Trade or Business - For Mutter.

[RyanMcC]

As I explained to you before, 26USC1 imposes a tax on "taxable income". 26USC63 defines "taxable income" as "gross income minus the deductions allowed by this chapter", and 26USC61 defines "gross income" as including (but not limited to) "Compensation for services".

Therefore, if you received "compensation for services" you have gross income, and if there is any money left after deductions allowed by 26USC63 then you have "taxable income".

The terms "wages", "trade or business", "self-employment income", "employee", or "employer" do not come into play anywhere here.

For most employed people the arguement is over, they definately have "gross income" and probally have "taxable income".

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There is this recent post from a user at Lost Horizons:

The 1040 instructs the filer to fill out a Schedule C - Business Profit or Loss. So I downloaded the form and the instructions. Line 1 of the form instructs the filer to fill-in gross receipts. The instructions, on page C-4 (middle of the column at the top), state the following:

"Enter gross receipts from your trade or business."


Using word substitution, I replaced "trade or business" with its definition. The instructions now read:

"Enter gross receipts from your performance of the functions of a public office."

So, I had to make a brutally honest, accurate self-assessment: how much money did my business make in gross receipts in its performance of the functions of a public office?

I liked the answer I was forced to put there scrupulously following the law.

Gotta love CtC filing!

http://losthorizons.com/phpBB/viewtopic ... sc&start=0

Now we know 26USC7701 defines "Trade or Business":

The term ``trade or business'' includes the performance of the functions of a public office.

We also know 26USC7701 defines "Includes and including":

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.

We know that the CtC crowd reads "includes" to mean "includes only" or "means", and we know that numerous courts have rejected this arguement, including in Pete's own civil case. Examples of cases where this arguement has been rejected can be found here:

http://evans-legal.com/dan/tpfaq.html#includes

For most reasonable people, this is the end of it, "includes" does not exclude other things otherwise within the meaning of the term (just as the statute says), and Pete's arguement is invalid as it has been rejected by numerous courts.

Unfortunately the CtC crowd does not fall into the category of "most reasonable people".

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Let's say you reject all of the cited court cases which say the CtC interpretation of "includes" is wrong (including Supreme Court decisions). Let's just assume for a moment the CtC definition of "trade or business" is correct and "trade or business" means:

The term ``trade or business'' means the performance of the functions of a public office.

(Example of incorrect CtC defintion of "trade or business").

All a reasonable person has to do is look in other parts of the tax code which mention the term "trade or business", insert the CtC definition of "trade or business" and see if that sentence makes any sense. If it doesn't make sense, Pete has to be wrong.

26USC48:

(D) Special rule. The first sentence of the matter in subsection (a)(3) which follows subparagraph (D) thereof shall not apply to qualified fuel cell property which is used predominantly in the trade or business of the furnishing or sale of telephone service, telegraph service by means of domestic telegraph operations, or other telegraph services (other than international telegraph services).

How could "the furnishing or sale of telephone service, telegraph service by means of domestic telegraph operations, or other telegraph services" be considered a function of a public office?

26USC3508:

The term ``direct seller'' means any person if--

(A) such person--

(i) is engaged in the trade or business of selling (or
soliciting the sale of) consumer products to any buyer on a
buy-sell basis, a deposit-commission basis, or any similar
basis which the Secretary prescribes by regulations, for
resale (by the buyer or any other person) in the home or
otherwise than in a permanent retail establishment,

(ii) is engaged in the trade or business of selling (or
soliciting the sale of) consumer products in the home or
otherwise than in a permanent retail establishment, or

(iii) is engaged in the trade or business of the
delivering or distribution of newspapers or shopping news
(including any services directly related to such trade or
business),

How could the "trade or business of the delivering or distribution of newspapers or shopping news" be considered the function of a public office?

How could the "trade or business of selling (or soliciting the sale of) consumer products in the home or otherwise than in a permanent retail establishment" be considered the function of a public office?

26USC108:

(2) Qualified farm indebtedness

For purposes of this section, indebtedness of a taxpayer shall be treated as qualified farm indebtedness if—

(A) such indebtedness was incurred directly in connection with the operation by the taxpayer of the trade or business of farming, and

How could farming be considered the function of a public office?

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Given this information, and the court cases that rejected his arguement, do you still think Pete's interpretation of "trade or business" is correct?

[.]

How could farming be considered the function of a public office?

Because "public offices" grow pork. By the ton. Mutter may or may not agree.

[LPC]

This thread reminds me of any argument I've seen about "trade or business" that leads to the conclusion that two people working in the same shop, performing the same tasks, and earning the same amounts of money, can produce two entirely different tax results.

Suppose a cobbler owns a shop and has an employee. During the day, the cobbler and the employee make shoes that are sold for $100. The cobbler pays the employee $20, pays $60 in other expenses (rent, utilities, and supplies), and goes home with $20 at the end of the day. So the cobbler and the employee both made shoes in the same shop, and both walked home with the same amount of money in their pockets that was the result of their labors.

But some tax nuts seem to think that the cobbler can be taxed for operating a "trade or business," while the employee can't be taxed for exchanging his labor for money even though employed in the same trade or business.

It makes no sense whatsoever.

[mutter]

How could farming be considered the function of a public office?

Because "public offices" grow pork. By the ton. Mutter may or may not agree.

dont get me started on bueracraps. I am a bipartisan hater of all of them.