The Epic Fail of Squatloosian Troll

[SquatloosianTroll]

Hmmm, it is you who are starting from the wrong place then

Wrong. When a tax return is filed it is then assessed after being received by the IRS. I am coming from the 2nd action not the 1st.

You can start from wherever you want, doesn't make it right. S.61 defines gross income, start there.

Okay, you want to go there, lets go there. I'll be your huckleberry. https://www.youtube.com/watch?v=wnVnE-wOXJs
Say when.

(a) General definition Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust.
(b) Cross references
For items specifically included in gross income, see part II (sec. 71 and following). For items specifically excluded from gross income, see part III (sec. 101 and following).

So where in this list am I liable? Compensation for services?

[SquatloosianTroll]

We'll pick this up tomorrow afternoon. I have a lot more "ammo" in my "six shooter".

[Famspear]

We'll pick this up tomorrow afternoon. I have a lot more "ammo" in my "six shooter".

No, you have no ammo, and you have no six shooter. And no, we won't pick this up tomorrow afternoon. We pick it up right now.

The assessment statutes have nothing to do with the goofy argument about "taxable activity." The imposition of the Federal income tax does not depend on whether you are engaged in an activity or not.

Many instances of realization of gross income for Federal income tax purposes do involve activities. Others do not. And, most certainly, the Federal income tax is not limited, in its application, to activities involving alcohol, tobacco and firearms.

[Famspear]

From IRC section 61:

(a) General definition Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust.
(b) Cross references
For items specifically included in gross income, see part II (sec. 71 and following). For items specifically excluded from gross income, see part III (sec. 101 and following).

And your question was:

So where in this list am I liable? Compensation for services?

Wrong question. You don't pick an item from the "list." We don't pick an item from the "list," either. That's not how the law works.

Instead, do this: You describe an item of income that you contend is NOT included in gross income for Federal income tax purposes. That does not merely mean an item "not listed" in section 61. That means not included in the section 61 definition of gross income.

Read the entire definition; don't read just the list. And, for now, we can make the task easy: just ignore the statutory exclusions under sections 101 et seq.

Next, you make your argument for why the item you pick is not included in section 61. Hey, you might be able to come up with something. For example, the receipt of cash loan proceeds is not a realization of gross income under section 61. There! I found something! See how easy that was? See if you can do it.

[NYGman]

(a) General definition Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(Snip)

So where in this list am I liable? Compensation for services?

Including is not meant to be a full list. Show me where it is specifically excluded? You can't

[fortinbras]

The income tax law was intended (as shown by the Congressional debates - first, on the proposal of the 16th Amendment, then on the first Internal Revenue Code in 1913, and the subsequent Code in 1954 and several other times) to reach and tax just about every penny that found its way into a person's pocket. Only a very few forms of revenue (such as dividends from municipal bonds) were explicitly declared to be untaxed.

As a generality, if a person has acquired money, the IRS wants a chunk of it and the burden is on the taxpayer to show that some of the money shouldn't be taxed (showing both the amount that shouldn't be taxed and why it shouldn't be taxed).

[Famspear]

(a) General definition Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(Snip)

So where in this list am I liable? Compensation for services?

Including is not meant to be a full list. Show me where it is specifically excluded? You can't

Indeed, section 61 includes a somewhat rare example, in the Internal Revenue Code, of multiple redundancy, in two respects.

First, the word "including" -- and the list of items that follows it -- is technically not even needed in order for section 61 to cover what it does cover -- all income from whatever source derived. The term "including" is not deemed to exclude other things otherwise within the meaning of the term defined. See section 7701(c).

As if that redundancy weren't enough, the phrase "(but not limited to)" is also a redundancy -- a rare example in the Code of what may be called intensive redundancy or emphatic redundancy. Even if the words "but not limited to" were not in section 61, the meaning of the term "including" would be the same as described above.

Congress was emphatic about the massively broad scope of the meaning of gross income for Federal income tax purposes, as shown by the wording of section 61.

[Burnaby49]

Canada used to have a similar definition of 'income' way, way back when the Income Tax Came out in WWI. At that time we didn't have legal geniuses like Squatloosian arguing that 'includes' means 'includes only'. The problem didn't devolve around the meaning of 'include' but the fact that as soon as there was a list of taxable income sources lawyers and accountants went into overdrive figuring ways that their clients could get what we would normally consider income through methods not included in the list. It was endless and the government was constantly plugging the loopholes. They finally gave up and now the Income Tax Act of Canada says;

DIVISION B
Computation of Income
Basic Rules

3 The income of a taxpayer for a taxation year for the purposes of this Part is the taxpayer’s income for the year determined by the following rules:

(a) determine the total of all amounts each of which is the taxpayer’s income for the year (other than a taxable capital gain from the disposition of a property) from a source inside or outside Canada, including, without restricting the generality of the foregoing, the taxpayer’s income for the year from each office, employment, business and property,

(b) determine the amount, if any, by which

(i) the total of

(A) all of the taxpayer’s taxable capital gains for the year from dispositions of property other than listed personal property, and

(B) the taxpayer’s taxable net gain for the year from dispositions of listed personal property,

exceeds

(ii) the amount, if any, by which the taxpayer’s allowable capital losses for the year from dispositions of property other than listed personal property exceed the taxpayer’s allowable business investment losses for the year,

(c) determine the amount, if any, by which the total determined under paragraph (a) plus the amount determined under paragraph (b) exceeds the total of the deductions permitted by subdivision e in computing the taxpayer’s income for the year (except to the extent that those deductions, if any, have been taken into account in determining the total referred to in paragraph (a), and

(d) determine the amount, if any, by which the amount determined under paragraph (c) exceeds the total of all amounts each of which is the taxpayer’s loss for the year from an office, employment, business or property or the taxpayer’s allowable business investment loss for the year,

and for the purposes of this Part,

(e) where an amount is determined under paragraph (d) for the year in respect of the taxpayer, the taxpayer’s income for the year is the amount so determined, and

(f) in any other case, the taxpayer shall be deemed to have income for the year in an amount equal to zero.

So only a few very broad catagories are noted. If there's an argument about whether or not something is income it's up to the Tax Court of Canada to figure it out and the court has taken a very wide-ranging view based on generally accepted dictionary terms of income. I can't recall a Tax Court case on this issue in years.

[Famspear]

The latest village idiot wrote:

Assessment has its authority at 27 Part 70 under the Parallel Table of Authorities.

https://www.law.cornell.edu/cfr/text/27/part-70

No.

The link you provided is a link to Part 70 of title 27 of the Code of Federal Regulations, which involves regulations under the authority of title 27 of the United States Code, relating to intoxicating liquors.

The assessment statutes you cited are found in what is called the Internal Revenue Code, which is separately codified as title 26 of the United States Code. The assessments statutes you provided do not "have their authority" from anything in 27 Part 70 of the Code of Federal Regulations, or from any other provision of any other thing found in the Code of Federal Regulations.

You need a course on legal research.

Assessment "has its authority" from the very Internal Revenue Code provisions you cited -- not from some regulation in title 27 of the Code of Federal Regulations.

Regulations derive their authority from the statutes to which those regulations relate -- not the other way around.

For example, Internal Revenue Code section 6201 ("Assessment authority") is a statute. That means: a law enacted by Congress. The phrase "this title" in section 6201(a) is a reference to the "Internal Revenue Title," which is now called the "Internal Revenue Code of 1986" (formerly called the "Internal Revenue Code of 1954"), and which is separately codified as title 26 of the United States Code.

A regulation issued by the Department of the Treasury under that statute is found at 26 CFR section 301.6201-1. The statute does not "have its authority" (so to speak) from the regulation. Instead, the regulation "has its authority" from the statute.

Similarly, Internal Revenue Code section 6203 ("Method of assessment") is a statute. Again, that means: a law enacted by Congress. A regulation issued by the Department of the Treasury under that statute is found at 26 CFR section 301.6203-1. Again, a statute does not "have its authority" from a regulation. Instead, the regulation "has its authority" from the statute.

[Famspear]

Further, neither the specific assessment statutes you cited, nor any related regulations in title 26 of the Code of Federal Regulations, have anything to do with what is or is not gross income under income tax provisions of the Internal Revenue Code.

In terms of the current Internal Revenue Code of 1986, as amended, the starting place for analysis of "what is gross income" is section 61 and the case law interpreting that section.

[Burnaby49]

A regulation issued by the Department of the Treasury under that statute is found at 26 CFR section 301.6201-1. The statute does not "have its authority" (so to speak) from the regulation. Instead, the regulation "has its authority" from the statute.

Similarly, Internal Revenue Code section 6203 ("Method of assessment") is a statute. Again, that means: a law enacted by Congress. A regulation issued by the Department of the Treasury under that statute is found at 26 CFR section 301.6203-1. Again, a statute does not "have its authority" from a regulation. Instead, the regulation "has its authority" from the statute.

Again, same in Canada. The Income Tax Act is a federal statute and any changes or modification to it must be done by a majority vote in parliament. However the regulations are not part of the Act and can be changed whenever the government in power wants them changed without going through parliament. As an example the right, or ability to charge depreciation/amortization (capital cost allowance) against income is in the Act. However the rates that can be deducted, the percentage of the original asset cost that can be written off, are in the regulations. So if the government decides to try and promote manufacturing (a political rather than a tax decision) it can increase the rate of depreciation on heavy equipment through a simple amendment to the regulations.

[noblepa]

Regulations derive their authority from the statutes to which those regulations relate -- not the other way around.

When I took a course on taxation in college, I had to buy the 1986 tax code, a two volume set.

I was amazed at how often the phrase "the commissioner shall promulgate regulations regarding . . . ". That means that the regulations have the force of law.

I was taught that the only way to fight a regulation was to show, to the court's satisfaction (not the petitioner's) that the regulation in question either contradicted the law, or was not supported by the law. This is something that very rarely, if ever happens.

Come to think of it, I've heard TP's argue that the tax code isn't "positive law", meaning that congress never voted on Title 26, in its entirety. It is a compendium of various statutes that congress did vote on and that the president did sign.

I'm surprised that, as far as I know, no TP has ever argued that the tax regulations have no legal force, because they were not enacted by congress. (I hope I haven't given anyone an idea).

[Duke2Earl]

This is my one and only response to the troll du jour. You go right ahead and take that position on your taxes. Fine with me. Just so long as you are aware that if contested you will lose. If you want to spend large portions of your life fighting and losing to prove a useless point that will lose 100% of the time....have at it. Sane people make other decisions. Good bye.

[Pottapaug1938]

Squatloosian Troll is just the latest in a long line of people who comes here, and tries to use what Stephen Law, in his excellent book "Believing Bullshit", calls "The Blunderbuss" and "Moving The Semantic Goalposts" to evade having to admit that he came here and failed, resoundingly, to challenge us on the facts regarding income taxation. When he goes on his merry way, he will go with a warm, fuzzy feeling as he thinks "I asked them all those questions about whether or not I am liable to pay income tax, and they couldn't answer them" to himself.

Of course, the fact that we DID answer the questions will completely escape his mind.

[noblepa]

Squatloosian Troll is just the latest in a long line of people who comes here, and tries to use what Stephen Law, in his excellent book "Believing Bullshit", calls "The Blunderbuss" and "Moving The Semantic Goalposts" to evade having to admit that he came here and failed, resoundingly, to challenge us on the facts regarding income taxation. When he goes on his merry way, he will go with a warm, fuzzy feeling as he thinks "I asked them all those questions about whether or not I am liable to pay income tax, and they couldn't answer them" to himself.

Of course, the fact that we DID answer the questions will completely escape his mind.

Yes, but we didn't give him answers that convince HIM that he is liable to pay income tax. And, or course, he is the only proper judge of the answers to such questions.

[wserra]

I believe I did answer Mr Wesley Serra's question:

Selling (an activity) alcohol tobacco and firearms.

It would seem to me that he needs to go back to school and further his education in the art of reading and comprehension.
No?

No. A number of ignoramuses like you have tried that in court. E.g., Hughes v. Chevron Phillips Chem. Co. LP, 804 F. Supp. 2d 539 (TXND 2011); Jones v. Comm'r, T.C. Memo 2014-101 (T.C. 2014); Wnuck v. Comm'r, 136 T.C. 498 (T.C. 2011). They lost every time, sometimes being sanctioned for making frivolous arguments. Jones, for example, was hit with the max ($25K), an addition to penalties for fraud.

No need for me to read any further. You, on the other hand, like most of the rest of the denizens of Stevens' board, cite nothing at all, preferring to rely on what appears to be a third-grade education. The results are predictable.

Famspear already addressed how you cite regs, thinking that they are the Code. And the wrong regs, at that.

Here are the 20 diversionary tactics toxic people use to silence and degrade you.

Snip massive copyright violation. Randall, did you notice the following at the beginning of the article you pirated: "The following article is copyrighted and may not be posted anywhere without permission from the author"? But then again, there's no evidence the law applies to you, is there?

Oh so sorry let me correct myself: "Privileged activity is taxed"

Wrong again. "All individuals, freeborn and nonfreeborn, natural and unnatural alike, must pay federal income tax on their wages, regardless of whether they have requested, obtained or exercised any privilege from the federal government." United States v. Sloan, 939 F.2d 499, 501 (7th Cir. 1991), cert. den. 112 S.Ct. 940 (1992). Many more cases say the same thing.

[morrand]

"All individuals, freeborn and nonfreeborn, natural and unnatural alike, must pay federal income tax on their wages, regardless of whether they have requested, obtained or exercised any privilege from the federal government." United States v. Sloan, 939 F.2d 499, 501 (7th Cir. 1991), cert. den. 112 S.Ct. 940 (1992). Many more cases say the same thing.

That may be true, Wes, but still I would like to be sure that the cited case is linked for our inquisitor's easy reference, as I suspect there are few others that open with:

Like moths to a flame, some people find themselves irresistibly drawn to the tax protestor movement's illusory claim that there is no legal requirement to pay federal income tax. And, like the moths, these people sometimes get burned. Lorin G. Sloan believed these claims and because he acted upon them now faces four months in a federal prison; there can be little doubt that he has been burned.

Let the willfully ignorant beware.

[Famspear]

SquatloosianTroll wrote:

So if Defendant [sic] did not engage in a taxable activity i.e. selling alcohol, tobacco or firearms, then he/she is/are not liable per the "gibberish code" per the assessment statute [ . . . ]

--Troll's citations to assessment statutes -- which have nothing to do with the concept or definition of a “taxable activity” -- not reproduced.

wserra responded:

What is a "taxable activity", and where do you find it in the law?

SquatloosianTroll responded to wserra with this:

Really you need me to explain “taxable activity”?
Selling (an activity) alcohol tobacco and firearms.

That looks like the Troll’s definition of “taxable activity”. And, since the Troll had previously indicated that because “Defendant” did not engage in a “taxable activity,” Defendant is “not liable” under the “gibberish code,” the Troll is effectively saying that the U.S. Federal income tax can be imposed only in the presence of a “taxable activity.”

The Troll’s argument is frivolous.

wserra responded with:

....Feel free to cite the section of the IRC that defines it [“taxable activity”]. Or the case or reg, for that matter.

And The Observer asked:

Are you suggesting that only the sale of alcohol, tobacco and firearms is a taxable activity? Are there other activities that are taxable?

And why is the sale of, say tobacco, a taxable activity? I am asking this since you really didn't answer wserra's question. That may be because you didn't understand what he was actually asking.

The Troll responded with:

I believe I did answer Mr Wesley Serra's question:

Selling (an activity) alcohol tobacco and firearms.

And yet, Troll later states, in a “response” of sorts directed to me:

I hate to break the news to YOU but I never said that "the Federal income tax is imposed only on "activities".

I hate to break the news to you, Troll, but you can’t seem to keep track of your own arguments.

If something is not an “activity,” then that something cannot be a “taxable activity.” And, when you claim that if someone did not engage in a “taxable activity” followed by the abbreviation “i.e.” and then using the phrase “selling alcohol, tobacco or firearms,” then claiming that “he/she is/are not liable”, the meaning or your claim is that that the Federal income tax is imposed only on activities.

You are quite wrong.

Further, your knowledge of ordinary logic is just as bad as your knowledge of how to understand legal materials such as statutes and regs.

Further, as noted above, you cited a provision of the Federal Register (which includes regs codified in the Code of Federal Regulations) which included a list of certain statutes (including the assessment statutes of the Internal Revenue Code) and you mistakenly claimed that the statutes derived their authority from the regs -- instead of the other way ‘round.

You’re now waffling, and you still have not come up with a single correct answer to any question posed to you.

What a surprise.

[SquatloosianTroll]

We'll pick this up tomorrow afternoon. I have a lot more "ammo" in my "six shooter".

No, you have no ammo, and you have no six shooter. And no, we won't pick this up tomorrow afternoon. We pick it up right now.

The assessment statutes have nothing to do with the goofy argument about "taxable activity." The imposition of the Federal income tax does not depend on whether you are engaged in an activity or not.

Many instances of realization of gross income for Federal income tax purposes do involve activities. Others do not. And, most certainly, the Federal income tax is not limited, in its application, to activities involving alcohol, tobacco and firearms.

Ummm, no I am in control here.

Go ahead, pick up the gun. Mister I don't want no trouble from you. I said pick up the gun. Mister, I just came into town to get some sugar candy for my kids and some gingham for my wife. I said pick up the gun ........
https://www.youtube.com/watch?v=Cdf8UvkjUbc

[SquatloosianTroll]

(a) General definition Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(Snip)

So where in this list am I liable? Compensation for services?

Including is not meant to be a full list. Show me where it is specifically excluded? You can't

I can't huh? Okay so this is under Subtitle A Income Taxes I think I am right on that point. (yay I'm right about something and posted it here on the infamous quatloos site... just ribbing you all) Okay here goes: Under 26 CFR 1.861-8T(d)(2)(iii)
(iii) 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:

(A) In the case of a foreign taxpayer (including a foreign sales corporation (FSC)) computing its effectively connected income, gross income (whether domestic or foreign source) which is not effectively connected to the conduct of a United States trade or business;

(B) In computing the combined taxable income of a DISC or FSC and its related supplier, the gross income of a DISC or a FSC;

(C) For all purposes under subchapter N of the Code, including the computation of combined taxable income of a possessions corporation and its affiliates under section 936(h), the gross income of a possessions corporation for which a credit is allowed under section 936(a); and

(D) Foreign earned income as defined in section 911 and the regulations thereunder (however, the rules of §1.911-6 do not require the allocation and apportionment of certain deductions, including home mortgage interest, to foreign earned income for purposes of determining the deductions disallowed under section 911(d)(6)).

So 1) Where is compensation for services in the above and 2) If these items of income ARE NOT exempt then one can infer that anything else IS EXEMPT.