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Internal Revenue Code, Statutory Construction, & the Term "Includes"

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  • FreeDave
    WHAT S WRONG WITH THIS ? Any opinions? The following is my analysis, taken from several sources, as to why the term self-employment income apparently only
    Message 1 of 3 , Aug 5, 2011
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      Any opinions?

      The following is my analysis, taken from several sources, as to why the term "self-employment income" apparently only applies to things in the same general class as the performance of the functions of a public office, which would eliminate private sector earnings, not from any government source.

      TITLE 26 > Subtitle A > CHAPTER 2 > § 1402 Definitions
      (a) Net earnings from self-employment
      The term "net earnings from self-employment" means the gross income derived by an individual from any trade or business carried on by such individual...
      (b) Self-employment income
      The term "self-employment income" means the net earnings from self-employment derived by an individual

      TITLE 26 > Subtitle F > CHAPTER 79 > § 7701 Definitions
      (26) Trade or business
      The term "trade or business" includes the performance of the functions of a public office.

      Below is mainly regarding the correct meaning of the term "includes."

      Internal Revenue Code § 7701(c), "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."

      They can't be terms of unlimited expansion, or you wouldn't require a definition, so what are they? The answer is that the definition establishes a class, to which other members of that class can be added, even though not specifically defined.

      From Helvering v. Morgan's, Inc.:

      * The terms "means" and "includes" are not necessarily synonymous. The distinction in their use is aptly pointed by §§ 2, 200 of the Act itself. Section 2(a) gives general definitions of ten terms; of these, three are stated to "include" designated particular instances, the other seven are stated to "mean" the definitions subsequently given. Section 200, in addition to the definitions contained in subsection (a), gives four of which two use the verb "include" and two the verb "means." That the draftsman used these words in a different sense seems clear. The natural distinction would be that, where "means" is employed, the term and its definition are to be interchangeable equivalents, and that the verb "includes" imports a general class, some of whose particular instances are those specified in the definition. This view finds support in § 2(b) of the Act, which reads:

      "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."

      26 CFR 170.59- "Meaning of Terms: The terms 'includes and including' do not exclude things not enumerated which are in the same general class."?
      The exact same verbiage is in title 27 as it existed in title 26 before it was pulled.
      27 C.F.R. § 479.11 Meaning of terms. Title 27 - Alcohol, Tobacco Products and ... The terms "includes" and "including" do not exclude other things not ...

      Concerning "[w]here general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words"
      Circuit City Stores v. Adams, 532 U.S. 105, 114-115 (2001)


      "Under the principle of ejusdem generis, when a general term follows a
      specific one, the general term should be understood as a reference to
      subjects akin to the one with specific enumeration." Norfolk & Western
      R. Co. v. Train Dispatchers, 499 U.S. 117 (1991) "[I]t is a commonplace of statutory construction that the specific governs the general..."
      Morales v. TWA, 504 U.S. 374 (1992).

      As the Supreme Court stated in Russello v. United States, 464. U.S. 16, 23 (1983 ), "[w]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposefully in the disparate inclusion or exclusion." (quoting United States v. Wong Kim Bo , 472 F.2d 720, 722 (CA 1972))

      "Perhaps the most lucid statement the books afford on the subject is in Blanck et al. v. Pioneer Mining Co. et al. (Wash.; 159 Pac. 1077, 1079), namely, "the word 'including' is a term of enlargement and not a term of limitation, and necessarily implies that something is intended to be embraced in the permitted deductions beyond the general language which precedes. But granting that the word 'including' is a term of enlargement, it is clear that it only performs that office by introducing the specific elements constituting the enlargement. It thus, and thus only, enlarges the otherwise more limited, preceding general language. * * * The word 'including' introduces an enlarging definition of the preceding general words, 'actual cost of the labor,' thus of necessity excluding the idea of a further enlargement than that furnished by the enlarging clause to introduced.
      Treasury Decision 3980, January-December, 1927 Vol. 29, page 65

      How does something join the class of things that are "within the meaning of the term defined", if that something is not enumerated in the definition?
      We can obtain some help in answering this question by referring to an older clarification of "includes" and "including" that was published in the Code of Federal Regulations in the year 1961. This clarification introduces the notion of "same general class"... This clarification reads:

      170.59 Includes and including.
      "Includes" and "including" shall not be deemed to exclude things other than those enumerated which are in the same general class.
      [26 CFR 170.59, revised as of January 1, 1961]

      "Under 'ejusdem generis' 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."
      Black's Law Dictionary, Sixth Edition

      Noscitur a sociis. It is known from its associates. The meaning of a word is or may be known from the accompanying words. Under the doctrine of "noscitur a sociis", the meaning of questionable or doubtful words or phrases in a statute may be ascertained by reference to the meaning of other words or phrases associated with it.
      Black's Law Dictionary

      Inclusio unius est exclusio alterius. The inclusion of one is the exclusion of another. The certain designation of one person is an absolute exclusion of all others. ... This doctrine decrees that where law expressly describes [a] particular situation to which it shall apply, an irrefutable inference must be drawn that what is omitted or excluded was intended to be omitted or excluded.
      Black's Law Dictionary

      Other terms. -- Any term used in this subtitle with respect to the application of, or in connection with, the provisions of any other subtitle of this title shall have the same meaning as in such provisions.
      IRC 7701(a)(28)

      ... [K]eeping in mind the well settled rule that the citizen is exempt from taxation unless the same is imposed by clear and unequivocal language, and that where the construction of a tax law is doubtful, the doubt is to be resolved in favor of those upon whom the tax is sought to be laid.
      Spreckels Sugar Refining Co. v. McLain
      192 U.S. 397 (1903)

      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 operations so as to embrace matters not specifically pointed out. In case of doubt they are construed most strongly against the Government, and in favor of the citizen.
      United States v. Wiggleswort]
      2 Story 369


      "...The court also considered that the word 'including' was used as a word of enlargement, the learned court being of opinion that such was its ordinary sense. With this we cannot concur."
      [Montello Salt Co. v. Utah, 221 U.S. 452 (1911)]

      Noscitur a sociis: "A word is also known by the company it keeps."
      Jarecki v. G. D. Searle & Co., 367 U.S. 303 See Gustafson v. Alloyd Co., 513 U.S. 561, 575 (1995)
    • oim4jr1@cox.net
      http://www.whatistaxed.com shows how to do a Boolean Search for individual using the Government Printing Office website - which always returns the same
      Message 2 of 3 , Aug 5, 2011
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        http://www.whatistaxed.com shows how to do a Boolean Search for "individual"
        using the Government Printing Office
        website - which always returns the same results: alien or nonresident alien
        - and never anyone in the private sector.

        It's all about government and privileges & benefits and never about the
        private sector.

        ~ C.
      • RadarBruce
        It s my understanding that individual means individual proprietorship, as in sole proprietorship, a form of business. Missouri law defines it that way.
        Message 3 of 3 , Aug 7, 2011
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          It's my understanding that "individual" means "individual proprietorship," as in "sole proprietorship," a form of business. Missouri law defines it that way. Individual does not mean individual person, because those cannot be taxed for the mere right of living. Individual proprietorships, however, can be taxed, and that's what the IRS thinks YOU are, if you don't tell them otherwise.
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