Income and Compensation Defined

[David Merrill]

Nikki resorts to that, even though she has no qualifications as a psychoanalyst.

Ignore her.



Regards,

David Merrill.

[John J. Bulten]

John, you're not an ex-exterminator, are you?

I'm an exex-terminator. I terminate exex.

Nikki, your favored agency, the IRS, just sent me a letter agreeing I had no income for 2006. They've admitted I've had no income since 2002, where there is a dispute. You don't have to take my word for it.

[jkeeb]

I have never seen a letter the IRS sent that stated:

Dear Taxpayer:

We agree you have no income.

IRS.

[jkeeb]

He won't mention the case so no one can follow it on Pacer. Then he can state all he wants about how "favorably" things are progressing and like Cryer, state a judge "didn't give a reason" for an order when the judge addressed all of Cryer's points.

[LPC]

Nikki, your favored agency, the IRS, just sent me a letter agreeing I had no income for 2006. They've admitted I've had no income since 2002, where there is a dispute. You don't have to take my word for it.

Actually, we do, because there is absolutely no evidence for what you have written other than your writing of it.

And what you are writing is contrary to IRS practice and policy, because the IRS does not send letters giving opinions on factual issues.

And you are a liar, as has been demonstrated on several threads.

Therefore, the smart money is saying that the IRS has either not sent you a letter, or the letter said nothing like you've claimed.

I'm sure that it will all be settled by the evidence introduced by the government during your criminal trial.

[webhick]

I knew a guy who was getting paid under-the-table since 1996. He was afraid of getting his employer in trouble, so he put $0 income down on his tax returns. After a year or two, he got a letter telling him not to file unless his situation changed (or something to that effect).

Perhaps this is what's happening with John. IRS doesn't have 1099s or W-2s to disprove his stance, so they accept it at face-value.

[John J. Bulten]

Department of the Treasury
Internal Revenue Service
Atlanta, GA 39901-0025

For assistance, call:
1-800-829-0922
Your Caller ID: ...
Notice Number: CP13
Date: April 23, 2007
Taxpayer Identification Number: ...
Tax Form: 1040A
Tax Year: December 31, 2006

JOHN J BULTEN ...

Why We Are Sending You This Notice

We are writing to you because there is an error on your 2006 Federal Income Tax Return. We will explain why we made the change and what you need to do.

Why We Made The Change

- We changed the amount claimed as federal income tax withheld on Line 38 of your Form 1040A to reflect the amounts reported on Form(s) W-2, 1099, or other supporting documents ....

2006 Tax Return Form 1040A as of April 23, 2007
Line Item On Your Return / Your Figures / IRS Figures
Adjusted Gross Income / $.00 / $.00
Taxable Income / $.00 / $.00
Total Tax / $.00 / $.00
Total Payments / / $.00 ....

In other words, they claim to have "corrected" my total payments from the amount I reported to $.00, while agreeing with my income and tax assessment. By the way, there exists no W-2, 1099, or other supporting document whatsoever which shows total payments of $.00, so their correction is obviously in error, as I will advise them. Regardless, it is with no equivocation that the IRS Figures for Adjusted Gross Income are $.00 (though the tabular form of the letter is not clearly retained above).

I did have significant W-2s reporting "wages" well above deductions for 2005 and 2006 (none for 2003-2004), which could have been adduced if the IRS administratively desired to disprove my stance. In both cases, the IRS instead disproved the W-2s: it has concurred in writing with my 4852s and disagreed in writing with the W-2s.

[jg]

The letter is based on your erroneous claim for refund filed the CtC way and nothing else. It does not constitute agreement that what you reported is correct or complete.

Form W-2 and W-3 that were sent to the SSA in January 2007 by the employers for year 2006 have not yet been compiled and transmitted to the IRS computers (unless this process has been considerably shortened in 2007).
Neither you nor the IRS has disproven the W-2s. The correction notice is simply a "math error" notice sent automatically based on your frivolous submission of 0.00 wages and some amount of federal income tax withheld.

See http://www.irs.gov/individuals/article/ ... 46,00.html

The CtC return is not consistent with reality- "the employer did not give me any money; but the employer took some of my money and transmitted it to be held as a credit for my federal income tax"

[John J. Bulten]

Dan has previously answered similar questions with a special pleading fallacy. He will do so again.

Surely Dan will not specially plead again (as last year at http://losthorizons.com/forum3/topic.as ... hichpage=8 ) that the term "employee" really does always include all employees, even for Railroad Retirement purposes?

If so I'd love to see the cite.

Will Dan specially plead again that private employees are included in 3401 because public employees are included in 3401; or will he specially plead again that private workers for corporations are included in 3401 because private officers of corporations are included in 3401?

If so, I already said, "If Congress intended by 'officer, employee, or elected official of the United States ....' to mean every 'officer, employee, or elected official', as DBE's position would require, the phrase 'of the United States' and the remaining bulk of that sentence would be completely unnecessary, against US v Menasche."

Will Dan specially plead again that private workers, where the workplace's element of control is clear, are included in 3401 because government/corporate workers, where the element of control is not so clear, are included?

If so, I already said, "Stating [the element of control is not so clear] as the class would only extend 'employee' to other workers where element of control is unclear, and would exclude common-law employees .... But if the rationale is that the class DBE wants to import can be inferred because opposite to the class which explicitly needed stating, the reductio ad absurdam would be this: 'No, Congress really intended the base definition of [3401] "employee" to be railroad worker as in 3231(b); and "the intent of section 3401(c) may have been to include officers who might otherwise not fall within the usual meaning of 'employee' because of their" non-rail-related work.'"

Will Dan specially plead again that private workers are included because of the broad statutory scheme?

If so, I already said, "'Every' and 'all' language proves nothing on its face ... Banana v Fruit, 213 US 347, 357 .... DBE cites further ... exclusions, they cannot expand the language; and they also cannot expand it on the grounds that the term must be wider than government-corporate to exclude all those classes. This was generally answered by the fellow who simply linked the exceedingly varied current government job postings list .... One might argue Congress really intended to tax everybody else when it exempted newsies; but then one'd be right back to the Constitutional argument DBE is losing."

Or will Dan in his prodigious capacity for rationalization specially plead with a different new or old argument?

The breathless answer is that Dan found a sixth and perhaps a seventh special pleading:

You are a liar .... What a liar you are .... This context is important, because section 3401 uses the word "includes" while the definitions of "employee" in section 3121 and 3231 use the word "means," which is completely different .... You deliberately misrepresented the context of my statement in order to mislead and deceive .... You are a liar.

Generalizing, definitions with "means" are different from definitions with "includes", the latter of which are expansible e.g. to common-law employees. But this sixth pleading falls apart immediately, because as I already informed Dan above, 3231 uses the word "includes" as well as "means", in virtually identical clauses.

So Dan's seventh special pleading must be inferred to be "3231 use[s] the word 'means' [and the word 'includes'], which is completely different [from 'includes' alone]." This hardly needs a response, but I'll close the circle anyway just to be thorough. 3231, stating "Employee means X, employee includes Y", is construed as "Employee means X or Y [or perhaps things like X or Y], but does not mean common-law employee", while 3401, stating "Employee includes A, employee includes B", is construed as "Employee means A or B or common-law employee". Generalizing, "includes" is not expansive when accompanied by "means". However, this amounts to recognizing "includes" simultaneously as expansive (per 7701) and restrictive (per 3231). Such "restrictively expansive" use of "includes" accords with nothing in my experience more than self-serving frip (flimsy rationalization in progress). The real generalization is: "includes" is expansive when I feel like it.

(By the way, in addition to 7 special pleadings now, in this one post I've gotten 4 to 6 charges of lying, simply for quoting a partial sentence accurately in a place where no claim to complete sentences was made. Clearly I don't understand what Dan means by "lying" either, because it sounds to me like his definition is "espousing tax denier positions". I'm not keeping total count of those charges, but it sure is fun to watch Dan implode again, just like last year.)

Anyone else among the silent who wants to have at it? Remember, the more special pleadings I accumulate, the cheaper each one becomes. Dilbert principle: Two excuses are always better than one (I didn't get your message, and you weren't in when I returned it).

Or is it possible that an honest person might see no reason to reject the argument after all?

1. If a party meets the description of "employee" in 26 USC 3121(d)(2) but does not meet any of the explicit descriptions of "employee" specifically listed in 26 USC 3231(b), is that party a 3231(b) employee? Remember jkeeb answered an implied "no" by saying, "You are not an employee under IRC 32xx"; and remember the subsection includes the clause, "The term 'employee' includes an officer of an employer", and IRC inclusion is somewhat expansive.

2. If a party meets the description of "employee" in 26 USC 3121(d)(2) but does not meet any of the explicit descriptions of "employee" specifically listed in 26 USC 3401(c), is that party a 3401(c) employee? Remember you answered an implied "yes" by saying on your FAQ, "'Employee' includes what you would normally think of as employees" (link above); and remember the subsection includes the clause, "The term 'employee' also includes an officer of a corporation", and IRC inclusion is somewhat expansive.

3a. If you do not answer no to 1, where has anyone authoritative ever held similarly, i.e., stating that common-law employees are in themselves subject to Railroad Retirement?

3b. Or, if you answer no to 1 but do not answer no to 2, by what rationale do you answer the two cases differently, i.e., rejecting the implicit application of your FAQ statement above to 3231(b)?

3c. Or, if you answer no to both, by what rationale do you retain your FAQ statement, i.e., maintaining a contradiction?

[John J. Bulten]

Oh, while keeping count, I forgot an eighth special pleading attributed to an unknown IRS worker, and clearly defective. I recall someone being told, "You're included because you're an 'employee of the United States' whenever you're an employee living in the United States." This person who cannot tell "of" from "in" might also need a refresher on "is". But isn't it amazing how much this mistaken soul sounds like Dan?

[wserra]

Nikki, your favored agency, the IRS, just sent me a letter agreeing I had no income for 2006. They've admitted I've had no income since 2002, where there is a dispute. You don't have to take my word for it.

I can believe it.

He certainly hasn't shown any marketable skills here.

[rachel]

I am reminded of a specific word for someone with no income for four years. That word is BUM.

To have no income for four years usually requires being a street person, a bum, or in a coma for that period of time.

So, either John-boy was a bum for four years, or got paid in cash and lied about how much he made in those four years.

If you were in a coma, glad to see you are doing better.

So you resort to name calling because you do not understand the issue?
Heres a little hint for you!
The only way you can have income for 1040 reporting purposes is by applying for a ssn FOR PURPOSES OF SOCIAL SECURITY BENEFITS. For example!
Without a ssn the IRS cannot factor in the zero-cost basis.
Without a ssn the IRS have no statutory "gross income".
Without a ssn the form 1040 cannot be properly completed.
Without a ssn the IRS has no juristiction to collect.
Without a ssn the employee does not earn statutory 3121(a) "wages".
Without a ssn of the employee, the employer is not statutorily 3121(b) "employing". See 3401(a).
Without a ssn the employer is not required to obtain an EIN.

[Joey Smith]

The social security number has nothing (nada, zed, zip, zilch) to do with the liability to pay taxes, any more than not having a driver's license allows you to run red lights.

You are still liable to pay taxes on your income even if you do not have an SSN, just as you must still obey the traffic laws even if you are driving without a license.

To claim that there is no tax liability because you don't have a SNN is an incredibly stupid and totally false argument. However, it is one that TPs buy into time after time after time.

[Nikki]

I am reminded of a specific word for someone with no income for four years. That word is BUM.

To have no income for four years usually requires being a street person, a bum, or in a coma for that period of time.

So, either John-boy was a bum for four years, or got paid in cash and lied about how much he made in those four years.

If you were in a coma, glad to see you are doing better.

So you resort to name calling because you do not understand the issue?
Heres a little hint for you!
The only way you can have income for 1040 reporting purposes is by applying for a ssn FOR PURPOSES OF SOCIAL SECURITY BENEFITS. For example!
Without a ssn the IRS cannot factor in the zero-cost basis.
Without a ssn the IRS have no statutory "gross income".
Without a ssn the form 1040 cannot be properly completed.
Without a ssn the IRS has no juristiction to collect.
Without a ssn the employee does not earn statutory 3121(a) "wages".
Without a ssn of the employee, the employer is not statutorily 3121(b) "employing". See 3401(a).
Without a ssn the employer is not required to obtain an EIN.

Wrong. Look up ITIN. But why should another little fact detour you on your rant?

[jg]

In the thread at http://quatloos.com/Q-Forum/viewtopic.p ... e3731b6101

Before discussing the issues raised by the motion to dismiss, it must be stated that a fundamental aspect of Plaintiffs' position in this case is without merit. Plaintiffs assert in their opposition memorandum that they are nontaxpayers and as such are not liable for federal income taxes. (Pls.' Mem. at 4-5, 8-13, 14-15.) They further argue that the tax system is voluntary. (Id. at 9.) However, the payment of income taxes is "not optional," United States v. Schiff, 876 F.2d 272, 275 (2d Cir. 1989); see United States v. Gerads, 999 F.2d 1255, 1256 (8th Cir. 1993) (rejecting argument that payment of income taxes is voluntary), and there is no question that all citizens working in the United States are required to pay taxes. See 26 U.S.C. sections 1, 1441(a), (b); 26 C.F.R. section 1.1-1 (2007); Schiff v. United States, 919 F.2d 830, 832-33 (2d Cir. 1990); United States v. Drefke, 707 F.2d 978, 981 (8th Cir. 1983) (stating that claim of immunity from IRS jurisdiction as "nontaxpayer" is "totally without arguable merit"); Bey v. City of New York Dep't of Corr., No. 97 Civ. 4866 (RPP), 1997 WL 576090, at * 2 (S.D.N.Y. Sept. 17, 1997).

emphasis added

But if that’s not enough, let us turn to the Supreme Court for guidance. A good history of the question of income is presented in the case of Commissioner v. Kowalski, 434 U.S. 77 (1977). The case involved a wage earner arguing that his fringe benefits did not constitute income. The court in Kowalski stated that section 61 is intended to be an "all-inclusive list, with no exceptions" other than those expressly stated in the code itself. There is no exception in the code for wages or salaries paid to an ordinary citizen in exchange for personal services. Moreover, the Kowalski court plainly defined the term "income," stating that it is "any accession to wealth, clearly realized and over which the citizen has complete dominion." How can it be said that ordinary wages and salaries fall outside the sweep of this definition?
The most recent Supreme Court decision on the topic was that of Cheek v. United States, 498 U.S. 192 (1991). This case addresses the question squarely, since Cheek was an airline pilot performing services for his employer, American Airlines. Cheek asserted that his wages were not income under the theory in question here. Cheek was prosecuted for tax evasion and failure to file returns. His case landed before the Supreme Court after his conviction. The court ruled not only that wages are taxable income but that such a conclusion is the "application of tax law in its most elementary and basic concept." The court stated that the very idea that wages were not taxable was "silly" and that it was "incomprehensible that a person of reasonable intelligence could assert that wages were not income more than 70 years after the institution of the federal income tax system."

Thousands of people came before Cheek arguing that their wages were not income. Many more have come after him. The law books are loaded with case precedent on the issue. In every case—without a single exception—where this issue was presented to a court, the citizen lost the legal issue. Most promoters, including Schiff, claim that if a person sends the IRS a recommended letter or undertakes a suggested strategy in response to a potential but unlikely challenge, the agency will just go away. This is both untrue and horrifically naive. The IRS does everything but go away in these cases because it never loses them.

emphasis added
See http://www.taxhelponline.com/Report%20T ... Claims.htm

[Randall]

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.).)

[26 USC 262] Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.

Let me clarify. Please show me one law stating that food cannot be deducted from compensation for purposes of calculating income derived from compensation.

You asking for someone to prove a negative, which cannot be done. In order for food to be deductible, there would have ot be a law allowing it. The only way food is deductible is as a business expense (entertainment). Can you prove otherwise?

The laws stating that food expenses cannot be deducted from income do not apply, as I had no income.

Which is BS because further down on the same page you admit that you have significant W-2 income.

[rachel]

The social security number has nothing (nada, zed, zip, zilch) to do with the liability to pay taxes, any more than not having a driver's license allows you to run red lights.

You are still liable to pay taxes on your income even if you do not have an SSN, just as you must still obey the traffic laws even if you are driving without a license.

To claim that there is no tax liability because you don't have a SNN is an incredibly stupid and totally false argument. However, it is one that TPs buy into time after time after time.

You've obviously never read 3121 or 3401

[rachel]

I am reminded of a specific word for someone with no income for four years. That word is BUM.

To have no income for four years usually requires being a street person, a bum, or in a coma for that period of time.

So, either John-boy was a bum for four years, or got paid in cash and lied about how much he made in those four years.

If you were in a coma, glad to see you are doing better.

So you resort to name calling because you do not understand the issue?
Heres a little hint for you!
The only way you can have income for 1040 reporting purposes is by applying for a ssn FOR PURPOSES OF SOCIAL SECURITY BENEFITS. For example!
Without a ssn the IRS cannot factor in the zero-cost basis.
Without a ssn the IRS have no statutory "gross income".
Without a ssn the form 1040 cannot be properly completed.
Without a ssn the IRS has no juristiction to collect.
Without a ssn the employee does not earn statutory 3121(a) "wages".
Without a ssn of the employee, the employer is not statutorily 3121(b) "employing". See 3401(a).
Without a ssn the employer is not required to obtain an EIN.

Wrong. Look up ITIN. But why should another little fact detour you on your rant?

Who needs an ITIN?

IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs. A non-resident alien individual not eligible for an SSN, who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty, needs an ITIN.

:
So if I'm an American (non foreign national) show me the law that requires that every American is compelled to obtain a SSN?
I cant get an ITIN as I'm an American living here in America that has no tax treaty and you cant find any law that compells every American to get a SSN.
Nobody on this forum including you can point to a law that says all Americans are compelled to get an SSN.

[Nikki]

The only way you can have income for 1040 reporting purposes is by applying for a ssn FOR PURPOSES OF SOCIAL SECURITY BENEFITS.

Wrong. Look up ITIN. But why should another little fact detour you on your rant?

Who needs an ITIN?

IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs. A non-resident alien individual not eligible for an SSN, who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty, needs an ITIN.

You just contradicted yourself. You said the "ONLY WAY YOU CAN HAVE INCOME FOR 1040 ..." and then you clearly showed how someone can file a tax return without having a SSN.

Now, please show exactly where in law something says that unless someone has applied for a SSN, they don't have income.

[John J. Bulten]

Instead of getting an answer to the question, I get:
- accused of lying, misrepresenting, misleading and deceiving
- suspected of being a street person, a bum, or in a coma
- accused of lacking marketable skills
- redirected by JG to long uncommented posts
- accused of forcing proof of a negative
- accused of BS
- accused of having W-2 income because a workplace said so

Yes, I had cash jobs 2003-2004 while I was researching the IRC. The primary workplace's accountant was fine with his annual reporting of my invoices. In 2005 when my understanding of the IRC was complete enough, I was able to return to W-4 jobs with a clear conscience.

As for food deduction, I'm the one proving a negative (no law prohibits food deduction from compensation in determining income derived) because a single counterexample would prove the positive (that some such law exists). The enumerated deductions are for converting "gross income" into "taxable income" after "gross income" has been determined. I'm deducting food prior to determining "gross income" and "income"/gain itself, and there is no law against that. There was no income derived from my compensation. People who are fuzzy with words (like Pilla) may not understand this.

And why doesn't anyone just answer the question detailed below: Why am I a 3401 employee but not a 3231 employee?

1. If a party meets the description of "employee" in 26 USC 3121(d)(2) but does not meet any of the explicit descriptions of "employee" specifically listed in 26 USC 3231(b), is that party a 3231(b) employee? Remember jkeeb answered an implied "no" by saying, "You are not an employee under IRC 32xx"; and remember the subsection includes the clause, "The term 'employee' includes an officer of an employer", and IRC inclusion is somewhat expansive.

2. If a party meets the description of "employee" in 26 USC 3121(d)(2) but does not meet any of the explicit descriptions of "employee" specifically listed in 26 USC 3401(c), is that party a 3401(c) employee? Remember you answered an implied "yes" by saying on your FAQ, "'Employee' includes what you would normally think of as employees" (link above); and remember the subsection includes the clause, "The term 'employee' also includes an officer of a corporation", and IRC inclusion is somewhat expansive.

3a. If you do not answer no to 1, where has anyone authoritative ever held similarly, i.e., stating that common-law employees are in themselves subject to Railroad Retirement?

3b. Or, if you answer no to 1 but do not answer no to 2, by what rationale do you answer the two cases differently, i.e., rejecting the implicit application of your FAQ statement above to 3231(b)?

3c. Or, if you answer no to both, by what rationale do you retain your FAQ statement, i.e., maintaining a contradiction?