Income and Compensation Defined

[wserra]

WSerra, I just found Terry Doverspike's number on Google,

I'm sure you did, John, but you had it long before that. Does "Zach Industries, Inc.", D/B/A "Zach Services", ring a bell? Mr. Doverspike incorporated it for you, didn't he? He's also listed as a principal of the corporation in Oklahoma corporate records, no? BTW, what was that about where the Oklahoma Tax Commission suspended your operations? I mean, didn't you discuss it with Mr. Doverspike before it came to that? Been playing around with this stuff for a while, haven't you, John?

I told him exactly where the 2 errors were on his FAQ

Why don't you point out the errors in quantum mechanics while you're at it, John?

which he still hasn't corrected

I'm shocked, I tell you. Shocked.

However, I have lately started working with Randy White, an independent paralegal with years of hard litigating experience

Let someone who really has thirty years of "hard litigating experience" give you a hint about something, John. Paralegals don't litigate. Now, I have run across on a couple of occasions paralegals who are so good at what they do that I'd have them at my side in a courtroom anytime. But I do the litigating, not the paralegal, and the buck stops with me, not with the paralegal. There is a world of difference.

Let's see, Pete won three lawsuits

Please cite them.

Bob has won a large number of lawsuits

Them too.

If you recall American history, our patriots are not moved away from their convictions

I also seem to remember that they didn't argue that they didn't have to pay the tea tax because oolong wasn't really tea, or because it was really a tax on tee-shirts, or because drinking tea was a God-given right which couldn't be taxed. You guys don't engage in anything resembling civil disobedience. That would be, "I'm not paying this tax because it's unjust. Come get me." You engage in mealy-mouthed, blathering ankle-biting. And, when they do come after you, you whine and wail like stuck pigs. Real civil protestors want to be "come after", since it makes their point. See: King, Gandhi, Mandela. Don't see Hecdrickson, Schultz, Bulten. Just typing that makes me want to wash my hands with lysol.

And I'm not a 3401(c) employee, thank you.

Probably right.

[Joey Smith]

It is always a curiousity to me why TPs quote Glenshaw Glass and other SCOTUS cases while overlooking the "surely frivolous" language from Cheek and the fact that the SCOTUS routinely allows the convictions of TPs to stand.

In our system of government, the courts decide issues in dispute. The courts have decided all these TP issues, including the definition of income, and they have decided it adversely to TPs. Merely repeating over and over that "wages are not income" is not going to make that wish come true.

[LPC]

Bulten has finally taken the time to cut-and-paste some of his favorite gibberish, and I feel some sort of misguided obligation to respond.

Our position is that "income" means, stated with great simplification, just "taxable gain".

Which is tautological. By inserting the word "taxable," Bulten has simply stated that he is only willing to consider something as taxable if he considers it to be taxable.

As for "compensation", I must admit a synecdoche which I and others have consistently but unconsciously employed. We have frequently used the word "compensation" to mean only "income derived from compensation", i.e., the gain portion of compensation rather than the even-exchange portion as well.

A "synecdoche" is a figure of speech which substitutes one word for another word which has a larger (or smaller) meaning. So "head" might be used to refer to cattle (i.e., a word for a part of the animal is sued to refer to the whole) and "the law" might be used to refer to a police officer (i.e., a word for the whole of the legal system is used to refer to a part).

This is typical tax denial dishonesty, because Bulten is giving himself carte blanche to claim that anything he said in the past (or might say in the future) might not really mean what the words would appear to mean.

I say this is dishonest, because tax deniers often say things that look sensible, but are really gibberish because the tax deniers have secretly redefined the important words so that they mean something different from what is meant in both common speech and law. Tax deniers don't have the courage or honesty to say what they really mean, so they hide behind hidden meanings and sophistries.

Bulten has now set the stage for saying things like "all income is included in gross income" because he has already redefined "income" to mean only the gains he things should be taxable, and he has claimed the use of synecdoches as a fall-back rationale for deniability if he should accidentally say anything that might otherwise appear to be rational.

To be technically correct, "compensation" is the first of "items of gross income" (26 CFR 1.61-1(a)), i.e., a source of income, not a portion or part of income.

Wrong.

If the things listed in section 61(a) are sources of income, and not income, then interest, dividends, rents, and business profits are also not income, which is absurd.

See http://evans-legal.com/dan/tpfaq.html#wagesource for details.

1. The common meaning of income is gain, not "all that comes in" (Southern Pacific v Lowe). Only this common meaning accords with the phrasing of Springer v US, and the phrasing in the 1941 Treasury Report, "The largest portion of consumer incomes in the United States is not subject to income taxation." I can't imagine someone seriously disagreeing on point 1. And the Treasury Report also supports point 2, because how could there be income not subject to income taxation, unless the subject of tax is more limited than just the subject "gain"?

I don't know the source of the "1941 Treasury Report" quote, but I am quite sure that it has been taken out of context, and refers not to the *kinds* of consumer incomes that are subject to tax, but to the *amounts* of consumer incomes subject to tax. As has been explained in this forum several times, the personal exemptions in force before 1942 freed most wages earners from filing returns, not because wages were automatically exempt but because the amounts of the wages were usually too small to tax.

Earned incomes in larger amounts were obviously subject to tax, as the Supreme Court unanimously declared in Lucas v. Earl in 1922.

So Bulten has simply found a new deception to support an old canard.

2. Statutory meaning of income is taxable gain, i.e. gain which Congress has jurisdiction to tax. Congress cannot tax anything they want (10th Amendment), but is limited by their Constitutional powers, as a canon of construction (Banana v Fruit).

Wrong, wrong, and wrong.

The *ONLY* limitation on the Congressional power to tax is that Congress cannot tax exports. Otherwise, the Supreme Court has consistently held that Congress can tax "every subject," meaning any person, activity, or property within the states of the United States. See, e.g., the License Tax Cases, cited at http://evans-legal.com/dan/tpfaq.html#i ... tecommerce

For instance, Congress does not have the power to tax 1st or 14th Amendment freedoms (Murdock v PA, analysis of state tax which is applied to any tax) or 10th Amendment rights (Bailey v Drexel).

Wrong and wrong again.

The Murdock decision confirmed that states can tax constitutionally protected rights, and interstate commerce, if the tax is nondiscriminatory. So, for example, a general income tax (or gross receipts tax) can apply to newspapers even though the publication of a newspaper is a first amendment right. See http://evans-legal.com/dan/tpfaq.html#rights for details.

And the Bailey decision reached the result that it did because it concluded that the "tax" in question was not a tax at all but an attempt to regulate something that the court had previously held could not be regulated. See http://evans-legal.com/dan/tpfaq.html#i ... tecommerce for details.

3. Gain from work is taxable only by excise. Right to work is within the untaxable rights to liberty and property (Coppage v Kansas), aka Jefferson's inalienable rights (Butcher Union v Crescent City).

Wrong. Neither of those cases held that the right to work is untaxable.

And the Supreme Court reached the opposite conclusion in Steward Machine. See http://evans-legal.com/dan/tpfaq.html#rights for details.

Congress may not tax right to work in itself because it would be a direct tax, but they have discovered how legally to move some of the gain from work into their jurisdiction, when it would not otherwise be there, by designating it an indirect tax (Pollock and Brushaber).

Two errors here:

First, Bulten is suggesting that Congress could not tax the "right to work" by a direct tax, Congress has the power to impose direct taxes as long as they are apportioned.

Second, it was the 16th Amendment and the Supreme Court that established that taxes on incomes should never be considered "direct taxes" subject to apportionment, and not Congress.

Third, it was the Supreme Court that held that taxes on incomes from employment were "indirect" (Pollock and Brushaber) and not Congress.

4. Gains are assessed by either the worker or the law. Usually only the worker may assess gain from work (section 93 of the 1862 act, RS 3173 as amended, 26 USC 6012 and 7602).

As others have pointed out already, Bulten is conflating two different issues: (a) Is there taxable income as a factual (or legal) matter; and (b) How is the tax assessed.

Of course the Secretary may assess after protracted failure by the worker to assess and do so correctly. But the Secretary may not assess without statutory or regulatory permission, which permissions are carefully crafted to retain the excise nature of the tax.

The "carefully crafted" nonsense is more tax denier dishonesty, and border-line gibberish, because Bulten has casually slipped his conclusion into a sentence without any explanation, support, or rationale for how or why the income tax has an "excise nature" or how or why the "excise nature" of the tax could (or could not) be retained.

For example, the IRS may assess upon credible report of "wages" or "trade or business" because (as CtC reveals) these are tied to excisable activities (3121, 3401, 1402, 6041).

The concept of "excisable activities" is another canard that tax deniers have invented out of whole cloth, and it has been repeatedly rejected by the courts. See http://evans-legal.com/dan/tpfaq.html#privileges for details.

5. As for me, I and the law have assessed zero or negligible gain on my pay. First, I made a CtC assessment, properly reporting any gain I thought might conceivably be taxed under law (e.g., bank interest). Second, I could have been assessed under law if a misstatement (that certain payments were wages) were allowed to stand.

Bulten has once again stated his conclusion, that the payments he received were not "wages" without any explanation or justification.

I could be assessed under law if it is proven in court that I was an independent contractor with "net earnings from self-employment" in the course of a "trade or business" (1402), or if I was paid in the course of someone else's "trade or business" (6041), or if other evidence of "income" is admitted in court. Toward this I am beginning to agree with diller72, babar, et al., and conclude that defensive rebuttal of these positions should also be proactively submitted to IRS with the Position Statement of Worker. However, this evidence could only be made by a firsthand party (FRoE), and must require admission of an excisable activity, usually via a term of art. If no such evidence exists, any contrary assessment is an IRS error and cannot be permitted to stand by the USSC. There is simply no other legal way to assess gain contrary to the worker's assessment.

As others have already suggested, there are two levels of mistakes here. One is a misunderstanding of the rules of evidence, and the other is a misunderstand of the difference between evidence (or the facts proven by evidence) and the legal conclusions derived from those facts.

1. Whether Bulten received payments from someone in exchange for services is a factual matter than can be proven by the duly authenticated business records of the payor (business records being an except to the hearsay rule).

2. Whether those payments should be included in gross income, whether as "wages" or "compensation for services" is a legal conclusion that the IRS (or the courts) can reach on the basis of the business records of the payor.

Since Bulten (and Hendrickson and other Crack-heads) do not dispute the receipt of the payments, the only issue is the character of the payments, and that is a question of law and not a question governed by the rules of evidence.

Wages are assessed as being income in totality, i.e., on a zero-cost basis, and no other accounting basis is legal for wages. But if no correct evidence exists linking my pay with any accounting requirement, I am free to choose my accounting basis among Generally Accepted Accounting Principles. I could conceivably claim zero basis even in the absence of evidence of wages, and report all my pay as income. I was surprised to realize that we were free to do that all the way back to 1862: anyone who volunteered to treat his pay the same as a government salary would have been welcomed, and has been ever since. I could also claim cost basis and itemize my costs. I could also claim market value basis and assess no gain on an even exchange.

These claims are simply inventions of Bulten with no basis in law or any method of accounting.

And they have been universally rejected by the courts. See http://evans-legal.com/dan/tpfaq.html#exchange and #livingcosts for details.

The fact that pay is now "generally" assessed on a zero basis does not impair my freedom. To impeach it, there must be evidence that zero basis is mandated. (And that will not happen under the Constitution.)

More conclusions without explanation or support, and completely contrary to all relevant court decisions.

Citations will not do the trick because they must remain Constitutional, and cannot create facts.

Translation: I can ignore any court decision I choose if I call it "not Constitutional" or "creating facts."

We are winning this battle in court and pressing their retreat to the next level.

That is just plain delusional. Hendrickson himself has lost, and the Crack-heads who are smart have settled.

1. All taxes which fall indifferently on (i.e., are laid on) every species of revenue are capitations (i.e., direct taxes). "The taxes which, it is intended, should fall indifferently upon every different species of revenue, are capitation taxes." —Adam Smith, 1776 (Wealth of Nations 5.2.4)

Adam Smith's definition of "capitation" is irrelevant to the meaning of "direct tax" in the Constitution. Adam Smith had no role in the drafting of the Constitution, the above definition of "capitation" has never been accepted by any court, and the meaning of "direct tax" in the Constitution extends beyond "capitations" to include taxes on the value of land (which Adam Smith did not consider to be a capitation).

2. No direct taxes are both Constitutional and unapportioned. "No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken." —Constitutional Convention, 1787 (Constitution)

True, but irrelevant, because (a) the Supreme Court has stated that taxes on employments are not "direct taxes" and (b) the 16th Amendment specifically states that taxes on incomes do not need to be apportioned.

3. The tax laid on incomes is both Constitutional and unapportioned. "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." —Congress, 1909 (16th Amendment)
4. Given 1-3, it follows that: not every species of revenue (i.e., every payment), in itself, is income. "We must reject ... that all receipts— everything that comes in— are income." —Justice Mahlon Pitney, 1918 (Southern Pacific v Lowe, 247 US 330, 335)

Wrong in several ways.

First, the proposition that "not every species of revenue is income" does NOT "follow" from propositions 1 through 3.

Second, the Supreme Court said that not all *RECEIPTS* are income, and has never said that any *revenue* might not be income.

Third, the legal issue in Southern Pacific had nothing to do with the issue of whether wages are income. (The actual question before the court was whether a dividend paid after the income tax was enacted in 1913 was taxable if paid out of profits earned before 1913.)

5. A tax on income as property (i.e., an apportioned tax on income and property) is a direct tax. "The power to tax real and personal property and the income from both, there being an apportionment ... is a direct tax in the meaning of the Constitution." —Chief Justice Melville Fuller, 1895 (Pollock v Farmers, 158 US 601, 634)

And that principle of the Pollock decision was reversed by the 16th Amendment.

6. The income tax is in its nature an excise (i.e., indirect tax). "Taxation on income was in its nature an excise entitled to be enforced as such." —Chief Justice Edward White, 1916 (Brushaber v Union Pacific, 240 US 1, 17)
7. Excises are taxes on activities like commodity transfer, occupational license, or corporate privilege (i.e., activities properly taxed indirectly). "Excises are 'taxes laid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations and upon corporate privileges'." —Justice William Day, 1911 (Flint v Stone Tracy, 220 US 107, 151)

That is ONE definition of "excise." There are others.

And that definition includes within its scope the taxation of "occupations," which means that wages can be the subject of an excise.

8. Given 5-7, it follows that: the income tax cannot tax income as property, but taxes activity properly taxed indirectly (i.e., activity done for income).

Which is gibberish, and does not "follow" from 5-7.

"Tax is measured by net profits or gains, and is not imposed upon gross income nor capital nor other property .... Income as thus defined does not embrace capital or principal, but only such gains or profits as may be realized from rent, interest, salaries, trade, commerce, or sales of any kind of property, and so forth, or profits or gains derived from any other source." —Tax law draftsman Cordell Hull, 1913 (Congressional Record)

Which means that Hull specifically included "salaries" as a kind of income subject to tax.

"It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce." —Tax law draftsman Morse Hubbard, 1943 (Congressional Record)

This was written 30 years after the 16th Amendment was ratified and the first income tax was enacted, and there are many reasons to believe that Hubbard was simply wrong. See http://evans-legal.com/dan/tpfaq.html#privileges for details.

9. Right to liberty (i.e., lawful liberty) is a Constitutional right jurisdictionally reserved to the people. "We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness." —Thomas Jefferson et al., 1776 (Declaration) "Nor shall any person ... be deprived of life, liberty, or property, without due process of law .... The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." —Congress, 1789 (5th and 10th Amendments) "Nor shall any State deprive any person of life, liberty, or property, without due process of law." —Congress, 1866 (14th Amendment)

The argument that taxation is a deprivation of property without due process was flatly rejected by the Supreme Court in Brushaber, and by every court since then. See http://evans-legal.com/dan/tpfaq.htmle#deprivation

10. Right to common work is part of right to liberty. "The liberty thus guaranteed ... denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life ...." —Justice James McReynolds, 1923 (Meyer v Nebraska, 262 US 390, 399) "Included in the right of personal liberty and the right of private property— partaking of the nature of each— is the right to make contracts ... of personal employment, by which labor and other services are exchanged for money or other forms of property." —Justice Mahlon Pitney, 1915 (Coppage v Kansas, 236 US 1, 14)
11. Congress cannot tax, in themselves, Constitutional rights jurisdictionally reserved (i.e., reserved to the people). "The first amendment, which the Fourteenth makes applicable to the states, declares that 'Congress shall make no law ....' It could hardly be denied that a tax laid specifically on the exercise of those freedoms would be unconstitutional .... A state may not impose a charge for the enjoyment of a right granted by the federal constitution." —Justice William Douglas, 1943 (Jones v Opelika, Murdock v Pennsylvania, 319 US 105, 108, 113) "The power of the state in that respect is not unlimited, and one of the limitations is that it may not impose conditions which require the relinquishment of constitutional rights." —Justice George Sutherland, 1926 (Frost v California, 271 US 583, 593, 594) "To take over to its control any one of the great number of subjects of public interest, jurisdiction of which the states have never parted with, ... by a so-called tax ... would be to break down all constitutional limitation of the powers of Congress." —Chief Justice William Taft, 1922 (Bailey v Drexel, 259 US 20, 38)

And Congress can tax even income from "fundamental rights." See http://evans-legal.com/dan/tpfaq.html#rights

13. Given 4 (not every payment, in itself, is income), 8 (income tax taxes activity done for income), and 12 (income tax cannot tax common work, in itself), it follows that: income tax cannot tax common work done for payment, in itself.

Given that 4 is irrelevant and 8 and 12 are wrong, it follows that the rest of the conclusions are also wrong.

[Demosthenes]

I don't know the source of the "1941 Treasury Report" quote,

The 1941 report:

http://www.taxhistory.org/Civilization/ ... 9048-1.htm

It is referring to the amount excluded from net income as a result of exemptions and credits.

II. COLLECTION AT SOURCE AS AN INFLATION CONTROL MEASURE

The largest portion of consumer incomes in the United States is not subject to income taxation. Likewise, only a small proportion of the population of the United States is covered by the income tax. For 1936, taxable income tax returns filed represented only 3.9% of the population. Only about 35% of the total flow of income to individuals was reached by the income tax and only about 25% was reported on taxable returns. The coverage of the income tax is narrowest where the greatest amount of income is concentrated, that is for individuals with incomes of less than $5,000.

In view of this, any payment system based upon the present levels of exemptions and credits would be inadequate as a means of price control. A tax at source on behalf of current year liability would, however, have an appreciable effect as an inflation control measure through withdrawing the tax compulsorily from current income.

As an alternative to a tax at source, consideration should be given to lowering personal exemptions as a means of controlling price increases. To an indeterminate extent, many individuals would curtail expenditures for consumer goods if their prospective tax liabilities were increased. For purposes of controlling inflationary price increases, it may be adequate to reduce the exemptions for heads of families to $1,500 since expenditures of those in the lower income classes are not likely to be made for articles, the supply of which is limited by Defense needs. Such lowering of personal exemptions, together with the popularization of tax anticipation certificates, may serve to control inflationary price increases in a manner similar to an income tax at source, though perhaps less effectively.

[LPC]

I don't know the source of the "1941 Treasury Report" quote,

The 1941 report:

http://www.taxhistory.org/Civilization/ ... 9048-1.htm

It is referring to the amount excluded from net income as a result of exemptions and credits.

As I thought.

You rarely go wrong by assuming that a tax denier is being dishonest (or delusional).

[LPC]

I told him [DBE] exactly where the 2 errors were on his FAQ (which he still hasn't corrected, even though he could do so without forsaking his position simply by being as deceptively compliant as the IRS), but he put no substantive reply to it.

You might consider our every exchange to be memorable, but I don't, so I have no idea what you are talking about.

My usual procedure when getting advice from kool-aid drinkers about "errors" is to check to see if there is any such "error." (The operating principle being that even a blind pig finds an occasional acorn.) There usually is no "error," but simply another instance of tax denier ignorance, delusion, or hair-splitting. I then forget about it.

Which is probably what happened in your case (assuming I even bothered to read your comments).

But if you'd like to tell me about the "errors" again, I'll look at the FAQ again and then tell you why I'm going to ignore you again.

(Dan, if you like, I'll draft exactly how you can change those 2 errors in a way that sounds like your position but is also legally accurate.)

Knock yourself out. It could provide some amusement.

On the Once More thread I quoted his website twice after I'd proven pretty directly that he had just made an admission which completely vitiated his FAQ, and I got nothing back on it from anyone.

Now you're mistaken (or lying), because I can still check that thread there is no such message.

[Brian Rookard]

I told him [Dan Evans] exactly where the 2 errors were on his FAQ (which he still hasn't corrected, even though he could do so without forsaking his position simply by being as deceptively compliant as the IRS), but he put no substantive reply to it. (Dan, if you like, I'll draft exactly how you can change those 2 errors in a way that sounds like your position but is also legally accurate.)

I can't help but feel that John's suggested corrections would be akin to a Flat Earther trying to have the Astronomy books "corrected" ...

[John J. Bulten]

Does "Zach Industries, Inc.", D/B/A "Zach Services", ring a bell? Mr. Doverspike incorporated it for you, didn't he? He's also listed as a principal of the corporation in Oklahoma corporate records, no? BTW, what was that about where the Oklahoma Tax Commission suspended your operations? I mean, didn't you discuss it with Mr. Doverspike before it came to that? Been playing around with this stuff for a while, haven't you, John?

Just calling to see your whole hand. Yes, in my youth I once let a corporation lapse. No, I didn't talk with Terry about it, I think he was busy running for City Council at the time. I probably should add that to my publicly available history. Deal me in again.

Real civil protestors want to be "come after", since it makes their point.

That's why I'm here.

Larken said, "Please prosecute me"; and he got it.

Pete constantly says, the latest DOJ filings continue to prove the truth of CtC.

Bob put his house in jeopardy over his principles.

Granted, there is a slight difference between "I reject this law as unjust" and "I reject your nonbinding interpretation of law as unjust, while I accept this law and its binding interpretations as written and demand their just application". But the commitment to "freedom above fortune", or truth above all, still prepares one for its temporary disadvantages.

[Brian Rookard]

But no, I won't find specific GAAP about determining gain on a work-for-pay transaction, which is basically my point: since there is no direct GAAP or IRC guidance, I'm free to choose among otherwise legitimate assumptions, supported by their silence.

How about all that guidance from the Courts which says that the pay you receive is income?

How about all the tax protestors that have lost on the same arguments you have made?

But you don't want guidance from that ... that wouldn't fit the agenda.

[jg]

There is, of course, direct guidance in the law as to determining the net income subject to the income tax from work for pay or from compensation for services. After inclusion in gross income of all accessions to wealth (except those specifically excluded), which are realized and over which one has dominion, one may take deductions for trade and business expenses as specified in the law. The computation is slightly different for an employee than for other individuals; but in every case no one may take any personal, living, or family expenses as a deduction except as expressly provided in the law.

TITLE 26, Subtitle A, CHAPTER 1, Subchapter B, PART I, Sec. 62 says, in part:

a) General rule
For purposes of this subtitle, the term "adjusted gross income" means, in the case of an individual, gross income minus the following deductions:
(1) Trade and business deductions
The deductions allowed by this chapter (other than by part VII of this subchapter) which are attributable to a trade or business carried on by the taxpayer, if such trade or business does not consist of the performance of services by the taxpayer as an employee.
(2) Certain trade and business deductions of employees
(A) Reimbursed expenses of employees
The deductions allowed by part VI (section 161 and following) which consist of expenses paid or incurred by the taxpayer, in connection with the performance by him of services as an employee, under a reimbursement or other expense allowance arrangement with his employer. The fact that the reimbursement may be provided by a third party shall not be determinative of whether or not the preceding sentence applies.

TITLE 26, Subtitle A, CHAPTER 1, Subchapter B, PART VI, Sec. 161 says:

In computing taxable income under section 63, there shall be allowed as deductions the items specified in this part, subject to the exceptions provided in part IX (sec. 261 and following, relating to items not deductible).

TITLE 26, Subtitle A, CHAPTER 1, Subchapter B, PART IX, Sec. 262 says:

(a) General rule
Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.

There is no "zero cost basis of labor" in the law; but there are some deductions that are allowed and some that are not allowed.

It can be argued whether deductions should or should not be allowed; but that is a policy discussion which is outside the scope of what is the law as applied and enforced.

No taxpayer has a constitutional right to a deduction. Indeed, deductions are considered a matter of "legislative grace" (New Colonial Ice Company, Inc. v. Guy T. Helvering, 292 U.S. 435 (1934)).

[Nikki]

John is not interested in discussing anything related to income taxes.

He is merely campaigning to support his self-nomination for ENM's FTOTY award.

[wserra]

Just calling to see your whole hand.

Well, of course you were. Funny how it looked like you were playing dumb until you had no choice. And what in the world makes you think that you saw my whole hand?

Don't forget those lists of wins by the Petey and Bobby show. And I'm really not that interested in Schulz getting a zoning variance. We're talking income taxes here, right?

Real civil protestors want to be "come after", since it makes their point.

That's why I'm here.

Well, then, you're in the wrong place, since we don't "come after" anyone other than with words. Why don't you go to the the office of your local U.S. Attorney with your crackhead returns and show them? Feel free to call the press first.

Larken said, "Please prosecute me"; and he got it.

When he got it, he squealed bloody murder about how unfair it was right up until the BOP shut him up. And, when he had the chance to argue his legal position (such as it was) where it counted - in court - he wimped out with the "But I had a good faith belief" Cheek defense.

Sounds like Rosa Parks to me, right? "But I really thought the law permitted me to sit in the front of the bus." Pathetic.

Bob put his house in jeopardy over his principles.

YM "greed". HTH.

Granted, there is a slight difference between "I reject this law as unjust" and "I reject your nonbinding interpretation of law as unjust, while I accept this law and its binding interpretations as written and demand their just application".

I'm glad you realize that every court to have considered it says you're wrong. Sorry, John, no Cheek defense for you.

[John J. Bulten]

Dan, thank you for your input. I have made the necessary corrections at the LH forum.

Somebody's webpage: “Employee” includes what you would normally think of as employees.

[LPC]

Dan, thank you for your input. I have made the necessary corrections at the LH forum.

I don't remember saying anything about the LH forum.

[Red Cedar PM]

Red, you know the basic principle that tax accounting uses thoroughly different rules than business accounting, and that's why credits to service revenue (which sounds fine to me) do not always flow into taxable income. But you've nailed the zero-basis issue (and are the first one who did): you assume I paid nothing to be able to labor. However, no one can labor without paying every one of the ordinary expenses of life, every one of which is a deductible business expense if paid to maintain a business machine but is considered nondeductible if paid to maintain the self. These expenses include fuel (food), maintenance (clothing, shelter, medical), improvements (education), transportation, insurance, downtime (recreation), long-term business investment (family), and other overhead. My charitable contributions are also otherwise deductible. The only gain left is increase in net worth, which is negligible, as I've said. And this is before depreciation (getting older), which is another place where the TIME I spent is converted into a GAAP unit of measure. Now, Red, I know that most of these are not deductible if I were operating a "trade or business". But I'm not, so I'm free to recognize their true value in an itemized accounting.

Your argument falls flat on its face before you are even out of the gate.

What you would like to do here is (I think) capitalize your personal expenses as an asset and then write those off as you exchange "yourself" for pay. It doesn't really work that way, bub. Accounting rules state that generally the only expenses that get capitalized are costs that are incurred to build inventory for resale (I don't see how you could consider yourself inventory) or a depreciable/amortizable long-lived asset. In either case, the inventory or the depreciable asset is property that is held by a business to generate income. You are not held by a business, and you are not property. The food that you eat, the clothes on your back, your charitable giving, etc. is a personal expense of John J. Bulten, Inc. Those expenses are generally nondeductible except via the tax code.

Think of it this way. If you were to prepare personal financial statements showing your assets, liabilities, revenues, and expenses, where would the food that you eat go? You are trying to say you would capitalize it as an asset and put yourself on the balance sheet, which is absolute nonsense. Food is a recurring expense that you will always need, just like a business will generally have recurring interest expense, depreciation, wage expense, etc. to keep itself going. You would never capitalize such expenses.

[Nikki]

John is in pasta mode:

Keep throwing it against the wall and pehaps something will stick.

Unfortunately, he is conducting a pasta duel with a sheet of Teflon (r)

[Quixote]

Now, Red, I know that most of these are not deductible if I were operating a "trade or business". But I'm not, so I'm free to recognize their true value in an itemized accounting.

Again, Bulten turns logic on its head. He argues that his personal expenses are business expenses, then argues that he can deduct them because he is not in business.

you assume I paid nothing to be able to labor.

No, he assumes you paid nothing for your labor, and he's right.

[Florida]

Red, you know the basic principle that tax accounting uses thoroughly different rules than business accounting, and that's why credits to service revenue (which sounds fine to me) do not always flow into taxable income. But you've nailed the zero-basis issue (and are the first one who did): you assume I paid nothing to be able to labor. However, no one can labor without paying every one of the ordinary expenses of life, every one of which is a deductible business expense if paid to maintain a business machine but is considered nondeductible if paid to maintain the self. These expenses include fuel (food), maintenance (clothing, shelter, medical), improvements (education), transportation, insurance, downtime (recreation), long-term business investment (family), and other overhead. My charitable contributions are also otherwise deductible. The only gain left is increase in net worth, which is negligible, as I've said. And this is before depreciation (getting older), which is another place where the TIME I spent is converted into a GAAP unit of measure. Now, Red, I know that most of these are not deductible if I were operating a "trade or business". But I'm not, so I'm free to recognize their true value in an itemized accounting.

Your argument falls flat on its face before you are even out of the gate.

What you would like to do here is (I think) capitalize your personal expenses as an asset and then write those off as you exchange "yourself" for pay. It doesn't really work that way, bub. Accounting rules state that generally the only expenses that get capitalized are costs that are incurred to build inventory for resale (I don't see how you could consider yourself inventory) or a depreciable/amortizable long-lived asset. In either case, the inventory or the depreciable asset is property that is held by a business to generate income. You are not held by a business, and you are not property. The food that you eat, the clothes on your back, your charitable giving, etc. is a personal expense of John J. Bulten, Inc. Those expenses are generally nondeductible except via the tax code.

Think of it this way. If you were to prepare personal financial statements showing your assets, liabilities, revenues, and expenses, where would the food that you eat go? You are trying to say you would capitalize it as an asset and put yourself on the balance sheet, which is absolute nonsense. Food is a recurring expense that you will always need, just like a business will generally have recurring interest expense, depreciation, wage expense, etc. to keep itself going. You would never capitalize such expenses.

I think Johnny means, that, prior to attaining adulthood, the food you eat helps you grow. As such, such expenditure would be properly characterized as a capital improvement (such as bigger bones). After reaching adulthood, the food expenditures are simply ones of maintaining that which has already grown.

Gosh darnit John is smart. Y'all are just too dense to recognize his intelligence. Just take a good look at his picture - that's a mental giant you would never want to face in a tax debate. Look at those glasses ready to sift through code sections and his sleeves rolled up as if to say, "ok, i leave no stone (code section) uncovered and I'm ready to get down and dirty."

[John J. Bulten]

What you would like to do here is (I think) capitalize your personal expenses as an asset and then write those off as you exchange "yourself" for pay.

See how much fun I'm having watching you guess!

Food is an expense and thus a source of decrease in net worth. Please show me one law stating that food cannot be deducted for purposes of calculating income derived from compensation. (The laws stating that food cannot be deducted for purposes of calculating income derived from trade or business are irrelevant to this inquiry.)

In fact, show me one law that states generally how to calculate income derived from compensation for those not government/corporate/similar workers. (The laws stating that wage earners are taxed on the full amount of wages are irrelevant to this inquiry.)

[.]

The laws stating that wage earners are taxed on the full amount of wages are irrelevant to this inquiry.

Actually, you are irrelevant to reality. But, you are amusing.