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[Excellent] Letter on Revenue Code & Statute Interpretation!

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  • dave
    The letter that is at this link will make your membership in this group and putting up with me all worth it! Somebody wrote this that knows something about the
    Message 1 of 19 , Jan 19, 2011
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      The letter that is at this link will make your membership in this group and putting up with me all worth it! Somebody wrote this that knows something about the Internal Revenue Code and the principles of statutory construction. I'm adding this letter to the files section of this group: http://groups.yahoo.com/group/tips_and_tricks/files/ under the file name: RevenueCode&StatutoryConstruction Bear Tips & Tricks

      PS: Thanks Dave for thinking of us. :-)

      http://cirrus.mail-list.com/paycheck-piracy/Estoppel-1.3.doc 53 Kb
    • Jake
      http://cirrus.mail-list.com/paycheck-piracy/Estoppel-1.3.doc There s one little section of the Internal Revenue Code (IRC) which kills the main argument
      Message 2 of 19 , Jan 21, 2011
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        http://cirrus.mail-list.com/paycheck-piracy/Estoppel-1.3.doc


        There's one little section of the Internal Revenue Code (IRC) which kills the main argument contained in that letter:


        IRC (26 U.S.C.) § 7701  Definitions

           

           (c) Includes and including
           The terms “includes” and “including” when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.


        Without that provision, the normal rules of statutory construction & contract law would apply, where the terms "includes" & "including" mean ONLY the things listed following the term - the reason you sometimes see "including but not limited to" is because "including" does mean "limited to" - but not in the IRC.


        ~ ~ ~


      • Barry
        But Jake, the 7701 subsection you mention seems to be nothing more than an expression of the statutory construction principle of ejusdem generis: Here:
        Message 3 of 19 , Jan 21, 2011
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          But Jake, the 7701 subsection you mention seems to be nothing more than an expression of the statutory construction principle of ejusdem generis:

          Here: http://www.legalserviceindia.com/articles/edjem.htm I found an explanation of the principle:

          Construction Ejusdem Generis
          According to the Black's Law Dictionary (8th edition, 2004) the principle of Ejusdem Generis is where general words follow an
          enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same general kind or class as those specifically mentioned. It is a canon of statutory construction, where general words follow the enumeration of particular classes of things, the general words will be construed as applying only to things of the same general class as those enumerated.

          The expression Ejusdem Generis means of the same kind. Normally, general words should be given their natural meaning like all other words unless the context requires otherwise. But when a general word follows specific words of a distinct category, the general word may be given a restricted meaning of the same category. The general expression takes it's meaning from the preceding particular expressions because the legislature by using the particular words of a distinct genus has shown its intention to that effect. This principle is limited in its application to general word following less general word only. If the specific words do not belong to a distinct. Genus, this rule is inapplicable. Consequently, if a general word follows only one particular word, that single particular word does not constitute a distinct genus and, therefore, Ejusdem Generis rule cannot be applied in such a case. Exceptional stray instances are, however, available where one word genus has been created by the courts and the general word following such a genus given a restricted meaning. If the particular words exhaust the whole genus, the general word following these particular words is construed as embracing a larger genus. The principle of Ejusdem Generis is not a universal application. If the context of legislation rules out the applicability of this rule, it has no part to play in the interpretation of general words. The basis of the principle of Ejusdem Generis is that if the legislature intended general words to be used in unrestricted sense, it would not have bothered to use particular words at all.

          If includes is expansive to the point of meaning everything in the whole wide world and this particular list in the statute, it would render the statute it was in void for vagueness where men of ordinary intelligence would differ as to its interpretation and the enforcement would be left to the whim of officials.

          I heard an explanation of a list/genus that included both corporation and individual that I liked. Since the genus included all artificial entities then a reference in that same list to "individual" would have to mean somebody acting in their corporate capacity. Bear

          --- In tips_and_tricks@yahoogroups.com, Jake <jake_28079@...> wrote:
          >
          > http://cirrus.mail-list.com/paycheck-piracy/Estoppel-1.3.doc
          > There's one little section of the Internal Revenue Code (IRC) which kills the main argument contained in that letter:
          > IRC (26 U.S.C.) § 7701  Definitions      (c) Includes and including
          >    The terms “includes” and “including” when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.
          >
          > Without that provision, the normal rules of statutory construction & contract law would apply, where the terms "includes" & "including" mean ONLY the things listed following the term - the reason you sometimes see "including but not limited to" is because "including" does mean "limited to" - but not in the IRC.
          > ~ ~ ~
          >

          --- In tips_and_tricks@yahoogroups.com, Jake <jake_28079@...> wrote:
          >
          > http://cirrus.mail-list.com/paycheck-piracy/Estoppel-1.3.doc
          > There's one little section of the Internal Revenue Code (IRC) which kills the main argument contained in that letter:
          > IRC (26 U.S.C.) § 7701  Definitions      (c) Includes and including
          >    The terms “includes” and “including” when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.
          >
          > Without that provision, the normal rules of statutory construction & contract law would apply, where the terms "includes" & "including" mean ONLY the things listed following the term - the reason you sometimes see "including but not limited to" is because "including" does mean "limited to" - but not in the IRC.
          > ~ ~ ~
          >
        • Brendan Trainor
          The list of federal government connected employment is fairly extensive, when you consider Post Office, National Banks, Fanny Mae, State Workers under
          Message 4 of 19 , Jan 21, 2011
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            The list of federal government connected employment is fairly extensive, when you consider Post Office, National Banks, Fanny Mae, State Workers under agreements by the Public Salary Tax Act,  etc. The words includes under this statute would include all of those not mentioned directly in the Statute but nevertheless "employed" in a federally connected privileged occupation.

            To read it as including also those American Nationals pursuing an occupation of common right would be to destroy the scope of "includes" entirely.

            The income tax is traceable throughout its history as a kick back on federal employment, or an excise tax on privilege whereby the wages themselves are not taxed, but are a measure of the privilege which is taxed.

            However, getting federal judges to own up to this is a good tip and trick.

            Are there any honest ones left?

            Brendan in Reno



            From: Jake <jake_28079@...>
            To: tips_and_tricks@yahoogroups.com
            Sent: Fri, January 21, 2011 6:59:37 AM
            Subject: Re: [tips_and_tricks] [Excellent] Letter on Revenue Code & Statute Interpretation!

             

            http://cirrus.mail-list.com/paycheck-piracy/Estoppel-1.3.doc


            There's one little section of the Internal Revenue Code (IRC) which kills the main argument contained in that letter:


            IRC (26 U.S.C.) § 7701  Definitions

               

               (c) Includes and including
               The terms “includes” and “including” when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.


            Without that provision, the normal rules of statutory construction & contract law would apply, where the terms "includes" & "including" mean ONLY the things listed following the term - the reason you sometimes see "including but not limited to" is because "including" does mean "limited to" - but not in the IRC.


            ~ ~ ~



          • BOB GREGORY
            * Here is a fairly thorough discussion of the includes and including subject: * in·clude tr.v. in·clud·ed, in·clud·ing, in·cludes. 1. To take in as a
            Message 5 of 19 , Jan 21, 2011
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              Here is a fairly thorough discussion of the "includes and including" subject:


              in·clude tr.v. in·clud·ed, in·clud·ing, in·cludes. 1. To take in as a part, an element, or a member. 2. To contain as a secondary or subordinate element. 3. To consider with or place into a group, class, or total: thanked the host for including us. [Middle English includen, from Latin inclu-dere, to enclose : in-, in; see IN-2 + claudere, to close.]
              American Heritage Electronic Dictionary
               
                      Please note the original Latin: To include is to enclose.

              en·close also in·close  -- tr.v. en·closed, en·clos·ing, en·clos·es. 1. To surround on all sides; close in. 2. To fence in so as to prevent common use: enclosed the pasture. [Middle English enclosen, from Old French enclos, past participle of enclore, from Latin inclu-dere, to enclose. See INCLUDE.]
              American Heritage Electronic Dictionary

                      To include is to enclose; to surround; to contain within.  If something is enclosed, the enclosure has an inside and an outside.  An item is either inside the enclosure or an item is outside the enclosure.  One or the other.  There is no third location.

                      This "enclosure" can be a corral which "encloses" a CLASS of items intended.  Or this "enclosure" can be a corral which "encloses" a LIST of items intended. Or this "enclosure" can be a corral which "encloses" a LIST of items intended and a CLASS of items intended.

                      This sets the stage for the following study and examination of the nature of limitation or expansion as the case may be for the words includes and including.

                      The question to be answered is where does any particular item reside. Does a particular item reside within the corral of items, or does the item reside outside the corral of items?

              Internal Revenue Code
              Section 7701(c) Includes and including

              The terms "includes" and "including" when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.

                     Please take note what 7701(c) does NOT state:

               The terms "includes" and "including" when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the common language (dictionary) definition of the word.

                      I'm going to distill IRC section 7701(c) by removing what is extraneous to this discussion. This leaves the essence of the concept to be more readily observed.

              Internal Revenue Code
              Section 7701(c) Includes and including

              The terms "includes" and "including" when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.


                      Section 7701(c) parse:
              The terms "includes" and "including" ... shall not ... exclude other things ... within the meaning of the term defined.

                      Only when the "term defined" is a CLASS of items can includes and including be expansive... And then, only in regard to items within the CLASS defined.

                      Section 7701(c) parse:
              The terms "includes" and "including" shall not exclude other things within the meaning of the CLASS of items defined.

                      Congress codified the following rule of statutory construction in section 7701(c):

              Ejusdem generis
              (eh-youse-dem generous) v adj. Latin for "of the same kind," used to interpret loosely written statutes. Where a law lists specific classes of persons or things and then refers to them in general, the general statements only apply to the same kind of persons or things specifically listed. Example: if a law refers to automobiles, trucks, tractors, motorcycles and other motor-powered vehicles, "vehicles" would not include airplanes, since the list was of land-based transportation.

                      ONLY when defining a CLASS can items be included (enclosed) in that class without specific enumeration. Then, and ONLY then, can the use of includes and including be expansive in nature. And the expansion can only expand to "enclose" items of the same CLASS. It does NOT "enclose" items not in the same class. Thus even as a term of expansion, includes and including are terms of LIMITED expansion.

              Expressio unius est exclusio alterius
              One of the linguistic canons applicable to the construction of legislation.  By expressing one thing is [by implication] to exclude another. There is no room for the application of this principle where some reason other than the intention to exclude certain items exists for the express mention in question. Thus what is said may be intended merely as an example or be included for abundance of caution or for some other reason; or the thing supposed to have been impliedly excluded may not have existed at the passing of the enactment.

                      The above rule of statutory construction acknowledges the prior rule of statutory construction. What is said may be intended as an example, and as the prior rule observes, a partial list may be an example of a CLASS of items.

                      HOWEVER, that is not the case when the corral "encloses" a specific list of items.

              "Designatio unius est exclusio alterius, et expressum facit cessare tacitum: The designation of one is the exclusion of the other; and what is expressed prevails over what is implied."
              Black's 7th edition.

                      Thus the TERM defined can be the name of a CLASS of items intended OR the name of a LIST of items intended. Thus in the one case the term is a term of LIMITED expansion, and the other, the term is a term of LIMITATION.

              Internal Revenue Code
              Sec. 3401. Definitions

              (c) Employee
              For purposes of this chapter, the term "employee" includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing.

                      The corral "encloses" a CLASS. The CLASS is defined by the list of items in the first sentence.  The first sentence DOES NOT enclose any item other than a government paid worker.

                      The term "employee" includes; (encloses; corrals);
              • an officer of the United States;
              • an employee of the United States;
              • an elected official of the United States;
              • an officer of the District of Columbia;
              • an employee of the District of Columbia;
              • an elected official of the District of Columbia;
              • an officer of a political subdivision of the United States;
              • an employee of a political subdivision of the United States;
              • an elected official of a political subdivision of the United States;
              • an officer of a political subdivision of the District of Columbia;
              • an employee of a political subdivision of the District of Columbia;
              • an elected official of a political subdivision of the District of Columbia;
              • an officer of a corporation.

                      I did not place the "state" addressed in the IRC section in the above list because the same game of "includes and including" is going on in the definitions of the term "state".

              Internal Revenue Code
              Sec. 3401. Definitions

              (c) Employee
              The term "EMPLOYEE" also includes an officer of a corporation.

                      In the second sentence, the use of includes is in the capacity of a plus sign. It ADDS an item to the previously defined CLASSPop-up info on a "corporation" to consider in regard to "an officer of a corporation."

                      If the dictionary definition ruled, there would be no need to define employee as including an employee of the United States, a State, or any political subdivision thereof... Since such a government employee is already contained within the dictionary definition of employee.


                      Let us apply the section 7701(c) parse to the statutory definition of an employee shown in IRC 3401. 

              The terms "includes" and "including" shall not exclude other things within the meaning of the term defined.

                      The term defined is a CLASS of items.

              The terms "includes" and "including" shall not exclude other things within the meaning of the CLASS defined.

                      That CLASS is government employees.

              The terms "includes" and "including" shall not exclude other things within the meaning of the government employees defined.

                      The things required to NOT be excluded are other government workers.

              The terms "includes" and "including" shall not exclude other government workers within the meaning of the government employees defined.

              Internal Revenue Code
              Sec. 3401. Definitions

              (c) Employee
              For purposes of this chapter, the term "employee" includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing.

              "In the interpretation of statutes levying taxes, it is the established rule not to extend their provisions by implication beyond the clear import of the language used, or to enlarge their operation so as to embrace matters not so specifically pointed out. In case of doubt they are construed most strongly against the government and in favor of the citizen."
              Gould v. Gould, 245 U.S. 151 (1917)

              • It is the established rule not to extend taxing statutes by implication.
              • It is the established rule not to extend taxing statutes beyond the clear language used.
              • It is the established rule not to embrace matters not so specifically pointed out in the taxing statutes.



                      If includes and including is always expansive, then why does section 61 state:

              ... gross income means all income from whatever source derived, including (but not limited to) the following items:


              Internal Revenue Code
              Sec. 3401. Definitions

              (d) Employer
              For purposes of this chapter, the term "employer" means the person for whom an individual performs or performed any service, of whatever nature, as the employee of such person, except that -

                      For those of you who insist that the bafflegab written by Congress above is because they didn't have any other way to put "public" entities within the "private" entities term; I've got news for you...

              15 USC 2651
              (b) Labor Department review
              Any public or private employee or representative of employees who believes he or she has been fired or otherwise discriminated against in violation of subsection (a) of this section may within 90 days after the alleged violation occurs apply to the Secretary of Labor for a review of the firing or alleged discrimination.

              38 USC 4323
              (a) Action for Relief. - (1) A person who receives from the Secretary a notification pursuant to section 4322(e) of this title of an unsuccessful effort to resolve a complaint relating to a State (as an employer) or a private employer may request that the Secretary refer the complaint to the Attorney General.

               29 USC 2006
              (e) Exemption for security services
              (1) In general
              Subject to paragraph (2) and sections 2007 and 2009 of this title, this chapter shall not prohibit the use of polygraph tests on prospective employees by any private employer whose primary business purpose consists of providing armored car personnel,

                      And the best was saved for last:

              20 USC 6103.
              (8) Employer
              The term ''employer'' includes both public and private employers.

                      With one more shot at what "includes" means:
                      The term "employer" includes (encloses - corrals) both public and private employers.

                      Congress does indeed know the difference between public and private employers, employees, and payroll compensation for service.


              =============================================================

              On Fri, Jan 21, 2011 at 2:23 PM, Brendan Trainor <libertreee04@...> wrote:
               

              The list of federal government connected employment is fairly extensive, when you consider Post Office, National Banks, Fanny Mae, State Workers under agreements by the Public Salary Tax Act,  etc. The words includes under this statute would include all of those not mentioned directly in the Statute but nevertheless "employed" in a federally connected privileged occupation.

              To read it as including also those American Nationals pursuing an occupation of common right would be to destroy the scope of "includes" entirely.

              The income tax is traceable throughout its history as a kick back on federal employment, or an excise tax on privilege whereby the wages themselves are not taxed, but are a measure of the privilege which is taxed.

              However, getting federal judges to own up to this is a good tip and trick.

            • dave
              Not so sure the Postal Orifice employees are government. Take a look at everything like “certified mailer”, “USPS”, “registered mail”. PO
              Message 6 of 19 , Jan 21, 2011
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                Not so sure the Postal Orifice employees are government. Take a look at everything like “certified mailer”, “USPS”, “registered mail”. PO BOX”…..and notice….all are trademarked. This was not the case a few years back when they were government because government is restricted from copyright, trademark, etc. You can’t even go to a UPS Store and get a “Post office box”….they will give you a “private mail box” for only the genuine post office has “post office boxes.”



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              • BOB GREGORY
                *Postal service employees participated in federal employee retirement programs and the Federal Employee Health Benefits Program, so they probably are
                Message 7 of 19 , Jan 21, 2011
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                  Postal service employees participated in federal employee retirement programs and the Federal Employee Health Benefits Program, so they probably are sufficiently "federally connected" to be considered federal employees.

                  On Fri, Jan 21, 2011 at 3:05 PM, dave <dwissel@...> wrote:
                   

                  Not so sure the Postal Orifice employees are government. Take a look at everything like “certified mailer”, “USPS”, “registered mail”. PO BOX”…..and notice….all are trademarked. This was not the case a few years back when they were government because government is restricted from copyright, trademark, etc. You can’t even go to a UPS Store and get a “Post office box”….they will give you a “private mail box” for only the genuine post office has “post office boxes.”



                • Patrick McKEE
                  WHY would they even NEED to be federally connected to have an INCOME TAX LIABILITY? For over TEN years I have heard many people claim things on the SUBJECT
                  Message 8 of 19 , Jan 21, 2011
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                    WHY would they even NEED to be "federally connected" to have an INCOME TAX LIABILITY?

                     

                    For over TEN years I have heard many people "claim" things on the SUBJECT (working for a corporation, usage of Federal Reserve Notes (FRNs), checking accounts, zip codes & social security numbers, for example), BUT I have NEVER had ANYONE tell me that the IRS attempted to COLLECT INCOME TAX from them PRIOR to them REQUESTING WITHHOLDING and/or filing an INCOME TAX RETURN.

                     

                    Personally, I worked for MANY years, claimed EXEMPT on my W-4.  I worked for a major corporation & I used FRNs, a checking account, a zip code & a social security number.

                     

                    I figured that IF I OWED income tax, the IRS would let me KNOW.  That is HOW it works with most other TAXES, ISN’T it?

                     

                    I NEVER heard from the IRS UNTIL after I IGNORANTLY let myself be talked into filing an INCOME TAX RETURN.  NOR did the IRS ever question those MANY years that I worked & did NOT file PRIOR to that.

                     

                    Patrick in California

                     

                    Founder, ALLIANCE for PEACE & PROSPERITY

                    http://groups.yahoo.com/group/alliancepeaceprosperity/

                     

                    "It ain't what ya don't know that hurts ya. What really puts a hurtin' on ya is what ya knows for sure, that just ain't so." -- Uncle Remus

                     

                     

                    --- In tips_and_tricks@yahoogroups.com , BOB GREGORY <rhgusn@...> wrote:

                    >  

                    > *Postal service employees participated in federal employee retirement

                    > programs and the Federal Employee Health Benefits Program, so they probably

                    > are sufficiently "federally connected" to be considered federal employees.

                  • BOB GREGORY
                    *The need to be federally connected is because of the definitions of wages and employee and employer in the tax code. It has to do with the legislative
                    Message 9 of 19 , Jan 21, 2011
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                      *The need to be "federally connected is because of the definitions of
                      "wages" and "employee" and "employer" in the tax code. It has to do with
                      the legislative jurisdiction of Congress and the limits imposed by the
                      Constitution.

                      The government can consider certain statuses "privileges" granted by the
                      federal government and then place an excise tax on the privilege.
                      Corporations are formed through charters granted by the government. Being a
                      member of the U.S. armed forces is a privilege (Commissioned officers are
                      "officers" because they are appointed by the President. Enlisted members
                      are "employees.") Employment by the federal government, state governments
                      and municipal governments is considered a privilege. Being an officer of a
                      corporation is an extension of the privilege of the corporation's charter.

                      Working for a corporation is no different than working for any other
                      business. Only officers of corporations are specifically mentioned in the
                      definition of "employee."

                      Virtually every company, whether a corporation or not, has been faked into
                      believing that every individual who works at the place MUST complete a W4
                      and that a W2 MUST be issued for every worker at the end of every year. The
                      W4 establishes withholding and then the W2 reports to the IRS that a worker
                      was paid "wages." Well then, if he was paid wages, he must be an "employee"
                      because only employees are paid wages. Other people just receive their pay
                      for work done. And if the company has "employees," then it must be an
                      "employer."

                      Many kids are inculcated into filing tax returns long before they ever
                      purportedly owe any income taxes. Some company hires a kid and tells him to
                      complete and sign a W4, so he does. Then they withhold money from his pay
                      and send in a W2 reporting that he received "wages." He didn't make enough
                      money to "owe" any tax but he has to file a return anyway just to get his
                      own money back. The pattern is established early on and the kid's name and
                      SSN are in the system.

                      ===========================================================*

                      On Fri, Jan 21, 2011 at 8:48 PM, Patrick McKEE
                      <paradoxmagnus@...>wrote:

                      >
                      >
                      > WHY would they even NEED to be "federally connected" to have an INCOME
                      > TAX LIABILITY?
                    • Jake
                      I agree with what you re saying, Bear, but the IRS doesn t; they say the terms includes & including are expansive, not restrictive & more importantly, the
                      Message 10 of 19 , Jan 22, 2011
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                        I agree with what you're saying, Bear, but the IRS doesn't; they say the terms "includes" & "including" are expansive, not restrictive & more importantly, the courts tend to agree with them.  I won't take the time to look up specific cases, but many times people have used arguments such as the individual income tax only applies to gov't. employees, people in Puerto Rico, etc. & all such arguments have been deemed "frivolous".  Yes, it's another case of what the law says & how it's applied being 2 very different things, but that's the way it is & nothing we say will change that. 


                        ~ ~ ~


                      • Patrick McKEE
                        Bob said that “It has to do with the legislative jurisdiction of Congress and the limits imposed by the Constitution.” In regards to the ENUMERATED POWERS
                        Message 11 of 19 , Jan 22, 2011
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                          Bob said that “It has to do with the legislative jurisdiction of Congress and the limits imposed by the Constitution.”

                           

                          In regards to the ENUMERATED POWERS granted by the CONSTITUTION, the LEGISLATIVE JURISDICTION of Congress is NATIONAL & includes both the several states of the Union & the federal territories & possessions.

                           

                          “Whoever considers, in a combined and comprehensive view, the general texture of the Constitution, will be satisfied, that the people of the United States intended to form themselves into a nation for national purposes. They instituted, for such purposes, a national Government, complete in all its parts, with powers Legislative, Executive and Judiciary; and, in all those powers, extending over the whole nation. Is it congruous, that, with regard to such purposes, any man or body of men, any person natural or artificial, should be permitted to claim successfully an entire exemption from the jurisdiction of the national Government? Would not such claims, crowned with success, be repugnant to our very existence as a nation?

                          Every State in the Union in every instance where its sovereignty has not been delegated to the United States , I consider to be as completely sovereign, as the United States are in respect to the powers surrendered. The United States are sovereign as to all the powers of Government actually surrendered: Each State in the Union is sovereign as to all the powers reserved. It must necessarily be so, because the United States have no claim to any authority but such as the States have surrendered to them: Of course the part not surrenderred must remain as it did before. The powers of the general Government, either of a Legislative or Executive nature, or which particularly concerns Treaties with Foreign Powers, do for the most part (if not wholly) affect individuals, and not States: They require no aid from any State authority. This is the great leading distinction between the old articles of confederation, and the present constitution. " 

                           

                          CHISHOLM v. STATE OF GA. , 2 U.S. 419 (1793)

                           

                          http://laws.findlaw.com/us/2/419.html

                           

                           

                          "The laws of the United States are laws in the several States, and just as much binding on the citizens and courts thereof as the State laws are. The United States is not a foreign sovereignty as regards the several States, but is a concurrent, and, within its jurisdiction, paramount sovereignty. Every citizen of a State is a subject of two distinct sovereignties, having concurrent jurisdiction in the State,-concurrent as to place and persons, though distinct as to subject-matter…The disposition to regard the laws of the United States as emanating from a foreign jurisdiction is founded on erroneous views of the nature and relations of the State and Federal governments. It is often the cause or the consequence of an unjustifiable jealousy of the United States government, which has been the occasion of disastrous evils to the country.  CLAFLIN v. HOUSEMAN, 93 U.S. 130 (1876)

                          http://laws.findlaw.com/us/93/130.html

                           

                           

                          “This statute is one of universal application within the territorial limits of the United States , and is not limited to those portions which are within the exclusive jurisdiction of the national government, such as the District of Columbia. Generally speaking, within any state of this Union the preservation of the peace and the protection of person and property are the functions of the state government, and are no part of the primary duty, at least, of the nation. The laws of congress in respect to those matters do not extend into the territorial limits of the states, but have force only in the District of Columbia , and other places that are within the exclusive jurisdiction of the national government.”  CAHA v. U.S. , 152 U.S. 211 (1894)

                          http://laws.findlaw.com/us/152/211.html     

                           

                           

                          "We have in this republic a dual system of government,-national and state,-each operating within the same territory and upon the same persons, and yet working without collision, because their functions are different. There are certain matters over which the national government has absolute control, and no action of the state can interfere therewith, and there are others in which the state is supreme, and in respect to them the national government is powerless. To preserve the even balance between these two governments, and hold each in its separate sphere, is the peculiar duty of all courts; pre-eminently of this,- a duty oftentimes of great delicacy and difficulty.”  SOUTH CAROLINA v. U S, 199 U.S. 437 (1905)

                          http://laws.findlaw.com/us/199/437.html

                           

                          As one of the ENUMERATED POWERS, the TAXING POWER is NATIONAL & is NOT limited to people & things that are "federally connected”.

                           

                          We must remember, too, that the revenues of the United States must be obtained in the same territory, from the same people, and excise taxes must be collected from the same activities, as are also reached by the states in order to support their local government.”  FLINT v. STONE TRACY CO., 220 U.S. 107 (1911)

                          http://laws.findlaw.com/us/220/107.html

                           

                           

                          "The subject-matter of taxation open to the power of the Congress is as comprehensive as that open to the power of the states, though the method of apportionment may at times be different. 'The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises.' Article 1, 8. If the tax is a direct one, it shall be apportioned according to the census or enumeration. If it is a duty, impost, or excise, it shall be uniform throughout the United States . Together, these classes include every form of tax appropriate to sovereignty. Cf. Burnet v. Brooks, 288 U.S. 378, 403 , 405 S., 53 S.Ct. 457, 464, 465, 86 A.L.R. 747; Brushaber v. Union Pacific R.R. Co., 240 U.S. 1, 12 , 36 S.Ct. 236, L.R.A.1917D, 414, Ann.Cas.1917B, 713. Whether the tax is to be [301 U.S. 548, 582]   classified as an 'excise' is in truth not of critical importance. If not that, it is an 'impost' (Pollock v. Farmers' Loan & Trust Co., 158 U.S. 601, 622 , 625 S., 15 S.Ct. 912; Pacific Insurance Co. v. Soule, 7 Wall. 433, 445), or a 'duty' (Veazie Bank v. Fenno, 8 Wall. 533, 546, 547; Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429, 570 , 15 S.Ct. 673; Knowlton v. Moore, 178 U.S. 41, 46 , 20 S.Ct. 747). A capitation or other 'direct' tax it certainly is not. 'Although there have been, from time to time, intimations that there might be some tax which was not a direct tax, nor included under the words 'duties, imposts, and excises,' such a tax, for more than 100 years of national existence, has as yet remained undiscovered, notwithstanding the stress of particular circumstances has invited thorough investigation into sources of revenue.' Pollock v. Farmers' Loan & Trust Co., 157 U.S. 429, 557 , 15 S.Ct. 673, 680. There is no departure from that thought in later cases, but rather a new emphasis of it. Thus, in Thomas v. United States, 192 U.S. 363, 370 , 24 S.Ct. 305, 306, it was said of the words 'duties, imposts, and excises' that 'they were used comprehensively to cover customs and excise duties imposed on importation, consumption, manufacture, and sale of certain commodities, privileges, particular business transactions, vocations, occupations, and the like.'"   CHAS. C. STEWARD MACH. CO. v. DAVIS , 301 U.S. 548 (1937)

                          http://laws.findlaw.com/us/301/548.html

                           

                          Remember, in the CONSTITUTION & its AMENDMENTS, United States MEANS the several states of the Union .

                           

                          “It is sufficient to observe in relation to these three fundamental instruments, that it can nowhere be inferred that the [182 U.S. 244, 251] territories were considered a part of the United States . The Constitution was created by the people of the United States, as a union of states, to be governed solely by representatives of the states; and even the provision relied upon here, that all duties, imposts, and excises shall be uniform 'throughout the United States,' is explained by subsequent provisions of the Constitution, that 'no tax or duty shall be laid on articles exported from any state,' and 'no preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another; nor shall vessels bound to or from one state be obliged to enter, clear, or pay duties in another.' In short, the Constitution deals with states, their people, and their representatives.

                           

                          The 13th Amendment to the Constitution, prohibiting slavery and involuntary servitude 'within the United States, or in any place subject to their jurisdiction,' is also significant as showing that there may be places within the jurisdiction of the United States that are no part of the Union. To say that the phraseology of this amendment was due to the fact that it was intended to prohibit slavery in the seceded states, under a possible interpretation that those states were no longer a part of the Union, is to confess the very point in issue, since it involves an admission that, if these states were not a part of the Union, they were still subject to the jurisdiction of the United States.

                           

                          Upon the other hand, the 14th Amendment, upon the subject of citizenship, declares only that 'all persons born or naturalized in the United States , and subject to the jurisdiction thereof, are citizens of the United States , and of the state wherein they reside.' Here there is a limitation to persons born or naturalized in the United States , which is not extended to persons born in any place 'subject to their jurisdiction.'

                          ...

                          This case may be considered as establishing the principle that, in dealing with foreign sovereignties, the term 'United States' has a broader meaning than when used in the Constitution, and includes all territories subject to the jurisdiction of the Federal government, wherever located. In its treaties and conventions with foreign nations this government is a unit. This is so, not because the territories comprised a part of the government established by the people of the states in their Constitution, but because the Federal government is the only authorized organ of the territories, as well as of the states, in their foreign relations. By art. 1, 10, of the Constitution, 'no state shall enter into any treaty, alliance, or confederation, . . . [or] enter into any agreement or compact with another state, or with a foreign power.' It would be absurd to hold that the territories, which are much less independent than the states, and are under the direct control and tutelage of the general government, possess a power in this particular which is thus expressly forbidden to the states.

                          ...

                          Upon the other hand, when the Constitution declares that all duties shall be uniform 'throughout the United States,' it becomes necessary to inquire whether there be any territory over which Congress has jurisdiction which is not a part of the 'United States,' by which term we understand the states whose people united to form the Constitution, and such as have since been admitted to the Union upon an equality with them. Not only did the people in adopting the 13th Amendment thus recognize a distinction between the United States and 'any place subject to their jurisdiction,' but Congress itself, in the act of March 27, 1804 (2 Stat. at L. 298, chap. 56), providing for the proof of public records, applied the provisions of the act, not only to 'every court and office within the United States,' but to the 'courts and offices of the respective territories of the United States and countries subject to the jurisdiction of the United States,' as to the courts and offices of the several states.This classification, adopted by the Eighth Congress, is carried into the Revised Statutes as follows:

                           

                          'Sec. 905. The acts of the legislature of any state or terri- [182 U.S. 244, 278]   tory, or of any country subject to the jurisdiction of the United States , shall be authenticated,' etc.

                          'Sec. 906. All records and exemplifications of books which may be kept in any public office of and state or territory, or of any country subject to the jurisdiction of the United States,' etc.

                           

                          Unless these words are to be rejected as meaningless, we must treat them as a recognition by Congress of the fact that there may be territories subject to the jurisdiction of the United States , which are not of the United States .

                          ...

                          Whatever may be finally decided by the American people as to the status of these islands and their inhabitants,-whether they shall be introduced into the sisterhood of states or be permitted to form independent governments,-it does not follow that in the meantime, a waiting that decision, the people are in the matter of personal rights unprotected by the provisions of our Constitution and subject to the merely arbitrary control of Congress. Even if regarded as aliens, they are entitled under the principles of the Constitution to be protected in life, liberty, and property. This has been frequently held by this court in respect to the Chinese, even when aliens, not possessed of the political rights of citizens of the United States . Yick Wo v. Hopkins, 118 U.S. 356 , 30 L. ed. 220, 6 Sup. Ct. Rep. 1064; Fong Yue Ting v. United States , 149 U.S. 698 , 37 L. ed. 905, 13 Sup. Ct. Rep. 1016; Lem Moon Sing, 158 U.S. 538, 547 , 39 S. L. ed. 1082, 1085, 15 Sup. Ct. Rep. 962; Wong Wing v. United States , 163 U.S. 228 , 41 L. ed. 140, 16 Sup. Ct. Rep. 977. We do not desire, however, to anticipate the difficulties which would naturally arise in this connection, but merely to disclaim any intention to hold that the inhabitants of these territories are subject to an unrestrained power on the part of Congress to deal with them upon the theory that they have no rights which it is bound to respect."

                           

                          DOWNES v. BIDWELL, 182 U.S. 244 (1901)

                           

                          http://laws.findlaw.com/us/182/244.html

                           

                          That has NOTHING to do with the EXCLUSIVE LEGISLATIVE JURISDICTION the Congress has in the federal territories, possession & enclaves in the several states of the Union .

                           

                          "To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And" ARTICLE 1, SECTION 8, CLAUSE 17 , CONSTITUTION OF THE UNITED STATES

                          http://www.archives.gov/exhibits/charters/constitution_transcript.html

                           

                           

                          Territories: Powers of Congress Thereover

                           

                          In the territories, Congress has the entire dominion and sovereignty, national and local, and has full legislative power over all subjects upon which a state legislature might act.313 It may legislate directly with respect to the local affairs of a territory or it may transfer that function to a legislature elected by the citizens thereof,314 which will then be invested with all legislative power except as limited by the Constitution of the United States and acts of Congress.315

                           

                          http://www.law.cornell.edu/anncon/html/art4frag15_user.html#art4_hd66  

                           

                          That is SHOWN by the simple FACT that a STATE has NO JURISDICTION in an area under the EXCLUSIVE LEGISLATIVE AUTHORITY of the United States unless it has been granted by the United States .

                           

                          CALIFORNIA GOVERNMENT CODE 110.  The sovereignty and jurisdiction of this State extends to all places within its boundaries as established by the Constitution. The extent of such jurisdiction over places that have been or may be ceded to, purchased, or condemned by the United States is qualified by the terms of the cession or the laws under which the purchase or condemnation is made.

                          http://www.leginfo.ca.gov/cgi-bin/displaycode?section=gov&group=00001-01000&file=110-127  

                           

                           

                          “The instant study was occasioned by the denial to a group of children of Federal employees residing on the grounds of a Veterans' Administration hospital of the opportunity of attending public schools in the town in which the hospital was located. An administrative decision against the children was affirmed by local courts, finally including the supreme court of the State. The decisions were based on the ground that residents of the area on which the hospital was located were not residents of the State since "exclusive legislative jurisdiction" over such area had been ceded by the State to the Federal Government, and therefore they were not entitled to privileges of State residency.

                           

                          In an ensuing study of the State supreme court decision with a view toward applying to the Supreme Court of the United States for a writ of certiorari, the Department of Justice ascertained that State laws and practices relating to the subject of Federal legislative jurisdiction are very different in different States, that practices of Federal agencies with respect to the same subject very extremely from agency to agency without apparent basis, and that the Federal Government, the States, residents of Federal areas, and others, are all suffering serious disabilities and disadvantages because of a general lack of knowledge or understanding of the subject of Federal legislative jurisdiction and its consequences.

                           

                          Article I, section 8, clause 17, of the Constitution of the United States, the text of which is set out in appendix B to this report, provides in legal effect that the Federal Government shall have exclusive legislative jurisdiction over such area not exceeding 10 miles square as may become the seat of government of the United States, and like authority over all places acquired by the Government, with the consent of the State involved, for Federal works. It is the latter portion of this clause, the portion which has been emphasized, with which this report is primarily concerned.

                           

                          The status of the District of Columbia , as the seat of government area referred to in the first part of the clause, is fairly well known. It is not nearly as well known that under the second part of the clause the Federal Government has acquired, to the exclusion of the states, jurisdiction such as it exercises with respect to the District of Columbia over several thousand areas scattered over the 48 States. Federal acquisition of legislative jurisdiction over such areas has made of them Federal islands within Stats, which the term "enclaves" is frequently used to describe.

                           

                          While these enclaves, which are used for all the many Federal governmental purposes, such as post offices, arsenals, dams, roads, etc, usually are owned by the Government, the United States in many cases has received similar jurisdictional authority over privately owned properties which it leases, or privately owned and occupied properties which are located within the exterior boundaries of a large area (such as the District of Columbia and various national parks) as to which a State has ceded jurisdiction to the United States. On the other hand, the Federal Government has only a proprietorial interest, within vast areas of lands which it owns, for Federal proprietorship over land and Federal exercise of legislative jurisdiction with respect to land are not interdependent. And, as the Committee will endeavor to make clear, the extent of jurisdictional control which the government may have over land can and does vary to an almost infinite number of degrees between exclusive legislative jurisdiction and a proprietorial interest only.

                           

                          The Federal Government is being required to furnish to areas within the States over which it has jurisdiction in various forms governmental services and facilities which its structure is not designed to supply efficiently or economically. The relationship between States and persons residing in Federal areas in those States is disarranged and disrupted, with tax losses, lack of police control, and other disadvantages to the States. Many residents of federally owned areas are deprived of numerous privileges and services, such as voting, and certain access to courts, which are the usual incidents of residence within a State. In short, it was found by the Department of Justice that this whole important field of Federal-State relations was in a confused and chaotic state, and that more was needed a thorough study of the entire subject of legislative jurisdiction with a view toward resolving as many as possible of the problems which lack of full knowledge and understanding of the subject had bred.

                          It should be emphasized that Federal instrumentalities and their property are not in any event subject to State or local taxation or to most types of State or local controls. However, the transfer to the United States of exclusive legislative jurisdiction over an area has the effect, speaking generally, of divesting the State and any governmental entities operating under its authority of any right to tax or control private persons or property upon the area. It was the divesting of such rights that reservations in consent and cession statutes were designed to combat.

                          Exclusive legislative jurisdiction.--The term "exclusive legislative jurisdiction" as used in this report refers to the power "to exercise exclusive legislation" granted to the Congress by article I, section 8, clause 17, of the Constitution, and to the like power which may be acquired by the United States through cession by a State, or by a reservation made by the United States through cession by a State, or by a reservation made by the United States in connection with the admission of a State into the Union. In the exercise of such power as to an area in a State the Federal Government theoretically displaces the State in which the area is contained of all its sovereign authority, executive and judicial as well as legislative. By State and Federal statutes and judicial decisions, however, it is accepted that a reservation by a State of only the right to serve criminal and civil process in an area, resulting from activities which occurred off the area, is not inconsistent with exclusive legislative jurisdiction.”

                           

                          Pgs. 1-13, JURISDICTION OVER FEDERAL AREAS WITHIN THE STATES, REPORT OF THE INTERDEPARTMENTAL COMMITTEE FOR THE STUDY OF JURISDICTION OVER FEDERAL AREAS WITHIN THE STATES, PART I, The Facts and Committee Recommendations, Submitted to the Attorney General and transmitted to the President, April 1956

                           

                          http://www.constitution.org/juris/fjur/1fj1-3.htm  

                           

                           

                          “In United States v. Cornell, Fed.Cas. No. 14,867, Mr. Justice Story, at circuit, held that a state consenting to the purchase by the United States of land for a fort was without jurisdiction of a public offense subsequently committed therein, and he stated his reasons as follows:

                           

                          "The Constitution of the United States declares that congress shall have power to exercise 'exclusive legislation' in all 'cases whatsoever' over all places purchased by the consent of the legislature of the state in which the same shall be for the erection of forts, magazines, arsenals, dockyards and other needful buildings. When, therefore, a purchase of land for any of these purposes is made by the national government, and the state legislature has given its consent to the purchase, the land so purchased, by the very terms of the Constitution, ipso facto falls within the exclusive legislation of Congress, and the state jurisdiction is completely ousted. This is the necessary result, for exclusive jurisdiction is the attendant upon exclusive legislation, and the consent of the state legislature is, by the very terms of the Constitution, by which all the states are bound and to which all are parties, a virtual surrender and cession of its sovereignty over the place. Nor is there anything novel in this construction. It is under the like terms in the same clause of the Constitution that exclusive jurisdiction is now exercised by Congress in the District of Columbia; for if exclusive jurisdiction and exclusive legislation do not import the same thing, the states could not cede, or the United States accept for the purposes enumerated in this clause, any exclusive jurisdiction."

                           

                          Of like import is the opinion of Mr. Justice Woodbury given at circuit in United States v. Ames , Fed.Cas. No. 14,441.

                           

                          In Sinks v. Reese, 19 Ohio St. 306, which related to lands purchased with the consent of the Legislature of Ohio for a national home for disabled volunteer soldiers, a question arose respecting the effect of a proviso in the act of consent declaring that nothing in the act should be construed to prevent residents of the home from exercising the right of suffrage within the township in which the home was located. The supreme court of the state held that, through the purchase of the site for the home with the consent of the state legislature, the United States acquired exclusive jurisdiction over the site, and that the residents of the home, being within that exclusive jurisdiction, were not residents of the state, and therefore not entitled to vote therein.

                           

                          In Foley v. Shriver, 81 Va. 568, it was held of lands within the State of Virginia, purchased with her consent for another national home for disabled volunteer soldiers, that, in virtue of the constitutional provision, the purchase invested the United States with complete jurisdiction of the lands to the exclusion of the state, so that they were "no longer a part of the State of Virginia." And there was a like ruling in Bank of Phoebus v. Byrum, 110 Va. 708.

                           

                          In State v. Mack, 23 Nev. 359, which related to a purchase by the United States with the state's consent of land for a post office and federal court building, it was held, notwithstanding a provision in the act of consent purporting to "except the administration of the criminals laws of the state," that the purchase operated under the constitutional provision to pass full jurisdiction over the land to the United States and to divest the state of all jurisdiction thereover, criminal as well as civil.

                           

                          Like views of the operation of the constitutional provision are stated by Chancellor Kent in his Commentaries, vol. 1, pp. 429-431, and by Judge Story in his work on the Constitution (5th ed.) vol. 2, §§ 1224-1227.

                           

                          In Fort Leavenworth R. Co. v. Lowe,, this Court said:

                           

                          "When the title is acquired by purchase by consent of the legislatures of the states, the federal jurisdiction is exclusive of all state authority. This follows from the declaration of the constitution that congress shall have 'like authority' over such places as it has over the district which is the seat of government -- that is, the power of 'exclusive legislation in all cases whatsoever.' Broader or clearer language could not be used to exclude all other authority than that of congress."

                           

                           And, after reviewing some of the earlier cases here cited, the Court further said, p. 114 U. S. 537:

                           

                          "These authorities are sufficient to support the proposition, which follows naturally from the language of the constitution, that no other legislative power than that of Congress can be exercised over lands, within a state purchased by the United States with her consent for one of the purposes designated, and that such consent, under the Constitution, operates to exclude all other legislative authority."

                           

                          And the view thus expressed was given approving recognition in our recent decision in United States v. Unzeuta, 281 U. S. 138, where it is said that, where the United States purchases lands by the consent of the legislature of the state within which they are situated for the purposes named in the constitutional provision, "the federal jurisdiction is exclusive of all state authority."

                           

                          SURPLUS TRADING CO. V. COOK, 281 U. S. 647 (1930)

                           

                          http://supreme.justia.com/us/281/647/case.html  

                           

                          Patrick in California

                           

                          Founder, ALLIANCE for PEACE & PROSPERITY

                          http://groups.yahoo.com/group/alliancepeaceprosperity/

                           

                          "It ain't what ya don't know that hurts ya. What really puts a hurtin' on ya is what ya knows for sure, that just ain't so." -- Uncle Remus

                           

                           

                          --- In tips_and_tricks@yahoogroups.com , BOB GREGORY <rhgusn@...> wrote:

                          >  

                          > *The need to be "federally connected is because of the definitions of

                          > "wages" and "employee" and "employer" in the tax code.  It has to do with

                          > the legislative jurisdiction of Congress and the limits imposed by the

                          > Constitution.

                        • BOB GREGORY
                          *I agree with Jake. The lawless application and adjudication of such things is deeply embedded in the system, and some righteous dude waving a bunch of law
                          Message 12 of 19 , Jan 22, 2011
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                            I agree with Jake.  The lawless application and adjudication of such things is deeply embedded in the system, and some righteous dude waving a bunch of law dictionaries and old-but-still-valid Supreme Court decisions will be shot down in flames every time.  The Supreme Court plays its certiorari card when it needs to join in the game on the side of the miscreants.  I have been saying for a long time now that nothing short of massive civil disobedience will change the status quo (Latin for the way they're screwing us now).  Twenty or thirty million people just quietly agreeing to stop or minimize withholding, stop filing tax returns and refusing to respond to any IRS correspondence would cause a change.  Attempts by individuals or small groups will end with people broke and in prison.  And writing to your Congressman is a joke.

                            At the present time I don't have much hope for anything like that happening.  Most of the dumbed-down, bread-and-circus-trained-seal people have spines like jellyfish.  But the country is about to go through some very bad times because of economic collapse and possible major civil unrest, along with food shortages and very high if not hyper- inflation.  Somewhere along the line during that uncertain scenario people may just decide that paying ever-increasing taxes to a broke and criminal government is just not worth bothering with.

                            ===================================


                            On Sat, Jan 22, 2011 at 5:51 AM, Jake <jake_28079@...> wrote:
                             

                            I agree with what you're saying, Bear, but the IRS doesn't; they say the terms "includes" & "including" are expansive, not restrictive & more importantly, the courts tend to agree with them.  I won't take the time to look up specific cases, but many times people have used arguments such as the individual income tax only applies to gov't. employees, people in Puerto Rico, etc. & all such arguments have been deemed "frivolous".  Yes, it's another case of what the law says & how it's applied being 2 very different things, but that's the way it is & nothing we say will change that. 


                          • BOB GREGORY
                            *First, consider that if Congress had complete and plenary jurisdiction to create income tax laws any way it wished, there would be no need for the
                            Message 13 of 19 , Jan 22, 2011
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                              First, consider that if Congress had complete and plenary jurisdiction to create income tax laws any way it wished, there would be no need for the weasel-wording used in the definitions I mentioned.  In other laws Congress seems to have no problem at all saying exactly who an employee is or what a state is, but in Title 26 that is not the case.  The Supreme Court (SC) has ruled that the provisions in the organic Constitution relating to direct and indirect taxes were unaffected by the 16th Amendment.  It also ruled that the 16th Amendment did not give congress any new powers of taxation nor extend taxation to any new objects of taxation.  All the 16th Amendment did, according to the SC, was to ensure that the taxation of incomes remained classified as an excise "where it inherently belongs." 

                              The SC has also ruled that common occupations and the earning a living through labor or operating a business are rights.  It also ruled that rights are not taxable and that Congress or the Secretary of the Treasury may not convert a right to a privilege in order to tax it.  The SC also ruled that "income" means corporate profit or gain and that taxes do not apply to capital itself.  It said that "income" is used as a measure of the profitability of a corporation and used to determine the amount of excise tax the corporation is required to pay on its privilege of existence by government charter.  In later cases about income tax laws the SC ruled that the meaning of "income" is the same in all of those laws as it is in the Corporate Excise Tax law.  It further said that the meaning of "income" has been settled through multiple rulings of the SC and that Congress may not in any way through legislation change that meaning.

                              The overall effect of this body of rulings by the SC is that Congress has very little leeway in the area of taxing the money paid to people for their labor.  The money itself is property and therefore subject to the rule of apportionment.  The money is not "income," or certainly not all of it because "income" implies profit or gain (ignoring for the moment that it is by definition corporate profit).  A corporation is allowed to deduct all of its costs of raw materials, supplies, utilities, depreciation, etc. from its gross receipts to arrive at its profit.  But according to the IRS you may have EITHER a "standard deduction" or you may itemize deductions only for certain specific costs such as property taxes, certain sales taxes, part of medical expenses, etc. but no real costs of everyday operations such as utilities, rent, transportation, food or the like.  After such expenses the typical worker does not have a lot of money "left over" at the end of the year as "profit."   But even if a worker's "profit" could be measured, a subject for the excise tax on that profit would need to be identified.  Is working for a living a privilege?  No, according to the SC it is a right, and rights may not be taxed.  So what would the excise-taxable privilege or event be?  Why would not Congress identify that privilege or event? 

                              All of the points are INCONVENIENT for the government, so they ignore them.  They "impose" a tax on the "gross income" and define that because the SC has not prohibited defining "gross income," only "income."  But then they do not make anyone "liable" for the payment of that tax.  (The Secretary of the Treasury sneakily tries to introduce the liability in 26 CFR 1.1-1 which is in Part 1 because it is purportedly a substantive or legislative regulation.  But only one tiny part of 1.1-1 is substantive and rest is interpretive.  The Secretary could not legally issue an substantive regulation saying that there is a liability for 26 USC Subtitle A taxes because that would be expanding on the law which states no liability.)   Note that all other taxes within the internal revenue laws have clearly states liability clauses.

                              They establish an elaborate ruse to cause people to "volunteer" to pay taxes on their purported "incomes" by carefully crafting definitions which appear to make workers "employees" who work for "employers" and who receive "wages" to compensate them for their work.

                              And it has all worked so wonderfully well from the government's point of view that most people just accept it without question and lower courts enforce the system as if it were lawful and valid.  It is a hugely successful scam, just as is Social Security.  It is entrenched and will not go away without massive resistance, as I have pointed out before.  But it is not LAWFUL.

                              =====================================                            
                            • Jake
                              Bob Gregory sez (in part):      Twenty or thirty million people just quietly agreeing to stop or minimize withholding, stop filing tax returns and refusing
                              Message 14 of 19 , Jan 23, 2011
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                                Bob Gregory sez (in part):
                                 
                                   Twenty or thirty million people just quietly agreeing to stop or minimize withholding, stop filing tax returns and refusing to respond to any IRS correspondence would cause a change.  Attempts by individuals or small groups will end with people broke and in prison.
                                 
                                This is true, although you do not want to ignore IRS correspondence as long as you're in "the system" because if you do, legally you're saying that whatever the IRS claims is true & correct.  But it's been said that the best way to kill a beast is to starve it to death & while I wouldn't say that's the best way, it certainly is one way.  Now notice the 1st part of 26 U.S.C. § 3121 (emphasis added):
                                 
                                   § 3121. Definitions
                                     (a) Wages
                                     For purposes of this chapter [21, FICA], the term “wages” means all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash;
                                 
                                The same definition is found in § 3306(b) (chap. 23, unemployment tax), a very similar one, identical regarding cash, in § 3306(a) (chap. 24, collection of income tax @ source) & there are probably more sections with the same definition too.
                                 
                                And understand that the IRS is a form-driven bureaucracy which relies heavily on a binary computer system (IBM 360) that's over 40 years old.  Also, know that the "Entity" as shown in an Individual Master File (IMF) is not you, is not a "person", it's the taxpayer ID number - SSN for an "Individual".  As long as there are forms such as W-2, 1099, etc. being sent in to the IRS with the Entity number on them, that Entity is presumed to be engaged in a "revenue taxable activity" & is required to file a "return".
                                 
                                But when you operate on a cash basis only, are not an "employee" earning "wages", do not use the Social Security account number assigned to you & there are no forms being sent in to the IRS, there is no "Entity" engaged in any revenue taxable activity.  You've heard the old computer saying, "garbage in, garbage out", well here's another one - nothing in, nothing out.
                                 
                                Now if 20 or 30 million people were to work their way out of "the system" so there were 20-30 million fewer Entities to track & tax, even if that didn't starve the beast, it'd sure put it on a heck of a diet!  I don't remember where I saw this figure, but a while back I read that there were 39 million non-filers that the IRS knew of.  How 'bout adding 20-30 million more they don't know about because they can't track 'em?
                                 
                                Problem is that requires a major lifestyle change few are willing to make, so I don't think you'll ever see a large enough segment of the public out of "the system" to make a substantial change.  And of course the Fed would just create more "money" out of thin air & have the Treasury's printing presses spitting out $$$ even faster to make up for the lost revenue, but the fewer people there are paying in, the sooner the Ponzi scheme fraud will come to an end - it's mathematically doomed to failure anyway.
                                 
                                I've been studying "the system" (which I'm out of) for 20 years & while there are numerous administrative procedures to use & ways of keeping the IRS @ bay indefinitely, that requires a lot of time & effort if you know how to do it yourself & a lot of $$$ if you don't - although substantially less than most non-filers would pay in taxes.  But if you're willing to make the lifestyle change, be an independent contractor rather than an employee, work for cash rather than checks or even worse, direct deposit, throw away the credit cards, don't take out bank loans, etc., then you don't have to deal with the IRS administrative BS anymore or ever see the inside of a courtroom.
                                 
                                The above definition makes it clear that the term "wages" does not include cash payments & while we are moving more & more towards a "cashless society", we'll never get all the way there, for several reasons.  And note comments about the "underground economy" in the Grace Commission Report to President Reagan back in 1984 - that it grows in direct proportion to tax increases & that @ the time, 1/3 of the taxes that could be collected were not because of it. 
                                 
                                It's pretty simple, really - the vast majority of folks leave a "paper trail" and/or "electronic footprints" everywhere they go & they're real easy to track, but while the Gov't. knows the "underground economy" exists, it can't do much of anything about it because the people in it you can't easily track, if @ all.  But if you've ever filed a tax return in your whole entire life, an "Entity" was created.  You can see it on an IMF - the 1st code in the Entity Transaction section is a 150, followed by a line of dashes, then a coded date, like 19682108.  Quoting from the IRS manual which defines the IMF transaction codes (TC), "This TC [150] when posted to the Entity Transaction Section indicates the Master File Entity was created by the posting of the return" & the date code indicates that happened during the 21st cycle (week) of 1968.  The 08 @ the end of the date code means the transaction wasn't posted by a newer system called "CADE" - customer account data engine.
                                 
                                But if that "Entity" quits filing & there are no more forms sent in from employers, banks, etc., sooner or later there will be a TC 598 code show up on the IMF & that means, "Shelved.  By national office direction only."  Either that "Entity" is dead or inactive - no longer engaged in any revenue taxable activity.  And it is the activity which is taxed, not the Entity or you personally.
                                 
                                So although it takes quite a bit of study, the Internal Revenue Code itself tells you how to not be required to file any forms / returns & how to not be liable for any tax(es).  But the general public assumes they have to use a SSN for everything, fill out a W-4 to get a job, etc. & in the criminal tax cases I've observed in court, the proscutor inevitably started out with the "everybody knows" argument - looking @ the jury & nodding his head up & down, the proscutor says, "Everybody knows you have to file your tax returns and pay your taxes."  And of course the jurors nod their heads in agreement.
                                 
                                Did you notice the possessive, "your" tax return, "your" taxes?  Excuse me, I don't own any returns or taxes, do you you?  Nearly everyone has been tricked into using the possessive, "my" SSN, "your" tax return, etc.  And the SSN doesn't belong to you any more than taxes or IRS forms do, it's just an account number which belongs to the Social Security Admin. which you can use if there's been $$$ paid into that acct. & you're eligible for any "benefits".
                                 
                                Sorry to be so long, but so much time is wasted arguing over the definitions of terms / "words of art" & it's really, really complicated if you're in "the system", it's really simple if you're not.  So get out & do your part to "starve the beast" !!!
                                 
                                ~ ~ ~
                                 

                              • Jake
                                   The SC has also ruled that common occupations and the earning a living through labor or operating a business are rights.  It also ruled that rights are
                                Message 15 of 19 , Jan 23, 2011
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                                     The SC has also ruled that common occupations and the earning a living through labor or operating a business are rights.  It also ruled that rights are not taxable and that Congress or the Secretary of the Treasury may not convert a right to a privilege in order to tax it.
                                   
                                  Ooops - that part of the message is (unfortunately) incorrect.  See e.g., Steward Machine Co. v. Collector of Internal Revenue, 301 U.S. 548, 580, 581 (1937):
                                   
                                     We learn that employment for lawful gain is a "natural" or "inherent" or "inalienable" right, and not a "privilege" at all.  But natural rights, so called, are as much subject to taxation as rights of less importance. [Fn 6]  An excise is not limited to vocations or activities that may be prohibited altogether.  It is not limited to those that are the outcome of a franchise.  It extends to vocations or activities pursued as of common right.  What the individual does in the operation of a business is amenable to taxation just as much as what he owns, at all events if the classification is not tyrannical or arbitrary.  "Business is as legitimate an object of the taxing powers as property."  Newton v. Atchison, 31 Kan. 151, 154 (per Brewer, J.), 1 Pac. 288.  Indeed, ownership itself, as we had occasion to point out the other day, is only a bundle of rights and privileges invested with a single name.  Henneford v. Silas Mason Co., 300 U.S. 577.  "A state is at liberty, if it pleases, to tax them all collectively, or to separate the faggots and lay the charge distributively."  Ibid.  Employment is a business relation, if not itself a business.  It is a relation without which business could seldom be carried on effectively.  The power to tax the activities and relations that constitute a calling considered as a unit is the power to tax any of them.  The whole includes the parts.  Nashville, C. & St.L. Ry. Co. v. Wallace, 288 U.S. 249, 267, 268.
                                   
                                  Footnote 6: The cases are brought together by Professor John MacArthur Maguire in an essay, "Taxing the Exercise of Natural Rights" (Harvard Legal Essays, 1934, pp. 273, 322).
                                   
                                  The Constitution determines how the exercise of a right may be taxed & as Bob mentioned, the 16th Amendment didn't create any new tax or class of taxation, but the Constitution doesn't say that the exercise of a common or natural right can't be taxed.
                                   
                                  There are some who claim the right itself is being taxed but that's not true & if you don't exercise a right it won't be taxed - i.e., you have a right to own property, but if you don't you pay no property tax; you have a right to travel on public highways, but if you don't buy gasoline or diesel fuel you don't pay the highway use tax on it, etc.
                                   
                                  Now some States, including Tennessee, have decided that while privileges can be taxed, the exercise of certain rights can't be - see e.g., Jack Cole Co. v. MacFarland, 206 Tenn. 694, 337. S.W.2d 453 (Tenn. 1960):
                                   

                                     It cannot be denied that the Legislature can name any privilege a taxable

                                  privilege and tax it by means other than an income tax, but the Legislature cannot

                                  name something to be a taxable privilege unless it is first a privilege.

                                   

                                  * * *

                                   

                                  Realizing and receiving income or earnings is not a privilege that can be

                                  taxed.

                                   

                                  * * *

                                   

                                  Since the right to receive income or earnings is a right belonging to every person,

                                  this right cannot be taxed as privilege.
                                   
                                  But unfortunately that Tennessee supreme court ruling does not apply nationwide.
                                   
                                   
                                  ~ ~ ~

                                • Frog Farmer
                                  ... I ask in a non-rhetorical un-Socratic manner: Are there any with their paperwork in order proving that they hold office legitimately left? Should we hold
                                  Message 16 of 19 , Jan 23, 2011
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                                    Brendan in Reno asked:

                                    > However, getting federal judges to own up to this is a good tip and
                                    > trick.
                                    >
                                    > Are there any honest ones left?

                                    I ask in a non-rhetorical un-Socratic manner:

                                    Are there any with their paperwork in order proving that they hold
                                    office legitimately left? Should we hold a contest with a prize for any
                                    list member who can prove that they found one?

                                    I've only looked at state judges but found only one and he went criminal
                                    (I caught him with witnesses committing a felony). But Paul Andrew
                                    Mitchell has a lot on federal judges who fail to qualify under law.

                                    Everyone waives it. Go figure!

                                    Regards,

                                    FF
                                  • Michael
                                    ... What?! Where did an exise come into the picture? An excise tax is uniform and mandatory, IF one engages in an excise taxable usage, alchohol, gasoline,
                                    Message 17 of 19 , Jan 23, 2011
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                                      --- In tips_and_tricks@yahoogroups.com, Jake <jake_28079@...> wrote:

                                      >  See e.g., Steward Machine Co. v. Collector of Internal
                                      > Revenue, 301 U.S. 548, 580, 581 (1937):
                                      >  
                                      >    We learn that employment for lawful gain is a "natural"
                                      > or "inherent" or "inalienable" right, and not a "privilege"
                                      > at all.  But natural rights, so called, are as much subject
                                      > to taxation as rights of less importance. [Fn 6]  An excise
                                      > is not limited to vocations or activities that may be
                                      > prohibited altogether. 

                                      What?! Where did "an exise" come into the picture? An
                                      excise tax is uniform and mandatory, IF one engages in
                                      an excise taxable usage, alchohol, gasoline, cigarettes,
                                      as a few common examples. So, how are "natural rights,
                                      so called,...subject to taxation?"


                                      Continuing:

                                      > It is not limited to those that are the outcome of a
                                      > franchise.  It extends to vocations or activities
                                      > pursued as of common right. 

                                      I must be missing something here. When or where does
                                      an excise "extend to a vocation or activity pursued
                                      as of common right?"


                                      > What the individual does in the operation of a
                                      > business is amenable to taxation...

                                      True, because a business is a fictional corporate
                                      creature subject to taxation...but not an excise?!


                                      >...just as much as what he owns, at all events if
                                      > the classification is not tyrannical or arbitrary. 

                                      I simply do not get that.


                                      Continuing:

                                      "Business is as legitimate an object of the taxing powers as property."  Newton v. Atchison, 31 Kan. 151, 154 (per Brewer, J.), 1 Pac. 288.  Indeed, ownership itself, as we had occasion to point out the other day, is only a bundle of rights and privileges invested with a single name.  Henneford v. Silas Mason Co., 300 U.S.
                                      > 577.  "A state is at liberty, if it pleases, to tax them all collectively, or to separate the faggots and lay the charge distributively."  Ibid.  Employment is a business relation, if not itself a business.  It is a relation without which business could seldom be carried on effectively.  The power to tax the activities and relations that constitute a calling considered as a unit is the power to tax any of them.  The whole includes the parts.  Nashville, C. & St.L. Ry. Co. v. Wallace, 288 U.S. 249, 267, 268."


                                      Sounds like someone is playing with words here, like under
                                      which shell is the non-taxable natural right?


                                      > * * *
                                      >  
                                      > Realizing and receiving income or earnings is not a
                                      > privilege that can be taxed.


                                      Wait a minute. "Income" is that which is derived from
                                      interest, is it not, and that form is taxable.
                                    • BOB GREGORY
                                      *Tennessee is not alone. Here are some Supreme Court and lower court citations to consider, including the Tennessee case:* Direct Taxes bear upon persons,
                                      Message 18 of 19 , Jan 23, 2011
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                                        Tennessee is not alone.  Here are some Supreme Court and lower court citations to consider, including the Tennessee case:

                                        "Direct Taxes bear upon persons, upon possession and the enjoyment of
                                        rights; Indirect Taxes are levied upon the happening of an event."
                                        Knowlton v. Moore, 178 US 41, 47 (1900).


                                        “The common business and callings of life, the ordinary trades and pursuits, which are innocuous in themselves, and have been followed in all communities from time immemorial, must therefore be free in this country to all alike upon the same conditions. The right to pursue them, without let or hinderance, except that which is applied to all persons of the same age, sex, and condition, is a distinguishing privilege of citizens of the United States, and an essential element of that freedom which they claim as their birthright. It has been well said that 'the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands, and to hinder his employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property. It is a manifest encroachment upon the just liberty both of the workman and of those who might be disposed to employ him.” Butcher's Union Co. v. Cresent City Co., 111 US 746 (1884).


                                        “… using of anything whereby any person or persons, bodies politic or corporate, are sought to be restrained of any freedom or liberty they had before or hindered in their lawful trade,' All grants of this kind are void at common law, because they destroy the freedom of trade, discourage labor and industry, restrain persons from getting an  honest livelihood, and put it in the power of the grantees to enhance the price of commodities. They are void because they interfere with the liberty of the individual to pursue a lawful trade or employment.” Butcher's Union Co. v. Cresent City Co., 111 US 746, 756 (1884)

                                        “That the right to conduct a lawful business, and thereby acquire pecuniary profits, is property, is indisputable.” TRUAX v. CORRIGAN, 257 U.S. 312, 348 (1921).

                                        In Sims v. Ahrens, 167 Ark. 557, 271 S.W. 720, 733 (1925):
                                        "[T]he Legislature has no power to declare as a privilege and tax for revenue purposes occupations that are of common right, but it does have the power to declare as privileges and tax as such for state revenue purposes those pursuits and occupations that are not matters of common right..."

                                        MEYER v. STATE OF NEBRASKA, 262 U.S. 390, 399  (1923):
                                        “While this court has not attempted to define with exactness the liberty thus guaranteed, the term has received much consideration and some of the included things have been definitely stated. Without doubt, it denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognized at common law as essential to the orderly pursuit of happiness by free men. Slaughter-House Cases, 16 Wall. 36; Butchers' Union Co. v. Crescent City Co ., 111 U.S. 746 , 4 Sup. Ct. 652; Yick Wo v. Hopkins, 118 U.S. 356 , 6 Sup. Ct. 1064; Minnesota v. Bar er, 136 U.S. 313 , 10 Sup. Ct. 862; Allegeyer v. Louisiana, 165 U.S. 578 , 17 Sup. Ct. 427; Lochner v. New York, 198 U.S. 45 , 25 Sup. Ct. 539, 3 Ann. Cas. 1133; Twining v. New Jersey 211 U.S. 78 , 29 Sup. Ct. 14; Chicago, B. & Q. R. R. v. McGuire, 219 U.S. 549 , 31 Sup. Ct. 259; Truax v. Raich, 239 U.S. 33 , 36 Sup. Ct. 7, L. R. A. 1916D, 545, Ann. Cas. 1917B, 283; Adams v. Tanner, 224 U.S. 590 , 37 Sup. Ct. 662, L. R. A. 1917F, 1163, Ann. Cas. 1917D, 973; New York Life Ins. Co. v. Dodge, 246 U.S. 357 , 38 Sup. Ct. 337, Ann. Cas. 1918E, 593; Truax v. Corrigan, 257 U.S. 312 , 42 Sup. Ct. 124; Adkins v. Children's Hospital (April 9, 1923), 261 U.S. 525 , 43 Sup. Ct. 394, 67 L. Ed. --; Wyeth v. Cambridge Board of Health, 200 Mass. 474, 86 N. E. 925, 128 Am. St. Rep. 439, 23 L. R. A. (N. S.) 147.” 

                                        “A state may not impose a charge for the enjoyment of a right granted by the Federal Constitution.” MURDOCK v. COMMONWEALTH OF PENNSYLVANIA, 319 US 105, at 113; 63 S Ct at 875; 87 L Ed at 1298 (1943).


                                        FLINT v. STONE TRACY CO., 220 U.S. 107, 165 (1911:
                                        “It is therefore well settled by the decisions of this court that when the sovereign authority has exercised the right to tax a legitimate subject of taxation as an exercise of a franchise or privilege, it is no objection that the measure of taxation is found in the income produced in part from property which of itself considered is nontaxable. Applying that doctrine to this case, the measure of taxation being the income of the corporation from all sources, as that is but the measure of a privilege tax within the lawful authority of Congress to impose, it is no valid objection that this measure includes, in part, at least, property which, as such, could not be directly taxed. See, in this connection, Maine v. Grand Trunk R. Co. 142 U.S. 217 , 35 L. ed. 994, 3 Inters. Com. Rep. 807, 12 Sup. Ct. Rep. 121, 163, as interpreted in Galveston, H. & S. A. R. Co. v. Texas, 210 U.S. 217, 226 , 52 S. L. ed. 1031, 1037, 28 Sup. Ct. Rep. 638.”


                                        Tennessee Supreme Court
                                        Jack Cole Company v. Alfred T. MacFarland, Commissioner, 206 Tenn. 694, 337
                                        S.W.2d 453 (Tenn. 1960):

                                        "It cannot be denied that the Legislature can name any privilege a taxable
                                        privilege and tax it by means other than an income tax, but the Legislature cannot
                                        name something to be a taxable privilege unless it is first a privilege.

                                        "Privileges are special rights, belonging to the
                                        individual or class, and not to the mass; properly,
                                        an exemption from some general burden, obligation or
                                        duty; a right peculiar to some individual or body"

                                        "The right to receive income or earnings is a right
                                        belonging to every person, and realization and
                                        receipt of income is therefore not a "privilege that
                                        can be taxed." [from:Taxation West Key 933]


                                        US Supreme Court in McCulloch v. Maryland, 4 Wheat 316:

                                        "If it could be said that the state had the power to
                                        tax a right, this would enable the state to destroy
                                        rights guaranteed by the constitutions through the
                                        use of oppressive taxation. ... The power to tax
                                        involves the power to destroy."


                                        Edwards v. Keith, 231 Fed 1:

                                        "One does not derive income by rendering services and
                                        charging for them."



                                        Conner v. U.S., 303 F.Supp. 1187 (1969) on page 1191:

                                        "If there is no gain there is no income ... Congress
                                        has taxed income not compensation."



                                        Wilby v. Mississippi, 47 S 465:

                                        "It certainly was not the intention of the
                                        legislature to levy a tax upon honest toil and labor."



                                        Staples v. U.S., 21 F.Supp. 737, 739 (1937):

                                        "Income is not a wage or compensation for any type of
                                        labor."



                                        Spring Valley Water Works v. Barber, 33 P 735:

                                        "A right common in every citizen such as the right to
                                        own property or to engage in business of a character
                                        not requiring regulation CANNOT, however, be taxed as
                                        a special franchise by first prohibiting its exercise
                                        and then permitting its enjoyment upon the payment of
                                        a certain sum of money."


                                        Oliver v. Halstead, 86 SE2d 859 (1955):

                                        "There is a clear distinction between 'profit' and
                                        'wages' or compensation for labor. Compensation for
                                        labor cannot be regarded as profit within the meaning
                                        of the law."



                                        Stratton's Independence v. Howbert, 231 US 309 (1913):

                                        "Income ... may be defined as the gain derived from
                                        capital or from labor or from both combined."



                                        The Supreme Court in Eisner v. Macomber, 40 SCt 192 and 252 US 189
                                        (1920) and subsequently reaffirmed in Goodrich v. Edwards, 255 US 527
                                        (1921):

                                        * "... it becomes essential to distinguish between
                                        what is, and what is not 'income'...

                                        * "Congress may not, by any definition it may adopt,
                                        conclude the matter, since it cannot by legislation
                                        alter the Constitution, from which alone it derives
                                        its power to legislate, and within whose limitations
                                        alone, that power can be lawfully exercised ...."

                                        * "Income may be defined as gain derived from capital,
                                        from labor or from both combined, provided it be
                                        understood to include profits gained through sale or
                                        conversion of capital assets."



                                        In the 1959 Tax Court case Penn Mutual Indemnity Co. v. Commissioner,
                                        32 Tax Court page 681:

                                        "The rule of Eisner v. Macomber has been reaffirmed
                                        on so many occasions that citation of the cases to
                                        this effect would be unnecessarily burdensome. To
                                        depart from the rule at this late date would ignore
                                        the sound principles upon which that case was decided
                                        and would throw into confusion the fundamental income
                                        tax structure and law as it has developed in the
                                        almost half century which has elapsed since adoption
                                        of the 16th amendment. That there cannot be 'income'
                                        without a 'gain' accords with the common
                                        understanding of the term, a test of construction
                                        which is particularly appropriate in our system of
                                        self-assessed Federal income tax ... Moreover, that
                                        which is not income in fact manifestly cannot be made
                                        such by the legislative expedient of calling it income
                                        ...."



                                        So. Pacific v. Lowe, 238 F. Supp. 736, 247 US 330:

                                        "'income' as used in the statute should be given a
                                        meaning so as not to include everything that comes in.
                                        The true function of the words 'gains' and 'profits'
                                        is to limit the meaning of the word 'income'.



                                        Laureldale Cemetery Assoc. v. Matthews, 345 A 239, and 47 A.2d 277
                                        (1946):

                                        "Reasonable compensation for labor or services
                                        rendered is not profit."



                                        U.S. Supreme Court in Murdock v. Pennsylvania, 319 US 105, at 113 (1943):

                                        "A state may not ... impose a charge for the e
                                        njoyment of a right granted by the Federal
                                        Constitution."



                                        U.S. Supreme Court in Magnano Co. v. Hamilton, 292 US 40:

                                        "The power to tax the exercise of a [right] ... is
                                        the power to control or suppress its enjoyment."



                                        Spreckels Sugar Ref. Co. v. Mclain, 24 SCt 382 (1904):

                                        "the citizen is exempt from taxation unless the same
                                        is imposed by clear and unequivocal language."



                                        Oregon Supreme Court in Redfield v. Fisher, 292 P 813, pg 819 (1930):

                                        "The individual, unlike the corporation, cannot be
                                        taxed for the mere privilege of existing. The
                                        corporation is an artificial entity which owes its
                                        existence and charter powers to the state: but the
                                        individuals' right to live and own property are
                                        natural rights for the enjoyment of which an excise
                                        cannot be imposed."



                                        Long v. Ramussen, 281 F 236, 238 (1922):

                                        "The revenue laws are a code or system in regulation
                                        of tax assessment and collection. They relate to
                                        taxpayers, and not to non-taxpayers. The later are
                                        without their scope. No procedure is prescribed for
                                        non-taxpayers, and no attempt is made to annul any of
                                        their rights and remedies in due course of law. With
                                        them Congress does not assume to deal, and they are
                                        neither of the subject nor of the object of the
                                        revenue law."
                                        Reaffirmed in Gerth v. US, 132 F. Supp. 894 (1955) and
                                        in Economy Heating Co. v. U.S., 470 F2d 585 (1972)



                                        Regal Drug Co v. Wardell, 260 US 386:

                                        "Congress may not, under the taxing power, assert a
                                        power not delegated to it by the Constitution."



                                        U.S. Supreme Court in Hurtado v. California, 110 US 516:

                                        "The state cannot diminish the rights of the people."
                                      • Jake
                                            In the 1959 Tax Court case Penn Mutual Indemnity Co. v. Commissioner, 32 Tax Court page 681: The rule of Eisner v. Macomber has been reaffirmed on so
                                        Message 19 of 19 , Jan 25, 2011
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                                             > In the 1959 Tax Court case Penn Mutual Indemnity Co. v. Commissioner, 32 Tax Court page 681:

                                          "The rule of Eisner v. Macomber has been reaffirmed on so many occasions that citation of the cases to this effect would be unnecessarily burdensome. . . ."


                                          BUT - the U.S. supreme court limited the scope of Eisner v. Macomber 4 years earlier.  See Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 430, 431 (1955):


                                               Nor can we accept respondents' contention that a narrower reading of § 22(a) is required by the Court's characterization of income in Eisner v. Macomber, 252 U.S. 189, 207 [1920], as "the gain derived from capital, from labor, or from both combined."  The Court was there endeavoring to determine whether the distribution of a corporate stock dividend constituted a realized gain to the shareholder, or changed "only the form, not the essence," of his capital investment.  Id. at 210. It was held that the taxpayer had "received nothing out of the company's assets for his separate use and benefit." Id. at 211. The distribution, therefore, was held not a taxable event.  In that context -- distinguishing gain from capital -- the definition served a useful purpose.  But it was not meant to provide a touchstone to all future gross income questions.


                                          Obviously, Glenshaw gets into the definition of "gross income" & the decision paints with a very broad brush, as does the statute.  The issue @ hand was whether punitive damages awarded were included in "gross income" & the court held that they were.


                                          § 22(a) (of the Internal Revenue Code of 1954) referred to in that case is now IRC § 61(a):


                                          § 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:
                                             (1) Compensation for services, including fees, commissions, fringe benefits, and similar items; 
                                             (2) Gross income derived from business; 
                                             (3) Gains derived from dealings in property; 
                                             (4) Interest; 
                                             (5) Rents; 
                                             (6) Royalties; 
                                             (7) Dividends; 
                                             (8) Alimony and separate maintenance payments; 
                                             (9) Annuities; 
                                             (10) Income from life insurance and endowment contracts; 
                                             (11) Pensions; 
                                             (12) Income from discharge of indebtedness; 
                                             (13) Distributive share of partnership gross income; 
                                             (14) Income in respect of a decedent; and 
                                             (15) Income from an interest in an estate or trust.


                                          And (a)(1), Compensation for services, is where they "getcha" regarding a paycheck or even "under the table" cash, although if the IRS doesn't know about the latter they can't tax it & "wages" as defined in § 3121 "means all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash;" (emphasis added).


                                          But back on point, the Glenshaw Glass decision limited the scope of Eisner v. Macomber to "distinguishing gain from capital", the character of a corporate stock dividend, etc.  And Eisner itself doesn't get into a personal income tax on "compensation" for labor or services rendered;  the current tax code didn't exist in 1920.  We can say that we have a "common right" to such compensation, it's not taxable & in some States it's not, but according to the IRS & unf-rtunately the supreme court, @ the federal level it is.


                                          Of course the best way to deal with that situation is to get out of "the system", work on a cash basis as an independent contractor & don't leave a "paper trail", etc., but that requires lifestyle changes few are willing to make.


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