Larken Rose

[LPC]

Now a new threat suddenly arises: a domestic terrorist group calling itself “The Iron Web,” a group bent on ending America as we know it.

And I think we know which side Larken is rooting for.

Seriously, this guy is going totally dark. See http://www.youtube.com/watch?v=xcvMwZShJTE for a taste of his lighter side.

[Demosthenes]

I was watching "Family Guy" last night and the not-so-subtle moral of the show was "the bigger the gun, the smaller the penis."

[Nikki]

Is there a similar correlation to mullet sizes?

[Pottapaug1938]

SteveSy: "Nothing in 861 tells a person not to use the regulations if all your income comes from within the U.S.. 1.861-8 even refers to section 61 so obviously it must apply to U.S. citizens. However it's impossible to determine your taxable income using the regulations under 861 if you make all your income from within the U.S. and you’re a wage earner even though it specifically references items of income described under section 61."

I could easily refute this rubbish; but Dan Evans has done it better than I ever could. Check out his Tax Protestor FAQ; and THEN see if you can tell us how 861 gets you out of paying income taxes.

And, BTW -- there is no legal principle which says that laws have to spell out the obvious for the benefit of the dimmer readers out there. A simple reading of the entire text of Section 861 discloses its true meaning -- not the one TPers fervently search for.

[SteveSy]

I could easily refute this rubbish; but Dan Evans has done it better than I ever could. Check out his Tax Protestor FAQ; and THEN see if you can tell us how 861 gets you out of paying income taxes.

And, BTW -- there is no legal principle which says that laws have to spell out the obvious for the benefit of the dimmer readers out there. A simple reading of the entire text of Section 861 discloses its true meaning -- not the one TPers fervently search for.

No one can refute it....it's either a flaw in the law or you don't owe taxes on domestic income if you are a citizen of the U.S.. Using only section 61 would make a person earning income in India who is a citizen of India liable for the federal income tax on income earned in India.

Please show where, using the regulations, that tells you not to use 861 and following if you have "income from sources within the U.S."? I like playing this game, it always boils down to "well, any moron knows that you shouldn't use it" but no one can explain why. Please don't waste my time and post some tax court case...none of them show anything either.

btw, Dan's FAQ is a waste of time also. It doesn't refute anything.

He uses this as his main refutation:
“In general, all citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States.”

Ok...sooo? No one is saying people aren't liable for the income tax when its imposed. Certainly people earning income from sources outside the U.S. do owe the income tax, that's spelled out quite clearly under 861 and following.

He also says:

And, unless an “operative section” provides an exception, then the general rule of section 61 continues to apply and gross income (which is the basis for taxable income) means “all income.”

Really? Where does it say that? I guess Dan just pulled that out of his arse...like he claims TP's do all the time.

[Paul]

Using only section 61 would make a person earning income in India who is a citizen of India liable for the federal income tax on income earned in India.

Poor stevesy. No matter how many times you spell it out for him, he just doesn't get it. For those of you who haven't heard it before . . .

Section 1 computes the tax of an individual on the individual's "taxable income." Section 63 defines taxable income as gross income minus deductions and exemptions. Section 61 says that, "Except as otherwise provided in this subtitle, gross income means all income from whatever source derived . . ."

Now, if you happen to be a citizen of India, you can read a little further in Subtitle A (i.e., "this subtitle" for those of you who are as slow as stevesy), and you will find Section 872, which tells you that as a nonresident alien (a person who neither lives in nor is a citizen of the US, or have we lost you already, stevesy? ), your gross income includes only gross income "derived from sources within the United States" and 871, which tells you that your taxable income includes only income and deductions from within the US. So, if you are a citizen of India, you aren't taxed on your income from sources within India. All spelled out very concisely and clearly in the IRC.

But how do you figure what income is "derived from sources within the United States", you say? Why, that's easy. You go to Sections 861 through 863 and their regulations. Those statutes and regulations do not exempt or include anything in taxable income, all they do is tell you how to divide your income between two piles -- one derived from sources within the US and one derived from sources without the US. As a citizen of India, you divide your income between the two piles, and pay tax only on one pile.

As a citizen of the US, there is nothing that tells you not to use Sections 861 through 863 to divide your income into two piles. However, Section 61 tells you that you have to include both piles in your tax base, so what's the point? Well, believe it or not, there are times that citizens do need to divide their income into these two piles. For example, when they have to compute the limit on their foreign tax credit under Section 904. Regulation section 1.861-8(f) even lists those times when people need to divide your income into these two piles. And, lo! It lists 904 and 871, among other areas. And guess what? It doesn't have any listing of a place in the IRC where citizens t need to use 861 to divide their income into two piles for purposes of actually computing their basic tax. Why? Because they don't need to, and it doesn't do anything for or to them. But moron Rose gets it 180 degrees wrong and says that, because there is no provision in 1.861-8(f) for citizens, it means they are not taxed! Kinda hard to refute "logic" like that, which ignores the simple meaning of every section you read on your way to 1.861-8(f), including the firs sentence of that section. But that's our Rosie, and and his mini-me-moron stevesy.

And stevsey still won't get it.

[Doktor Avalanche]

Bopnus - there are gangs in L.A that are probably larger than many of the "militia" group combind and probabvly equally armed. Roll into MS13 territory with guns out Holmes and the essays will punch your ticket.

That's "homez" and "eses", you dunderhead.

[SteveSy]

As a citizen of the US, there is nothing that tells you not to use Sections 861 through 863 to divide your income into two piles.

That's true, but there's nothing to tell you to use section 61 either if you have income.
But like 61 it's pretty obvious. "Income from sources within the U.S.".

However, Section 61 tells you that you have to include both piles in your tax base, so what's the point? Well, believe it or not, there are times that citizens do need to divide their income into these two piles. For example, when they have to compute the limit on their foreign tax credit under Section 904. Regulation section 1.861-8(f) even lists those times when people need to divide your income into these two piles. And, lo! It lists 904 and 871, among other areas. And guess what? It doesn't have any listing of a place in the IRC where citizens t need to use 861 to divide their income into two piles for purposes of actually computing their basic tax. Why? Because they don't need to, and it doesn't do anything for or to them. But moron Rose gets it 180 degrees wrong and says that, because there is no provision in 1.861-8(f) for citizens, it means they are not taxed! Kinda hard to refute "logic" like that, which ignores the simple meaning of every section you read on your way to 1.861-8(f), including the firs sentence of that section. But that's our Rosie, and and his mini-me-moron stevesy.

§ 1.861-1 Income from sources within the United States.

(a) Categories of income. Part I (section 861 and following), subchapter N, chapter 1 of the Code, and the regulations thereunder determine the sources of income for purposes of the income tax. These sections explicitly allocate certain important sources of income to the United States or to areas outside the United States, as the case may be

Seems pretty obvious to me....but hey to each their own. I guess if you believe you have some sourceless income you might not need to use the source rules.

btw, Dan gets it wrong, a simple reading of 61 shows the items listed in 61 are not "sources" of income, like "compensation for services", they're items of gross income. Furthermore, the regulations under 861 specifically state the items under 61 are items of gross income. But Dan won't let that get in his way.

[Famspear]

No one can refute it....it's either a flaw in the law or you don't owe taxes on domestic income if you are a citizen of the U.S

Translation: No matter how many times I read it, no matter how many times I have it clearly explained to me, and no matter how many courts rule that the law means exactly what it says, I refuse to accept it.

[Famspear]

Nothing in 861 tells a person not to use the regulations if all your income comes from within the U.S.. 1.861-8 even refers to section 61 so obviously it must apply to U.S. citizens. However it's impossible to determine your taxable income using the regulations under 861 if you make all your income from within the U.S. and you’re a wage earner even though it specifically references items of income described under section 61.

Bingo, Steve! More to the point, it's impossible to determine your taxable income by using ONLY the regulations under section 861. Section 861, and the regs thereunder, are not the sole source of the law.

I've noticed all of the supposed debunkers slyly avoid the fact that 1.861-8 refers to section 61 for items of gross income. That blows a massive hole in every one of their arguments.

No. The Larken Rose argument is (oversimplified) as follows: Because of section 861 and its regs, the domestic income of a U.S. citizen is not taxable for federal income tax purposes.

The problem for Larken Rose is that nothing in section 861, or its regs, or anything else in the Code, says that.

Please don't waste my time and post some tax court case...none of them show anything either.

Giggle....Steve, please don't waste our time with statements like that.

Using only section 61 would make a person earning income in India who is a citizen of India liable for the federal income tax on income earned in India.

Steve, you've use another impotent tax protester tactic -- arguing that all the law must be contained in ONE AND ONLY ONE CODE SECTION. Where do you come up with this kind of pseudo-legal mumbo-jumbo?

Actually, using "only section 61" would not make anyone liable for anything. Section 61 defines gross income. Section 61 does not impose the federal income tax. For individuals, you generally look to places like section 1 and section 55 for the imposition of the federal income tax (other sections as well).

Steve, in your example, for a resident of India (who is not a U.S. citizen or U.S. resident), you would generally look to section 1, section 55, and section 871 or section 877 (maybe others, too) to find the statutes that impose the federal income tax.

Steve, sometimes you have to look at the law in its entirety -- and not chop off little bits and pieces.

EDIT: Steve, before you respond, think. (I am playing hide the ball right now.)

[Imalawman]

Using only section 61 would make a person earning income in India who is a citizen of India liable for the federal income tax on income earned in India.

How so? Please explain that conclusion. As I see it, IRC sec. 61 is merely definitional.

[Famspear]

Using only section 61 would make a person earning income in India who is a citizen of India liable for the federal income tax on income earned in India.

How so? Please explain that conclusion. As I see it, IRC sec. 61 is merely definitional.

Steve, please note that "Imalawman" has set a trap for you (as did I in the previous post).

Hint: This reminds me of a complaint I recently received from a bankruptcy lawyer, a friend of mine, who expressed frustration with dealing with the Internal Revenue Code because of the lack of complete cross-referencing. Yes, it is very easy to miss things in the Internal Revenue Code. Some obscure provision in "section ZZZZ" (whatever) will almost completely change or negate what would otherwise be the effect of a more well-known provision in "section A." The taxation of non-resident aliens is an example.

Think before you answer, Steve.

[SteveSy]

Using only section 61 would make a person earning income in India who is a citizen of India liable for the federal income tax on income earned in India.

How so? Please explain that conclusion. As I see it, IRC sec. 61 is merely definitional.

Steve, please note that "Imalawman" has set a trap for you (as did I in the previous post).

Hint: This reminds me of a complaint I recently received from a bankruptcy lawyer, a friend of mine, who expressed frustration with dealing with the Internal Revenue Code because of the lack of complete cross-referencing. Yes, it is very easy to miss things in the Internal Revenue Code. Some obscure provision in "section ZZZZ" (whatever) will almost completely change or negate what would otherwise be the effect of a more well-known provision in "section A." The taxation of non-resident aliens is an example.

Think before you answer, Steve.

I agree with Imalawman. Section 61 is simply a broad section that starts off including everything known to mankind as do all main sections in the code. It isn't until you go through the sections that the specifics are exposed.

The argument made here is that 61 shows you owe the income tax regardless...well, that's true if only you use 61, but then if you're a foreigner making money in a foreign land you would owe also.

I want to make something clear, I am not supporting anyone to use 861 to claim they don't owe taxes. You can not win against the government in the courts it appoints judges to, not concerning something as major as this. It would be akin to wining a landmark lawsuit against GE where they appoint the judges and set the rules.

I'm merely pointing out the merits of the argument.

[Imalawman]

Using only section 61 would make a person earning income in India who is a citizen of India liable for the federal income tax on income earned in India.

How so? Please explain that conclusion. As I see it, IRC sec. 61 is merely definitional.

I agree with Imalawman. Section 61 is simply a broad section that starts off including everything known to mankind as do all main sections in the code. It isn't until you go through the sections that the specifics are exposed.

Well, then you agree that you were incorrect in your initial post? You also then would agree that sec 61 does not impose a worldwide tax on non-residents without US source income?

[SteveSy]

Well, then you agree that you were incorrect in your initial post? You also then would agree that sec 61 does not impose a worldwide tax on non-residents without US source income?

I'm merely pointing out that IF we were to rely on 61 to determine if we owe the tax then it would also mean other things we know aren't taxed would be taxed. I simply disposed of a flawed argument. Section 61 doesn't impose any tax, it provides a list of items of gross income that come from sources. Since there is a source section in the code its safe to presume whatever source means whether sources within or without the U.S. Unless of course you know of some source that isn't within or without the U.S.?

[Famspear]

The argument made here is that 61 shows you owe the income tax regardless...well, that's true if only you use 61, but then if you're a foreigner making money in a foreign land you would owe also.

No. If you're a foreigner making money in a foreign land -- a non-resident alien -- you would owe U.S. federal income tax only to the extent provided by U.S. tax law. And section 61 by itself does not impose a federal income tax -- on anyone.

Non-resident aliens can owe some U.S. federal income tax in limited circumstances -- but that has nothing much to do with section 61.

I am still playing hide the ball, Steve. Your problem is that you haven't read the Internal Revenue Code. The answer is right there in the statute. You need to read ALL APPLICABLE PROVISIONS -- not just section 61, not just section 861.

The general rule is that for a non-resident alien (the person in India, a citizen of India, a resident of India, who is not a citizen or resident of the USA), the regular federal income tax (imposed by section 1) and the alternative minimum tax (under section 55) are imposed ONLY to the extent provided under either section 871 or section 877.

But do you know why, Steve?

Keep looking, Steve.

I'm merely pointing out that IF we were to rely on 61 to determine if we owe the tax then it would also mean other things we know aren't taxed would be taxed. I simply disposed of a flawed argument. Section 61 doesn't impose any tax, it provides a list of items of gross income that come from sources. Since there is a source section in the code its safe to presume whatever source means whether sources within or without the U.S. Unless of course you know of some source that isn't within or without the U.S.?

I think you're missing the big picture, Steve. Nobody is saying that we rely on section 61 -- i.e., ONLY on section 61 -- to determine whether we owe the tax. We rely not only on section 61, but also on ALL APPLICABLE PROVISIONS OF THE INTERNAL REVENUE LAWS, including (there's that word!) the Internal Revenue Code, certain other statutes, the regs, the tax treaties, and so on.

EDIT: Steve wrote:

Since there is a source section in the code its safe to presume whatever source means whether sources within or without the U.S.

That's correct. The phrase "whatever source" means any source, regardless of whether that source is within or without the United States.

But that doesn't change the point that Larken Rose completely flubbed it, in his interpretation of the Internal Revenue Code. Again, the answer is all there in the law -- but you have to know where to look for it.

[Red Cedar PM]

[SteveSy]

I am still playing hide the ball, Steve. Your problem is that you haven't read the Internal Revenue Code. The answer is right there in the statute. You need to read ALL APPLICABLE PROVISIONS -- not just section 61, not just section 861.

Agreed

The general rule is that for a non-resident alien (the person in India, a citizen of India, a resident of India, who is not a citizen or resident of the USA), the regular federal income tax (imposed by section 1) and the alternative minimum tax (under section 55) are imposed ONLY to the extent provided under either section 871 or section 877.

Wait, nothing told them to use those sections.....why would they do that? According to people like Dan, people who make U.S. income and are U.S. citizens aren't supposed to use 861 because nothing tells them to use it.

But do you know why, Steve?

Yes, I do...but I'm not going to play the game where you assume the premise to your position is true without proving the premise.

[Famspear]

I am still playing hide the ball, Steve. Your problem is that you haven't read the Internal Revenue Code. The answer is right there in the statute. You need to read ALL APPLICABLE PROVISIONS -- not just section 61, not just section 861.

Agreed

The general rule is that for a non-resident alien (the person in India, a citizen of India, a resident of India, who is not a citizen or resident of the USA), the regular federal income tax (imposed by section 1) and the alternative minimum tax (under section 55) are imposed ONLY to the extent provided under either section 871 or section 877.

Wiat, nothing told them to use those sections.....why would they do that?

But do you know why, Steve?

Yes, I do...but I'm not going to play the game where you assume the premise to your position is true without proving the premise.

No, it kinda, sorta appears that you do not know SPECIFICALLY why, Steve. You don't know which Code provision directs that guy from India to section 871, etc. If you're a citizen and resident of India (not a citizen or resident of the USA), the Internal Revenue Code itself tells you to use section 871 or section 877 (and certain other applicable Code sections). It's just that you need to know where to look in order to find the place where the Code tells you that.

I am still playing hide the ball.

[SteveSy]

No, it kinda, sorta appears that you do not know SPECIFICALLY why, Steve. You don't know which Code provision directs that guy from India to section 871, etc. If you're a citizen and resident of India (not a citizen or resident of the USA), the Internal Revenue Code itself tells you to use section 871 or section 877 (and certain other applicable Code sections). It's just that you need to know where to look in order to find the place where the Code tells you that.

I am still playing hide the ball.

The core sections are 861 and 862 respectively for sources within or without the U.S.
Walking through the regulations will clearly show what is or is not taxed for foreigners under the regulations for those sections and how to treat that income.

I have not looked at the 861 argument for a while and I do not recall a specific section in the code off the top of my head that specifically tells you to use 871 except 1441.

btw, just because something is "gross income" doesn't mean it's taxable income.