Fuzzrabbbit Speaks

[Cpt Banjo]

Banjo:

Then you need to understand that Congress' power to tax is not dependent upon its power to regulate interstate commerce, any more than it's dependent on Congress' power to establish post offices, enact uniform bankruptcy laws, grant patents, or raise armies and navies. The power to tax and the power to regulate are two different things, and the Supreme Court has consistently held that the former is independent of the latter and that Congress may tax things that is might not be able to regulate otherwise. You might want to start by reading the following: The License Tax Cases

I haven't read the others, but License Tax Cases are special case LICENSED professions, not general private business. And about interstate taxation: I may even agree with you. But intrastate--definitely out of Congress's power to tax. (OK Dan, I know you're ready with SC cases...)

Son, please read the cases; you may learn something. Btw, The License Tax Cases involved the intrastate sale of liquor and lottery tickets, matters which the Court conceded Congress could not regulate or grant permission to engage in contrary to state law. The "license" was merely a method of taxation, not a permit to engage in the business.

Incidentally, if your argument is that Congress can't tax intrastate activities because it can't regulate intrastate commerce, how would Congress ever get the authority to license (in the true sense) an intrastate activity in order to tax it? Why, for example, can Congress tax the income of a corporation chartered by a state that does purely intrastate business? How can it impose an estate tax on the intrastate transfer of property on death or a gift tax on an intrastate donative transfer?

[grammarian44]

Fuzzrabbit, you've completely ignored the point I was trying to make. I am saying that it is your duty to persuade people that the 861 argument is true, and not anyone else's duty--including the judiciary's--to persuade you that it is not true.

Gould v. Gould addresses how judges should interpret statutes. It does not address a judge's duty to persuade any citizen who strolls along to agree with the judge's interpretation of the law.

Yes, judges also defer to the regs when there is doubt. That doesn't change the central point that when the judge doubts the meaning of a statute, the statute will be construed in favor of the taxpayer. Remember that Gould v. Gould appeared in 1917, long before the regulatory system, and judicial interpretation of that system, developed as it has today. There was no Chevron case in 1917.

When you say you can't see any judicial consensus on the 861 argument, you're just being willfully ignorant. The cases have been pointed out to you many times. You just choose to ignore them.

You still seem to believe that Gould v. Gould imposes a burden on the justice system to persuade you that you owe taxes. The case says nothing of the kind.

I really think that you latched onto this quote from Gould v. Gould without really thinking it through in relation to the argument I was making. My argument is that it is your burden to persuade others that the 861 argument is true, and that it is the burden neither of people on this web site nor the judiciary to persuade you to accept their interpretation of the statute. Nothing in Gould v. Gould is even remotely applicable to my point.

[jg]

Great-West Life Assur. Co. v. United States, 230 Ct. Cl. 477, 678 F.2d 180, 183 (1982) ("The determination of where income is derived or 'sourced' is generally of no moment to either United States citizens or United States corporations, for such persons are subject to tax under section 1 and section 11, espectively, on their worldwide income.").

Wrong.
Atricle 1, Section 8, clause 3 and the 10th Amendment forbid intrastate regulation (including taxation--SC) of trade.

Got a cite that says the federal income tax does not apply (or can not be enforced) to a transaction that is entirely intrastate?

My suggestion is to look at this claim; on your own; as it is a leg upon which tax deniers stand that is not supported in the law.

This claim has been litigated (without reference to section 861) and decided that the federal income tax is consitutional - sorry I do not have the material, time or effort to go into details at this time.

Is it April 17 yet?

[silversopp]

No, I understand that ONLY THE SC can "make" the law, by ruling. What IS their opinion on Larken's views? That would satisfy me. As long as those 4 who put Bush in office were in the minority.....

The Supreme Court doesn't make laws, that's the job of the legislative brance.

When a law is passed, and if someone believes that there is a conflict with the law and another law, constitution, or procedure, judges are involved to settle the dispute. There are many courts in the United States that perform this function, as you can surely understand that the task too much work for the nine SC justices. The Supreme Court hears a very small percentage of the total cases, as they get to pick and choose which ones that they will hear.

The Supreme Court is made up of individuals which occassionally are replaced. This sometimes causes one group of individuals on the Supreme Court to rule opposite as another group of individuals on teh Supreme Court did in the past. The Supreme Court may have a strong sounding name, but it is not some super law creating machine.

The belief that only the Supreme Court can make laws is completely wrong.

[.]

Hey, Fuzz, you have my sympathy.

To your great credit, you figured Larken's scam out many months ago. Now, for unknown reasons, you have relapsed, at least partially, into la-la-land.

That's a losing proposition. Don't waste your time.

[Joey Smith]

By the government avoiding a real response to his charges our liberties are voided.

The IRS has repeatedly responded to Larken's and Dr. Tom's (bogus) arguments, and made clear their position. The courts have agreed with the IRS, and not with Larken or Dr. Tom.

In fact, both Larken and Dr. Tom decided at the last minute in their criminal trials that they wouldn't even attempt a defense made on their position (and thus test it themselves) but instead unsuccessfully tried a Cheek defense.

Their theory has been repeatedly tested, in the Takaba case and elsewhere -- it has also repeatedly gone down in flames. No judge or credible legal or tax scholar thinks that their theory is any more than a big joke.

[Joey Smith]

It seems like fuzzy has figured out that the 861 argument isn't worth the paper it is written on, and so it concerned about his own position and the chance of possible jail time or a $25,000 frivolous penalty.

[Cpt Banjo]

The "license" was merely a method of taxation, not a permit to engage in the business.

Incidentally, if your argument is that Congress can't tax intrastate activities because it can't regulate intrastate commerce, how would Congress ever get the authority to license (in the true sense) an intrastate activity in order to tax it? Why, for example, can Congress tax the income of a corporation chartered by a state that does purely intrastate business? How can it impose an estate tax on the intrastate transfer of property on death or a gift tax on an intrastate donative transfer?

I don't think they can--
constitutionally. But when has that ever stopped them? I don't think the Founders had this federal gov't in mind. I really and truly DON'T.

Son, the point is that the Supreme Court says that the Constitution says they can, and that's what determines the law. Btw, if you really think the Founders didn't intend for Congress to tax intrastate activities, please read up on the Whiskey Rebellion, which was put down by a certain Go. Washington, whose signature appears quite prominently at the bottom of the Constitution.

[Joey Smith]

It is my understanding that only SC rulings have weight of "law."

Your understanding is once again incorrect. The rulings of the lower court have the weight of law unless they are reversed.

BTW, the U.S. Supreme Court routinely allows the convictions and fines of tax protestors to stand. The jurors of that court share the same opinion of tax protestors and their arguments as most of the posters here.

[jg]

Joey:

Takaba case and elsewhere

For the umpteenth time, and like I've told jg, these are STRAW DOGS. Amid several other unrelated nonsense claims like no OMB # or not recognizing Demandant's status, Mr. Sulla's (Takaba's lawyer) and the judge's understanding of 861 are no better than yours. They said "gross" income, where "taxable" is what matters. Like I tell EVERYONE: until somebody, hopefully a JUDGE, shows me they understand the argument, I'm not buying.

Not sure what the ability to understand another's argument has to do with presenting an accurate interpretation of the law as it is written, applied and enforced; but you should read the article(s) at http://docs.law.gwu.edu/facweb/jsiegel/ ... es/861.htm if you have not done so already.

You and stevesy may feel or believe deeply that the founders did not intend the income tax as it exists; but the fact remains that it is what it is. If you do not like the law, try to get it changed.

[Paul]

Not to jump in late in the game, fuzzy, but try actually reading sections 1, 61, 62, 63, 861, 862, 871, 872, 881, 882 and 904. It's not a matter of whether a resident can "use" 861, it's just that all 861 does is tell him or her what items of income are from sources within the US. Nothing more, nothing less. 862 says which items of income are from sources outside the US. So, if you use those two sections, you can divide your income up into two piles - one pile of income from sources within US and one from sources without the US. All of your income will be in one pile or another.

The trouble is that Section 61 tells you that (except as otherwise provided in the IRC) you're taxed on your income from ALL sources. So what is the point of dividing your income into two piles according to geographic source, when you're taxed on both sources? Well, if you're a nonresident alien or a foreign corporation, sections 871, 872, 881 and 882 create an exception to the all sources rule in Section 61 - they tell you that you're taxed only on the pile from within the US. Can you find anything in the IRC that creates such an exception for residents? Don't worry that you can't -- it's not there.

But you can still use 861 and 862 if you're a resident. Section 901 gives you a credit for taxes paid to other countries. Section 904 imposes limits on the credit, which require you to -- mirabile dictu! -- figure out how much of your income is from sources outside the US.

So no one can really tell a resident not to use 861. It's just that dividing a resident's income into two piles is usually a waste because all of their income is actually in the "within the US" pile, and even those with income in the "outside the US" pile are still taxed on income from that pile (with only limited exceptions, which I'll let you find on your own).

[thatdude]

If they jailed Larken, they could jail anyone.

Wrong.

Most Americans do not espouse idiot legal theories about how they can't be taxed. Larken is in jail for acting on his stupidity.

Larken's arguments have been trashed here and elsewhere before. The fact that you (or Larken) choose not to accept the replies you're given is not our problem.

Larken is in Jail again, wow

[Colonel_Buck]

which makes one wonder whether they really believe in the guff they sold to others.

Was there any evidence presented at Larken's trial that he benefited financially from his 861 activities? If so, was the amount deemed excessive?

Also, if I am a non-citizen living in the USA (that would be a resident alien, right?) and have income from sources within and without the USA, am I taxed on the income from without?

[Cpt Banjo]

Also, if I am a non-citizen living in the USA (that would be a resident alien, right?) and have income from sources within and without the USA, am I taxed on the income from without?

It appears so.

http://www.irs.gov/businesses/small/int ... 93,00.html

[grammarian44]

grammarian44:

can't see any judicial consensus on the 861 argument, you're just being willfully ignorant.The cases have been pointed out to you many times. You just choose to ignore them.

I hold to my statement: I haven't seen a direct refutation of LARKEN'S position, whether it is right or wrong. I wish someone would...few here seem to know it. The judges sure don't. Name one--the best one.

You're still ignoring my point. Yet again, it's not the job of anyone here to prove to you the argument is false. You have to prove to us that it's true. Show me the judge who agrees with you. You made the argument, you have the burden of proof.

What you're saying is analogous to this: "I believe that our country is secretly run by a band of gnomes living in a trailer park in upstate New York. Until you prove to me there is no such band of gnomes, my point of view prevails."

By the way, I notice you've stopped referring to the Gould v. Gould case. Do you now see how irrelevant to my claims that case is?

[Brian Rookard]

I think a lot of people here think they know Larken's argument, but they obviously don't.

That is the tax protestor's argument every time ... "if only they understood me they would see how unconstitutional this all is and how the government is just robbing the American people ..."

Trust me, there are plenty of people here who understand Larken's argument.

It's more like the tax protestor's don't understand the explanations as to just why they're wrong. (Of course, maybe if they'd quit covering their ears and closing their eyes ...)

[LPC]

.You need to understand the argument to argue against it. He thinks taxable income is subject to Constitutional exemption, reflected in 861.

We know what he thinks. We also know why he's wrong.

Your only evidence that we "just don't understand" is that we contradict him. But the only reason we contradict him is because he's wrong, and we know he's wrong because we understand his argument.

It was once clearly stated, less so now.

That's because it's less true now.

In the 19th century and early part of the 20th century, the Supreme Court recognized several limitations on the power of Congress to tax income. *ALL* of those limitations have been over-ruled by later decisions of the Supreme Court. Specifically:

1. In Collector v. Day, 78 U.S. 113 (1870), it was held that Congress could not tax the salary of a state employee. That holding was reversed by Helvering v. Gerhardt, 304 U.S. 405 (1938).

2. Evans v. Gore, 253 U.S. 245 (1920), held that the compensation received by federal judges could not be subject to income tax because Article III of the Constitution states that the compensation of judges ‘shall not be diminished during their Continuance in Office.’ Evans v. Gore was over-ruled by O’Malley v. Woodrough, 307 U.S. 277 (1939).

3. In Pollock v. Farmers’ Loan & Trust Co., 157 U.S. 429, (1895), the Supreme Court held that interest on the debts of state and local governments could not be taxed. That holding was reversed in South Carolina v. Baker, 485 U.S. 505 (1988).

4. In Burnet v. Coronado Oil & Gas Co., 285 U.S. 393 (1932), it was held that the income from land owned by a state and leased to a private corporation could not be taxed if the lease was part of a “governmental function.” That holding was reversed by Helvering v. Mountain Producers Corp., 303 U.S. 376 (1938).

Larken's claim that there are types of income that are constitutionally exempt from tax is simply wrong, as the above decisions demonstrate.

There is nothing WRONG with law, except obtuse construction.

Such as a construction that claims that the 16th Amendment doesn't mean what it says, or that "all income, fro whatever source derived," does not mean ALL income from WHATEVER source derived? Yes, those would be obtuse constructions.

He debates Siegel this Saturday on the air, maybe I'll see what that brings out. Siegel makes the same off-the-mark arguments about gross being income from whatever, which Larken will never dispute, as it is IRRELEVANT to his take on the IRC. I think a lot of people here think they know Larken's argument, but they obviously don't.

Your comments demonstrate that you don't really understand Siegel's argument, or any of the other arguments against Larken's nonsense.

And you can't really be sure that Larken is right if you don't understand the arguments against him.

[LPC]

.You need to understand the argument to argue against it. He thinks taxable income is subject to Constitutional exemption, reflected in 861. It was once clearly stated, less so now. There is nothing WRONG with law, except obtuse construction.

I can't let this go without adding one more point, which is that, in order to reach his conclusion, Larken has to ignore not only the plain words of sections 61 and 63, but also the plain words of section 861 itself.

Section 861(b) defines "taxable income from sources within the United States" as "the items of gross income specified in subsection (a) as being income from sources within the United States" less certain deductions. Subsection (a) states that "The following items of gross income shall be treated as income from sources within the United States: ... (3) Personal services.
Compensation for labor or personal services performed in the United States...."

In order to avoid the conclusion that "compensation for labor or personal services performed in the United States" in included in "taxable income from sources within the United States," Larken is forced to argue that section 861 does not apply to citizens of the United States even though it does not say so.

And that's why he launches into his squirrelly argument about the Constitution, because he needs to find some way of explaining why section 861 doesn't actually mean what it says.

If that isn't an "obtuse construction," then I don't know what is.

And in order to explain why the statute doesn't say what he thinks it should say, and why the courts have all ruled against him, he presumes an enormous conspiracy involving Congress, the IRS, the courts, and most of the lawyers and accountants who have lived in the last 100 years.

Meanwhile, the idea that sections 61 and 63 might mean what they say, that section 861 might mean what it says, and that the courts might mean what they say, has been rejected by fuzzrabbit as an "obtuse construction."

Amazing.

[Cpt Banjo]

Banjoman:

Btw, if you really think the Founders didn't intend for Congress to tax intrastate activities, please read up on the Whiskey Rebellion, which was put down by a certain Go. Washington, whose signature appears quite prominently at the bottom of the Constitution.

I think Madison, and George Mason had more to do with that, and they were more for states' rights. There was generally suspicion of centralized power. Well, just look what can happen: anybody argue FOR our current fiasco-commander, Congressional midgits, and feckless Justices? You like what the IRC does for public confidence? No organization in the history of the planet is more reviled, 'cept maybe PETA.

You're straying from the topic, which was the scope of the federal taxing power and whether the Founders would have intended for Congress to be able to tax purely local matters within the States. Aside from the fact that there's nothing in the Constitution that prohibits such taxation, you need to understand the following:

1. The main reason the Articles of Confederation failed was that the central government did not have the power to tax, but had to rely on requisitions from the states. The Founders knew this, and that's why they put a very broad taxing power in the Constitution. As Jefferson said in a 1789 letter, "I approved, from the first moment, of the great mass of what is in the new Constitution... and the power of taxation. I thought at first that the latter might have been limited. A little reflection soon convinced me it ought not to be."

2. Two of the first taxing measures the new Congress passed were the carriage tax and the whiskey tax, both imposed on purely intrastate activities.

3. The language of the Constitution makes it very clear that Congress' power to tax reaches within the states:

"The 8th section of the 1st article gives to Congress the "power to lay and collect taxes, duties, imposts and excises," for the purposes thereinafter mentioned. This grant is general, without limitation as to place. It, consequently, extends to all places over which the government extends. If this could be doubted, the doubt is removed by the subsequent words which modify the grant. These words are, "but all duties, imposts, and excises, shall be uniform throughout the United States." It will not be contended, that the modification of the power extends to places to which the power itself does not extend. The power then to lay and collect duties, imposts, and excises, may be exercised, and must be exercised throughout the United States. Does this term designate the whole, or any particular portion of the American empire? Certainly this question can admit of but one answer. It is the name given to our great republic, which is composed of States and territories." Loughborough v. Blake, 18 U.S. 317 (1820)

The law couldn't be clearer that Congress can tax intrastate activities, and Rose and the other TP yahoos who think otherwise are hopelessly wrong. Abandon this argument, son; it's a loser.

[silversopp]

silversopp:

The belief that only the Supreme Court can make laws is completely wrong.

It is my understanding that only SC rulings have weight of "law."

Is it also your understanding that the thousands of theives, murderers, and rapists should be able to just walk out of prison because the Supreme Court did not oversee their trials? Why should they be in prison if the court they went to does not have the "weight of law" behind them?