and hence, the present debate over the PPACA. The government can adjust, deny, or otherwise cancel said benefits and all respective programs anytime they want, and run off with every penny of that money supposedly being held in trust (but is actually not).

And, unless the parent is in the business of issuing loans at interest or that was their provable intention from the outset, then it could not be said to have been intended to their offspring as a gift. As stated in 26 USC 7872:

“…and which is a gift loan or a demand loan…”

(f)(3) Gift loan
The term “gift loan” means any below-market loan where the forgoing of interest is in the nature of a gift.

(f)(5) Demand loan
The term “demand loan” means any loan which is payable in full at any time on the demand of the lender. Such term also includes (for purposes other than determining the applicable Federal rate under paragraph (2)) any loan if the benefits of the interest arrangements of such loan are not transferable and are conditioned on the future performance of substantial services by an individual. To the extent provided in regulations, such term also includes any loan with an indefinite maturity.

And also:

(c) Below-market loans to which section applies
(1) In general
Except as otherwise provided in this subsection and subsection (g), this section shall apply to—

(2) $10,000 de minimis exception for gift loans between individuals
(A) In general
In the case of any gift loan directly between individuals, this section shall not apply to any day on which the aggregate outstanding amount of loans between such individuals does not exceed $10,000.


SOURCE: http://www.law.cornell.edu/uscode/text/26/7872

Indy Vidual
06-11-2012, 01:14 PM
So you are saying that we should...

I am saying:

1. Prove it works in the real world, without going to jail.
2. If possible, make the steps workable without needing an expensive lawyer.

Until then it's just a (useless) long-winded debate/research project. Enjoy that if you have the time. :)

Wheeljack
06-11-2012, 05:31 PM
Who has the right of control is irrelevant to the economics of the situation. In both cases, the person is providing the work-- either his own labor or the labor of someone else (for which he presumably paid something). The independent contractor is making just as much of an "investment" as the employee.

The economics of the situation is that the independent contractor is the market maker, whereas the employee is not. That means that the independent contractor can pass the amount of taxes he may owe to his customers in inflated prices, the employee can not do this.




The issue isn't whether Congress would pass such a law but whether they have the constitutional power to do so. The point is that even if the compensation an employee receives were a return of capital, it would still be taxable because Congress has the power to impose an excise on the employment relationship (this is why Social Security taxes were held to be constitutional). Look at it this way: Congress could clearly pass a law that said, "There is hereby imposed a tax on each person who enters into a contract of employment with another under which the latter agrees to pay compensation to the former. The tax shall be calculated and collected in the same manner as if the compensation were includable in the gross income of the person receiving same."

That is precisely my argument, Since Congress has passed an Act that taxes the employment relationship, then why did they not use the definition of wages contained within that Act for the collection of income tax at source? The definition used in the Social Security Act is much broader than the definition used in the collection of income tax at source, and the collection of income tax at source uses the same wording as Section 61.



Ah, you say, but Section 61 doesn't read that way. No, but it doesn't have to. Saying that pay-for-work is includable in gross income is the functional equivalent of my hypothetical statute. Let me give you another example: Section 7872 of the Code says that (subject to certain exceptions) when a lender makes a loan and charges less than a specified rate of interest, the foregone interest is deemed to have been transferred by the lender to the borrower and then retransferred by the borrower to the lender as interest. In other words, the lender has to include in gross income the interest the statute imputes to him. Now it's clear that in an economic sense the lender hasn't received income at all. In fact, he has deliberately structured the deal so as to not receive the income represented by the foregone interest.* Yet that law says he has income anyway. Can Congress create and tax such phantom income? Yes, because it has the power to impose an excise on the making of loans that bear a below-market rate of interest.



*Why would a lender do this? As just one example, if the lender were a parent and the borrower were a child the parent might not charge any interest; in such a case, the imputed transfer of the foregone interest by the parent to the child would be treated as a gift.

What does income received from a below market interest rate have to do with a return of capital? Absolutely nothing. The tax is applicable to the interest, not the principal.

Weston White
06-12-2012, 05:11 AM
I am saying:

1. Prove it works in the real world, without going to jail.
2. If possible, make the steps workable without needing an expensive lawyer.

Until then it's just a (useless) long-winded debate/research project. Enjoy that if you have the time. :)

Well, now that is banging reasoning there.

Sonny Tufts
06-14-2012, 03:35 PM
The economics of the situation is that the independent contractor is the market maker, whereas the employee is not. That means that the independent contractor can pass the amount of taxes he may owe to his customers in inflated prices, the employee can not do this.

What does this have to do with taxability? Remember, the Supreme Court has rejected the argument that a tax that can't be shifted is a direct tax that needs to be apportioned, so don't try going down that path.

Moreover, you're assuming that the IC has more bargaining power than the employee, which may or may not be the case. Unless the IC has unique skills not possessed by his competitors or unless there are other factors affecting the market, he will have to set his prices at whatever the market rate for his services is.


Since Congress has passed an Act that taxes the employment relationship, then why did they not use the definition of wages contained within that Act for the collection of income tax at source?

Because the statutes were enacted at different times and because Section 61 is much broader than either the withholding or FICA provisions.


What does income received from a below market interest rate have to do with a return of capital? Absolutely nothing. The tax is applicable to the interest, not the principal.

The point is that the imputed interest under Section 7872 is an example something that is not income being included in the income tax base. Similarly, even if pay-for-working-for-someone-else-as-an-employee were a return of capital, it still can be included in the income tax base (i.e., gross income).

Weston White
06-14-2012, 04:54 PM
What does this have to do with taxability? Remember, the Supreme Court has rejected the argument that a tax that can't be shifted is a direct tax that needs to be apportioned, so don't try going down that path.

Not so much, such is the status quo misconception, while the matter concerning individuals in their personal, individual capacity and ability has yet to have been thoroughly addressed by the high court; and regardless any tax that is to take directly out from the capital or its conversion is unavoidably a direct tax when so assessed (directly) upon the affected individual, who is then left to incur an unrecoverable loss.

You seek a desire to devise a false-truism that direct and indirect taxation is merely a creation, existing of nothing more than purely convenient fictions. So, Sonny Jim, heed to your own advice by not “going down that path.” Aside from the blindingly obvious, the cases you reference were addressing modes of taxation that were, are, and have always as a fact, been well known and understood to exist as indirect taxes, you derelict.



Moreover, you're assuming that the IC has more bargaining power than the employee, which may or may not be the case. Unless the IC has unique skills not possessed by his competitors or unless there are other factors affecting the market, he will have to set his prices at whatever the market rate for his services is.

Regardless of what the market bears, a subordinate employee will never possess more authority than those employing them, both in their employments and bargaining (e.g., both Lindsey Lohan’ and Charlie Sheen’ recent reality check).

And that exact same rule would apply to general laborers, regardless if they work under a contractor or not, or for Howdy the hamburger aficionado, or whomever; thereby it cross-cancels itself out, rendering the purpose of your reply completely moot.



The point is that the imputed interest under Section 7872 is an example something that is not income being included in the income tax base. Similarly, even if pay-for-working-for-someone-else-as-an-employee were a return of capital, it still can be included in the income tax base (i.e., gross income).

You are being entirely dishonest in your representation of that statute, as I had already pointed out above. And no Congress cannot directly tax the individual by guising the frivolous notion that the individual is somehow acting in a SB/SE capacity; or that one way or the other there is simply no discernable distinction. The core distinction is one of vast significance; that being the individual’s right to live, unencumbered, within their own natural (full) potential versus the privilege of acquiescing certain aspects of the former in order to exceed one’s natural potential in an attempt to effect gains, profits, and wealth.

Wheeljack
06-14-2012, 10:36 PM
Moreover, you're assuming that the IC has more bargaining power than the employee, which may or may not be the case. Unless the IC has unique skills not possessed by his competitors or unless there are other factors affecting the market, he will have to set his prices at whatever the market rate for his services is.
:confused:

You miss the point, he is not restricted to the market rate, he is a determiner of the market rate. And as such can push up the market rate.

The employee can not push up the market rate for employment, the determiners of the market rate are the employers and what pushes up the market rate is the competition between the employers to attract employees.



Because the statutes were enacted at different times and because Section 61 is much broader than either the withholding or FICA provisions.

Yes, they were enacted at different times.
FICA - 1935, Wages defined as compensation for employment.

Withholding- 1942, Wages defined as compensation for services, performed by an employee, for the employer. Gee, seven years later and we can't use the definition that uses employment, within a section that clearly deals with employment.

Section 61 - 1954, Compensation for services, again no mention of employment.

Overall Section 61 is broader than FICA, because it covers more subjects, but in regard to the single subject of employment it is not.





The point is that the imputed interest under Section 7872 is an example something that is not income being included in the income tax base. Similarly, even if pay-for-working-for-someone-else-as-an-employee were a return of capital, it still can be included in the income tax base (i.e., gross income).
Interest on a loan is clearly something that is income, that Section clearly points out that you can not hide it by disguising it as a gift.

.

Sonny Tufts
06-15-2012, 06:29 AM
You miss the point, he is not restricted to the market rate, he is a determiner of the market rate. And as such can push up the market rate.

And if he increases his price while his competitors are charging less, just how many customers do you think he'll have?


The employee can not push up the market rate for employment, the determiners of the market rate are the employers and what pushes up the market rate is the competition between the employers to attract employees.

Some employees can, if they have unique skills that are in high demand. Just watch Josh Hamilton of the Texas Rangers after he becomes a free agent later this year.


Interest on a loan is clearly something that is income, that Section clearly points out that you can not hide it by disguising it as a gift..

You misunderstand the statute. There is no real interest involved. If A makes a loan to B and doesn't charge interest A is deliberately avoiding receiving interest. Yet (subject to certain exceptions) the statute treats the parties as if A had transferred the foregone interest to B (as a gift, a capital contribution, or as soomething else depending on the facts) and B had retransferred it to A as interest. In reality, A received nothing of economic value, yet he's taxed as if he did.

Weston White
06-15-2012, 02:09 PM
And if he increases his price while his competitors are charging less, just how many customers do you think he'll have?

This has no relevance to the substance of the debate; the amounts involved are only considerable for establishing tax rates. Substance exists over form.



Some employees can, if they have unique skills that are in high demand. Just watch Josh Hamilton of the Texas Rangers after he becomes a free agent later this year.

Your constant reliance upon entertainment and athletic “professions” to support your arguments is poorly founded, being representative of a very small fraction of society that is designed to serve as a constant distraction for the masses; thereby, affording the establishment ample cover to operate (i.e., rather than people taking an interest in reading and studying and learning about things that really matter (viz., real life events and issues), they spend the vast portion of their lives admiring their “hero”, favorite sports team, etc., memorizing the rules, schedules, stats, histories, etc. that are involved; or obsess on the entire private lives of their favorite stars; etc.).

Also, I don’t really think that hitting a baseball out of the park more than the average player would actually qualify as a unique skill. The success of Josh Hamilton depends more on his marketability (viz., as to his fan popularity, which is largely dictated by the player's sports agent) more than his gifted playing ability, while the two usually go hand-in-hand, such is not necessarily the case, e.g., the recent events surrounding Tiger Woods, who is only recently beginning to make a comeback after losing much of his sponsorship; also this logic can be applied to politicians, for example, such as how Barry Soetoro (Obama) and Sarah Palin were overly built-up through such marketing tact and both turned out to be “shocking” disappointments.



You misunderstand the statute. There is no real interest involved. If A makes a loan to B and doesn't charge interest A is deliberately avoiding receiving interest. Yet (subject to certain exceptions) the statute treats the parties as if A had transferred the foregone interest to B (as a gift, a capital contribution, or as soomething else depending on the facts) and B had retransferred it to A as interest. In reality, A received nothing of economic value, yet he's taxed as if he did.

No, Wheeljack has pretty much nailed the context of the statute you have been referencing. What you are asserting is only the case when that would have otherwise been the intention of A (for you are ignoring the stipulations provided therein), otherwise that statute exempts itself from consideration of both A and B. You are vastly incorrect on that point.

Indy Vidual
06-15-2012, 02:29 PM
It's great you have a subject that interests you so much.

Edit:
Your OP says "All remuneration paid expressly for employment, such as hourly wages do not fall under the scope of this definition of wages", but doesn't state exactly how people can use that info without risking going to jail.


I am saying:

1. Prove it works in the real world, without going to jail.
2. If possible, make the steps workable without needing an expensive lawyer.

Until then it's just a (useless) long-winded debate/research project. Enjoy that if you have the time. :)


Well, now that is banging reasoning there.


If you are seriously suggesting the average person doesn't have to pay income taxes, then please condense the "proof" into a single post that the average person can understand.
Since juries tend to send "tax resisters" to jail, what good does it do to call this anything but a research project?

Sonny Tufts
06-15-2012, 03:18 PM
No, Wheeljack has pretty much nailed the context of the statute you have been referencing. What you are asserting is only the case when that would have otherwise been the intention of A (for you are ignoring the stipulations provided therein), otherwise that statute exempts itself from consideration of both A and B. You are vastly incorrect on that point.

Mr. White, this meaningless word salad simply shows that not only are you clueless when it comes to caselaw, you can't understand a tax statute, either. And your attempt to appear erudite by stringing together words in a haphazard manner is truly pathetic.

realtonygoodwin
06-15-2012, 03:31 PM
This thread is 6 pages long, and I still don't understand what the point it.

Weston White
06-15-2012, 04:47 PM
Mr. White, this meaningless word salad simply shows that not only are you clueless when it comes to caselaw, you can't understand a tax statute, either. And your attempt to appear erudite by stringing together words in a haphazard manner is truly pathetic.

1. There is not much to understand, as the stipulations are quite clear; however, you are opting to wrongfully ignore them, to which I had already quoted the significant portions above.
2. "stringing together words", of course I can't speak for you personally, but the wording of my response to your utter nonsense was rather basic.
3. One that frequently relies on tactics of virulence, does so only in their desperation to covet.
4. Sonny Jim, you are an outright fraud. The more that you continue to post your driveling deception, the more this is shown.

Weston White
06-15-2012, 04:48 PM
This thread is 6 pages long, and I still don't understand what the point it.

Did you post in the wrong thread or are you high?

Wheeljack
06-16-2012, 09:14 AM
Edit:
Your OP says "All remuneration paid expressly for employment, such as hourly wages do not fall under the scope of this definition of wages", but doesn't state exactly how people can use that info without risking going to jail.


Ask questions to achieve understanding, once you have understanding, then how to use the info will become known to you and the fear of risk will not paralyze you.



If you are seriously suggesting the average person doesn't have to pay income taxes, then please condense the "proof" into a single post that the average person can understand.


First, I am in no way suggesting that the average person does not have to pay income taxes. The subject of this thread is that wages received for working are not subject to the income tax, but wages received for not working are subject to the income tax.



Since juries tend to send "tax resisters" to jail, what good does it do to call this anything but a research project?


Your negativity is holding you back.

Weston White
12-14-2012, 06:23 PM
Just a quick update on this thread; concerning several of the underlying points I had prior made, namely pertaining to the writings of Turgot and Smith, this last week I came across another very interesting work (Wage Labour and Capital (1847)) that was written by Karl Marx nearly a century later and amazingly it wholly substantiates the preceding works of the former authors –so not any real shocker on from whom Mr. Marx and Engels seem to have borrowed the ideas they mind-warped to further the agenda of socialism. I have posted highlights for ready viewing here: http://www.community.defendindependence.us/viewtopic.php?p=1804#p1804

* And kudos to the OP, this thread has now surpassed 10,000 views.

Wheeljack
03-09-2013, 12:13 PM
Almost 12,000 views. Amazing!

Any questions, bring them?

Wheeljack
03-09-2013, 12:15 PM
Almost 12,000 views. Amazing!

Any questions, bring them?:cool:

libertyjam
03-09-2013, 02:16 PM
I keep seeing Mr. White using the shorthand of SB/SE initials to refer to a certain class of earners, but I cannot find what these stand for. I did a search for those letters on every page and did not see a definition for what the terms are that they are representing. What is he referring to?

Wheeljack
03-09-2013, 03:32 PM
SB/SE = Small Business and Self-employed

libertyjam
03-09-2013, 07:03 PM
thank you.

Weston White
04-01-2013, 11:44 AM
Cool beans! So here is an update of the boil-downs I have been working on. Tons of great stuff are to be realized within this PDF attachment (it is a bit too large to be posted). Futher enlightenment: persuasive authorities (http://www.community.defendindependence.us/download/file.php?id=139)

ZENemy
05-08-2013, 12:44 PM
Wow, I read this whole thread! I should get a prize. :D

Our beloved Gov likes to move the goal post, it seems like even if we win, we actually lose anyway because they will change the laws/rules/definitions/interpretations on the fly. We are dealing with a lawless regime, not sure they care how RIGHT we are (even if we are 100% correct)

I like the Marc Stevens approach to things, "do you have evidence that the code or statue applies to me" Anyone familiar with his style? Any comments on it? It seems to be somewhat effective and he had dozens of phone recordings on youtube.

ZENemy
05-08-2013, 12:48 PM
Ask questions to achieve understanding, once you have understanding, then how to use the info will become known to you and the fear of risk will not paralyze you.




First, I am in no way suggesting that the average person does not have to pay income taxes. The subject of this thread is that wages received for working are not subject to the income tax, but wages received for not working are subject to the income tax.



Your negativity is holding you back.


Can you give me an example of when ones wages would not be subject to the income tax? I'm sure you went over it and I did my best to read most of the info in this thread but I'm looking for a clear simple answer.

If Jamba Juice hires me to dance for them for 8 hours, the exchange is not taxable because there is no gain for myself and is just a direct TRADE of compensation for labor?

BAllen
05-08-2013, 12:48 PM
I'm in sales, on straight commission. So you're saying I don't have to pay any taxes?

Wheeljack
05-08-2013, 02:14 PM
I'm in sales, on straight commission. So you're saying I don't have to pay any taxes?

If you are being paid commission, then you are subject to federal income tax. Why, you may ask?

Because you are being paid for the result of your work, therefore you have some degree of control over what that result will be.