Quote from ratboy88:
yes.... so then you have to see who is required to pay... how much simpler can it be?
they even give you the answer... non resident aliens doing business in the U.S. or us citizens doing business with foreign corporations and/or possessions such as guam. thats it.. end of story.
And -
"Section 861 shows that the domestic income of U.S. citizens is not taxable."
This argument, which has achieved some notoriety, is mistaken. Section 861 of the tax code (plus some of the following sections and the attendant regulations) determines whether income is considered to be from a source within the United States or from a source outside the United States. But the rest of the tax code (especially sections 1, 61, and 63) shows that U.S. citizens are taxed on their income from all sources, whether from within or outside the United States. So anyone can use section 861 to determine whether their income is from foreign or domestic sources, but for most U.S. citizens, the source simply doesnât matter, because U.S. citizens are taxed on their income from all sources.
But to repeat, for a typical U.S. citizen, section 861 is irrelevant. Anyone can go ahead and use it to characterize their income as from U.S. sources or foreign sources, but, because U.S. citizens are taxed on all income from all sources, the characterization simply wonât matter for most U.S. citizens.
That's really all one needs to know, but readers who have seen this video or other material by one Larken Rose, a big proponent of the 861 argument, may want more detail.
Readers might also be interested to know that Mr. Rose served a substantial jail term following his conviction on tax charges. One might wish to consider this in deciding whether he is a trustworthy source of tax information.
Like other tax protestor arguments, the 861 argument has been to court many times and has a batting average of ZERO. Every court to consider the argument has rejected it.