That's why I'm confused because 26 USCS Sec. 61 broadly defines "gross income," which is the starting point in calculating the personal income tax as including "[c]ompensation for services, including fees, commissions, fringe benefits, and similar items." Seems pretty clear to me that a person has to pay income tax on compensation received for services rendered. What am I missing?
The word "income", as it is defined in relation to a business, is pounced upon by some as not being relevant to personal wages. It's clear this particular meaning is to be used only pertaining to a business. Many individuals have tried and failed to use this strategy to avoid personal income taxes.
Individual income is determined by the statute you posted, according to all the rulings I've seen. The courts still think wages are income inspite of the best efforts of many tax protestors.