A Reality Check for this August Group

[Submarine Veteran]

Would one of you kindly identify the activity or event associated with the income of the average American that gives rise to a liability for a Title 26 tax? There are tens of taxes within Title 26 and they're all in the form of a duty, excise or impost (indirect).

Referring to the Brushaber case, the income tax was clearly defined as a tax in the form of an excise, an indirect tax, meaning that some event or activity that is taxable gave rise to the liability.

Quote:
“[The Pollock Court] recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it.” Brushaber v. Union Pacific R. Co., 240 U.S. 1, 17, 36 S.Ct. 236 (1916). (bolding mine)

The IRS enforces some Title 26 taxes as direct taxes on all "income" based on the frivolous argument that the Sixteenth Amendment erased the distinction between direct and indirect taxes in the Constitution, which it clearly did not. There are examples, within the current set of amendments, where the constitution has repealed a section of the constitution and the language of the amendment is specific as to what was repealed and what was not. The language of the 16th does not destroy the separation of the two great classes of taxation and cannot. It is further clear that there has always been the power to tax anything but exports pursuant to the constitution, it's just that capitations, the tax on the "wages of labour" must be apportioned by representation to remain in harmony with our supreme law.

The erroneous position of the IRS is clear from their own website:

http://www.irs.gov/pub/irs-utl/friv_tax.pdf (PAGE 33)

[QUOTE]
6. Contention: The Sixteenth Amendment does not authorize a
direct non-apportioned federal income tax on United States
citizens.

Some assert that the Sixteenth Amendment does not authorize a direct
non-apportioned income tax and thus, U.S. citizens and residents are not
subject to federal income tax laws.

The Law: The constitutionality of the Sixteenth Amendment has
invariably been upheld when challenged. And numerous courts have both implicitly and explicitly recognized that the Sixteenth Amendment authorizes a non-apportioned direct income tax on United States citizens and that the federal tax laws as applied are valid. In United States v. Collins, 920 F.2d 619, 629 (10th Cir. 1990), cert. denied, 500 U.S. 920 (1991), the court cited to Brushaber v. Union Pac. R.R., 240 U.S. 1, 12-19 (1916), and noted that the U.S. Supreme Court has recognized that the “sixteenth amendment authorizes a direct nonapportioned tax upon United States citizens throughout the nation.”

[END QUOTE]

Clearly, the lower court judge in the 10th circuit for the Collins case didn't understand what the USSC said in Brushaber (or deliberately lied to allow the fraud to persist), but it doesn't matter because the Brushaber court was clear on the matter and lower court cases aren't valid when the USSC cases are clear. The tax is, and must be, in the form of an excise or else it must be apportioned by representation. USSC always trumps lower court rulings...

You can also see by the Collins ruling that this is a matter that today's USSC does not want to address openly because it blows the scam by the IRS wide open (hence the cert. denied). The USSC knows that there are lower court rulings that defy the proper classification of the tax as "indirect" so they refuse to hear these challenges, leaving all these mixed messages so the IRS/DOJ can choose what they want to further the scam.

Please provide me a USSC decision that overrides Brushaber!

[LPC]

Would one of you kindly identify the activity or event associated with the income of the average American that gives rise to a liability for a Title 26 tax?

It is the realization of income that is the "activity or event" that gives rise to liability for the income tax that is imposed by Subtitle A of Title 26.

“From the beginning the revenue laws have been interpreted as defining ‘realization’ of income as the taxable event rather than the acquisition of the right to receive it.” Helvering v. Horst, 311 U.S. 112, 115 (1940).

Referring to the Brushaber case, the income tax was clearly defined as a tax in the form of an excise, an indirect tax, meaning that some event or activity that is taxable gave rise to the liability.

The Supreme Court never said that there must be some "event or activity that is taxable." Not in the Brushaber opinion nor in any other opinion. You just made that part up.

The IRS enforces some Title 26 taxes as direct taxes on all "income" based on the frivolous argument that the Sixteenth Amendment erased the distinction between direct and indirect taxes in the Constitution,

The IRS has never said that the 16th Amendment "erased the distinction between direct and indirect taxes." What the IRS has said, and all the courts have said, is that the 16th Amendment means what it says, and that Congress can tax incomes without apportionment.

Please provide me a USSC decision that overrides Brushaber!

Not necessary, because Brushaber held that the income tax is constitutional, and the income tax is still constitutional.

[fortinbras]

The 16th Amendment explicitly says it authorizes "taxes upon incomes, from whatever source derived." It does not specify or distinguish whether this tax is, or should be, classified as direct or indirect.
That being the case, if the income tax falls into a category that is otherwise not permitted, then an exception is made for the income tax because it is expressly permitted by the 16th Amendment.
Is this a difficult concept??

[Evil Squirrel Overlord]

Would one of you kindly identify the activity or event associated with the income of the average American that gives rise to a liability for a Title 26 tax?

Simple: The transfer of income to a level above exemption of a calendar year to the control of an average American will give the average American a tax laibility.

There are examples, within the current set of amendments, where the constitution has repealed a section of the constitution and the language of the amendment is specific as to what was repealed and what was not.

You mean the 21st Amendment?

[Unknown Named Agent]

Would one of you kindly identify the activity or event associated with the income of the average American that gives rise to a liability for a Title 26 tax?

Here are a few examples:

(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.

[Cpt Banjo]

It is further clear that there has always been the power to tax anything but exports pursuant to the constitution, it's just that capitations, the tax on the "wages of labour" must be apportioned by representation to remain in harmony with our supreme law.

The argument that a tax on "wages of labour" is a direct tax that needs to be apportioned was rejected over 125 years ago in the Springer case.

Son, if you're gonna post over here it would be a good idea to do a little research first before espousing legal positions that have repeatedly lost.

[Quixote]

The IRS enforces some Title 26 taxes as direct taxes on all "income" ...

I've always been curious about that statement. How would IRS enforce a direct tax differently from an indirect one? What aspects of enforcement mark the tax as direct or indirect? The only difference between a direct tax on income and an indirect tax on income would be that the indirect one would have to be imposed uniformly throughout the US. IRS does not impose taxes, so it could not impose a non-uniform income tax even if such a tax were allowable. So, in what possible sense is IRS enforcing Title 26 as a direct tax and what does that mean?

[grixit]

Would one of you kindly identify the activity or event associated with the income of the average American that gives rise to a liability for a Title 26 tax?

You got paid.

[The Operative]

SV, since you like the Brushaber case so much, why don't you read the VERY NEXT SENTENCE THAT FOLLOWS THE QUOTE YOU USE.

Nothing could serve to make this clearer than to recall that in the Pollock Case, in so far as the law taxed incomes from other classes of property than real estate and invested personal property, that is, income from 'professions, trades, employments, or vocations' ( 158 U.S. 637 ), its validity was recognized; indeed, it was expressly declared that no dispute was made upon that subject, and attention was called to the fact that taxes on such income had been sustained as excise taxes in the past.
- BRUSHABER v. UNION PACIFIC R. CO., 240 U.S. 1 (1916)

(Bolding is mine.)

Some courts, especially the 9th circuit in Re:Becraft, refer to the income tax as a non-apportioned direct tax. This is unfortunate because the Supreme Court has ALWAYS referred to an income tax as a constitutional 'duty or excise'. The Brushaber and Stanton cases were clear in stating that the 16th amendment did not create a direct tax that would not be apportioned, but instead simply prevented income taxes from being "taken out of the the category of INDIRECT taxation to which it inherently belonged".

The fact that the IRS uses the lower courts wording in their frivolous tax arguments publication does not invalidate the law or make it any different than what the Supreme Court says it is. The income tax is an INDIRECT tax and is Constitutional.

[Submarine Veteran]

The 16th Amendment explicitly says it authorizes "taxes upon incomes, from whatever source derived." It does not specify or distinguish whether this tax is, or should be, classified as direct or indirect.
That being the case, if the income tax falls into a category that is otherwise not permitted, then an exception is made for the income tax because it is expressly permitted by the 16th Amendment.
Is this a difficult concept??

Only if one has read and understands the constitution!

I don't care what you want to tax. It's either direct or not and that is clear from the supreme law.

[Cpt Banjo]

Of course, Congress already had the power to tax incomes without apportionment even before the 16th Amendment, except for the limited category of investment income carved out by the Pollock case.

[LPC]

Only if one has read and understands the constitution!

One must both read and understand the constitution?

Then you're 0-for-2.

Where in the Constitution does it say that an "excise" must be on a "privilege"?

Where in the 16th Amendment does it say that Congress cannot tax "earned" income, or that there are some incomes that Congress cannot tax without apportionment?

I don't care what you want to tax. It's either direct or not and that is clear from the supreme law.

And I don't care what you do NOT want to tax. If it's a kind of income then Congress can tax it without apportionment and that is clear from the Constitution.

[Famspear]

SubVet wrote:

Would one of you kindly identify the activity or event associated with the income of the average American that gives rise to a liability for a Title 26 tax? There are tens of taxes within Title 26 and they're all in the form of a duty, excise or impost (indirect).

OK, here's a taxable event for U.S. federal income tax purposes: Payment of compensation to an individual payee for services rendered by the individual payee to the payor, even where neither the individual payee nor the payor has any connection with the federal government.

Now, SubVet, go look for a U.S. federal court case (Supreme Court or otherwise) where an individual payee argued IN THAT CASE that because neither he (or she) nor his (or her) payor (whether called "employer" or not) was connected with the federal government, the compensation paid to that payee was not fully includible in gross income under IRC section 61 and was not taxable -- and that individual won his case. You will never find any such case.

No more citing obiter dicta from Brushaber; no more arguing that some verbiage Brushaber or some other court case means something other than what it actually says, or that it means something other than what the court in that case actually ruled. And no more pretending. Go look for a holding, an actual federal court ruling, a case where a federal court ruled that the individual's compensation was not taxable on the basis I just described.

Hint: I am sending you on a fool's errand. There is no such case in the entire history of the Republic. None.

Now, a few words about the hilarious "includes" and "employee" argument that Peter Hendrickson and other losers have made (adapted from something I wrote in another forum):

An argument linked to the meaning of the words "includes" and "including" is the argument that for Federal income tax purposes, the term "employee" under Internal Revenue Code section 3401(c) does not include a regular, private-sector employee. The courts have uniformly rejected this argument. The text of section 3401(c), which deals only with the employer's withholding requirements, and not with the employee's requirement to report Internal Revenue Code section 61 compensation for personal services (whether called wages, salaries, or any other term) as INCOME, is as follows:

For purposes of this chapter, the term “employee” includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term “employee” also includes an officer of a corporation.

--26 USC 3401(c).

In Sullivan v. United States, taxpayer Grant W. Sullivan argued that he had not received “wages” and was not an “employee” under Internal Revenue Code section 3401(c). The United States Court of Appeals for the First Circuit ruled against Sullivan, stating:

To the extent Sullivan argues that he received no “wages” in 1983 because he was not an “employee” within the meaning of 26 U.S.C. §3401(c), that contention is meritless. Section 3401(c), which relates to income tax withholding, indicates that the definition of “employee” includes government officers and employees, elected officials, and corporate officers. The statute does not purport to limit withholding to the persons listed therein.

--Sullivan v. United States, 788 F.2d 813, 86-1 U.S. Tax Cas. (CCH) paragr. 9343 (1st Cir. 1986) (per curiam).

In United States v. Ferguson, a Cracking the Code case, taxpayer Joy Ferguson argued that she was not an “employee” under section 3401(c), and that she therefore could not have “wages.” The court ruled against her, stating:

The core of the dispute before the court is Ferguson's assertion that she was not an “employee” as defined by §3401(c) of the Internal Revenue Code, and therefore did not earn any "wages." [footnote omitted] As such, she argues that her Form 1040 and Form 4862 accurately reported her wages as zero. As noted by the government, Ferguson's interpretation of §3401(c) has been considered and rejected numerous times by many courts. This Court would agree with the overwhelming precedent on this issue, Ferguson's argument that she is not an employee as defined by §3401(c) is frivolous.

--United States v. Ferguson, 2007-1 U.S. Tax Cas. (CCH) paragr. 50,461 (D. Nev. 2007).

In Luesse v. United States, taxpayer Chell C. Luesse of St. Louis Park, Minnesota, argued that he received no “wages” because he was not an “employee” under section 3401(c). The court ruled against Mr. Luesse. Luesse v. United States, 84-1 U.S. Tax Cas. (CCH) paragr. 9389 (D. Minn. 1984).

In Richey v. Stewart, the court stated:

Another familiar argument from Mr. Richey [the taxpayer] is that he is not an employee under the terms of the Internal Revenue Code, citing Section 3401(c), which states that the term “employee” includes government employees. What Mr. Richey misapprises in his reading of the statute is the inclusionary nature of the language. The Code does not exclude all other persons from taxation who are not government employees.

--Richey v. Stewart, 84-2 U.S. Tax Cas. (CCH) paragr. 9642 (S.D. Ind. 1984).

In United States v. Charboneau, the court stated:

[ . . . ] Ms. Charboneau contends that the Code's definitions of "wage income" and "self employment income" only include income derived from individuals who work for the federal government, or whose work involves that of "the performance of the functions of a public office." Because Ms. Charboneau never worked for any federal or state government during the tax years in question, she claims that the IRS cannot make any tax assessments against her.

This nonsensical argument is belied by the plain language of the Internal Revenue Code itself. For example, 26 U.S.C. §3401 defines wages as "all remuneration (other than fees paid to a public official) for services performed by an employee for his employer...." 26 U.S.C. §3401(a) (emphasis added). The statute then goes on to define various exceptions to this broad definition of wages in certain categories of private employment, such as in the agricultural and domestic service fields, newspaper delivery, the clergy, and for wages incurred by individuals working for employers "other than the United States or an agency therof" within Puerto Rico or a possession of the United States. There is nothing in the statute limiting "wages" to solely publicly-derived income. [footnotes omitted]

Ms. Charboneau, however, focuses on §3401(c), which states that:

the term “employee” includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term “employee” also includes an officer of a corporation.

26 U.S.C. §3401(c). Setting aside the last sentence of this provision, which clearly states that officers of private corporations are considered employees for purposes of determining wages, it is obvious that within the context of this statute that the word "includes" is a term of enlargement, not of limitation, and the reference to certain public officers and employees was not intended to exclude all others. See also Sims v. United States, 359 U.S. 108, 112-13 (1959) (finding that similar provision in 26 U.S.C. §6331 dealing with levies on salaries and wages does not exclude wages of private citizens); Sullivan v. United States, 788 F.2d 813,815 ("[Section 3401(c)] does not purport to limit withholding to persons listed therein"); ''United States v. Latham'', 754 F.2d 747, 750 (7th Cir, 1985) (the Internal Revenue Code definition of “employee” in 26 U.S.C. §3401 does not exclude privately employed wage earners);. In addition, 26 U.S.C. §7701, which provides the definitions of terms used throughout the Internal Revenue Code, states that 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." 26 U.S.C. §7701(c).

--United States v. Charboneau, 2006-2 U.S. Tax Cas. (CCH) paragr. 50,507 (M.D. Fla. 2006).

In McCoy v. United States, the court stated:

McCoy argues she should not have to pay taxes for 1996-98 because under Code Section 3401 she was not an “employee” which she contends is defined as an elected or appointed employee or official of the federal government. McCoy clearly misconstrues Section 3401(c). The definition of “employee” includes private-sector employees, employees of the federal government, as well as elected and appointed officials. The very language of the Code is inclusive, not limited to the examples of included persons.

--McCoy v. United States, 2001 U.S. Dist. LEXIS 18986, 2001-2 U.S. Tax Cas. (CCH) paragr. 50,787 (N.D. Tex. 2001) (footnotes omitted).

The argument that only certain types of taxpayers (such as only Federal government employees, corporations, nonresident aliens, residents of the District of Columbia, or residents of Federal territories) are subject to income tax and employment tax, and variations of this argument, have been officially identified as legally frivolous Federal tax return positions for purposes of the $5,000 frivolous tax return penalty imposed under Internal Revenue Code section 6702(a). 26 USC 6702, as amended by section 407 of the Tax Relief and Health Care Act of 2006, Pub. L. No. 109-432, 120 Stat. 2922 (Dec. 20, 2006). See Notice 2008-14, I.R.B. 2008-4 (Jan. 14, 2008), Internal Revenue Service, U.S. Department of the Treasury (superseding Notice 2007-30).

Winners talk; losers walk.

[Submarine Veteran]

The 16th Amendment explicitly says it authorizes "taxes upon incomes, from whatever source derived." It does not specify or distinguish whether this tax is, or should be, classified as direct or indirect.
That being the case, if the income tax falls into a category that is otherwise not permitted, then an exception is made for the income tax because it is expressly permitted by the 16th Amendment.
Is this a difficult concept??

It is clear that congress has the authority to tax income both directly and indirectly however, different approaches must be taken to maintain the construction specified by the constitution.

If taxing as an excise, it must be related to a taxable event or activity - it must have a nexus to the federal government.

If taxing directly, it still must be apportioned by representation.

Working to feed and clothe my family is not tied to any privileged activity and is therefore not taxable as an excise.

[LPC]

If taxing [income] as an excise, it must be related to a taxable event or activity - it must have a nexus to the federal government.

So you say, and yet the Constitution does not say that, and no federal judge in the history of the United States has ever said that. Quite the opposite, in fact, as demonstrated previously in this thread.

Your ignorant and unthinking beliefs cannot overcome 200 years of legal history not matter how obstinately you may cling to them.

If taxing [income] directly, it still must be apportioned by representation.

Wrong. The 16th Amendment says that Congress can tax incomes WITHOUT apportionment.

How is that so difficult to understand?

[Famspear]

The 16th Amendment explicitly says it authorizes "taxes upon incomes, from whatever source derived." It does not specify or distinguish whether this tax is, or should be, classified as direct or indirect.
That being the case, if the income tax falls into a category that is otherwise not permitted, then an exception is made for the income tax because it is expressly permitted by the 16th Amendment.
Is this a difficult concept??

It is clear that congress has the authority to tax income both directly and indirectly however, different approaches must be taken to maintain the construction specified by the constitution.

If taxing as an excise, it must be related to a taxable event or activity - it must have a nexus to the federal government.

If taxing directly, it still must be apportioned by representation.

Working to feed and clothe my family is not tied to any privileged activity and is therefore not taxable as an excise.

No, if the tax is an excise, there is no requirement that the event or activity being taxed have any nexus to the federal government. No requirement at all. None. Zero. Zilch. Now, go look for a federal court decision where an individual argued your argument, and the court ruled that the individual was correct. Hint: There are no such cases.

There is currently no requirement that a federal income tax of any kind whatsoever be apportioned by representation. None. Now, go look for a court case where someone argued your side and the court ruled in that person's favor. Hint: There are no such cases.

The compensation you receive for working to feed and clothe your family is not tied to any privileged activity, but is nevertheless taxable -- and the tax is an excise in the form of the current federal income tax under the Internal Revenue Code of 1986 as amended. Now, go look for a court case where the individual argued your side, and the court ruled in that person's favor. Hint: There are no such cases.

There is no requirement in the U.S. Constitution, or anywhere else, that any federal income tax of any kind whatsoever be tied to any privileged activity (federal-related or otherwise). Now, look for a court case where the court ruled in favor of your argument. There are none.

For example, extorting or embezzling money is not a privileged activity; it's a crime. Yet the wrongdoer is required to report the receipt of the extorted or embezzled money as INCOME for federal income tax purposes, even though the money is not his, and even though he is required to return it to its rightful owner.

[wserra]

the wrongdoer is required to report the receipt of the extorted or embezzled money as INCOME for federal income tax purposes, even though the money is not his, and even though he is required to return it to its rightful owner.

But can s/he deduct (or file an amended return based on) the amount returned?

[ASITStands]

Wikipedia

Weasel words are deliberately misleading or ambiguous elements of language used to avoid making a straightforward statement while simultaneously generating the illusion that a direct, clear form [of] communication is being utilized.

Your comments [below] come close to the definition of "weasel words."

It is clear that congress has the authority to tax income both directly and indirectly however, different approaches must be taken to maintain the construction specified by the constitution.

If taxing as an excise, it must be related to a taxable event or activity - it must have a nexus to the federal government.

If taxing directly, it still must be apportioned by representation.

Working to feed and clothe my family is not tied to any privileged activity and is therefore not taxable as an excise.

Each of your points have been substantively addressed by others, on this and other threads, but instead of addressing them, you simply repeat the 'Cracking the Code' mantra.

Several have addressed the direct/indirect tax question while 'The Operative' succinctly summarized it. The tax on incomes is an indirect tax in the nature of an excise.

It is not necessarily an excise in the nature of any other excise, such as the excise on the production or sale of alcohol, tobacco and firearms. However, it's treated as an indirect tax in the nature of an excise subject to uniformity among the several States.

The importance of the 16th Amendment was to remove any doubt as to whether a tax on incomes would be treated as a direct tax subject to apportionment or an indirect tax in the nature of an excise subject to uniformity. Both Congress with the amendment and the Supreme Court in Pollock, Brushaber and Stanton settled the question.

Whether the Ninth Circuit in In re Becraft, the Seventh in Sloan, the Tenth in Collins or the Service in their 'Truth About Frivolous Arguments' use the language, "For seventy-five years, the Supreme Court has recognized that the sixteenth amendment authorizes a direct nonapportioned tax upon United States citizens ...," is not conclusive.

The Supreme Court and Congress have settled the question. The tax on incomes is indirect.

Your argument comes down to whether working for a living is tied to a federal privilege.

'LPC' and others have already shown that excises need not be tied to any particular privilege, so that part of your argument falls to the ground [unless you can find substantive case law to the contrary]. And, your statement, "If taxing as an excise, it must be related to a taxable event or activity - it must have a nexus to the federal government," is wrong.

You're drawing a conclusion that's not supported in law, and instead of addressing the issue substantively, you simply repeat your mantra, as if to say, "I'm right. You're wrong."

And, what about addressing the issue of Section 93? You've not addressed anything yet.

You came here ostensibly to challenge Quatloosians, and you've stated a position that's as yet unproven by statute or case law while you continue to ignore the issues.

I'll admit that posting on Quatloos can be like a feeding frenzy among sharks. However, most posters here are hoping you'll address the issues substantively or discover your error.

[Famspear]

the wrongdoer is required to report the receipt of the extorted or embezzled money as INCOME for federal income tax purposes, even though the money is not his, and even though he is required to return it to its rightful owner.

But can s/he deduct (or file an amended return based on) the amount returned?

Ah, somebody just HAD to ask a really good question!

My off the top answer (without research) would be that if the money is returned in the same year it was stolen, the taxpayer MIGHT be able to simply show the offset on the return -- but I'm not sure.

If the money is stolen in year 1 and repaid in a later year (year 2), I think the wrongdoer would be limited to trying to find a deduction rationale. That means reporting the income in year 1 (and paying tax on it, basically) and then deducting the repayment in year 2. So, was the wrongdoer engaged in a trade or business (albeit illegal?) that would allow a section 162 deduction? Alternatively, was the extortion/embezzlement an activity engaged in for the production of income, such that the repayment would be deductible under section 212? Third possible alternative: Is there a "claim of right" doctrine that would allow the deduction in the year the money is repaid? I don't recall one, but I'd have to check.

[Famspear]

Regarding the allowability of business deductions in connection with an illegal activity, one case to look at would be McGraw v. Commissioner, 384 F.3d 965 (8th Cir. 2004). Not precisely on point, but not a good result for the bad guys.

I'm pretty weak on deductions for expenses incurred in an illegal activity. Most of my clients don't, uh, have these issues.

Say, are the expenses incurred by Pete Hendrickson in connection with his "Cracking the Code" activity (selling the book, etc.) deductible -- even assuming that it's a "trade or business" or an "activity engaged in for the production of income"?