Fundamentally, there are only two
(2) objects in income tax law...
- Exempt income
"income that is ... exempt"
- Taxable income
"Income that is not ... exempt"
Ultimately, income is either
exempt or taxable
In addition, the actual tax due is only a percentage
of taxable income, not a percentage of all income.
mining income tax code will produce the following...
1. Tax imposed
"There is hereby imposed
on the taxable income of every individual...a
USC Sec. 1
2. "taxable income"
"In general ... the
term ``taxable income'' means gross income
minus the deductions"
USC Sec. 63
Taxes, Too Complicated?
The Supreme Court has said,
it is a "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"
U.S. 397, p-416
News commentator Paul
Harvey, on January 22, 2007, explains how
this Supreme Courst decision was put into action...
"Now for what it's
worth, the 9th circuit panel in San Francisco
has been reversed. The Internal Revenue Service,
the IRS, has ruled that Valerie and Robert McKee
owed the government $31,000 in unpaid taxes, until
Valerie and Robert demonstrated in court that
the tax law is so complex nobody can understand
it. The court had to agree that
the law was indeed so complex that nobody can
understand it, and the court reversed itself,
and the IRS gets the bill. The government also
sought and got us...ha ha ha (laugh)... your government
also tried to get a stipulation that this verdict
would not be made public, but it just was... Paul
Harvey, Good Day!!"
ROBERT C. MCKEE v. COMMISSIONER OF INTERNAL REVENUE
IRS No. 4036-03
-- To hear this Paul Harvey sound clip and more,
3. "gross income"
"Except as otherwise provided
in this subtitle, gross income means all income from whatever
USC Sec. 61
4. Otherwise provided
"Items of gross income, expenses,
losses, and deductions, other than those specified
in sections 861(a) and 862(a), shall be allocated or apportioned
to sources within or without the United States, under
regulations prescribed by the Secretary."
USC Sec. 863
Where's the “deductions”?
regulations" for “deductions”
(Include HTML characters and semicolon)
Sec. 861. Coincidence?
5. "under regulations"
"(a) Gross income means all income
from whatever source derived, unless excluded by law."
"(b) ...To the extent that another section of the Code or
of the regulations thereunder, provides specific treatment for
any item of income, such other provision shall apply notwithstanding
section 61 and the regulations thereunder."
CFR Sec. 1.61-1
So, "notwithstanding (in spite of) section 61"
(and it's claim to "all income from whatever source"),
if another section "provides specific treatment ...
such other provision shall apply".
6. Such other provision
Source: Government Printing Office - http://ecfr.gpoaccess.gov
"how to determine taxable income"
CFR Sec. 1.861-8(a)(1)
- "specific sources" - Sec. 1.861-8(a)(1)
- "specific guidance" - Sec. 1.861-8(a)(1)
- "excluded income" - Sec. 1.861-8 and
to excluded income" - Sec. 1.861-8(a)(4)
- "eliminated income" - Sec. 1.861-8(d),
and 1.861-8(d)(2), and 1.861-8T(d)(2)
- "eliminated items" - Sec. 1.861-8T(d)
- "Allocation and apportionment to exempt, excluded,
or eliminated income." - Sec.
eliminated, or excluded income" - Sec.
- "the sources of income for purposes of the income tax" -
that is exempt or excluded" - Sec. 1.861-8T(d)(2)
- "gross income may include excluded income" -
- "specific rules for allocation and apportionment of deductions"
- Sec. 1.861-8(a)(5)(ii)
- "expenses, losses, or other deductions" -
"income that is not considered tax exempt" -
Sec. 1.861-8T(d)(2)(iii) - The list of taxable items (Income
For more, see
boolean search results from regulations, and search results
from statutes - According
to law and who
7. "Allocation and apportionment to exempt, excluded,
or eliminated income."
For "deductions to excluded income" the regulations
tell us to "See paragraph (d)(2)" ...
Allocation and apportionment to exempt, excluded, or eliminated
income. [Reserved] For guidance, see Sec. 1.861-8T(d)(2).
And Sec. 861-8(d)(2) tells us to see Sec. 861-8T(d)(2)
... T is for temporary.
8. "For guidance, see Sec. 1.861-8T(d)(2)"
What is "exempt income"?
that is ...exempt"
"Exempt income and exempt asset defined--(A)
In general. For purposes of this section, the term exempt
income means any income that is, in whole
or in part, exempt, excluded, or
eliminated for federal income tax purposes."
- CFR Sec. 1.861-8T(d)(2)(ii)
What income is not exempt? i.e.
"income that is not...exempt"
"Income that is not considered tax
exempt. The following items are
not considered to be exempt, eliminated, or excluded income
and, thus, may have expenses, losses, or other deductions
allocated and apportioned to them:"
CFR Sec. 1.861-8T(d)(2)(iii)
Sec. 1.861-8T(d)(2)(iii) lists taxable income - what
Supporting terms found in 861: specific sources, specific
guidance, excluded income, eliminated income, eliminated items,
& the legal definition for exempt income.
Notice domestic earned income has been excluded from
the list of taxable items.
Domestic earned income is "excluded by law"
- the term doesn't even exist in the code or regulations.
shouldn't be a surprise that something has been excluded by law.
We are told by statutes to expect this...
"Except as otherwise provided"
USC Sec. 61
And by regulations...
"all income from whatever
source ... unless excluded by law."
CFR Sec. 1.61-1(a).
But, Domestic earned income is not in the list of taxable
income, because it is "excluded by law".
Gross income "means
all income from whatever source".
But, the tax is "imposed on the taxable
The only item from the list of "income
that is not ... exempt" which is applicable to American citizens
is Item D, . "Foreign earned income". However, most Americans do not have any
"Foreign earned income".
Thus, according to law, most Americans do not owe federal income
tax. Their income has been "excluded by law."
Congress, Secretary, IRS, Judges, CPAs, tax lawyers, tax software
Explain yourselves! Ignorance of the law is no excuse. Right? We expect accuracy when we pay you to work.
If Sec. 861 is frivolous, then where is the law that you claim to
follow? Thousands of people, including your own IRS
agents, have asked you this many times, but you, and
IRS Commissioner, Mark Everson, have ignored this question.
What is the section number? ... Evidently, it is Sec. 861.
Either you know the law or you're not the experts you pretend
truth is tax law is so simple a child can figure it out. It shouldn't
be long before many of them do. (If teenagers can hack into NASA,
the Air Force, government computers, etc, they can easily figure
out a simple tax code.)
Teen charged with hacking into Air Force system
Interview: anonymous. Young hacker caught breaking into NASA's
Teen hacks 27 ISPs, gains root access
Another teen hacks NASA
The Code does not lie, but judges, politicians, and bureaucrats
All of the Titles of Law are suspect of your color of law, and all
are candidates for data mining.