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Do we have to pay income tax?
- Thread starter Daxtrader
- Start date
Quote from ratboy88:
IHOP vs Waffle House 1937 supreme court Judge Yo Quiero ruled in favor of the "no pancake" defense.
There are a wide variety of ways that psychological denial can be expressed by a person who is unconsciously defending or protecting themselves from unwanted knowledge, thoughts, or feelings. What follows is a partial list of denial strategies. Human ingenuity being what it is, I couldn't possibly list all the possible strategies.
"Affect Storm" or Exaggerated Emotional Responses
This is a hyperemotional response to anything that threatens the veneer of denial or that questions the motivations of the denier.
EXAMPLE: Take your pick among the usual ad hominem attacks leveled at anyone who has the audacity to disagree with the person in denial or to question his denial.
Quote from ratboy88:
please quote this source. [/QUOTE
ok.
http://docs.law.gwu.edu/facweb/jsiegel/Personal/taxes/861.htm
Quote from Haroki:
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.
Yet another "expert"
opinion poo-pooing the 861 evidence was recently brought to my
attention. It would be a full-time job to respond to all of them
(the status quo always has a lot of beneficiaries, and therefore
proponents), but the general gist of most of them can be addressed
with one response. The example I'll use this time comes from a
professor of law at the George Washington University Law School (in
DC), so one would think that it would at least be a little more
credible than the remarks of some untrained paper-pusher. Here is
the link to the (attempted) refutation of the 861 evidence:
http://docs.law.gwu.edu/facweb/jsiegel/Personal/taxes/861.htm
An
important first thing to note about the article is that it cites
absolutely nothing from the law. Not one word. Anywhere. As is
often the case, it consists of a string of unsupported assertions.
The closest thing to legal support Mr. Siegel gives is to say that
"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." Again, nothing
from the law is quoted. cont.
As many of you know, Section 1 imposes a
tax on one's "taxable income." It says nothing about how to
determine what is and what is not "taxable income." Section 63
generally defines "taxable income" to mean "gross income" minus
deductions. It says nothing about how to determine what is or is
not to be included in "gross income." Section 61 not only says
NOTHING about geographic origin of income, or the type of commerce
which generates the income (which is addressed in great detail in
Subchapter N of the code, beginning with Section 861), but Section
61 itself, for many decades, was followed by a cross-reference
referring the reader to Section 861 regarding "Income from sources
WITHIN the United States," and to Section 862 regarding income from
OUTSIDE of the United States. (If the wording of Section 61 meant
that geographic origin didn't MATTER, why on earth would we be told
to look somewhere else concerning geographic origin?)
I expect
that Mr. Siegel is basing his conclusion upon the wording "all
income from whatever source derived" from Section 61, though he did
not bother to quote even that. But the first thing that should be
addressed is actually a psychological point: WHY did he feel no
need to cite ANYTHING from the law? My guess is that, being a
professor of law, he is accustomed to having his students assume
that he knows what he's talking about. In other words, his
credentials ARE his support, and the only support he thinks he
needs. (Conversely, many people might view my LACK of credentials
as all that is needed to render my "opinion" worthless, despite the
fact that I quote from the law itself constantly, as you'll see
below.) cont.
tax on one's "taxable income." It says nothing about how to
determine what is and what is not "taxable income." Section 63
generally defines "taxable income" to mean "gross income" minus
deductions. It says nothing about how to determine what is or is
not to be included in "gross income." Section 61 not only says
NOTHING about geographic origin of income, or the type of commerce
which generates the income (which is addressed in great detail in
Subchapter N of the code, beginning with Section 861), but Section
61 itself, for many decades, was followed by a cross-reference
referring the reader to Section 861 regarding "Income from sources
WITHIN the United States," and to Section 862 regarding income from
OUTSIDE of the United States. (If the wording of Section 61 meant
that geographic origin didn't MATTER, why on earth would we be told
to look somewhere else concerning geographic origin?)
I expect
that Mr. Siegel is basing his conclusion upon the wording "all
income from whatever source derived" from Section 61, though he did
not bother to quote even that. But the first thing that should be
addressed is actually a psychological point: WHY did he feel no
need to cite ANYTHING from the law? My guess is that, being a
professor of law, he is accustomed to having his students assume
that he knows what he's talking about. In other words, his
credentials ARE his support, and the only support he thinks he
needs. (Conversely, many people might view my LACK of credentials
as all that is needed to render my "opinion" worthless, despite the
fact that I quote from the law itself constantly, as you'll see
below.) cont.
Mr Siegel asserts that 861 and its regs exist, not to
determine whether domestic income is taxable, but merely to
"determine[] whether income is considered to be from a source
within the United States or from a source outside the United
States." While that is ONE thing that those sections do (though he
cites nothing demonstrating that), the implication is clearly that
one should NOT look there to determine whether his domestic income
is TAXABLE. Again, nothing is cited supporting such a claim.
Being
sans credentials myself, I must defer to the statutes and
regulations. Mr. Siegel states that whether one's income is foreign
or domestic "doesn't matter" and that 861 "is irrelevant" for most
U.S. citizens, "because U.S. citizens are taxed on all income from
all sources." However, here is what the official Executive branch
regulations say:
ââ¬Å(c) Determination of taxable income. The
taxpayerââ¬â¢s taxable income from sources WITHIN OR WITHOUT the United
States WILL BE DETERMINED under the rules of Secs. 1.861-8 [and
following].ââ¬Â [26 CFR ç 1.863-1(c)]
Of course, to determine what
(if anything) you owe, you must first determine your TAXABLE
income, be it foreign and/or domestic. So how does one DETERMINE
his taxable domestic income? I think the above is pretty darn clear
about that. I believe the following is pretty darn clear as well:
cont.
determine whether domestic income is taxable, but merely to
"determine[] whether income is considered to be from a source
within the United States or from a source outside the United
States." While that is ONE thing that those sections do (though he
cites nothing demonstrating that), the implication is clearly that
one should NOT look there to determine whether his domestic income
is TAXABLE. Again, nothing is cited supporting such a claim.
Being
sans credentials myself, I must defer to the statutes and
regulations. Mr. Siegel states that whether one's income is foreign
or domestic "doesn't matter" and that 861 "is irrelevant" for most
U.S. citizens, "because U.S. citizens are taxed on all income from
all sources." However, here is what the official Executive branch
regulations say:
ââ¬Å(c) Determination of taxable income. The
taxpayerââ¬â¢s taxable income from sources WITHIN OR WITHOUT the United
States WILL BE DETERMINED under the rules of Secs. 1.861-8 [and
following].ââ¬Â [26 CFR ç 1.863-1(c)]
Of course, to determine what
(if anything) you owe, you must first determine your TAXABLE
income, be it foreign and/or domestic. So how does one DETERMINE
his taxable domestic income? I think the above is pretty darn clear
about that. I believe the following is pretty darn clear as well:
cont.
ââ¬ÅSections 861(b) and 863(a) state in general terms HOW TO DETERMINE
TAXABLE INCOME OF A TAXPAYER FROM SOURCES WITHIN THE UNITED STATES
after gross income from sources within the United States has been
determined. Sections 862(b) and 863(a) state in general terms how
to determine taxable income of a taxpayer from sources WITHOUT the
United States after gross income from sources without the United
States has been determined.ââ¬Â [26 CFR ç 1.861-8]
Clearly implied in
Mr. Siegel's comments is that you DON'T NEED to go to Section 861
and its regs to determine the "taxable income of a taxpayer from
sources within the United States." The rest of the code, he say
(without quoting anything from it), says that citizens are taxed on
their income regardless of its geographic source. Someone can have
taxable domestic income, taxable foreign income, both, or neither.
(There can't be taxable income that doesn't come from anywhere.)
Consider the following, which is what the first section of
regulations under 861 says, and has said since before I was born
(with minor wording changes). While reading it, keep in mind that
this professor of law says you should NOT be looking to 861 to
determine your taxable domestic income:
ââ¬Åç1.861-1 Income from
sources within the United States
(a) Categories of income. Part I
(section 861 and following), subchapter N, chapter 1 of the Code,
and the regulations thereunder DETERMINE THE SOURCES OF INCOME FOR
PURPOSES OF THE INCOME TAX. ... The statute provides for the
following three categories of income:
à à (1) WITHIN the United
States The gross income from sources within the United States,
consisting of the items of gross income specified in section 861(a)
plus the items of gross income allocated or apportioned to such
sources in accordance with section 863(a). See çç 1.861-2 to 1.861-
7, inclusive, and ç 1.863-1. The TAXABLE INCOME FROM SOURCES WITHIN
THE UNITED STATES, in the case of such income, shall be determined
by deducting therefrom, in accordance with sections 861(b) and
863(a), the [allowable deductions]. See çç 1.861-8 and 1.863-1.
cont.
TAXABLE INCOME OF A TAXPAYER FROM SOURCES WITHIN THE UNITED STATES
after gross income from sources within the United States has been
determined. Sections 862(b) and 863(a) state in general terms how
to determine taxable income of a taxpayer from sources WITHOUT the
United States after gross income from sources without the United
States has been determined.ââ¬Â [26 CFR ç 1.861-8]
Clearly implied in
Mr. Siegel's comments is that you DON'T NEED to go to Section 861
and its regs to determine the "taxable income of a taxpayer from
sources within the United States." The rest of the code, he say
(without quoting anything from it), says that citizens are taxed on
their income regardless of its geographic source. Someone can have
taxable domestic income, taxable foreign income, both, or neither.
(There can't be taxable income that doesn't come from anywhere.)
Consider the following, which is what the first section of
regulations under 861 says, and has said since before I was born
(with minor wording changes). While reading it, keep in mind that
this professor of law says you should NOT be looking to 861 to
determine your taxable domestic income:
ââ¬Åç1.861-1 Income from
sources within the United States
(a) Categories of income. Part I
(section 861 and following), subchapter N, chapter 1 of the Code,
and the regulations thereunder DETERMINE THE SOURCES OF INCOME FOR
PURPOSES OF THE INCOME TAX. ... The statute provides for the
following three categories of income:
à à (1) WITHIN the United
States The gross income from sources within the United States,
consisting of the items of gross income specified in section 861(a)
plus the items of gross income allocated or apportioned to such
sources in accordance with section 863(a). See çç 1.861-2 to 1.861-
7, inclusive, and ç 1.863-1. The TAXABLE INCOME FROM SOURCES WITHIN
THE UNITED STATES, in the case of such income, shall be determined
by deducting therefrom, in accordance with sections 861(b) and
863(a), the [allowable deductions]. See çç 1.861-8 and 1.863-1.
cont.
(2) Without [outside of] the United States ...
à à (3) Partly within
and partly without the United States ...
(b) Taxable income from
sources within the United States.
The TAXABLE INCOME FROM SOURCES
WITHIN THE UNITED STATES shall consist of the taxable income
described in paragraph (a)(l) of this section plus the taxable
income allocated or apportioned to such sources, as indicated in
paragraph (a)(3) of this section.ââ¬Â [26 CFR ç 1.861-1]
In giving his
reason for 861's existence, without (in his words) "going into all
the situations where section 861 matters," Mr. Siegel gives two
examples: 1) a foreigner distinguishing between taxable domestic
income and non-taxable foreign income, and; 2) a citizen entitled
to the foreign tax credit, who must determine domestic versus
foreign to figure out the limit on the credit. Again (sorry to beat
a dead horse), he cites nothing supporting his claim that 861 is
only to be used in such unusual circumstances. Above, you can see
for yourself what the OFFICIAL government regulations say about
what the sections are for. Notice that they give NO indication that
only CERTAIN people should be referring to those sections. Here is
yet another example of an official IRS document summarizing the
purpose of 861 and following. See if you see ANY indication that
most people should ignore the section entirely, as Mr. Siegel
suggests.
ââ¬ÅRules are prescribed for DETERMINATION OF GROSS INCOME
AND TAXABLE INCOME derived from sources WITHIN AND WITHOUT the
United States, and for the allocation of income derived partly from
sources within the United States and partly without the United
States or within United States possessions. çç 1.861-1 through
1.864. (Secs 861-864; ââ¬Ë54 Code.)ââ¬Â [Treasury Decision 6258]
cont.
à à (3) Partly within
and partly without the United States ...
(b) Taxable income from
sources within the United States.
The TAXABLE INCOME FROM SOURCES
WITHIN THE UNITED STATES shall consist of the taxable income
described in paragraph (a)(l) of this section plus the taxable
income allocated or apportioned to such sources, as indicated in
paragraph (a)(3) of this section.ââ¬Â [26 CFR ç 1.861-1]
In giving his
reason for 861's existence, without (in his words) "going into all
the situations where section 861 matters," Mr. Siegel gives two
examples: 1) a foreigner distinguishing between taxable domestic
income and non-taxable foreign income, and; 2) a citizen entitled
to the foreign tax credit, who must determine domestic versus
foreign to figure out the limit on the credit. Again (sorry to beat
a dead horse), he cites nothing supporting his claim that 861 is
only to be used in such unusual circumstances. Above, you can see
for yourself what the OFFICIAL government regulations say about
what the sections are for. Notice that they give NO indication that
only CERTAIN people should be referring to those sections. Here is
yet another example of an official IRS document summarizing the
purpose of 861 and following. See if you see ANY indication that
most people should ignore the section entirely, as Mr. Siegel
suggests.
ââ¬ÅRules are prescribed for DETERMINATION OF GROSS INCOME
AND TAXABLE INCOME derived from sources WITHIN AND WITHOUT the
United States, and for the allocation of income derived partly from
sources within the United States and partly without the United
States or within United States possessions. çç 1.861-1 through
1.864. (Secs 861-864; ââ¬Ë54 Code.)ââ¬Â [Treasury Decision 6258]
cont.
I just
can't relate to this strange psychological phenomenon wherein
someone with credentials can assert ANYTHING, and somehow people
think it needs responding to. "That section is only for
foreigners/Americans with foreign income/albino wombats named
Edmund." They ASSERT who should look there, and people
automatically give it credibility, though the asserters cite
NOTHING from the law supporting it. They can assert until they're
blue in the face that 861 is for someone other than you, but when
have you ever seen any of them QUOTE anything from the statutes or
regulations which comes close to supporting that claim? Show me ANY
citation which says that 861 is NOT to be used by everyone to
determine their taxable domestic income. You will NEVER see one.
I've done text searches through ALL of the tax statutes and
regulations, reviewing EVERY mention of Section 861. NEVER is there
any indication, or even a subtle hint, that most people should
IGNORE 861 when it comes to determining their taxable domestic
income. Quite the opposite, as you can see above.
So let's review:
we have lots of assertions but ZERO citations saying that we
shouldn't use 861--that's it's not for us--and at least half a
dozen official citations (including those shown above) which say,
unequivocally and unconditionally, that those ARE the sections to
use for "determining taxable income from sources within the United
States." Why are people so reluctant to believe their own eyes, or
to accept what is right in front of them in black and white? Why do
they continue to give weight to the provably-false, utterly
baseless assertions of people, just because those people have
credentials (i.e., pieces of paper that say they SHOULD know what
they're talking about)?
cont.
can't relate to this strange psychological phenomenon wherein
someone with credentials can assert ANYTHING, and somehow people
think it needs responding to. "That section is only for
foreigners/Americans with foreign income/albino wombats named
Edmund." They ASSERT who should look there, and people
automatically give it credibility, though the asserters cite
NOTHING from the law supporting it. They can assert until they're
blue in the face that 861 is for someone other than you, but when
have you ever seen any of them QUOTE anything from the statutes or
regulations which comes close to supporting that claim? Show me ANY
citation which says that 861 is NOT to be used by everyone to
determine their taxable domestic income. You will NEVER see one.
I've done text searches through ALL of the tax statutes and
regulations, reviewing EVERY mention of Section 861. NEVER is there
any indication, or even a subtle hint, that most people should
IGNORE 861 when it comes to determining their taxable domestic
income. Quite the opposite, as you can see above.
So let's review:
we have lots of assertions but ZERO citations saying that we
shouldn't use 861--that's it's not for us--and at least half a
dozen official citations (including those shown above) which say,
unequivocally and unconditionally, that those ARE the sections to
use for "determining taxable income from sources within the United
States." Why are people so reluctant to believe their own eyes, or
to accept what is right in front of them in black and white? Why do
they continue to give weight to the provably-false, utterly
baseless assertions of people, just because those people have
credentials (i.e., pieces of paper that say they SHOULD know what
they're talking about)?
cont.