Is 26 USC 3401(c) "includes" restrictive?

[webhick]

i'm beginning to suspect that Non Compos Mentis is someone we've already discussed here.

My magic 8 ball says it's Harvester. The IP is one of those "you can't see me" diversions that resolves to Dubai.

Whomever it is, they think they're real clever.

If it's really Harvey, he'll slip up eventually. Lorne/Aunti Zeituni did.

[Non Mens Rea]

Thanks for the replies.
I'm saving this thread to my HD to read thoroughly before I respond in full.
(By the way, I have never posted before on Quatloos, under any previous username.)

I'm wondering why nobody has yet to express any curiosity that the IRC does not
contain any clarifying rules of construction (as supplied in other titles) about the
allegedly nonlimiting nature of "includes" and "including" -- especially given the
magnitude of ramifications. It took some time for the lower courts to begin to
rule on 3401(c) "includes", so I don't follow that Congress meanwhile allowed such
significant confusion to exist. Congress has amended the IRC many times since
1942 for much less poignant reasons, yet still no slam-dunk IRC rules of construction on a
matter affecting trillions of dollars.

I see IRC § 7701(c) "shall not be deemed to exclude other things otherwise within the meaning of the term defined" as a "The term means its definition" tautology. Besides,
if Congress meant to clarify the matter with IRC § 7701(c), they could have better done so
with "the terms "includes" and "including" are not limiting" as they did in 11 USC 102
and 28 USC 3003.

More in a day or so when I'm back at my desk.

Regards,
Non Mens Rea

[The Observer]

I'm wondering why nobody has yet to express any curiosity that the IRC does not contain any clarifying rules of construction (as supplied in other titles) about the
allegedly nonlimiting nature of "includes" and "including" -- especially given the
magnitude of ramifications.

Because any such curiosity forces a logical person into having to wonder, if Congress did intend by passing 3401(c) for income tax only to apply to a limited set of people, why did not any member of Congress stand up and address this issue and clarify Congress' intent - especially if lower courts were ruling erroneously. It would have the been the most simple and expedient resolution if there was a problem. Since it didn't happen, I have to conclude that there was no conflict between what Congress intended and what the courts have concluded, thus no need for any clarifying rules of construction.

[Dr. Caligari]

I see IRC § 7701(c) "shall not be deemed to exclude other things otherwise within the meaning of the term defined" as a "The term means its definition" tautology. Besides,
if Congress meant to clarify the matter with IRC § 7701(c), they could have better done so
with "the terms "includes" and "including" are not limiting" as they did in 11 USC 102
and 28 USC 3003.

Why would Congress pass a meaningless statute that adds nothing to the Code (which is how you read 7701(c))?

Section 7701(c) means the same thing as 11 USC 102 and 28 USC 3003; they are just worded differently. (Different Codes, passed by different Congresses at different times). Section 7701 (c) says that word "including" does not exclude "other things otherwise within the meaning of the term defined." The term defined is "employee"; it "otherwise" means anyone who works for pay as a common-law employee; the additional meanings that are "included" (government officials, corporate officers) do not exclude the meaning that employee would have "otherwise."

[Quixote]

I'm wondering why nobody has yet to express any curiosity that the IRC does not
contain any clarifying rules of construction (as supplied in other titles) about the
allegedly nonlimiting nature of "includes" and "including" -- especially given the
magnitude of ramifications.

Two reasons. First, as you know but for reasons best known to yourself have chosen to ignore, the IRC does contain a clarifying rule, IRC § 7701(c). Second, no one, certainly no court or anyone else with a modicum of common sense, has ever been confused about the meaning of "includes" as it is used in the IRC. The second is due in part to the presence of the first, but the clarification in IRC §7701(c) is hardly necessary. No one uses the word "includes" to mean "includes only".

[Cpt Banjo]

I see IRC § 7701(c) "shall not be deemed to exclude other things otherwise within the meaning of the term defined" as a "The term means its definition" tautology. Besides, if Congress meant to clarify the matter with IRC § 7701(c), they could have better done so with "the terms "includes" and "including" are not limiting" as they did in 11 USC 102 and 28 USC 3003.

No, it's not a tautology. What 7701(c) means is that you don't exclude the normal meaning of the word. You may, however, add things to the normal meaning. For example, you may want a statute to apply to people residing in the States and Puerto Rico. Instead of having to write "the States and Puerto Rico" all throughout the statute, you decide to make a shortcut and say "For purposes of this section the term 'State' includes Puerto Rico". When you do this, 7701(c) says that in construing the term "State" in this statute, you don't exclude the 50 states.

You should not expect all statutory rules of construction to read the same, since they were drafted at different times by different people. Although I agree that 7701(c) could have been written more clearly, it still stands for the proposition that "includes" is not a restrictive term when used in a definition in the Code.

[Famspear]

.. I'm wondering why nobody has yet to express any curiosity that the IRC does not contain any clarifying rules of construction (as supplied in other titles) about the
allegedly nonlimiting nature of "includes" and "including" -- especially given the
magnitude of ramifications. It took some time for the lower courts to begin to
rule on 3401(c) "includes".....

No, it didn't take some time. Federal courts rule only in actual cases and controversies -- and only on issues about which the litigants ask for rulings. Federal courts do not survey the statutes and pick subjects that the courts feel need to be ruled on. Until litigants present issues in federal courts, federal courts will not rule on those issues.

There is no reason for anyone to "express curiosity" about what you believe about "clarifying rules of construction." Indeed, you yourself are not "curious" about the subject. You are simply engaging in rhetoric designed to hide the fact that you don't agree with what the courts have ruled.

......so I don't follow that Congress meanwhile allowed such significant confusion to exist. Congress has amended the IRC many times since 1942 for much less poignant reasons, yet still no slam-dunk IRC rules of construction on a matter affecting trillions of dollars.

No, you do follow. Again, you're using rhetoric to try to create a false issue.

No, there is not "significant confusion" about the meaning of the statute. The tax protester/tax denier movement began, of record, long, long after these statutes were enacted. Neither the tax protester-tax denier community nor the legal community nor the courts are significantly "confused." I repeat: Tax protesters are not confused about the meaning of the statute. They are well aware of the statute's meaning -- they just refuse to accept it.

You are wrong. We have had "slam-dunk IRC rules of construction" on this very topic -- right there in the Internal Revenue Code -- since before you were born. The fact that miscreants began litigating the issue of the meaning of "includes" in connection with tax protests several decades after the statutory provisions were enacted does not demonstrate a lack of existence of "slam-dunk" rules. The fact that the tax protester argument about the meaning of "includes" has lost every single time in federal court is illustrative of the point that the rule of construction on the meaning of "includes" is indeed a "slam-dunk."

Relitigating a legally frivolous argument over and over and over and over and over again does not create some sort of legal validity to the argument. Just the opposite: What relitigating in this way does is to even more firmly entrench the rule of law that contradicts that frivolous argument. And that is what tax protesters have been doing for years -- shooting themselves in the feet by relitigating frivolous arguments. Trying to relitigate a frivolous argument that has already been shot down every single time is counter-productive for tax protesters.

.....if Congress meant to clarify the matter with IRC § 7701(c), they could have better done so.....

Wrong. This is the kind of fuzzy thinking we see with tax protester-tax denier types all the time. The Congress is not here to satisfy you about the proper way that you personally believe statutes should be worded. The fact that you contend that 7701(c) is not clear enough to you is of no importance. Statutes, especially federal statutes, are drafted with a view to the actual rules of statutory construction. Your own "rules," Non Mens Rea, are not important.

Now, a word about tautology in statutes. The Congress is not bound to follow the rules you learned from your eighth grade English teacher. Although 7701(c) is not worded as a tautology, there are some statutes do violate some of the rules of English that we were taught in school. THAT'S TOO BAD. The fact that legislatures don't alway follow the "rules" does not necessarily affect the legal standing of the statutes.

Interpretation of statutes, court decisions, and other legal materials is not something that you can master by applying your own idiosyncratic feelings or beliefs about how these materials should have been drafted. Interpretation of legal materials can be learned properly only by studying and accepting the actual rules of legal analysis.

[Nikki]

Contention: The only “employees” subject to federal income tax are employees of the federal government.
Some argue that the federal government can tax only employees of the federal government; therefore, employees in the private sector are immune from federal income tax liability. This argument is based on a misinterpretation of section 3401, which imposes responsibilities to withhold tax from “wages.” That section establishes the general rule that “wages” include all remuneration for services performed by an employee for his employer. Section 3401(c) goes on to state that the term “employee” includes “an officer, employee, or elected official of the United States, a State, or any political subdivision thereof . . . .”

The Law: Section 3401(c) defines “employee” and states that the term “includes an officer, employee or elected official of the United States . . . .” This language does not address how other employees’ wages are subject to withholding or taxation. Section 7701(c) states that the use of the word “includes” “shall not be deemed to exclude other things otherwise within the meaning of the term defined.” Thus, the word “includes” as used in the definition of “employee” is a term of enlargement, not of limitation. It clearly makes federal employees and officials a part of the definition of “employee,” which generally includes private citizens. The Internal Revenue Service issued Revenue Ruling 2006-18, 2006-1 C.B. 743, warning taxpayers of the consequences of making this frivolous argument.

In June 2006, a federal district court in California permanently barred Christopher M. Hansen (using the business names of the “Family Guardian” and the “Sovereignty Education and Defense Ministry) from promoting a fraudulent tax scheme based on the frivolous theory, among others, that only federal workers are subject to the Internal Revenue Code. See http://www.usdoj.gov/opa/pr/2006/June/06_enrd_345.html; see also 2006 TNT 107-98 (Jun. 2, 2006).

In March 2007, a federal court in Michigan issued a temporary restraining order barring Donald A. Gray from preparing federal income tax returns for others. The court found that the Portage, Michigan, man had been preparing income tax returns for customers based on the frivolous theory that wages are not income for federal tax purposes unless the wage earner works for the government. See http://www.usdoj.gov/tax/txdv07024.htm.

In May 2007, a federal court in Michigan permanently barred Peter and Doreen Hendrickson from filing tax returns and forms on which they falsely report their income as zero. The injunction order also requires the couple to repay more than $20,000 in federal income, Social Security, and Medicare taxes that they had obtained by filing false tax returns with the IRS. The order notes that the couple based their improper conduct on a book Peter Hendrickson wrote called “Cracking the Code.” The book states that federal tax withholding and income taxes on wages are applicable only for a limited class of people, primarily government employees. See http://www.usdoj.gov/tax/txdv07320.htm. In November 2008, a federal court in Michigan arraigned Hendrickson on an indictment charging him with submitting false documents to the IRS. The 10-count indictment charges that Hendrickson filed IRS Forms 1040 and/or IRS Forms 4852 stating that he had received no wages for those years. See http://www.usdoj.gov/tax/usaopress/2008 ... ickson.pdf. On October 26, 2009, a jury found Hendrickson guilty of all 10 counts. http://www.justice.gov/tax/usaopress/20 ... ickson.pdf. Hendrickson was subsequently sentenced to 33 months in prison and ordered to pay a $25,000 fine.

Relevant Case Law:
Montero v. Commissioner, 2009 WL 3929916 (5th Cir. Nov. 19, 2009) – the court affirmed a $20,000 section 6673(a) penalty against the petitioner for advancing frivolous arguments that he is not an employee earning wages as defined by sections 3121 and 3401.

Sullivan v. United States, 788 F.2d 813, 815 (1st Cir. 1986) – the court rejected Sullivan’s attempt to recover a civil penalty for filing a frivolous return, stating “to the extent [he] argues that he received no ‘wages’. . . because he was not an ‘employee’ within the meaning of 26 U.S.C. § 3401(c), that contention is meritless. . . . The statute does not purport to limit withholding to the persons listed therein.” The court imposed sanctions on Sullivan for bringing a frivolous appeal.

United States v. Latham, 754 F.2d 747, 750 (7th Cir. 1985) – calling the instructions Latham wanted given to the jury “inane,” the court said, “[the] instruction which indicated that under 26 U.S.C. § 3401(c) the category of ‘employee’ does not include privately employed wage earners is a preposterous reading of the statute. It is obvious within the context of [the law] the word ‘includes’ is a term of enlargement not of limitation, and the reference to certain entities or categories is not intended to exclude all others.”

Peth v. Breitzmann, 611 F. Supp. 50, 53 (E.D. Wis. 1985) – the court rejected the taxpayer’s argument “that he is not an ‘employee’ under 26 U.S.C. § 3401(c) because he is not a federal officer, employee, elected official, or corporate officer,” stating, “[he] mistakenly assumes that this definition of ‘employee’ excludes all other wage earners.”

Pabon v. Commissioner, T.C. Memo. 1994-476, 68 T.C.M. (CCH) 813, 816 (1994) – the court characterized Pabon’s position – including that she was not subject to tax because she was not an employee of the federal or state governments – as “nothing but tax protester rhetoric and legalistic gibberish.” The court imposed a penalty of $2,500 on Pabon for bringing a frivolous case, stating that she “regards this case as a vehicle to protest the tax laws of this country and espouse her own misguided views.”

Note the citations. As far back as 1985 -- eleven years ago, tax evaders who relied on the "3401(c) includes" argument were losing their court cases.

Congress has had plenty of time (and many requests from other tax evaders) to correct the definition of includes and including to kake it correspond with the definition congress intended when that section of the IRC was enacted.

Congress has, despite the events in many courts, not to do so.

Doesn't it seam EXTREMELY likely that the various courts' interpretations and resulting decisions are exactly in accordance with what Congress intended and still intends?

[Famspear]

By the way, here's the definition of "includes" and "including" from the 1939 Internal Revenue Code:

(b) 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.

---Internal Revenue Code of 1939, section 3797(b) (enacted February 10, 1939).

Hey, does that look familiar?

Yes, this has been the definition of "includes" and "including" in the federal tax law for at least the past seventy-two years. This is the language that was continued in subsection (b) of section 7701 of the 1954 Code (signed into law on August 16, 1954). (Note: In the Deficit Reduction Act of 1984, Congress re-designated subsection (b) as subsection (c) and, in 1986, Congress changed the name of the '54 Code to "Internal Revenue Code of 1986".)

I haven't checked the statutes prior to the 1939 Code, but I wouldn't be surprised if this definition pre-dates even the 1939 Code.

Now, if the meanings of "employee" and "includes" in section 3401(c) (and of "includes" in 7701(c) and its predecessors) were so in need of "clarification," then why, pray-tell, Mr. Non Mens Rea, did it take the tax protester-tax denier people so long to start litigating over those meanings?

No, the "problem" (so to speak) is not that the courts "took a long time," but rather that the tax protesters took a long time. The law was on the books for decades before the wackadooster tax protesters got the bright idea to start litigating over it.

The definition of "includes" has been in the Internal Revenue Code for at least seventy-two years. Now, Non Mens Rea, if you want to entertain us, go look for all the court decisions on the meaning of this term in the Internal Revenue Code -- and tell us how the courts ruled -- in every single case.

Hint: In every single case, the courts rejected the tax protester's argument. No exceptions.

Again, 3401(c) is a rabbit trail for tax protesters, anyway. If the entire provision were repealed tomorrow, that would have nothing to do with whether the compensation you receive for rendering services is includible in your gross income (and thus taxable) for federal income tax purposes.

[Famspear]

Note that Nikki posted citations to the leading cases such as Latham and Sullivan. Look at the dates on those cases.

[Cpt Banjo]

I haven't checked the statutes prior to the 1939 Code, but I wouldn't be surprised if this definition pre-dates even the 1939 Code.

It does. The first use of this definition that I found was in Section 2(b) of the Revenue Act of 1924.

http://www.scribd.com/doc/24622913/PL-6 ... ct-of-1924

[Kestrel]

It does. The first use of this definition that I found was in Section 2(b) of the Revenue Act of 1924.

I see that the 1924 act uses the phrase "includes ONLY". "The Term 'United States' when used in a geographical sense includes only the States, the Territories of Alaska and Hawaii, and the District of Columbia."

"Includes ONLY" has a very different meaning than the unrestricted word "includes." To read an implicit "only" into the current code is self-serving wishful thinking.

[Cpt Banjo]

"Includes ONLY" has a very different meaning than the unrestricted word "includes." To read an implicit "only" into the current code is self-serving wishful thinking.

Indeed. The current Code know how to use "includes only" -- e.g., Sections 544(a)(2), 872(a), 882(a)(2), and 7701(a)(9). But guess what? It didn't in any of the sections that the tax deniers are always babbling on about. How do they 'splain that, Lucy?

[webhick]

If the first "definition" of includes is "includes only" then I think it's established through use that if they want "includes only" to mean "includes only" then they'll say "includes only" and not just "includes."

[LPC]

I'm wondering why nobody has yet to express any curiosity that the IRC does not contain any clarifying rules of construction (as supplied in other titles) about the allegedly nonlimiting nature of "includes" and "including" -- especially given the magnitude of ramifications.

You mean like IRC section 7701(c)?

The third message in this thread was:

If, as you claim, you have read Dan's FAQ and "nearly every District and Circuit court decision regarding TP defenses", you would have read about how Section 7701(c) provides a nonexclusive definition for "includes" as used in Code definitions. Why didn't you even mention this provision in your post? Could it be that you really aren't interested in a civil, reasoned, and issue-constrained discussion?

I think you just answered his question.

I see IRC § 7701(c) "shall not be deemed to exclude other things otherwise within the meaning of the term defined" as a "The term means its definition" tautology.

I see your "I see" as repeating your answer to Capt Banjo's question.

Besides, if Congress meant to clarify the matter with IRC § 7701(c), they could have better done so with "the terms "includes" and "including" are not limiting" as they did in 11 USC 102 and 28 USC 3003.

Yes, the old "I would have written the statute differently so therefore it doesn't mean what it says" argument.

I've already addressed that in my first posting in this thread.

[fortinbras]

The Tax Code actually uses the phrase "includes only" as a restrictive definition in about a dozen places -- e.g. §§ 164(b)(2) & (3); 614(d); 871(g)(1)(B); and 7701(a)(9).

It follows, then, that since it clearly uses "includes only" to mean something, when it uses "includes" (without the "only") it must intend a different meaning.

[Non Mens Rea]

Hello,

Thank you for your replies.
My below reply regards generally those posts I read yesterday.
I've saved your posts since then to read and reply to next time.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Amazing, we're still having to debate the meaning of the word "includes" - even after the father of the 3401(c) argument is in jail.

Nobody here "has" to debate anything, much less read anything.
And, Hendrickson was not the father of the 3401(c) argument, which preceded him
by over 10 years.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I would challenge the assertion that you've read "every" case on the subject. That's a pretty bold statement in and of itself.

If it's true, then boldness doesn't enter it.
I've read every case that Evans cited.
Most I'd previously studied; a few I hadn't.

I think one would have to include cases defining employees for classification purposes as well.

Not really, regarding the basic issue of income tax jurisdiction.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Saying that "employee" includes such and such does not "strip away" the ordinary
meaning of "employee".

If "includes" is not limiting, then you would be correct. However, . . .

The question here (yet to be unequivocably clarified by either Congress or SCOTUS),
is whether or not "includes" is limiting. The elucidation of Helvering strongly suggests
that when "includes" is used on its own (without a prior "means"), and also without an
"also" modifier, the word is synonymous with "means".

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

26 USC § 7701(c), on the expansive meaning of "include", has been upheld by the
Supreme Court, in such cases as Helvering v. Morgan's Inc. (1934) 293 US 121.

Sorry, but Helvering did not rule on "includes" regarding section 3401(c)
or its early equivalents, but on fractional tax years:

3. While the term "includes" may sometimes be taken as synonymous with "means," it
may be used also as the equivalent of "comprehends" or "embraces." Therefore, under §
200(a), the phrase "taxable year" may, where the context requires it, be taken to embrace
all fractional parts of the taxable year;
~ http://supreme.justia.com/us/293/121/

You'll also notice that Helvering ruled:

"the term "includes" may sometimes be taken as synonymous with "means"
"is not free from ambiguity"
"the phraseology is also open to the construction"

Was it your goal to point this out?

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

All federal courts which have ruled on the matter have ruled that the terms "includes" and
"including" are expansive, not restrictive. For the United States Supreme Court's treatment
of "includes" and "including" as used in the Internal Revenue Code, see Sims v. United
States, 359 U.S. 108 (1959).

Sims ruled on the applicability of federal income tax on State employees' wages,
in harmony with section 3401(c) "the term "employee" includes an officer, employee, or
elected official of the United States, a State, or any political subdivision thereof".
If anything, raising Sims here rather helps my case vs. negating it:

Held:
1. Sections 6331 and 6332 authorize a levy on the accrued salaries of the employees of a
State to collect federal income taxes. Pp. 359 U. S. 110-113.
~ http://supreme.justia.com/us/359/108/

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Words can have meanings even if they have not been defined within the IRC using the
word "means." Indeed, undefined words must have meanings because not every word in
the IRC is defined.

Certainly. Who could disagree with that?
But since section 3401(c) uses the section 7701(c) term of "includes", then
section 3401(c) "employee" is ipso facto also an IRC term.

The common law definition of employee (which most of you assert as ruling within
the IRC) would naturally embrace public employees as well as private ones.
Or, put another way, why wasn't the language of IRC section 3121(d) sufficient
for section 3401(c) if both are allegedly synonymous?

By the way, LPC/Dan Evans, your tag line "Trusted Keeper of the All True FAQ"
is incorrect on several points. You have some signficant errors in your FAQ,
especially regarding what on some court cases ruled upon. I can, for forum tidiness,
begin a separate thread about this. (You are correct, however, that the certiorari of
Lucas is often misquoted as the Court's ruling.)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Section 7701(c) means the same thing as 11 USC 102 and 28 USC 3003; they are just worded differently. (Different Codes, passed by different Congresses at different times).

Congressional legal draftsmen are hardly so unique, even across decades.
The IRC has a remarkable uniformity of linguistic style.

I am currently inclined to believe that 7701(c) is a circular and self-referencing tautology.
It does not mean the same as this unambiguous alternative:

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
common meaning of the word.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Why should Congress need to clarify? The courts have settled the matter. If Congress is
unhappy with the result, they had (and still have) the opportunity to pass new legislation. If
anything, "congressional silence" means that Congress is satisfied with the current
interpretation.

I have no doubt that Congress is "satisfied with the current interpretation".

That begs the question of why there should be (after 69 years) any reason for any
room for "interpretation" on this vital point. Why use a ambiguous tautology as section
7701(c) vs. that absolutely clear language employed in 11 USC 102 and 28 USC 3003?
I've previously quoted that "smoking gun":

"includes" and "including" are not limiting.

Such would, once and for all, clear up any confusion by leaving no room for "interpretation".
Would it not?

To illustrate this point, read where Congress is elsewhere perfectly capable of including
private-sector employment:

(8) Employer - The term "employer" includes both public and private employers.
— Title 20, Chapter 69, Section 6103

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Although I agree that 7701(c) could have been written more clearly,

Thanks, Cpt Banjo, for at least that.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

No, it's not a tautology. What 7701(c) means is that you don't exclude the normal meaning of the word. You may, however, add things to the normal meaning. For example, you may want a statute to apply to people residing in the States and Puerto Rico. Instead of having to write "the States and Puerto Rico" all throughout the statute, you decide to make a shortcut and say "For purposes of this section the term 'State' includes Puerto Rico". When you do this, 7701(c) says that in construing the term "State" in this statute, you don't exclude the 50 states.

Thanks for bringing up an example I'd meant to provide.

Sec. 3121. - Definitions
(e) State, United States, and citizen
For purposes of this chapter -
(1) State
The term "State" includes the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and
American Somoa.
— http://www.law.cornell.edu/uscode/26/3121.html

Notice that the 50 States are not listed.
Somebody wrote their Congressman, asking about the oddity:

In your letter you asked if section 3(a) of H.R. 97 [which mentions the 50 States] defining
the word state, and 26 U.S. Code 3121(e) [which does not mention the 50 States] are the
the same. I have checked with Legislative Counsel and the Congressional Research
Service about the definition. According to these legal experts the definitions are not the
same. The term state in 26 U.S. Code 3121(e) specifically includes only the named U.S.
Territories and possessions of the District of Columbia, Puerto Rico, the Virgin Islands,
Guam and American Somoa.
— Congresswoman Barbara B. Kenelly to a constituent, 24 Jan. 1996
http://www.supremelaw.org/press/rels/kennell3.gif

This is not a temporary expansion (because there is no "also"), but a definition that rules
for that chapter. Section 3121(e) "includes" is one of exclusion versus inclusion. It
excludes the 50 States by virtue of not including them. (I notice that Evans curiously
doesn't mention this section on his "Tax Protestor FAQs" website. Why not?)

No one uses the word "includes" to mean "includes only".

Yes, they can, and they occasionally do. See above.
The Legislative Counsel and the Congressional Research Service seem to disagree with you.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Correct (and bloody obvious) conclusion: 3401(c) does not define "employee". It expands
on the well-understood common-law definition. And (as others have already pointed out) it
has no effect on an individual's tax obligations in any event.

Again, 3401(c) is a rabbit trail for tax protesters, anyway. If the entire provision were repealed tomorrow, that would have nothing to do with whether the compensation you receive for rendering services is includible in your gross income (and thus taxable) for federal income tax purposes.

If you're writing of section 61, such is a different (though somewhat related) matter.
I can certainly get into that in another thread.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
I have the pdfs of all revenue acts since 1862, and have carefully studied them.
Here is something interesting from 1942 (vs. today's equivalent section 3401(d)), which
I've never seen discussed elsewhere:

(1942)
The term 'employer' includes any person for whom an individual performs any service, of
whatever nature, as the employee of such person.
— Revenue Act of 1942, Section 465(e)

(Today)
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.
— IRC § 3401(d)

The language is practically identical, except that "means" is today used instead of the 1942
"includes". This clearly proves that the two words can be (and often are) synonyms — and
they certainly were synonyms regarding the "employer" definition.

There were certainly spoken of by Congress as salient definitions. Subsections 465(d) and (e)
both use the word "includes" as a synonym of "means" — and were referred to in
May 1943 as tax code definitions by a Mr. George of the House Committe on Finance:

Section 1621 (c) defines the term "employee" in the same terms as the House bill and
section 465 (d) of the code.
Section 465 (c) and (e) of the code contains definitions of the terms "withholding
agent" and "employer," respectively.
— Current Tax Payment Act of 1943

In 1942 they should have used "means" in order to make the "includes" under the
"employee" definition seem enlarging vs. limiting. Can this be why the modern "employer"
definition now uses "means" — as if only "means" can be limiting?

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
In a particularly revealing example, the Revenue Act of 1921 referred to — within the same
section — both business "income derived from wages" and government compensation:

. . . the term gross income -
(a) includes gains, profits, and income derived from salaries, wages, and
compensation for personal service
(including . . . the President [and all other federal positions], the [entire]
compensation received as such [vs. "income" separately derived from such compensation
as just described])
— Section 213, Revenue Act of 1921

Such was also the case in section 22(a) of the 1939 IRC. This is yet another smoking
gun, made obvious by such close proximity. (They never made that mistake after 1939.)
If your wages were taxable in their entirety (as are federal "wages"), then Revenue Acts
would read that way. They would dispense with any "income derived from salaries,
wages, and compensation" language, as they have always left out such phrases when
taxing federal employees.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Finally, can anybody point to any congressional debate about the
income tax of 1913 that even mentions intent to tax remuneration for private labor?
I have looked extensively for such, to no avail.

Regards,
Non Mens Rea

[Judge Roy Bean]

Hello,

Thank you for your replies. ...
I have looked extensively for such, to no avail. ...

Regards,
Non Mens Rea

None are so blind as those who will not see.

[Thule]

I have no doubt that Congress is "satisfied with the current interpretation".

That begs the question of why there should be (after 69 years) any reason for any
room for "interpretation" on this vital point. Why use a ambiguous tautology as section
7701(c) vs. that absolutely clear language employed in 11 USC 102 and 28 USC 3003?
I've previously quoted that "smoking gun":

There is no room for interpretation. But as Hendrickson proves, there is plenty of room for splitting hairs over semantics, as long as you ignore decades of precedent. If you think the IRC could or should be more precise, fair enough. But beeing slightly unhappy with the wording does not give anyone the right to ignore the law.

Besides, no matter how precise you manage to write the law, there will always be people who will disagree. After all, people believe in a flat earth, a hollow earth, Nazi-UFOs on the moon or that the Cubs will win the WS before the Black Goat of the Woods have been properly satisfied.

As someone pointed out once; People will believe the most incredible things if it happens to coincide with their self-interest.

So, when will you tire of your new moniker, Harv?

[wserra]

I have no doubt that Congress is "satisfied with the current interpretation".

So you have no need to go any further.

The courts have spoken definitively that you're wrong. Congress fully approves of what the courts have held. Not satisfied, you occupy much space with your personal musings on semantics.

You are clearly not one who has much experience in the law. Word games don't work.