Challenge to Ducky

[Nikki]

Will you endorse: that making money from working a non-federally connected job(independent of any gain derived from this money) is completely within the scope of the income tax and is constitutional, and furthermore that this scope of taxation is afforded by the written code( known as the IRC).

To the extent that "making money" (from whatever source -- federally-connected or disconected) constitutes compensation for services, it is included in gross income subject to taxation, per 26USC.

I fail to comprehend your hang-up over "federally-connected." There isn't a single line of text within the entirety of 26USC which addresses "federally-connected" as a basis for inclusion or exclusion related to imcome taxes.

The only places that "federally-connected" issues arise are in the screeds of tax evaders and tax-evasion promoters.

[notorial dissent]

This can’t be done because IRC as written, IS Constitutional. Therefore the “income” tax IS also constitutional.

I was going to let this slide, but since you insist on starting off with an inaccurate if not false statement and proceeding on downhill I might as well start here.

The Income Tax is NOT constitutional because of the IRC, the Tax is constitutional because of the 16th Amendment. Therefore the statutes that followed, and the IRC, are constitutional expressions of that authority.

Harry, since he is in the employ of the federal government, and enjoys the advantages thereof, IS subject to the “income” tax being imposed on his salary. Christopher on the other hand, enjoys no benefit or privelege from the federal government, in other words he is completely disconnected from the federal gov’t. Therefore, his basic right to earn a living and the money that he receives for the work he has completed DOES NOT fall within the realm of the income tax.

I seem to have missed the part in either the 16th Amendment, or the statutes, or the IRC about there being a requirement of working for the government to be subject to the Income Tax. Pete seems to be convinced he found that, but so far I haven’t seen it, neither has the rest of the functioning population, and you certainly haven’t shown it. So error !!!! The tax is on income, from whatever source, there are no other qualifications. There is nothing in the amendment, all 30 words of it, or the statutes that say anything about a federal benefit being required, just that it be income-as defined by statute. The statutes on the other hand spell out what is considered to be income, and whereas money coming in from a stock investment would be considered income, the proceeds of a loan would not, unless the loan were not repaid.

I think this is consistent with the argument of CTC, which basically holds that the tax on income IS constitutional; but a tax on “all that comes in“, which is generated or realized by a most basic right, the right to earn a living, would be Unconstitutional.

And yet you have no basis for this belief. Just because Pete really really really wishes it were true doesn’t alter the fact it isn’t. There is NO statutory, or case law that says this.

You’ve been asked a question, at least twice now, and as I’m not as polite as most are around here so I’ll just come out and say it.

What are you going to do when bonehead Hendrickson gets his ass handed back to him on a platter by the 6th, and the Supreme Court? Considering that he has lost every round to date, I should think the handwriting should be quite plain on the wall to even the dimmest of the CTC denizens.

[wserra]

It's not English, HUH?

Right, it's not. Want to examine it?

that making money from working a non-federally connected job(independent of any gain derived from this money)

I don't know what "non-federally connected" means. Does it refer to employees of the federal government? That phrase is clear - probably why you don't use it. Does it refer to those who rely on transportation partially or wholly funded by federal tax dollars to get to work? That seems like a "federal connection" to me. You, like Humpty-Dumpty, use it to mean what you want it to mean.

As Nikki points out, of course, any type of "federal connection" has nothing to with tax liability in any event, but that's another subject.

"is completely within the scope of the income tax"

What is "within the scope of the income tax"? Do you mean "taxable"? Why not say so? After all, having a beer is "within the scope" of the murder statutes - the scope of which encompasses everyone regardless of their activities - it just isn't murder.

and is constitutional,

I think you confused yourself. Parse your own "question", and you find this clause declaring that "making money from working a non-federally connected job ... is constitutional". I can certainly give an unambiguous answer to that: Yes, it is, making money is fine by the Constitution. I just don't think that is what you meant, because the damn question isn't English.

and furthermore that this scope of taxation is afforded by the written code( known as the IRC).

Do you mean that the tax code is the IRC? Well, duh. If you don't, I have no idea what you mean.

Now, there's a reason, I would venture to say, why you don't state something intelligible. I'm not sure what exactly it is, but it likely has something to do with games. As you see, Homey don't play that.

Oh, yeah: how are the proceeds of illegal activity "federally-connected"? When the courts declare Hendrickson wrong, will you accept that he is? See how clear questions can be?

[Quixote]

Will you endorse: that making money from working a non-federally connected job(independent of any gain derived from this money) is completely within the scope of the income tax and is constitutional, and furthermore that this scope of taxation is afforded by the written code( known as the IRC).

Why do you persist in playing games? I know you wrote that sentence, but have you read it? Making money from any activity is certainly constitutional, but I doubt that's what you intended to say. I have no idea what you mean by "making money ... is within the scope of the income tax". And the phrase "independent of any gain derived" is almost always going to be out of place in a discussion about an income tax. That you used it in your convoluted construct suggests to me that not even you know what you meant or that you are under the impression that income taxes tax something besides income.

If, by that mass of verbiage, you intended to ask if Congress can tax and has taxes, by means of the IRC, income derived from a non-federally connected job, that question has been answered "yes" several times in this thread alone.

If, by that mass of verbiage, you intended to ask if Congress can tax the receipt of money related to a non-federally connected job, the answer is also "yes", because, other than exports, Congress can tax anything.

I suggest you pick up a copy of "Elements of Style" by Strunk and White. Your writing style would benefit considerably from the authors' advice.

[The Operative]

Ducky,

Let's make this absolutely clear. If a person is an employee of a business, in most instances, that person's pay is subject to income tax. If a person is self-employed, in most instances, that person's earnings are subject to income tax. In your earlier example, Christopher, earns money by painting. Once he deducts expenses relating to the service he provides, his income is taxable. He cannot deduct his cost of living. The imposition of the income tax on Christopher is constitutional. No twisted reading of the IRC or of various court decisions is going to change that fact.

[Quixote]

You, like Humpty-Dumpty, use it to mean what you want it to mean.

But unlike Ducky, Humpty-Dumpty defined the word to which he was giving a new meaning. Humpty-Dumpty treated words as mathematicians do. Lewis Carroll wrote entertaining nonsense; Charles Dodgson wrote boring, but precise, mathematical treatises.

[Famspear]

Ducky wrote:

Christopher on the other hand, enjoys no benefit or privelege [sic] from the federal government, in other words he is completely disconnected from the federal gov’t. Therefore, his basic right to earn a living and the money that he receives for the work he has completed DOES NOT fall within the realm of the income tax. It cannot constitutionally.

(bolding added)

Ducky, the verbiage -- whether it's your belief or Hendrickson's belief or somebody else's belief -- is completely incorrect.

Assuming arguendo that Christopher has a "basic right" to earn a living, the money he receives for the work he has completed DOES "fall within the realm" of the income tax, regardless of any connection (or lack thereof) to the federal government.

There is no rule of U.S. constitutional law or statutory law or any other law whatsoever, in any way, shape, form, or manner, that supports the quoted verbiage.

Ducky, you are fast losing credibility by arguing that you are merely playing the "devil's advocate". You appear to be trying to bob and weave and avoid the inevitable.

Perhaps you thought that you could come here and somehow persuade the Quatloos regulars to go step by step, point by point, with you through Hendrickson's "book" -- apparently withou realizing what a waste of time that would be.

The questions posed to you by the Quatloos regulars are really pretty straightforward. You understandably are avoiding the questions. If you want to preserve or re-establish some credibility, then do either of the following:

A. Present a full citation to a U.S. federal court decision where a person presented the argument that where that person is completely disconnected from the federal government, that person's basic right to earn a living and the money that he or she receives for the work he or she has completed DOES NOT and CANNOT CONSTITUTIONALLY fall within the realm of the U.S. federal income tax -- AND THE FEDERAL COURT RULED IN THAT INDIVIDUAL'S FAVOR ON THAT PARTICULAR POINT.

or

B. Admit that the quoted verbiage is incorrect as a matter of law.

And, when you have concluded (correctly) that you cannot find any such court case (because no court has ever so ruled), please ask yourself why you are wasting your time trying to play "devil's advocate."

And, Ducky, when you have answered that question for yourself, ask yourself: Why is it that while you and Peter Hendrickson cannot find A SINGLE COURT CASE THAT RULES IN FAVOR OF THE ARGUMENT YOU PRESENTED, by contrast the Quatloos regulars have found plenty of federal court cases where the courts have SPECIFICALLY ruled that for income to be taxable, there is NO CONSTITUTIONAL REQUIREMENT that there be any connection to any federal government employment or privilege? Why is is so easy to find court cases that reject Hendrickson, and so impossible to find a court case that rules in his favor?

Why is it that although there are no court rulings in Hendrickson's favor on this very, very basic point, you seem to want to play "devil's advocate"? Why did think -- as you apparently did -- that the people here at Quatloos should somehow go with you through Hendrickson's "book," step by step, point by point, and refute everything, point by point, to your personal satisfaction? Why did you think, as you apparently did, that Henrickson's book could possibly have a chance to survive that kind of intellectual onslaught?

EDIT: I changed "when you concluded" to "when you have concluded" (inserting the word "have"). Obviously, I am not saying that Ducky has YET made that conclusion, or that he or she ever will.

[jg]

Section 86 has a provision for withholding by paymasters that is not in section 90. The specificaton of salaries of government workers is to identify the amount from which to "deduct and withhold the aforesaid duty of three per centum". So, it is not redundant even if some of the wording is repetitive. Hendrickson draws the wrong conclusion and ignores the substantive difference of deducting and withholding on the government workers salary.

The specification of “all salaries of officers or payments to…” is not incorporated to identify the amount from which to deduct, but rather, it is clearly incorporated to identify upon what the duty is imposed, in Section 86. You cannot conflate part one, where the upon whom and what is laid out, with part two, where the “how we are going to collect this tax” is laid out.

The point still remains the same that, as posited in the two separate sections, the basis for the tax is quite different. Section 86 bases the tax on “salaries and payments to.” Section 90 bases the tax on “gains, profits, or income”

What part one and part two? It is all in one sentence (though a bit of a run on sentence):

Sec. 86
And be it further enacted, that on and after the first day of August, eighteen hundred and sixty-two, there shall be levied, collected, and paid on all salaries of officers, or payments to persons in the civil, military, naval, or other employment or service of the United States, including senators and representatives and delegates in Congress, when exceeding the rate of six hundred dollars per annum, a duty of three per centum on the excess above the said six hundred dollars; and it shall be the duty of all paymasters, and all disbursing officers, under the government of the United States, or in the employ thereof, when making any payments to officers and persons as aforesaid, or upon settling and adjusting the accounts of such officers and persons, to deduct and withhold the aforesaid duty of three per centum, and shall, at the same time, make a certificate stating the name of the officer or person from whom such deduction was made, and the amount thereof, which shall be transmitted to the office of the Commissioner of Internal Revenue, and entered as part of the internal duties;…
(underlining and bold added by jg)

Sec. 90
And be it further enacted, That there shall be levied, collected, and paid annually, upon the annual gains, profits, or income of every person residing in the United States, whether derived from any kind of property, rents, interest, dividends, salaries, or from any profession, trade, employment, or vocation carried on in the United States or elsewhere, or from any other source whatever, except as hereinafter mentioned, if such annual gains, profits, or income exceed the sum of six hundred dollars, and do not exceed the sum of ten thousand dollars, a duty of three per centum on the amount of such annual gains, profits, or income over and above the said sum of six hundred dollars; if said income exceeds the sum of ten thousand dollars, a duty of five per centum upon the amount thereof exceeding six hundred dollars;…

Section 86 does impose the duty on a specific set of salary and paymnets; and it provides for paymasters to deduct and withhold the aforesaid duty. Section 90 imposes a duty on a more broad set of income items and does not include any provision for withholding.

One must note that if section 90’s tax levied upon annual gains, profits or income meant the same thing as a tax on salary or payment, then section 86 would have been redundant. Had it been constitutional to levy a duty on the salary or payment to everyone residing in the United States this would have been explicitly stated that way.

I simply showed you that section 86 is not redundant because of the provision for paymasters to deduct and withhold on that particular type of income.

So if I understand your logic correctly, the basis for the tax, although clearly different, really means the same thing. The authors just wrote the two as such because they needed to specify how the tax would be collected in section 86, which was going to be different than the planned method of collection for 90. Instead of wording the basis for the tax the same in both, resisted this temptation because __fill in the blank_______________.

The simple reason that only "all salaries of officers, or payments to persons in the civil, military, naval, or other employment or service of the United States, including senators and representatives and delegates in Congress, " is used in section 86 is that those are the only payments that are subject to paymasters deducting and withholding the aforesaid duty.

I am going to go with “salaries and payments” doesn’t mean the same thing as “gains, profit and income” _______________.

And you would be correct.Salaries and payments is a subset of “gains, profit and income” Only the income items paid to the persons mentioned in section 86 are subject to deduction and withholding. That is not to say that the officers, or persons in the civil, military, naval, or other employment or service of the United States, including senators and representatives and delegates in Congress are not also subject to section 90 and the duty imposed on all of their annual gains, profits, or income for which deduction and withholding did not apply. Hence the more expansive language in section 90.

Let me ask you a fairly simple and direct question, so we don’t have to beat around the bush. Do you think that “salaries, or payments” can be interchanged with “gains, profits, or income” or vice versa?

No.

Although it is unclear why we are discussing a revenue act that has long been replaced with more current statutes, there is available a copy of the 1862 tax return at http://www.taxhistory.org/thp/readings. ... _page1.jpg

Because, technically, the concept of “income” has not changed since the inception of the “income” tax.

That statement is a bit too broad. There are certainly items of income (such as the previously mentioned illegal income) for which it was unclear as to whether that item was income that would be subject to the income tax. There are certainly Supreme Court decisions relevant to what income is subject to the income tax under the statutes.

One case that was not well received by CtC adherents is COMMISSIONER v. GLENSHAW GLASS CO., 348 U.S. 426 (1955) (see http://laws.findlaw.com/us/348/426.html for the full case and links):

It is conceded by the respondents that there is no constitutional barrier to the imposition of a tax on punitive damages. Our question is one of statutory construction: are these payments comprehended by 22 (a)?

The sweeping scope of the controverted statute is readily apparent:


"SEC. 22. GROSS INCOME.

"(a) GENERAL DEFINITION. - `Gross income' includes gains, profits, and income derived from salaries, wages, or compensation for personal service . . . of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever. . . ." (Emphasis added.) 4

This Court has frequently stated that this language was used by Congress to exert in this field "the full measure of its taxing power." Helvering v. Clifford, 309 U.S. 331, 334 ; Helvering v. Midland Mutual Life Ins. Co., 300 U.S. 216, 223 ; Douglas v. Willcuts, 296 U.S. 1, 9 ; Irwin v. Gavit, 268 U.S. 161, 166 . Respondents contend that punitive damages, characterized as "windfalls" flowing from the culpable conduct of third parties, are not within the scope of the section. But Congress applied no limitations as to the source of taxable receipts, nor restrictive labels as to their nature. And the Court has given a liberal construction to this broad phraseology in recognition of the intention of Congress to tax all gains except those specifically exempted. Commissioner v. Jacobson, 336 U.S. 28, 49 ; Helvering v. Stockholms Enskilda Bank, 293 U.S. 84, 87 -91. Thus, the fortuitous gain accruing to a lessor by reason of the forfeiture of a lessee's improvements on the rented property was taxed in Helvering v. Bruun, 309 U.S. 461 . Cf. Robertson v. United States, 343 U.S. 711 ; Rutkin v. United States, 343 U.S. 130 ; United States v. Kirby Lumber Co., 284 U.S. 1 . Such decisions demonstrate that we cannot but ascribe content to the catchall provision of 22 (a), "gains or profits and income derived from any source whatever." The importance of that phrase has been too frequently recognized since its first appearance in the Revenue Act of 1913 5 to say now that it adds nothing to the meaning of "gross income."
Nor can we accept respondent's contention that a narrower reading of 22 (a) is required by the Court's characterization of income in Eisner v. Macomber, 252 U.S. 189, 207 , as "the gain derived from capital, from labor, or from both combined." 6 The Court was there endeavoring to determine whether the distribution of a corporate stock dividend constituted a realized gain to the shareholder, or changed "only the form, not the essence," of his capital investment. Id., at 210. It was held that the taxpayer had "received nothing out of the company's assets for his separate use and benefit." Id., at 211. The distribution, therefore, was held not a taxable event. In that context - distinguishing gain from capital - the definition served a useful purpose. But it was not meant to provide a touchstone to all future gross income questions. Helvering v. Bruun, supra, at 468-469; United States v. Kirby Lumber Co., supra, at 3.

Here we have instances of undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion. The mere fact that the payments were extracted from the wrongdoers as punishment for unlawful conduct cannot detract from their character as taxable income to the recipients. Respondents concede, as they must, that the recoveries are taxable to the extent that they compensate for damages actually incurred. It would be an anomaly that could not be justified in the absence of clear congressional intent to say that a recovery for actual damages is taxable but not the additional amount extracted as punishment for the same conduct which caused the injury. And we find no such evidence of intent to exempt these payments.

This decision and the identification of income that is subject to income tax as "undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion" is the latest word from the Supreme Court on what, in a general sense, is "income" according to the statute.

When that description is applied to any worker's payments received in exchange for services it is clear that those payments are income that is subject to the income tax if there is not any other exclusion of that particular item in the statute (such as foreign earned income exlcusion). That is what the Supreme Court has said is the meaning of the current section 61 of the Internal Revenue Code; which is comparable to section 22 when the Glenshaw Glass case was decided.

Hendrickson imagines a difference in the taxation of the items of income mentioned in the Act of 1862; but there is no merit to his legal argument. The Revenue Act of 1862 language in sections 86 and 90 does not support the contention that the "salaries of officers, or payments to persons in the civil, military, naval, or other employment or service of the United States, including senators and representatives and delegates in Congress" is taxed differently than the salaries of officers, or payments to persons NOT in the civil, military, naval, or other employment or service of the United States; except that the former was subject to deduction nad witholding under that act and the latter was not under the Act of 1862.

[The Operative]

Ducky,

After reading JG's post, I wanted to add a small comment. Section 86 and 90 of the Revenue Act of 1862 are not redundant for another reason besides the withholding clause. Section 90 taxes all RESIDENTS of the United States. Section 86 taxes persons employed by the United States. There were people in 1862 that were employed or in the service of the United States but did not RESIDE in the United States. For example, Ambassadors and their staff may reside in a foreign country, but section 86 made their income taxable. If section 86 did not exist, their income would not have been taxed.

[Ducky]

Ok, Dan, I have a request that I would like you to respond to, that request is.

Will you endorse: that making money from working a non-federally connected job(independent of any gain derived from this money) is completely within the scope of the income tax and is constitutional, and furthermore that this scope of taxation is afforded by the written code( known as the IRC).

No, I won't.

If you have something to say, then say it. If you have nothing to say, then leave.

I have written extensively about the federal income tax, both in my FAQ (about 132,000 words) and in this forum (6,250 messages over 5 years), and I write what I want and when I want to. I don't take dictation from semi-literate crackpots.

I didn't mean to invoke this kind of response. I do agree the statement I asked you to endorse is poorly worded. Thank you, quatloosians for your constructive criticisms in that regard. I have ordered "Elements of Style" as Quixote suggested. Sorry, It was late last night when I wrote that and I didn't proof read it or think about it before posting.

Let me try to word my original statement better, using some suggestions.

making money (such as the receipt of check or cash from a job completed) as a worker, not in the employ of the federal goverment, IS taxable.

Please tell me this is concise and clearly worded.

My intent earlier was not to play a game, or invoke a response as I got. I was just trying to avoid using words which have narrow legal meanings.

The above italicized statement is pretty straight forward, as far as I can tell, everbody here would consider "making money (such as the receipt of check or cash from a job completed) as a worker, not in the employ of the federal goverment" is definitely taxable, Right?

The simple act of endorsing THIS statement shouldn't be a problem, Right.

Sorry Dan, the reason I picked you was that you are an attorney at law, and have, verifiably, a lot of experience in tax law and specifically income tax law. The reason I asked you to endorse my particular wording was because of the fact that if you had, I would feel as though CTC is bunk. So I kindly ask you to endorse the above italicized statement under the same terms as earlier. I will include the simple proviso that you can change the wording, provided you explicitly define any words that are legal terms or that don't have their common meaning. If you decline would you kindly provide a rational reason as to why you won't endorse it. I won't accept ad hominen and that you don't take to dictation. This will convince me that CTC is bunk.

If Dan won't do this, the request goes out to anyone else whether he/she is an attorney or not. Although, I would preferably like an endorsement from an attorney.

I have been wanting to ask for an endorsment since I read CTC. To me, this is a litmus test as to whether or not his theory is valid. I just got the opportunity since I joined here.

NO one is by any means obligated to make the legally binding endorsement of my statement, but if one is made by an attorney I will be convinced that CTC is bogus.

Thanks

[jg]

making money (such as the receipt of check or cash from a job completed) as a worker, not in the employ of the federal goverment, IS taxable.

Perhaps due to the number of responses you did not take time to read them before posting; but if you read back on the same page where you are asking for confirmation of your statement you can see that Quixote, Nikki, The Operative, Famspear and myself (at least, sorry if I missed someone) have all told you that the core idea in your statement is true, using our own words.

Your statement fails to take into account provisions that could exclude such nmoney made for a job completed like the foreign earned income exclusion. Or your statement could not be taking into account the deductible expenses of a contractor that would reduce or even eliminate the amount subject to income tax.

Your insistence that we agree to a specific wording you provide when we have repeatedly told you that it is so does appear to be a game or a set up for semantic sophism.

For most, if not all of us, 26 U.S.C. § 61 that says:
[G]ross 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;
(and ten other items, snipped for brevity) says it quite plainly and without legal terms.

For more explanation of what it means see the articles at http://docs.law.gwu.edu/facweb/jsiegel/ ... omeTax.htm or http://evans-legal.com/dan/tpfaq.html

CtC is bogus.

[Red Cedar PM]

making money (such as the receipt of check or cash from a job completed) as a worker, not in the employ of the federal goverment, IS taxable.

I would say that this is a true statement, although the qualification that someone is employed by the government is unnecessary. I think Grixit summed it up very nice and succinctly (as he/she tends to do) on another thread (I can't find it, might be deleted) when he said "if you did something, and got paid for it, you owe tax." That is the general rule, and anyone who tells you otherwise is lying or totally delusional.

I guess the bit I don't understand is that people have been saying that CtC is totally bogus for the last few weeks to Diller, SubVet, and Ducky. Why does he now need to confirm this? Are you saying that you didn't think that was the general opinion of most of the members here? If so, you are either ignoring people's posts or are pretty dull.

[Famspear]

Ducky, what you have to understand is that to Quatloos regulars you appear to be angling for some sort of result using a word game. We have been through all this before, especially with people coming here and pushing Peter Hendrickson's Cracking the Code.

For example, one tactic that I understand Hendrickson uses is to recognize court decisions that destroy a particular argument of his by saying that he "agrees" with what the court said, but that the court didn't really "mean" what the court apparently meant. He then goes through an elaborate word game, the end result of which is to conclude (and to convince his worshipful followers) that the law "really" is exactly the opposite of what the courts have ruled.

The classic example of this is the section 7701 definition of "includes and including." Hendrickson uses these terms as terms of "exclusion" or of "limitation." The courts have consistently rejected that use, and have ruled that in 7701 the terms are terms of expansion, not of exclusion or limitation. My understanding (and I can't remember whether it's from reading Pete's work or reading his followers' interpretations of his work) is that Hendrickson has tried to work around this problem by convincing his followers that HE REALLY AGREES that the terms are terms of "expansion" -- but then goes on to elaborate on what he contends "expansion" really means. And when you're finished with Hendrickson's hilarious word game, it turns out that Hendrickson is just trying to pull you back to his contention that the terms are, in effect, terms of exclusion or limitation, even though he supposedly "agrees" with the court that they're not that. The classic case is in his use of the term "includes" or "including" in section 3401, relating to the definition of an "employee" -- where Hendrickson puts forth the completely nonsensical argument that "employee" does NOT "include" a regular worker (such as a worker at the local McDonald's restaurant, essentially).

Indeed, I believe I have detected what appears to be a bit of Hendrickson's kind of sophistry, his impotent word gaming, in your own references to his theories.

Look, neither Hendrickson nor anyone else can get around the federal tax law by pretending to be clever. No federal court is ever going to be fooled by anything filed by one of the half-wits who absorb Hendrickson's material.

And when Hendrickson himself tried to blow his smoke in his own court case last year, he fell apart. Not only did he lose his case, but he was effectively ordered never to use his own Cracking the Code crap on his own tax returns again.

When he appealed that decision, it was obvious that he had fallen apart. He wrote an appellate brief for the Court of Appeals for the Sixth Circuit that was so bad that (I have to confess) even I felt sorry and embarrassed for him. A little sorry, not a lot of sorry. A lot of "embarrassed." You know, the kind of cringing, embarrassed feeling you get when you watch someone make a fool of himself on television, so badly that you almost want to avert your eyes or change the channel because it's so bad. A train wreck.

Lawyers are often very careful with words. We do split a lot of hairs in legal matters. But we know how to do it properly. When Peter Hendrickson tries to do it, it just doesn't work. You want to avoid his example.

[notorial dissent]

No, what you are wanting is a partial agreement that you can then construe to mean something else. Isn't going to happen. You are not interested in facts, but rather in playing further word games, just as Pete attempts to do, and fails so badly at.

If you were being honest instead of ingenuous, you would have completed your statement with “as is federal employment”, or contrarily “whereas federal employment is not”, you did not.

[Ducky]

Ducky, what you have to understand is that to Quatloos regulars you appear to be angling for some sort of result using a word game. We have been through all this before, especially with people coming here and pushing Peter Hendrickson's Cracking the Code.

For example, one tactic that I understand Hendrickson uses is to recognize court decisions that destroy a particular argument of his by saying that he "agrees" with what the court said, but that the court didn't really "mean" what the court apparently meant. He then goes through an elaborate word game, the end result of which is to conclude (and to convince his worshipful followers) that the law "really" is exactly the opposite of what the courts have ruled.

The classic example of this is the section 7701 definition of "includes and including." Hendrickson uses these terms as terms of "exclusion" or of "limitation." The courts have consistently rejected that use, and have ruled that in 7701 the terms are terms of expansion, not of exclusion or limitation. My understanding (and I can't remember whether it's from reading Pete's work or reading his followers' interpretations of his work) is that Hendrickson has tried to work around this problem by convincing his followers that HE REALLY AGREES that the terms are terms of "expansion" -- but then goes on to elaborate on what he contends "expansion" really means. And when you're finished with Hendrickson's hilarious word game, it turns out that Hendrickson is just trying to pull you back to his contention that the terms are, in effect, terms of exclusion or limitation, even though he supposedly "agrees" with the court that they're not that. The classic case is in his use of the term "includes" or "including" in section 3401, relating to the definition of an "employee" -- where Hendrickson puts forth the completely nonsensical argument that "employee" does NOT "include" a regular worker (such as a worker at the local McDonald's restaurant, essentially).

Indeed, I believe I have detected what appears to be a bit of Hendrickson's kind of sophistry, his impotent word gaming, in your own references to his theories.

Look, neither Hendrickson nor anyone else can get around the federal tax law by pretending to be clever. No federal court is ever going to be fooled by anything filed by one of the half-wits who absorb Hendrickson's material.

And when Hendrickson himself tried to blow his smoke in his own court case last year, he fell apart. Not only did he lose his case, but he was effectively ordered never to use his own Cracking the Code crap on his own tax returns again.

When he appealed that decision, it was obvious that he had fallen apart. He wrote an appellate brief for the Court of Appeals for the Sixth Circuit that was so bad that (I have to confess) even I felt sorry and embarrassed for him. A little sorry, not a lot of sorry. A lot of "embarrassed." You know, the kind of cringing, embarrassed feeling you get when you watch someone make a fool of himself on television, so badly that you almost want to avert your eyes or change the channel because it's so bad. A train wreck.

Lawyers are often very careful with words. We do split a lot of hairs in legal matters. But we know how to do it properly. When Peter Hendrickson tries to do it, it just doesn't work. You want to avoid his example.

Ok Thanks Farmspear,

You guys have been through this a million times, I am going to save myself the time and not bother presenting the rest of the book.

Regarding the "including" I will qoute this entry at a blog from someone named Matthew.

Matthew Says:

March 3rd, 2008 at 1:56 pm
(A response to jameso)

I quote that blog entry:
“The section c reference uses the term “includes” meaning it is not exhaustive. That’s just plain English.”

Sorry, it isn’t just plain English. Why?
Because “includes” is actually a legal term as well!

At 26,7701:
“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.”

What a tangled mess of a definition this is!

If “includes” in the IRC means what common English says it means, then there would be no need to define it at all. Since Congress has defined it, then it is clearly NOT the common English definition.

If you take a look at an older definition of “includes” from 26 CFR 170.59, you see that includes and including “do not exclude things not enumerated which are in the same general class”.

And even if we examine the current word usage, the term “includes” does not exclude things otherwise within the meaning of the TERM DEFINED.

Notice they don’t say “does not exclude things otherwise within the meaning of the word” or “common meaning of the term”.

This horrible mess of words ends up saying that “includes” doesn’t exclude things that are part of what the term defines, which is the same as the earlier definition of things within the same general class.

If Congress had really wanted to make “includes” a term of expansion and not limitation, they could have easily done so, like this:

“Includes and including, when used in this title, are not limiting.”

Simple, easy, to the point.
But they did not do that, and their decision to exclude private workers from their definitions all throughout the code show that private workers are not included. They are certainly not in the same general class as officers and employees of the government.

It dampens my spirit when defenders of the Constitution, like those on LRC, refuse to believe that the Constitution actually holds any sway over the legal process in this country.

In keeping with the powers of the Constitution, if Congress does not explicitly include something in a law, that thing is excluded.

“It is axiomatic that the statutory definition of the term excludes unstated meanings of that term.” U.S. Supreme Court, Meese v. Keene, 481 U.S. 465 (1987)

Doesn’t it seem odd to you that anyplace Congress seems to be overstepping its bounds, anyplace that has the income tax applying to private workers, you see that ambiguous “includes” pop up?
If Congress meant to tax private workers with their law, they would have included them in the definition.

http://blog.jimostrowski.com/?p=1019

Regarding the case he has something to say later in the blog,

Matthew Says:

March 31st, 2008 at 5:05 pm
Before we start in, let me point to the ruling cited in that file.

“[the contention 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.”
I would agree. A preposterous reading.
All WAGE EARNERS, no matter where EMPLOYED are “employees”.
But the court WONT RULE that all PAY for WORK constitutes “employment”.

Can’t you see they are just walking in circles? All EMPLOYED workers are “employees”? Wow, what a freaking epiphany. Couldn’t have figured that out myself.

Now, on to the document itself…

Nowhere is it established that Hendrickson has an “employer” or is an “employee” or received “wages”.

The evidence in this case consists of:
-W2 from Personnel Management, claiming Hendrickson earned $X wages.
-4582 from Hendrickson, claiming he earned no wages.

Where does the court draw its conclusions from? Why is testimony from Personell Management given precedence over Hendrickson’s penalty? Under what provision is the court demanding the amending of the Hendricksons’ returns?

The court has no authority to demand someone amend their returns. The Hendricksons filed their 1040’s in accordance with the IRC, by entering numbers they believe true based on their understanding of the tax code.

The 1040 Form is a testimony by the party filing it. Forcing the Hendricksons to file their 1040’s with amounts they believe to be inaccurate is no different than forcing someone charged with murder to confess to stabbing someone.

The proper recourse when someone is charged with murder (or tax evasion) is to examine the evidence. The IRS has no evidence to present that determines Hendrickson’s wages to be anything other than what he says.

This is because the IRS only has information about federally connected activities, and therefore can only present evidence of wages when the person in question engaged in a federally connected activity.

The IRS has NO EVIDENCE TO PRESENT with regards to Hendrickson’s wages. Without any evidence to say otherwise, it must be assumed that his wages were zero, as he says. If he DID earn wages, there would be evidence of such.

Look at the document here and ask yourself a few questions.
Using what evidence have they concluded that Hendrickson earned wages?
Using what evidence have they concluded that Hendrickson is “employed”?
They do not give evidence or reasoning of any sort regarding these things. They simply talk about them from the beginning like they are assumed.

This is no different than starting a murder trial by assuming the accused is a murderer that is only hiding his terrible deed.

[Joey Smith]

Sorry, Ducky, but nobody who matters agrees with that definition of "includes". The U.S. Supreme Court doesn't, the circuit and district courts do not, and no accredited legal, tax or constitutional scholar believes it applies that way. It is, simply, wrong.

[Nikki]

Ducky:

Irrespective of Pete's status as employee, non-employee, contractor, factotum, lackey, etc; where does anything that you posted address the fact that:

Pete received compensation for personal services (which is SPECIFICALLY defined as a component of income) yet failed to pay taxes on said compensation.

You are spinning words (and your wheels) and throwing red herrings aplenty.

Why don't you just cut to the chase and explain how Pete's (or any other person's) compensation for personal services magically removes itself from a component of income subject to taxation?

[The Operative]

Ducky,

The blog that you reference is using the exact same type of word games that Famspear and others have discussed. Several courts have made it clear, "WAGES ARE INCOME". On the other hand, there are no court decisions finding that a person's income is not subject to tax if they did not receive any benefit or enjoy any privilege from the federal government.

Re: the word "Includes"
Let's examine the following sentence.

New England includes Maine.

Does the sentence mean that Maine is the only state in New England? No, it does not. New England also consists of New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. People know this because those states are within the meaning of the term being defined.

Twisting of the word "includes" is just more word games. Forget about CTC, what does the term "employee" mean to you? What does the term, "employer" mean to you? If you can get that CTC crap out of your head, those words will have very common meanings. In most instances, the pay an employee receives will be subject to income tax.

[Famspear]

Dear Ducky: Maybe this will help.

Employee.

A person in the service of another under any contract of hire, express or implied, oral or written, where the employer has the power or right to control and direct the employee in the material details of how the work is to be performed. [. . . ] One who works for an employer; a person working for salary or wages.

--Black's Law Dictionary, p. 471 (5th Ed. 1979).

Employer.

One who employs the services of others; one for whom employees work and who pay their wages or salaries. The correlative of "employee."

--Black's Law Dictionary, p. 471 (5th Ed. 1979).

Now read 26 USC 7701(c):

The terms “includes” and “including” when used in a definition contained in this title [meaning the Internal Revenue Title, which is codified as title 26 of the United States Code] shall not be deemed to exclude other things otherwise within the meaning of the term defined.

(bolding added). Now, re-read the Black's Law Dictionary definitions.

Now, read 26 USC 3401(c):

For purposes of this chapter [Ducky, "this chapter" does not mean the entire Internal Revenue Title; it means Chapter 24 of the IRC, which relates ONLY to the withholding obligation of the EMPLOYER], the term “employee” includes [Ducky: read it; it does not say "means," it says "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.

Thus, for purposes of the EMPLOYER'S obligation to WITHHOLD, the term "employee" is EXPANDED to include officer of the United States, etc., etc.

As if all that were not enough, I want to reiterate that nothing in section 3401 (or in any other section of Chapter 24 of the Code) defines "gross income" for purposes of determining whether wages (or salary, or anything else) are taxable to the employee. Chapter 24 imposes only the withholding obligation of the employer, not the federal income tax liability of the employee.

[wserra]

Will you endorse: that making money from working a non-federally connected job(independent of any gain derived from this money) is completely within the scope of the income tax and is constitutional, and furthermore that this scope of taxation is afforded by the written code( known as the IRC).

(BTW, how is this statement difficult to understand, It's not English, HUH? does everbody concur that this is difficult to understand)

I do agree the statement I asked you to endorse is poorly worded.... It was late last night when I wrote that and I didn't proof read it or think about it before posting.

Y'know, Ducky, I've revised my opinion of Hendrickson. I now think he's a prince among men. He is the One True Source of enlightenment about the income tax. He is the Redeemer returned to lead his flock to the Promised Land; the Savior of mankind; the Buddha, Lord Krishna, Mohammed and Jesus Christ rolled into One. You should follow his advice to the letter when dealing with the IRS. If they don't like it, they can ____ your ____. You now have The Power.

Of course, it was late last night when I wrote that and I didn't proof read it or think about it before posting.