Posted on 01/18/2003 12:42:39 AM PST by Uncle Bill
If the 861 argument had a factual basis, the appellate level would rule in its favor. Then Congress would rewrite the section and that would be the end of it.
There actually is no reason to believe otherwise. Judges income is not dependent upon the kind of tax in existence, judges do not like income taxes anymore than anyone else, and judges would be more than happy to be rid of dealing with folks like yourselves. Unfortunately for TP'rs, most judges do indeed have some degree of integrity in spite of TP rumors to the contrary and are not about to change law for the mere sake of not liking it.
Changing law belongs to Congress.
Of course not. If you did, all of the cut and paste off-point precedent would be worthless. None of the cases you post have anythng to do with the sources argument. You don't know that because you haven't studied it.
I think it's reasonable to ask of one who comes out against a position to study the position so that he know what it is before he posts against it.
If the 861 argument had a factual basis, the appellate level would rule in its favor. Then Congress would rewrite the section and that would be the end of it.
It's not the "861 argument"; it's the sources argument. 861 is just a part of the whole. You don't know that because you haven't read it.
Judges income is not dependent upon the kind of tax in existence, judges do not like income taxes anymore than anyone else, and judges would be more than happy to be rid of dealing with folks like yourselves.
Who pays federal judges and from what source?
Unfortunately for TP'rs, most judges do indeed have some degree of integrity in spite of TP rumors to the contrary and are not about to change law for the mere sake of not liking it.
Then why has not one judge examined the sources argument and pointed in judicial opinion where the argument fails? Yet, when any other of the old arguments are presented, even for the umpteenth time, they take great pains to detail the flaws in those.
Why is that? Your cynicism of people and you trust of government is touching, but frightening. It should be the other way 'round.
I think it's reasonable to ask of one who comes out against a position to study the position so that he know what it is before he posts against it.
I know whats in it, that it has no basis in common sense, the Constitutional authority of Congress, or the intent of Congress. That is more than sufficient. You have yet to show otherwise. You make assertions with no basis and that is all your "sources" argument is.
Who pays federal judges and from what source?
The Treasury from general revenues, with debt paper if necessary; fees, tarriffs, specific excises, duties, .... Take your pick. The income tax is not necessary to the payment of judges. Payment of judges is guaranteed before all other expenses of government, by Article III of the Constitution.
It's not the "861 argument"; it's the sources argument. 861 is just a part of the whole. You don't know that because you haven't read it.
Whatever you want to call it. Subchapter 'N' argument is another name for it. It's been around for quite awhile, and nothing new in it.
Then why has not one judge examined the sources argument and pointed in judicial opinion where the argument fails?
None of your "losers" have chosen to take their case to the appellate level, to the law as opposed to the facts as applied to statute in the lower court. The low court goes by overturning precident or presumption of the law's validity lacking such precident from a higher court. Lowest level courts may only apply statute and law in existence they cannot hear cases concerning the law itself. If you want a win in a test at law, you appeal, otherwise lose for not carrying the case forward.
As far a "sources" legal argument Meyers v CBOE is the appellate answer to overcome.
(pdf document) 2001 SBE 001, pages 8-11:
"Income “Sources.” Appellant’s primary contention relies on his misapplication of IRC section 861 and its implementing regulations (most specifically, Treasury Regulation section (Regulation) 1.861-8(f)(1)). Appellant contends that “gross income” (apparently for both federal and state tax purposes) is limited to income from an obscure list of “operative sections” listed in Regulation 1.861-8(f)(1). This contention is groundless and frivolous. To better understand this contention we will briefly review a few IRC sections and regulations. California Revenue and Taxation Code (R&TC) section 17071 defines “gross income” by reference to IRC section 61 “except as otherwise provided.” Section 61 defines “gross income” as follows:
“Except as otherwise provided in this subtitle [Subtitle A—Income Taxes], gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust.”(Emphasis added.)
For federal purposes, IRC section 1 imposes a tax on the taxable income of every individual who is a citizen or resident alien of the United States. One of its implementing regulations provides, in part, as follows:
“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. . . . As to tax on nonresident alien individuals, see sections 871 and 877.”
(Treas. Reg. § 1.1-1(b); emphasis added.) Thus, for a citizen or a resident alien it will normally not matter whether a source of income is from within the United States or without—since both are subject to the federal income tax unless specifically provided elsewhere in the code (such as the “foreign earned income” discussed above).
Nonresident aliens and foreign corporations have special provisions for federal income tax purposes. For example, IRC section 871 imposes “a tax of 30 percent of the amount received from sources within the United States by a nonresident alien individual . . . [on income other than capital gains].” (Emphasis added.) One of the implementing regulations for IRC section 871 provides, in part, as follows:
“For purposes of the income tax, alien individuals are divided generally into two classes, namely, resident aliens and nonresident aliens. Resident alien individuals are, in general, taxable the same as citizens of the United States; that is, a resident alien is taxable on income derived from all sources, including sources without the United States.”
(Treas. Reg. § 1.871-1(a); emphasis added.) Once again, it is clear that citizens and resident aliens are taxable on income from all sources, both within and without the United States.
For some purposes (such as taxing the income of nonresident alien individuals and foreign corporations), it is necessary to know whether a source of income is from within or without the United States. (See Int.Rev. Code, § 871, supra.) IRC sections 861 through 865, together with their implementing regulations, provide the bases for making this determination— for federal income tax purposes. IRC section 861 provides the criteria for determining which portions of various income items are from “sources” within the United States, and IRC section 862 does the same for “sources” of income without the United States. (IRC sections 863–865 provide additional rules—including for the apportionment and allocation of income to sources within or without the United States.)
The regulations under IRC section 861 assist in determining whether income is from a source within or without the United States—including situations where income comes partly from within and partly from without the United States—and where it is necessary to allocate and apportion deductions. It is here that appellant makes his primary error. Appellant completely misapplies Regulation 1.861-8, subsections (a)(1) and (f)(1). He concludes that these relatively obscure portions of the regulations suddenly change the whole definition of taxable income for citizens and resident aliens to include only income from the list of “operative sections” in subsection (f)(1) of this regulation. This defies logic and the clear purpose of IRC section 861. Subsection (a)(1) of the regulation states that it applies to the determination of taxable income “from specific sources and activities under other sections of the Code, referred to in this section as operative sections.” The list of “operative sections” in subdivision (f)(1) does not include IRC sections 61 and 63. Therefore, rather than limiting either “gross income” under section 61 or “taxable income” under section 63, this regulation has only the very limited application defined therein. Indeed, Regulation 1.861-8(g) provides a number of examples of how section 861 should be applied. (See Treas. Reg. § 1.861-8(g), examples 17-22 and 25-33.) These examples show how to determine whether an item of income (sometimes in very complex factual situations) is from a source within or without the United States. Sometimes the examples use terms such as “domestic” or “U.S.” source, or “foreign” source, instead of “within” or “without.” But they all clearly apply only to the determination of whether an item of income is from “within” or “without” the United States.
As well as the wording of Section 861 itself in context of the whole statute:
26 USC 7805(a) Rules and regulations
(a) Authorization - … the Secretary [of the Treasury] shall prescribe all needful rules and regulations for the enforcement of this title [Title 26]…" [26 USC § 7805]
Thus under amplifying Treasury regulations for 26 USC 1, 26 CFR 1.1-1(a),(b)
Sec. 1.1-1 Income tax on individuals.
(a) General rule. (1) Section 1 of the Code imposes an income tax on the income of every individual who is a citizen or resident of the United States and, to the extent provided by section 871(b) or 877(b), on the income of a nonresident alien individual.(b) Citizens or residents of the United States liable to tax. 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.
And in Regard to 26 USC 861
861. Income from sources within the United States
(a) Gross income from sources(activities) within United States
The following items of gross income shall be treated as
income from sources within the United States:(3) Personal services
Compensation for labor or personal services performed in the United States;EXCEPT that compensation for labor or services
performed in the United States shall not be deemed to be income
from sources within the United States if -(A) the labor or services are performed by a nonresident
alien individual temporarily present in the United States ..."
Yet, when any other of the old arguments are presented, even for the umpteenth time, they take great pains to detail the flaws in those.
The lower courts do not take any time on those either. What is to be said is said at the Appellate and Supreme Court level where the test is of the law. If you don't make an appeal of a low court's ruling, guess what, you don't get answers.
To win at law, you have to lose the factual case in the low court first then test the law on appeal. That is the lesson most folks never understand and fail to carry forward.
In the end analysis only the Supreme Court has the final say, or appellate if the SC lets the ruling stand by denying cert.
Your cynicism of people and you trust of government is touching, but frightening.
Only to someone who is stretching reality to fit their personal agenda.
It should be the other way 'round.
Trust but verify is the rule to be followed. Anything else is anarchy.
Your argument has no Constitutional basis, no common sense basis, and no basis in the courts where such matters are generally resolved. You certainly are no authority, nor control the outcome of court decisions. Who are you that I should pay the least attention to over my own capacity of independant research.
Why is that?
The bottomline of what is a risk when one cannot provide a defense to the Court's satisfaction.
26 USC 5761.
CIVIL PENALTIES
(b) FAILURE TO PAY TAX
Whoever fails to pay any tax imposed by this chapter at the time prescribed by law or regulations, shall, in addition to any other penalty provided in this title, be liable to a penalty of 5 percent of the tax due but unpaid.26 USC 7203.
WILLFUL FAILURE TO FILE RETURN, SUPPLY INFORMATION, OR PAY TAX
Any person required under this title[26] to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution. In the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under section 6654 or 6655 with respect to such failure. In the case of a willful violation of any provision of section 6050I, the first sentence of this section shall be applied by substituting "felony" for "misdemeanor" and "5 years" for "1 year"
Your cynicism of people and you trust of government is touching, but frightening. It should be the other way 'round.
Amazing that tax law is one of the few professions that a claim of no training, education or experience suffices as authority to tell others about their tax liability. I hope you don't look at brain surgery the same way.
The credentials of Larkin Rose, by his own admission, who you direct us to as an authority on tax matters:
| http://www.taxableincome.net/about/aboutauthor.html |
| “Who is this Larken Rose guy, anyway?” Larken Rose is a not a lawyer. He has never received formal training in tax law, or any other kind of law. He has no special degrees or credentials regarding tax law. He earns his living in a business unrelated to tax law. “So why should I take his word for anything?” You shouldn’t. |
Are yours any better? How is it that anyone should rely on your or the Rose analysis without independant look at the documents, history and rulings that actually control the outcome of tax cases?
I'll go by my findings, you go by yours thank you very much.
But you don't know because you haven't studied it. All you have is a theory of what it says, which, if the cases you cite are any indication, is incorrect.
The short answer, of course, is that anyone can read and think. The correct evaluation of any treatise is the truth or falsity therein tested against reality, not against a degree from an academic institution.
If opinions fail because lack of formal training, your's fail for the same reason.
Thank you for admitting that the courts have not taken up the sources argument.
LOL, TP'rs give up after a loss at the Tax Court, and the "Courts"? haven't taken up the sources argument. The usual claim of TP victory I see:
"William T. Conklin claims to be successful in fighting the IRS, and has described himself as a "known tax protester like Jesus Christ, Thomas Jefferson, Benjamin Franklin and George Washington." Conklin v. United States, KTC 1994-259, Case No. 89-N-1514 (D. Col. 1994). Unfortunately, his claims of success are contradicted by the public record, because he has lost every case on record. See, e.g., Conklin v. Commissioner, 91 T.C. 41 (1988); Church of World Peace, Inc. v. Commissioner, T.C. Memo 1992-318; Church of World Peace, Inc. v. Commissioner, T.C. Memo 1994-87.
Cases claimed as wins by William T. Conklin:
Church of World Peace, Inc. v IRS, 715 F.2d 492
United States v. Church of World Peace, 775 F.2d 265
Conklin v. United States, 812 F.2d 1318
Conklin v. C.I.R., 897 F.2d 1032
Tavery v. United States, 897 F.2d 1027
Tavery v. United States, Civ. No. 87-Z-180, USDC Colorado "
No my friend, the Courts have had their say. You have not supported your argument because it is insupportable.
The courts have had their say, it is up to you to meet the challenge which you have not and will never do
Appellate ruling as regards sources:
Great-West Life Assur. Co. v. United States, 678 F.2d 180, 183 (Ct. Cl. 1982)
– the court stated that “[t]he determination of where income is derived or ‘sourced’ is generally of no moment to either United States citizens or United States corporations, for such persons are subject to tax under I.R.and I.R.C. § 11, respectively, on their worldwide income.”
Tax Court rulings:
Williams v. Commissioner, 114 T.C. 136, 138 (2000) – the court rejected the taxpayer’s argument that his income was not from any of the sources listed in Treas. Reg. § 1.861-8(a), characterizing it as “reminiscent of tax-protester rhetoric that has been universally rejected by this and other courts.”
Corcoran v. Commissioner, T.C. Memo. 2002-18, 83 T.C.M. (CCH) 1108, 1110 (2002) – the court rejected the taxpayers’ argument that his income was not from any of the sources in Treas. Reg. § 1.861-8(f), stating that the “source rules [of sections 861 through 865] do not exclude from U.S. taxation income earned by U.S. citizens from sources within the United States.” The court further required the taxpayers to pay a $2,000 penalty under section 6673(a)(1) because “they . . . wasted limited judicial and administrative resources.”
Aiello v. Commissioner, T.C. Memo. 1995-40, 69 T.C.M. (CCH) 1765 (1995) – the court rejected the taxpayer’s argument that the only sources of income for purposes of section 61 are listed in section 861.
Madge v. Commissioner, T.C. Memo. 2000-370, 80 T.C.M. (CCH) 804 (2000) – the court labeled as “frivolous” the position that only foreign income is taxable.
Solomon v. Commissioner, T.C. Memo. 1993-509, 66 T.C.M. (CCH) 1201, 1202 (1993) – the court rejected the taxpayer’s argument that his income was exempt from tax by operation of sections 861 and 911, noting that he had no foreign income and that section 861 provides that “compensation for labor or personal services performed in the United States . . . are items of gross income.”
As regards "sources" argument Meyers v CBOE stands as the representation of the Court's response for you to argue against at your turn on the docket.
(pdf document) 2001 SBE 001, pages 8-11:
"Income “Sources.” Appellant’s primary contention relies on his misapplication of IRC section 861 and its implementing regulations (most specifically, Treasury Regulation section (Regulation) 1.861-8(f)(1)). Appellant contends that “gross income” (apparently for both federal and state tax purposes) is limited to income from an obscure list of “operative sections” listed in Regulation 1.861-8(f)(1). This contention is groundless and frivolous. To better understand this contention we will briefly review a few IRC sections and regulations. California Revenue and Taxation Code (R&TC) section 17071 defines “gross income” by reference to IRC section 61 “except as otherwise provided.” Section 61 defines “gross income” as follows:
“Except as otherwise provided in this subtitle [Subtitle A—Income Taxes], gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust.”(Emphasis added.)
For federal purposes, IRC section 1 imposes a tax on the taxable income of every individual who is a citizen or resident alien of the United States. One of its implementing regulations provides, in part, as follows:
“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. . . . As to tax on nonresident alien individuals, see sections 871 and 877.”
(Treas. Reg. § 1.1-1(b); emphasis added.) Thus, for a citizen or a resident alien it will normally not matter whether a source of income is from within the United States or without—since both are subject to the federal income tax unless specifically provided elsewhere in the code (such as the “foreign earned income” discussed above).
Nonresident aliens and foreign corporations have special provisions for federal income tax purposes. For example, IRC section 871 imposes “a tax of 30 percent of the amount received from sources within the United States by a nonresident alien individual . . . [on income other than capital gains].” (Emphasis added.) One of the implementing regulations for IRC section 871 provides, in part, as follows:
“For purposes of the income tax, alien individuals are divided generally into two classes, namely, resident aliens and nonresident aliens. Resident alien individuals are, in general, taxable the same as citizens of the United States; that is, a resident alien is taxable on income derived from all sources, including sources without the United States.”
(Treas. Reg. § 1.871-1(a); emphasis added.) Once again, it is clear that citizens and resident aliens are taxable on income from all sources, both within and without the United States.
For some purposes (such as taxing the income of nonresident alien individuals and foreign corporations), it is necessary to know whether a source of income is from within or without the United States. (See Int.Rev. Code, § 871, supra.) IRC sections 861 through 865, together with their implementing regulations, provide the bases for making this determination— for federal income tax purposes. IRC section 861 provides the criteria for determining which portions of various income items are from “sources” within the United States, and IRC section 862 does the same for “sources” of income without the United States. (IRC sections 863–865 provide additional rules—including for the apportionment and allocation of income to sources within or without the United States.)
The regulations under IRC section 861 assist in determining whether income is from a source within or without the United States—including situations where income comes partly from within and partly from without the United States—and where it is necessary to allocate and apportion deductions. It is here that appellant makes his primary error. Appellant completely misapplies Regulation 1.861-8, subsections (a)(1) and (f)(1). He concludes that these relatively obscure portions of the regulations suddenly change the whole definition of taxable income for citizens and resident aliens to include only income from the list of “operative sections” in subsection (f)(1) of this regulation. This defies logic and the clear purpose of IRC section 861. Subsection (a)(1) of the regulation states that it applies to the determination of taxable income “from specific sources and activities under other sections of the Code, referred to in this section as operative sections.” The list of “operative sections” in subdivision (f)(1) does not include IRC sections 61 and 63. Therefore, rather than limiting either “gross income” under section 61 or “taxable income” under section 63, this regulation has only the very limited application defined therein. Indeed, Regulation 1.861-8(g) provides a number of examples of how section 861 should be applied. (See Treas. Reg. § 1.861-8(g), examples 17-22 and 25-33.) These examples show how to determine whether an item of income (sometimes in very complex factual situations) is from a source within or without the United States. Sometimes the examples use terms such as “domestic” or “U.S.” source, or “foreign” source, instead of “within” or “without.” But they all clearly apply only to the determination of whether an item of income is from “within” or “without” the United States.
All you have is a theory of what it says, which, if the cases you cite are any indication, is incorrect.
ROTFLM(_|_)O, the proof is in the pudding. No wins in the courtroom for you, and amazingly it manages to get there in spite of you claims that it should never do so.
Appellate ruling as regards sources:
Great-West Life Assur. Co. v. United States, 678 F.2d 180, 183 (Ct. Cl. 1982)
– the court stated that “[t]he determination of where income is derived or ‘sourced’ is generally of no moment to either United States citizens or United States corporations, for such persons are subject to tax under I.R.and I.R.C. § 11, respectively, on their worldwide income.”
Tax Court rulings:
Williams v. Commissioner, 114 T.C. 136, 138 (2000) – the court rejected the taxpayer’s argument that his income was not from any of the sources listed in Treas. Reg. § 1.861-8(a), characterizing it as “reminiscent of tax-protester rhetoric that has been universally rejected by this and other courts.”
Corcoran v. Commissioner, T.C. Memo. 2002-18, 83 T.C.M. (CCH) 1108, 1110 (2002) – the court rejected the taxpayers’ argument that his income was not from any of the sources in Treas. Reg. § 1.861-8(f), stating that the “source rules [of sections 861 through 865] do not exclude from U.S. taxation income earned by U.S. citizens from sources within the United States.” The court further required the taxpayers to pay a $2,000 penalty under section 6673(a)(1) because “they . . . wasted limited judicial and administrative resources.”
Aiello v. Commissioner, T.C. Memo. 1995-40, 69 T.C.M. (CCH) 1765 (1995) – the court rejected the taxpayer’s argument that the only sources of income for purposes of section 61 are listed in section 861.
Madge v. Commissioner, T.C. Memo. 2000-370, 80 T.C.M. (CCH) 804 (2000) – the court labeled as “frivolous” the position that only foreign income is taxable.
Solomon v. Commissioner, T.C. Memo. 1993-509, 66 T.C.M. (CCH) 1201, 1202 (1993) – the court rejected the taxpayer’s argument that his income was exempt from tax by operation of sections 861 and 911, noting that he had no foreign income and that section 861 provides that “compensation for labor or personal services performed in the United States . . . are items of gross income.”
As regards "sources" argument Meyers v CBOE stands as the representation of the Court's response for you to argue against at your turn on the docket.
(pdf document) 2001 SBE 001, pages 8-11:
"Income “Sources.” Appellant’s primary contention relies on his misapplication of IRC section 861 and its implementing regulations (most specifically, Treasury Regulation section (Regulation) 1.861-8(f)(1)). Appellant contends that “gross income” (apparently for both federal and state tax purposes) is limited to income from an obscure list of “operative sections” listed in Regulation 1.861-8(f)(1). This contention is groundless and frivolous. To better understand this contention we will briefly review a few IRC sections and regulations. California Revenue and Taxation Code (R&TC) section 17071 defines “gross income” by reference to IRC section 61 “except as otherwise provided.” Section 61 defines “gross income” as follows:
“Except as otherwise provided in this subtitle [Subtitle A—Income Taxes], gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust.”(Emphasis added.)
For federal purposes, IRC section 1 imposes a tax on the taxable income of every individual who is a citizen or resident alien of the United States. One of its implementing regulations provides, in part, as follows:
“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. . . . As to tax on nonresident alien individuals, see sections 871 and 877.”
(Treas. Reg. § 1.1-1(b); emphasis added.) Thus, for a citizen or a resident alien it will normally not matter whether a source of income is from within the United States or without—since both are subject to the federal income tax unless specifically provided elsewhere in the code (such as the “foreign earned income” discussed above).
Nonresident aliens and foreign corporations have special provisions for federal income tax purposes. For example, IRC section 871 imposes “a tax of 30 percent of the amount received from sources within the United States by a nonresident alien individual . . . [on income other than capital gains].” (Emphasis added.) One of the implementing regulations for IRC section 871 provides, in part, as follows:
“For purposes of the income tax, alien individuals are divided generally into two classes, namely, resident aliens and nonresident aliens. Resident alien individuals are, in general, taxable the same as citizens of the United States; that is, a resident alien is taxable on income derived from all sources, including sources without the United States.”
(Treas. Reg. § 1.871-1(a); emphasis added.) Once again, it is clear that citizens and resident aliens are taxable on income from all sources, both within and without the United States.
For some purposes (such as taxing the income of nonresident alien individuals and foreign corporations), it is necessary to know whether a source of income is from within or without the United States. (See Int.Rev. Code, § 871, supra.) IRC sections 861 through 865, together with their implementing regulations, provide the bases for making this determination— for federal income tax purposes. IRC section 861 provides the criteria for determining which portions of various income items are from “sources” within the United States, and IRC section 862 does the same for “sources” of income without the United States. (IRC sections 863–865 provide additional rules—including for the apportionment and allocation of income to sources within or without the United States.)
The regulations under IRC section 861 assist in determining whether income is from a source within or without the United States—including situations where income comes partly from within and partly from without the United States—and where it is necessary to allocate and apportion deductions. It is here that appellant makes his primary error. Appellant completely misapplies Regulation 1.861-8, subsections (a)(1) and (f)(1). He concludes that these relatively obscure portions of the regulations suddenly change the whole definition of taxable income for citizens and resident aliens to include only income from the list of “operative sections” in subsection (f)(1) of this regulation. This defies logic and the clear purpose of IRC section 861. Subsection (a)(1) of the regulation states that it applies to the determination of taxable income “from specific sources and activities under other sections of the Code, referred to in this section as operative sections.” The list of “operative sections” in subdivision (f)(1) does not include IRC sections 61 and 63. Therefore, rather than limiting either “gross income” under section 61 or “taxable income” under section 63, this regulation has only the very limited application defined therein. Indeed, Regulation 1.861-8(g) provides a number of examples of how section 861 should be applied. (See Treas. Reg. § 1.861-8(g), examples 17-22 and 25-33.) These examples show how to determine whether an item of income (sometimes in very complex factual situations) is from a source within or without the United States. Sometimes the examples use terms such as “domestic” or “U.S.” source, or “foreign” source, instead of “within” or “without.” But they all clearly apply only to the determination of whether an item of income is from “within” or “without” the United States.
The correct evaluation of any treatise is the truth or falsity therein tested against reality, not against a degree from an academic institution.
The issue at bar resolves around false & misleading commercial speech of Thurston Bell as regards the source argument. That is the test of reality.
Mash Here >>> [ http://www.nite.org/ ] for the court order, displayed in compliance with that order.
Then there are the other cases as well. The "Sources" argument lacks for failing the "truth of falsity" test against reality.
Appellate ruling as regards sources argument:
Great-West Life Assur. Co. v. United States, 678 F.2d 180, 183 (Ct. Cl. 1982)
– the court stated that “[t]he determination of where income is derived or ‘sourced’ is generally of no moment to either United States citizens or United States corporations, for such persons are subject to tax under I.R.and I.R.C. § 11, respectively, on their worldwide income.”
A few Tax Court rulings against "Sources" argument:
Williams v. Commissioner, 114 T.C. 136, 138 (2000) – the court rejected the taxpayer’s argument that his income was not from any of the sources listed in Treas. Reg. § 1.861-8(a), characterizing it as “reminiscent of tax-protester rhetoric that has been universally rejected by this and other courts.”
Corcoran v. Commissioner, T.C. Memo. 2002-18, 83 T.C.M. (CCH) 1108, 1110 (2002) – the court rejected the taxpayers’ argument that his income was not from any of the sources in Treas. Reg. § 1.861-8(f), stating that the “source rules [of sections 861 through 865] do not exclude from U.S. taxation income earned by U.S. citizens from sources within the United States.” The court further required the taxpayers to pay a $2,000 penalty under section 6673(a)(1) because “they . . . wasted limited judicial and administrative resources.”
Aiello v. Commissioner, T.C. Memo. 1995-40, 69 T.C.M. (CCH) 1765 (1995) – the court rejected the taxpayer’s argument that the only sources of income for purposes of section 61 are listed in section 861.
Madge v. Commissioner, T.C. Memo. 2000-370, 80 T.C.M. (CCH) 804 (2000) – the court labeled as “frivolous” the position that only foreign income is taxable.
Solomon v. Commissioner, T.C. Memo. 1993-509, 66 T.C.M. (CCH) 1201, 1202 (1993) – the court rejected the taxpayer’s argument that his income was exempt from tax by operation of sections 861 and 911, noting that he had no foreign income and that section 861 provides that “compensation for labor or personal services performed in the United States . . . are items of gross income.”
As regards "sources" argument Meyers v CBOE stands as the representation of the Court's response for you to argue against at your turn on the docket.
(pdf document) 2001 SBE 001, pages 8-11:
"Income “Sources.” Appellant’s primary contention relies on his misapplication of IRC section 861 and its implementing regulations (most specifically, Treasury Regulation section (Regulation) 1.861-8(f)(1)). Appellant contends that “gross income” (apparently for both federal and state tax purposes) is limited to income from an obscure list of “operative sections” listed in Regulation 1.861-8(f)(1). This contention is groundless and frivolous. To better understand this contention we will briefly review a few IRC sections and regulations. California Revenue and Taxation Code (R&TC) section 17071 defines “gross income” by reference to IRC section 61 “except as otherwise provided.” Section 61 defines “gross income” as follows:
“Except as otherwise provided in this subtitle [Subtitle A—Income Taxes], gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust.”(Emphasis added.)
For federal purposes, IRC section 1 imposes a tax on the taxable income of every individual who is a citizen or resident alien of the United States. One of its implementing regulations provides, in part, as follows:
“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. . . . As to tax on nonresident alien individuals, see sections 871 and 877.”
(Treas. Reg. § 1.1-1(b); emphasis added.) Thus, for a citizen or a resident alien it will normally not matter whether a source of income is from within the United States or without—since both are subject to the federal income tax unless specifically provided elsewhere in the code (such as the “foreign earned income” discussed above).
Nonresident aliens and foreign corporations have special provisions for federal income tax purposes. For example, IRC section 871 imposes “a tax of 30 percent of the amount received from sources within the United States by a nonresident alien individual . . . [on income other than capital gains].” (Emphasis added.) One of the implementing regulations for IRC section 871 provides, in part, as follows:
“For purposes of the income tax, alien individuals are divided generally into two classes, namely, resident aliens and nonresident aliens. Resident alien individuals are, in general, taxable the same as citizens of the United States; that is, a resident alien is taxable on income derived from all sources, including sources without the United States.”
(Treas. Reg. § 1.871-1(a); emphasis added.) Once again, it is clear that citizens and resident aliens are taxable on income from all sources, both within and without the United States.
For some purposes (such as taxing the income of nonresident alien individuals and foreign corporations), it is necessary to know whether a source of income is from within or without the United States. (See Int.Rev. Code, § 871, supra.) IRC sections 861 through 865, together with their implementing regulations, provide the bases for making this determination— for federal income tax purposes. IRC section 861 provides the criteria for determining which portions of various income items are from “sources” within the United States, and IRC section 862 does the same for “sources” of income without the United States. (IRC sections 863–865 provide additional rules—including for the apportionment and allocation of income to sources within or without the United States.)
The regulations under IRC section 861 assist in determining whether income is from a source within or without the United States—including situations where income comes partly from within and partly from without the United States—and where it is necessary to allocate and apportion deductions. It is here that appellant makes his primary error. Appellant completely misapplies Regulation 1.861-8, subsections (a)(1) and (f)(1). He concludes that these relatively obscure portions of the regulations suddenly change the whole definition of taxable income for citizens and resident aliens to include only income from the list of “operative sections” in subsection (f)(1) of this regulation. This defies logic and the clear purpose of IRC section 861. Subsection (a)(1) of the regulation states that it applies to the determination of taxable income “from specific sources and activities under other sections of the Code, referred to in this section as operative sections.” The list of “operative sections” in subdivision (f)(1) does not include IRC sections 61 and 63. Therefore, rather than limiting either “gross income” under section 61 or “taxable income” under section 63, this regulation has only the very limited application defined therein. Indeed, Regulation 1.861-8(g) provides a number of examples of how section 861 should be applied. (See Treas. Reg. § 1.861-8(g), examples 17-22 and 25-33.) These examples show how to determine whether an item of income (sometimes in very complex factual situations) is from a source within or without the United States. Sometimes the examples use terms such as “domestic” or “U.S.” source, or “foreign” source, instead of “within” or “without.” But they all clearly apply only to the determination of whether an item of income is from “within” or “without” the United States.
Looks like your batting zero Terrell.
If opinions fail because lack of formal training, your's fail for the same reason.
I present the court's positions, any hypothetical lack of formal training on my part is irrelavent.
It is up to the reader to decide whether or not a courtroom defense exits relative to the courts' analysis and press it in the courts for themselves, if that the way they wish to go.
You, Thurston Bell, and Larkin Rose are presenting your own analysis, not the courts or that of any authority whatsoever. In point of fact you disclaim any such training or claim to authority. Your lack of credentials and formal training are an issue in such circumstance as any false premise you espouse can lead to severe harms to those who would follow such analysis as being valid.
26 USC 5761.
CIVIL PENALTIES
(b) FAILURE TO PAY TAX
Whoever fails to pay any tax imposed by this chapter at the time prescribed by law or regulations, shall, in addition to any other penalty provided in this title, be liable to a penalty of 5 percent of the tax due but unpaid.26 USC 7203.
WILLFUL FAILURE TO FILE RETURN, SUPPLY INFORMATION, OR PAY TAX
Any person required under this title[26] to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution. In the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under section 6654 or 6655 with respect to such failure. In the case of a willful violation of any provision of section 6050I, the first sentence of this section shall be applied by substituting "felony" for "misdemeanor" and "5 years" for "1 year"
The Court validating its position for the injunction against Thurston Bell & NITE, in its ongoing case United States v. Thurston Bell, 1:CB-1-2159 pg 5-8:
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*** The Plaintiff[United States] argues that it is likely to succeed on the merits because the "861 argument is completely meritless" and because Bell blindly insists on the argument's validity, "despite overwhelming evidence to the contrary." (Doc. 35 pg 23) The court agrees with the plaintiff
26 U.S.C.A. § 61(a) (emphisis added) 5 |
| The Supreme Court has "repeatedly emphasized the 'sweeping scope' of [section 61(a)] and its statutory predecessors." C.I.R. v. Schleier, 5151 U.S. 323, 327 (1995) (citing C.I.R. v. Glenshaw Glass Co., 348 U.S. 426, 429(1955); United States v. Burke, 504 U.S. 229, 233 (1992); Helvering v. Clifford, 209 U.S. 332,334(1940)). When it defined income, Congress intended "to use the full measure of its taxing power." Glenshaw Glass, 348 U.S. at 429. Moreover, it is well-settled that wages or compensation for services constitute income and that individuals receing income are subject to the federal income tax. Sec, e.g., 26 U.S.C. § 61(a)(1); Central Illinois Public Service Co. v. U.S., 435 U.S. 21, 25 (1978). U.S. v. Connor, 898 F.2d 942, 943-44 (3rd Cir. 1990); Coleman v. Commissioner, 791 F2d 68, 70 (7th Cir. 1986). Bell's U.S. Sources argument is nonsensical. I rests purely on semantics and takes the regulations promulgated under section 861 out of context.4 As noted by the Tax Court in Christopher v. C.I.R., 2002 WL 71029 *3 (Tax Ct. 2002):
4 The illogical nature of Bell's U.S. Sources argument can best be described by reference to the following quote from the Seventh Circuit in Coleman v. Commissioner, 791 F.2d 68 69 (7th Cir. 1986):
6 |
| See also Great-West Life Assur. Co. v. United States, 678 F.2d 180, 183 (Ct. Cl. 1982) ("the determination of where income is derived or 'sourced' is generally of no moment to either United States citizens or United States corporation, for such persons are subject to tax under I.R.C. § 1 and I.R.C. § 11, respectively, on their worldwide income.") Other jurisdictions which have heard this U.S. Sources argument have uniformly found it unpersuasive. See, e.g., Loofbourrow v. C/I.R., 208 F.Supp.2d 698,709-10 (S.D. Tex. 2002) ("Loofbourrow's argument, however, is misplaced and takes the regulations out of context."); In re Clark, 2001 WL 1807509 (Bankr. E.D.N.Y. 2001) (holding that 26 C.F.R. §§ 1.861-1 to 1.861-8, and 1.861-8T do not exempt U.S. citizens' domestic income from taxation); Madge v. C.I.R., 23 Fed.Appx. 604. 2001 WL 1414315 *1 (8th Cir. 2001) ("[T]he Tax Court properly rejected Madge's contention that the income from his business was not 'gross income' under 26 U.S.C. § 61(a)"): Williams v. Commissioner, 114 T.C. 136, 138-139, 2000 WL 230343(2000) (rejecting claim that income is not subject to tax because it is not from any of the source listed in 26 C.F.R. § 1.861-8(a)). The regulations cited by Bell - 26 C.F.R. §§ 1.861-1 to -8 and 26 C.F.R. § 1.861-8T - were promulgated for the purpose of interpreting 26 U.S.C § 861. Section 861 "does not define gross income; it provides which items of gross income shall be treated as income from sources within the United States, and also provides, at § 1.861-8, for the allocation and apportionment of deductions between statutory groupings of gross income for the purpose of calculating taxable income" for nonresident aliens and 7 |
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foreign corporations. In re Clark, 2001 WL 1807509 *6 (Bankr. E.D.N.Y. 2001). See Also Great-West Life, 678 F.2.d at 183-84 n.8 (describing bifurcated taxing pattern applicable to nonresident aliens and foreign corporations). To suggest these regulations create an exemption for domestic wages of U.S. citizens is irresponsible and frivolous advocacy. See 26 C.F.R. § 1.861-4 (providing that gross income from sources within the United States includes compensation for labor or personal services performed in the United States). For all of the foregoing reasons, the court finds a substantial likelihood that the United States will prevail on the merits. Accord U.S. v. Rosile, 2002 Wl 1760861 *1; U.S. v. Bosset, 2002 Wl 1058105 *1. The court also finds that enjoining Bell from selling this frivolous tax argument is "necessary [and] appropriate for the enforcement of the internal revenue laws." 26 U.S.C. § 7402. Bell testified that he intends to continue to promote the U.S. Sources argument. N.T. at 47. On the NITE website, Bell boasts that the U.S. Sources argumetn has resulted in eight "Employer IRS Refunds," three "IRS Abatements," and thirteen "Individual IRS Refunds/Credits" for his clients. (Doc. 36, Exhibit C, pg 65). Every time Bell convinces another individual to file false tax returns under the U.S. Sources argument, the internal revenue laws are thwarted. The court will not countenance such impropriety. 8 |
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