diller72 CTC thread again

[LPC]

FOR THE RECORD (again), neither Hendrickson nor myself nor any other serious student of CtC would ever proclaim that the Section 7701 definition of "includes" should be interpreted to limit what is embraced by the subject of a dependent definition to only the item or items listed in the latter's definitional predicate. What we DO say is that in order to differentiate which other items CAN be embraced by the dependent definition from the REST OF THE KNOWN AND UNKNOWN COSMOS, some boundary MUST exist and that boundary MUST be inferable from the nature of the explicit example item or items in that definition.

The second sentence contradicts the first.

[Imalawman]

FOR THE RECORD (again), neither Hendrickson nor myself nor any other serious student of CtC would ever proclaim that the Section 7701 definition of "includes" should be interpreted to limit what is embraced by the subject of a dependent definition to only the item or items listed in the latter's definitional predicate. What we DO say is that in order to differentiate which other items CAN be embraced by the dependent definition from the REST OF THE KNOWN AND UNKNOWN COSMOS, some boundary MUST exist and that boundary MUST be inferable from the nature of the explicit example item or items in that definition.

The second sentence contradicts the first.

Of course Diller won't understand that, no matter how many times he re-reads that it will make sense to him and won't appear contradictory. Herein lies the problem.

[Kimokeo]

Repaying the refund falsely gained is but one part.
Possible criminal prosecution is another.

But, a third, is the frivolous issue. I wonder what that $1,000 refund was worth when the civil penalty can be $5,000.

$5,000 will bring the attention of the lien and levy department.

[Quixote]

Repaying the refund falsely gained is but one part.
Possible criminal prosecution is another.

But, a third, is the frivolous issue. I wonder what that $1,000 refund was worth when the civil penalty can be $5,000.

$5,000 will bring the attention of the lien and levy department.

Huh? Did you post this in the right thread?

[Quixote]

2. The 16th amendment conferred no new power of taxation, but merely prevented a presumptive reclassification of income taxes from indirect to direct based on the nature of the source or economic activity from which income is derived.

6. Granted and dispensed privileges are distinguishable from inalienable rights.

There is an apparent conflict between these two statements.
If the 16th amendment (and the court decisions after it) disallow reclassification based on the source of the income, it does not matter if the income was derived from the exercise of a right or of a privilege. Just because there is a distinction does not make a difference for dispensed privileges and inalienable rights being subject to the income tax.

The 16th did not disallow consideration of the source for all reasons, just for the purpose of reclassifying an indirect tax on income as a direct tax. The courts, at one time, looked to the source of judge's salaries and state bond payments to determine they were not subject to the income tax. Those decisions are no longer good law, but for reasons not relevant here. If inalienable rights were exempt from taxation, the 16th would not prevent the courts from so holding. Diller72 is, of course, wrong about the taxability of inalienable rights.

[grammarian44]

FOR THE RECORD (again), neither Hendrickson nor myself nor any other serious student of CtC would ever proclaim that the Section 7701 definition of "includes" should be interpreted to limit what is embraced by the subject of a dependent definition to only the item or items listed in the latter's definitional predicate. What we DO say is that in order to differentiate which other items CAN be embraced by the dependent definition from the REST OF THE KNOWN AND UNKNOWN COSMOS, some boundary MUST exist and that boundary MUST be inferable from the nature of the explicit example item or items in that definition.

Translation: There is no such thing as a non-exclusive list. OR: If you look closely enough at any purported non-exclusive list, you will find that it is "really" exclusive after all, even if the drafters of the list fully intended it to be non-exclusive.

Let's suppose language really worked that way.

A child asks its parent, "What is a cat?" The parent responds, "See that thing over there? That is a cat." The single example of a cat is nothing more than a non-exclusive list.

According to diller72, it must be possible for the child to infer from that single example of a cat the very essence of "catness," so that from that point on, the child will be able to distinguish true cats from everything in the universe that is not a cat.

But in real life language doesn't work that way. Suppose the parent points to Demo's avatar and says, "That is a cat." It's a perfectly true statment. But next time a cat without a melon on its head walks up to the child, the child is likely to think it must be some creature other than a cat. That's not a result of a mistaken inference; it's just the way the process of learning language works. None of us is able to grasp the essence of a thing (assuming things really have essences) from looking at a single example.

diller72's problem is not merely that s/he doesn't understand the legal meaning of the word "include." The real problem has nothing to do with the law. The real problem is that language cannot work the way diller72 expects it to.

[LPC]

FOR THE RECORD (again), neither Hendrickson nor myself nor any other serious student of CtC would ever proclaim that the Section 7701 definition of "includes" should be interpreted to limit what is embraced by the subject of a dependent definition to only the item or items listed in the latter's definitional predicate. What we DO say is that in order to differentiate which other items CAN be embraced by the dependent definition from the REST OF THE KNOWN AND UNKNOWN COSMOS, some boundary MUST exist and that boundary MUST be inferable from the nature of the explicit example item or items in that definition.

Translation: There is no such thing as a non-exclusive list. OR: If you look closely enough at any purported non-exclusive list, you will find that it is "really" exclusive after all, even if the drafters of the list fully intended it to be non-exclusive.

Let's suppose language really worked that way.

A child asks its parent, "What is a cat?" The parent responds, "See that thing over there? That is a cat." The single example of a cat is nothing more than a non-exclusive list.

According to diller72, it must be possible for the child to infer from that single example of a cat the very essence of "catness," so that from that point on, the child will be able to distinguish true cats from everything in the universe that is not a cat.

But in real life language doesn't work that way. Suppose the parent points to Demo's avatar and says, "That is a cat." It's a perfectly true statment. But next time a cat without a melon on its head walks up to the child, the child is likely to think it must be some creature other than a cat. That's not a result of a mistaken inference; it's just the way the process of learning language works. None of us is able to grasp the essence of a thing (assuming things really have essences) from looking at a single example.

diller72's problem is not merely that s/he doesn't understand the legal meaning of the word "include." The real problem has nothing to do with the law. The real problem is that language cannot work the way diller72 expects it to.

What you are describing is what I would call inductive reasoning (or inductive learning), and although it is true that most of our early and most elemental learning is by induction, I don't know that language must always work by induction. We can use language to deduce meanings as well as induce meanings, so Diller's problem is not necessarily with the nature of language (although he certainly has problems with both semantics and rhetoric).

I would say that Diller (and most other tax deniers who can't understand the meaning of "includes") suffer from two conceptual deficits:

1. They can't understand that all words must be defined by using other words, and language is inherently recursive because it is impossible to define every word without some circularity. Sometimes the circularity is obvious. You go to a dictionary to find the meaning of "worker" and find the synonym "employee" and then look up "employee" to find the synonym "worker." Other times the circularity is implicit. But the fact still remains that not every word in a statute can be defined without the list of definitions going to infinity.

So, for example, tax deniers constantly whine that the IRC does not define "income." But IRC section 61(a) specifically states that "gross income" includes "compensation for services." Any tax denier that concedes the relevance of section 61 immediately goes on to dispute the meaning of "compensation" and "services." But any definition of "compensation" or "services" would use other words that are themselves undefined by statute, and so the demand that every word be defined leads to a stream of definitions without end.

2. They don't understand that legislatures often don't want to have to redefine words, but want to rely on well-understood and well-established meanings for words. For example, the concept of "employee" is important to tort law, because the employer is responsible for the actions of an employee but not an independent contractor, and so a body of case law has developed over hundreds of years to establish standards for who is (or is not) an employee. Rather than attempt to restate those principles in defining who would be subject to withholding on wages, Congress simply used the word "employee" but added a couple of types of relationships that that are not usually within the meaning of "employee" but that Congress wanted to be subject to withholding: corporate officers and elected officials. So the "definition" in section 3401(c) uses the word "includes," by which Congress meant that the word "employee" means what you would expect the word to mean, and also corporate officers and elected officials.

Diller believes (or at least claims to believe) that "what you would expect the word to mean" opens the possible meaning to "rest of the known and unknown cosmos," and yet the sky has not fallen. IRS officials and judges both have some common sense, and can understand the English language, and can understand that the word "employee" does not include business partners, paramours, cousin, neighbors, or other things that are obviously not "employees" within the usual meaning of the word.

[Famspear]

Earlier, diller72 wrote:

So, despite the common connotations of 'trade' and 'business', someone who is unlicensed by the federal government and is performing work [for which no federal licensing or special clearance is required or involved] in exchange for payment under a project-specific or piecework contract with a private-sector company in a Union state has in such an instance no possible "trade or business" connection. Therefore, the payer should not be issuing a return (1099-MISC) purporting that payments were made to the payee in the course of a "trade or business", which in essence also is tantamount to making the fraudulent claim (were it witting and willful) that the private company is operating as an official arm of the federal government.)

Diller, I have previously made the point that the term "trade or business" is not limited to activities related to the federal government.

I would like to make a more fundamental point. Diller, I'm not sure whether you were implying that some sort of connection to a "trade or business" is somehow required in order for income to be taxable. So, whether you were trying to do that or not, I'll just state for the record: There is no legal requirement that either the payor or the payee be engaged in (or connected to) a "trade or business" in order for the payee's income to be included in "gross income" of the payee under Internal Revenue Code section 61.

Stated another way: "Gross income" under section 61 is not limited to income realized in connection with a "trade or business."

For example, as alluded to by another editor above (LPC, I think), theft in the form of embezzlement is a taxable event to the wrongdoer, even if (as is generally and obviously the case) the wrongdoer is legally required to return the money to its rightful owner. See the U.S. Supreme Court decision in James v. United States, 366 U.S. 213 (1961). Under the James doctrine, there is absolutely no requirement that either the wrongdoer or the victim be engaged in a "trade or business" in order for the federal income tax to be validly imposed on the wrongdoer's receipt of the embezzled funds.

See also Rutkin v. United States, 343 U.S. 130 (1952): a wrongdoer extorting money is required to report the receipt of the extorted money as income for federal income tax purposes. Again, there is no requirement that either the wrongdoer or the victim be engaged in or connected to a "trade or business."

And, as I believe LPC stated, I would reiterate the separate point that there is no "privilege" (federal or otherwise) to either embezzle or extort. There is no requirement that for income to be taxable, it must somehow be connected with a federal "privilege" or any other kind of "privilege."

[Leftcoaster]

On a more pedestrian note, gambling winnings are fully taxable, whether won in Las Vegas on dollar slots, or a scratch-off ticket purchased at the local 7-11.

But not in Canada, unless you are a professional gambler.

[webhick]

On a more pedestrian note, gambling winnings are fully taxable, whether won in Las Vegas on dollar slots, or a scratch-off ticket purchased at the local 7-11.

But not in Canada, unless you are a professional gambler.

In which case you can probably get away with deducting mileage and refreshments for those gambler's anonymous meetings. But you may have a hard time getting someone there to sign off on the receipts.

[grixit]

Hey Diller: forget terms like "wages", "income", "derived from", "received", etc. If you did something, and got paid for it, you owe tax.

[Quixote]

I would like to make a more fundamental point. Diller, I'm not sure whether you were implying that some sort of connection to a "trade or business" is somehow required in order for income to be taxable.

In his first substantive post, Diller72 stated, inter alia (gotta toss in the occasional Latin phrase to keep my illuminatti street cred)

...

3. Income taxes are therefore indirect taxes, and within that class they are neither imposts nor duties.

4. Income taxes are therefore excise taxes.

5. Excise taxes are synonymous with privilege taxes.

....

The voluminous verbiage following point 5 appears to stem from Diller72's confusion on that point. I have pointed out that points 4 and 5 are logically inconsistent. Others have noted that point 5 is contrary to any number of Supreme Court holdings stretching back to 1830. 3 and 4 are questionable, but harmless in the absence of the stupendously erroneous point 5.

I see little benefit in addressing the myriad errors in the details of Diller72's argument when his fundamental premise is so very, very wrong.

[Dezcad]

Neither diller nor any CTC person has shown any success under 26 USC 7434.

If the CTC'ers are the victims of false information returns (as they claim to be since they rebut the information returns), then they should all be able to get civil damages from the issuer of the false information returns.

Why doesn't chief Crackhead Pete sue the issuers of the information returns filed for him? Why doesn't he advise any the CTC'ers to do so?

Those are questions that CTC'ers should be asking Petey.

[Quixote]

Neither diller nor any CTC person has shown any success under 26 USC 7434.

If the CTC'ers are the victims of false information returns (as they claim to be since they rebut the information returns), then they should all be able to get civil damages from the issuer of the false information returns.

Why doesn't chief Crackhead Pete sue the issuers of the information returns filed for him? Why doesn't he advise any the CTC'ers to do so?

Those are questions that CTC'ers should be asking Petey.

Isn't such a suit part of Diller72's brilliant plan? You know, the one in which they need to find an employer who will take a dive.

[Gregg]

What I wanna know is when is one of them going to be indicted, prosecuted and convicted for fraud for trying to rebut the information returns with false statements. Aren't they real big on "under penalty of perjury" statements? I say fine, let's prosecute a few for perjury, after all, lying under oath or on a jurat is just that.