Ask a Tax Lawyer about the Tax Law

I am retired military and live overseas. I get half my pension about $7000 per year (X wife gets other half). I use my sisters address in Massachusetts as my home address. (I never file state tax). I come back each year and work 1099 for about 2 months(not in Mass) and make about $10,000 to $15,000.

Should I claim myself as living overseas?

Oh, I am remarried and have 2 stepchildren under 18.

reply to post by endisnighe


The "taxable income" of a person is their "gross income" minus any deductions that the tax law allows. Many personal expenses are not deductions the code allows, so a person can have a taxable income, even if their personal expenses equal or exceed the amount of salary they make.

If a person were allowed to deduct all personal expenses from their gross income, most people would have zero personal income as the average American is in debt. Furthermore, allowing people to deduct all personal expenses is bad fiscal policy because those people who were not in debt could avoid the income tax by spending their money way.

reply to post by FallenFromTheTree


The Federal Courts have jurisdiction over any matter relating to federal law. Since the Internal Revenue Code is a federal law, federal courts have jurisdiction.

With regards to your comment about the government avoiding litigation over "Tax Law," you can ask any person who has a case before the IRS whether the government is avoiding litigation over "Tax Law." The Government initiates much of the litigation concerning taxes.

reply to post by endisnighe


Labor itself is not taxable, but wages from labor is taxable. (See IRC section 61(a)(1) (gross income includes "compensation for services")

As far as forming a corporation and having it pay all your personal expenses is concerned, the letter of the law prevents you from doing this. However, this is not to say that to some degree virtually every business owner breaks this rule.

It all boils down to a matter of enforcement for the IRS. The IRS does not have the resources to bring down hammers on every business owner who makes a questionable deduction on a business lunch here and there. It might be worth the IRS' time to go after someone who is committing a huge break in the rules like you are proposing.

One thing I should probably discuss are the sources of the Tax Law. Some of you might find it interesting, if not shocking.

The rules that govern the "tax law" not only come from the Internal Revenue Code (a statute passed by Congress) and court cases interpreting the IRC, but they also come from Treasury Regulations, which are made by the Executive Branch. In fact, the Treasury Regulations are more voluminous than the IRC.

An astute student of high school civics may think this is unconstitutional. Congress is supposed to make laws, not the executive branch. This was largely true before the New Deal. At the time of the New Deal the law began to change to allow the executive branch to not only enforce laws, but make laws and even adjudicate laws. The Supreme Court felt this was necessary because the executive branch had the expertise Congress did not have to do things like regulate securities market and come up with safety regulations.

One of the most important cases in American history that few people (and many lawyers) do not know about is the Chevron case. Chevron pretty much allows agencies like the IRS to make rules and interpret statutes so long as their interpretation is "reasonable" provided there is some ambiguity in the statute.

A lot of you have said words like "income" are ambiguous. You are correct. The Code is riddled with dozens, perhaps hundreds of ambiguities. Under Chevron, the Treasury is free to make regulations defining "income" and can pretty much do what it wants so long as they are acting "reasonably."

Originally posted by hotpinkurinalmint
One thing I should probably discuss are the sources of the Tax Law. Some of you might find it interesting, if not shocking.

The rules that govern the "tax law" not only come from the Internal Revenue Code (a statute passed by Congress) and court cases interpreting the IRC, but they also come from Treasury Regulations, which are made by the Executive Branch. In fact, the Treasury Regulations are more voluminous than the IRC.

An astute student of high school civics may think this is unconstitutional. Congress is supposed to make laws, not the executive branch. This was largely true before the New Deal. At the time of the New Deal the law began to change to allow the executive branch to not only enforce laws, but make laws and even adjudicate laws. The Supreme Court felt this was necessary because the executive branch had the expertise Congress did not have to do things like regulate securities market and come up with safety regulations.

One of the most important cases in American history that few people (and many lawyers) do not know about is the Chevron case. Chevron pretty much allows agencies like the IRS to make rules and interpret statutes so long as their interpretation is "reasonable" provided there is some ambiguity in the statute.

A lot of you have said words like "income" are ambiguous. You are correct. The Code is riddled with dozens, perhaps hundreds of ambiguities. Under Chevron, the Treasury is free to make regulations defining "income" and can pretty much do what it wants so long as they are acting "reasonably."

Then perhaps it would be a good idea to ask about the term "taxpayer". You continue to say that the term "incime" is ambiguous under the Internal Revenue Code and that the term is defined by its general understanding. Is this also true of "taxpayer" or is it more specifically defined by the Code itself?

Originally posted by hotpinkurinalmint
I am a Tax Lawyer. There are a lot of myths and misconceptions about the tax laws out there. For example, many people think that rich people pay zero taxes or that you do not have to pay income taxes because the Supreme Court held the federal income tax is unconstitutional. However, that is not to say that some of these beliefs may be rooted in truth. Rich people can use sophisticated tax planning techniques to lower their tax bill. Courts have held some tax statutes were unconstitutional under limited circumstances like retroactively assessed taxes.


This thread will be limited to myths and misconceptions about tax laws. I will not give legal advice on this thread, so please do not ask me if you can deduct this or exclude that.

So anyway, hit me with your questions or comments.

It seems to me that in order for any law to be enforceable it has to be understood. I have no problems in admitting that I do not understand the tax code at all. Of course, as a point of law, I am presumed to know the law. It is for this reason, I have made the effort to understand the tax code. Despite the due diligence I have put into understanding this law, I don't understand it any better today than before I made any due diligence. The difference between then and now, is that I have become convinced that no one understands the tax code, including you!

Thus far, in this thread, you have done little to show that you understand this law any better than anyone else, unless your only concern is to help people become tax compliant. Of course, if somebody wants to become tax compliant, couldn't they just pick up the phone and call the IRS and save themselves the trouble of and expense of an attorney?

It seems to me, that when you started this thread you hoped to engage in conversations with "tax protesters", or just people who are aware of the "tax protester movement". It is they, these "tax protesters" who seem to have misconceptions about the tax code. I am not sure what you mean by myths, as I understand myths to be tales told, usually rooted in some sort of historical event or person, that are intended to give valuable life lessons.

I understand that by using the term myth you meant falsehood, however why not just say falsehood than myth. Just because the word myth has become equated with falsehood doesn't mean a lawyer should so willingly engage in sloppy use of language. Jesus is a mythical figure and there are millions of people who would be greatly offended at the notion that Jesus is a falsehood. In fact, because myth is so often used today to mean falsehood there are many Christians who would get offended by hearing Jesus referred to as a mythical figure, but the fact remains, he is a mythical figure, and it is not the word that myth that does Jesus a disservice but the sloppy way in which that word is used today that does so.

I labor the point, certainly not belabor the point since this common usage has confused the issue in regards to a simple word, to make clear that it is, in my humble opinion, unacceptable for any lawyer to be so casual with the use of language and one would think a lawyer would be acutely aware of the need to be precise in language in order to be better understood. Of course, there is the phrase "legalese" which has become used in common usage as term to describe incomprehensible language to laymen and only understood by the mystical priest class lawyers and judges who while very much reliant upon the common law notion that all people are presumed to know the law, will then turn around and insist that only they should be trusted to interpret it.

Since you have ignored my last two questions, and in fairness to you, perhaps you intend to answer my last question, but you were on line for over an hour after I asked this question and did not answer it, and given that you very much ignored the questions I asked before that, I hope you can understand why I am inclined to believe you are ignoring my last question. In fact, for all I know, you have pushed the ignore button in regards to me.

I hope this is not the case, because if you have pressed the ignore button then it seems to me that you will be wholly unaware of the fact that I have most certainly taken up your invitation to ask questions and make comments and will continue to do so.

That said, I am not interested in making any assertions about this law myself. I am not a tax protester and some of my earlier posts should have made that clear, but just in case they haven't made it clear, I will review our conversation to date, so that any confusions might be cleared up.

My questions began by me asking:

What is the subject of the "Personal Income Tax"

Is it a direct tax or an indirect tax?

Is it a tax on People, Property or Activities?

I will use the next post to quote your response...

Originally posted by hotpinkurinalmint
reply to post by Jean Paul Zodeaux

 

Under the income tax system, the federal government takes a percentage of any "income" you make. Generally, income is anything of value one receives except gifts and bequests. Gifts and bequests are subject to the gift and estate taxes.

The income tax applies to individuals who make income, but the government can put a lien on individuals' property if they do not pay income tax.

As anyone with half a brain can see from reading your response, you did not answer my questions directly and instead answered questions I did not ask.

I refused to accept this evasiveness as an appropriate answer and again asked you the very same questions. The next post will quote your reply...

Originally posted by hotpinkurinalmint
reply to post by Jean Paul Zodeaux

 

The tax applies to people who engage in the activity of receiving income. What do you mean by direct vs. indirect tax?

At last, I thought to myself, someone who will refreshingly answer the questions directly and if not understanding the questions state that and ask for clarification.

What is important about this response of yours is that you answered my question of the tax being a tax on People, Property or Activities as being one laid upon Activities. Why this is important will become clear later.

I answered to your question about what I mean by direct vs. indirect as such:

"My understanding is that direct taxes are either capitation taxes or taxes on property. Indirect taxes would be excise taxes, imposts or duties. Would that be correct? It reads to me that you are saying the "income" tax is an indirect tax on activities, and the subject of that tax would be the activity of earning income, is that a correct interpretation? If this is what you are saying, could you point me to the specific section of the Internal Revenue Code where a tax has been laid upon that subject?"

The next post will reveal your reply...

Originally posted by hotpinkurinalmint
reply to post by Jean Paul Zodeaux

 

Section 1 of the internal revenue code reads " there is hereby imposed on the taxabgle income off..."

If you want to get picky with semantics, the tax is imposed specifically on the income. However, "income" does not go to prison if a person fails to pay taxes. The IRS can put liens on property which is not "income" that belongs to a person that fails to their taxes. So in all practicality, the tax is placed on the individual.

I for one cannot understand why you are so concerned with whether the tax is direct or indirect. Perhaps you are trying to construct some argument as to why the income tax is unconstitutional, unfair, etc. I cannot defend the income tax laws as always being fair. As far as their constitutionality is concerned, the Supreme Court has held that the tax system is constitution.

No matter how eloquent, articulate, and well reasoned your argument against the tax laws are; no matter how many people on ATS high five you for your argument, you will get slaughtered in a court of law if you even try to raise these arguments.

Again, anyone with half a brain can read the clear contradiction of this answer to the answer you gave me just before this one. First you tell me that the tax is imposed upon the activity of earning income, then you tell me that it is imposed specifically on income. To further confuse the issue, you make clear that the code itself has laid a tax upon "taxable income" then get evasive attempting to frame me as the one who would get picky about semantics when clearly, if Congress expects to people to believe that a tax has been imposed upon income then it is they who have engaged in semantics by imposing a tax upon "taxable income".

Because you so willingly confused the issue and contradicted your own answer I responded by asking what is taxable income. To be clear, before I asked you that question I took you to task for attempting to frame me as one who was making any arguments. I had not done so and the only answer I made was in direct response to your question of what I meant by direct vs. indirect. I told what my understanding of that was, and asked if that understanding was correct or not.

Instead of answering that question you instead engaged in obfuscation going as far as suggesting that members of ATS would give me high fives, and if asking straight forward questions in a direct manner is worthy of high fives then what exactly is wrong with that?

So, I asked you to define "taxable income" and the next post will show your reply...

Originally posted by hotpinkurinalmint
reply to post by Jean Paul Zodeaux

 

With all due respect, I am trying to figure out where you are getting. I do not know why you care if the tax is "indirect" vs. "direct" or imposed on individuals, property, or actions. All I can tell you is how the system generally works.

With regards to the definition of "taxable income" the code is tautological. It defines income as "income from whatever source derived." Taxable income is the gross income minus deductions. Generally, income is any property you receive except for gifts and bequests. The code lists exceptions to the general rule that all property you receive (other than gifts or bequests) is income.

Here we have what appears to be dis-ingenuousness. To your credit you do define "taxable income" but before you do you imply that you do not understand the significance of whether the tax is indirect or direct, while still not answering my earlier question of what I understood the primary differences between direct tax and indirect tax to be.

So, again I will state that it is my understanding that direct taxes are either capitation taxes or taxes laid upon property, while indirect taxes are excises, imposts and duties, which are then taxes laid upon specific activities. Thus, when you claimed earlier that the tax was laid upon the activity of earning income, this would suggest that the tax is an indirect tax.

However, when defining "taxable income", which you define as "gross income", you declare income to be any property except for gifts and bequests. Well, if the tax is then on property then the tax is direct tax.

Do you even know if this tax is a direct tax or an indirect tax? You offer assertions such as "all I know is that the system generally works" and you being a tax lawyer, it would make sense that you think the system works since presumably you are profiting off of it. However, if you are asserting that all people who earn income are Subject to the revenue law and have been made liable for a tax then it seems to me that you should be able to point out where in the code it states that all people who earn income have been made liable for a tax and are therefore subject to the revenue laws. To just arbitrarily declare all people who earn income as being liable for the tax and subject to the law without proving it, seems to me to be a gross conflict of interest for you.

While you may greatly benefit from this confusion, if you are purposely adding to the confusion then there is no doubt a conflict of interest happening. Either that tax is direct tax or is it an indirect tax as these are the only two classes of taxes allowed for in the Constitution. There is no authority to create a different class of tax that functions as a direct tax when it is convenient to do so and as an indirect tax when that is convenient. The income tax is either one or the other and not both.

You rely on the "tautological" nature of the code to imply that income has been defined, but the truth is that income has not been defined by the code. Income becomes the meaning of "gross income" but this does not mean that income has been defined. In response to what I have quoted in this thread I confronted your proclivity for contradicting yourself and made clear to you this is why I was asking for a direct answer to my question of whether this income tax was a direct tax or indirect tax.

However, you have chosen to only answer those questions that can only keep up the confusion rather than make clear what the law means. No wonder there are so many misconceptions about this law. Either you realize the problem with this and have made peace with your lack of ethics or you are blind to the fact that the misconceptions stem from the law itself.

Later you attempt to rely upon Chevron U.S.A. Inc., vs. Natural Resource Defense Council 467, U.S. 837 (1984) which I will address later, but at this point, all you have made clear is your own confusion. I don't know what you actually mean by "I do not know why you care if the tax is "indirect" vs. "direct" or imposed on individuals, property, or actions.", but it seems to me that all people should care and have the right to know. Either the tax is one or the other and given that specific rules were imposed on how Congress can impose taxes in either class, then all people have the right to know which class of taxation is being used in regards to the income tax.

So, in response to your reply in this thread, I asked:

"Are you suggesting that the subject of a tax is not relevant? By tautological do you mean to say repetitious and circumlocutory in nature? Are you telling me that the Code defines "taxable income" as "gross income" or it defines income as "gross income"? In an earlier post you either you implied or I inferred that the subject of the tax was on the activity of earning income, but now you refer to income as property. This is why I am asking, is the "income" tax a direct tax on property, or is it an indirect tax on a specific activity?"

In the next post we will take a look at your reply...

Originally posted by hotpinkurinalmint
reply to post by Jean Paul Zodeaux

 

The taxable income is the gross income minus any deductions.

The definition of gross income is tautological if you look it up in the code. The code defines gross income as income from whatever source derived. Of course, this sounds tautological, don't you think?

Your line of questioning is unique. Whether a tax is direct v. indirect or on property vs. persons vs. activities is not something tax lawyers give much thought to. Tax lawyers are concerned when the government slaps a lien on their clients property or is threatening to put their clients in jail, but we do not sit down and worry about these semantics.

I was guessing that you were trying either interested in the mechanics of how the income tax is enforced (i.e. whether it is enforced against people or their property) or on what exactly is taxed (i.e. the income people earn vs. anything else that could be taxed.)

What an odd statement to make that "Whether a tax is direct v. indirect or on property vs. persons vs. activities is not something tax lawyers give much thought to.", since the Constitution imposes specific rules in regards to both direct and indirect taxation. If a tax is direct it is held to the rule of apportionment and if a tax is indirect it is held to the rule of uniformity. It seems to me that the Internal Revenue Codes yields to the rule of uniformity and you being a tax lawyer, one would think you would have given at least some thought to this.

Again, I am not making any assertion on what this tax law is or isn't as I just simply don't understand it. However, you are a tax lawyer who opened this thread presenting yourself as one who understands this law, so it is wholly reasonable to expect you to be able to answer simple questions like is the tax direct or indirect.

It is also my understanding that any lawyer is expected to provide a zealous defense for their clients. However, if your stance is that all people who earn income are liable for the tax and therefore subject to it, and this assertion of yours, clearly posted here in this thread, is a mistake of fact, misinterpretation of law, or willful fraud, then it seems to me that instead of providing a zealous defense for your clients what you are more interested in doing is working in concert with the Internal Revenue Service and ensuring that their scope of jurisdiction as malleable as possibly can be.

It also seems to me that the only way out of this ethical dilemma for you is to come clean and admit that you only deal with people who are all ready liable for a tax and therefore subject to the law. In that regard, dealing with "myths and misconceptions" of the law may have some use for you, but it has no use at all for those who have not been made liable for the tax nor are they subject to the law, and indeed, when you are confronted with such people and they are being harassed by the I.R.S. all you can ethically do is refer them to a criminal defense attorney. Because if the I.R.S. intends to charge these people with tax evasion and failure to file a valid tax return, then you can't help them, can you? Unless they are willing to become tax compliant, of course.

If this is true then it I wonder what service you truly provide your clients? If a person liable for a "taxpayer" needs to retain a tax attorney in order to make certain that the tax collector is behaving within the scope of the law, this implies that tax collection agency is dealing with ethical problems itself. If this is true then why should anyone simply take the tax collectors word for any assertions they make in regards to who is and who is not liable for a tax and/or subject to the relevant laws?

So, in response to your reply quoted in this post, I asked:

"It is interesting that a lawyer would not worry about the "semantics" or verbiage of a law. Doesn't the rules of statutory construction require that each and every word be given significance? I am interested in the mechanics of this law. It seems to me, if we are to understand this law, the first thing we would have to know is the subject of the tax, wouldn't that be right?"

We will review your answer in the post below...


[edit on 8-1-2010 by Jean Paul Zodeaux]

Originally posted by hotpinkurinalmint
reply to post by Jean Paul Zodeaux

 

You are right. The definition of income in the code is circular, or tautological as I said. Most tax lawyers, law school professors, and judges would agree with you.

Semantics can be important when reading a statute or regulation. From a lawyer's perspective, it is impractical to meditate on every word and punctuation mark all the time. The text of the internal revenue code is 5 very thick volumes thick and the treasury regulations are even more dense. The key is to hone in on a particular word when applying a law to a certain set of facts.

Let us say there is a law that states "it is illegal to drive red sports cars with fury dice hanging in the mirror, yellow bumper stickers, pink tires, tinted windows, and side view mirrors that are less than 4 inches in width." This law is pretty long winded and it would not be smart to focus on every word. If you get accused of driving a car that violates this statute and your lawyer is defending you, he will not focus on every word of the statute when making his argument on your behalf.

He may focus on the word "tire" if your hubcaps are pink instead of your tires. He may focus on the word "fury" if you have leathery dice hanging from your mirror rather than fury dice. He is going to put forth a concise and simple to follow argument that states that in order for you to be guilty you must have pink tires and fury dice, and you are not guilty because your tires were not pink and your dice were not fury. Anything more, e.g. mentioning bumper stickers, whether the word "yellow" includes light brown, is redundant.

At least we can all be in agreement to the circumlocution of definitions within the code, and while I love Abbot and Costello's "Who's on First" routine as much as anyone, I don't find it amusing in the least for Congress to engage in such comedy when drafting laws. Further more, I find Abbot and Costello's routine to be infinitely easier to understand than the tax code and can tell you without fear of recourse or contradiction that Who is on first, What is on second and I don't know is on third.

With a few exceptions, I can not tell you who has been made liable for this tax, and who is subject to the Internal Revenue Code. One exception would be the manufacturers or importers of tobacco. Here the law is painfully clear and without the use of any tautological definitions, without the use of any ambiguity, the law makes undeniably clear that those who import or manufacture tobacco are liable for a tax and as such subject to the law.

However, you go on to say that:

"From a lawyer's perspective, it is impractical to meditate on every word and punctuation mark all the time. The text of the internal revenue code is 5 very thick volumes thick and the treasury regulations are even more dense. The key is to hone in on a particular word when applying a law to a certain set of facts."

What an astounding assertion to make! If the rules of statutory construction do indeed require that each and every word be given significance then how practical is it for people to rely upon attorneys who claim it is impractical to meditate on every word...? The excuse given is the sheer voluminous nature of the tax law itself. Well, I ask you plainly, do the tax collectors also take the same attitude and do they also find it impractical to meditate on every word? Does Congress who created this five volume set of laws find it impractical to meditate on every word?

If both Congress and the tax collectors involved do find a practicality to meditating on every word, then wouldn't that put tax attorneys at a distinct disadvantage when entering into a court and defending their client? If Congress and the tax collectors find it impractical to meditate on every word, then perhaps the first question becomes why so many words?

Between the both of us we have well established that if it was Congress' intent to levy a tax on income they could have simply done so by stating it as such rather than creating an excess of verbiage in the form of tautological terms that require defining. Impose a tax upon income directly or indirectly through the activity of earning income then there is no need for terms such as "taxable income" and "gross income" and "adjusted gross income", right?

Either there was a very specific reason Congress had in imposing the tax on "taxable income" or they are incompetent legislators who have created incomprehensible law. Yet, we get more to the heart of the matter when you assert: "The key is to hone in on a particular word when applying a law to a certain set of facts."

Facts! Are you suggesting that each and every word only has significance in the fact finding portion of a trial and has no significance in an evidentiary hearing. Can you understand the very real problem with such an suggestion? Once a person accused of a crime is in the fact finding portion of the trial certain facts, such as liability and subject become irrelevant, as it is presumed that the person accused of the crime is indeed liable for and/or subject to the law.

If one is not subject to the Revenue Laws then it would be capricious to hone in on that as a certain set of facts. If one has not been made liable for a tax but is accused of owing the tax it would again be capricious to simply and arbitrarily declare his or her liability a fact. If lawyers in general have no interest in meditating on words during the evidentiary hearing, and only during the fact finding portion of the trial then this again suggests a gross conflict of interest.

Since a lawyer who would successfully challenge the jurisdiction of an administrative agency demanding they prove on record how his or her client was made liable for a tax and that administrative agency can not effectively do so, then the charges must be dropped and there won't be any fact finding portion of the trial. That lawyer will not make as much money off of their client in doing this, but they will have zealously defended their client and acted in an ethical manner.

I all ready made the point in an earlier post that your traffic analogy was off point so I won't go into that here. Let us then look at your next reply...

Originally posted by hotpinkurinalmint
reply to post by Jean Paul Zodeaux

 

You are right that the definition of "income" in the code itself is circular. It However, the code is relatively clear as to what is not "income." For example, if you inherit money this is not income. It also lists several exclusions like fringe benefits and such. As a rule of thumb, pardon me for the double negative, if something is not not-income, then it is income.

A rule of thumb? Are you serious? A rule of thumb is a principle with broad application not intended to be accurate or reliable for every situation. So, a rule of thumb may be all fine and good when adding a pinch of salt to a meal or measuring without a ruler or yardstick but when someone is being charged with criminal tax evasion or willful failure to file a valid tax return do you honestly think it is in their benefit to engage in rules of thumb? Is the best you can do in terms of defining what income is as to its meaning in the tax code is offer a double negative? If it is not not income then it is income, and this is how the law decided what is income? Please!

Have judges and lawyers become so lazy and incompetent in their mystical incantations and positions of priest class, that they casually rely upon rules of thumbs and double negatives? Will you continue to ignore my posts or will you show the courage to stand up and defend your profession as being noble and worthy of respect, hotpinkurianlmint?

reply to post by Jean Paul Zodeaux


You are correct in that the law is not as "scientific" as we would like. When it comes to gray areas judges and lawyers often employ a "smell test" to determine if a particular position is correct or not rather than ruthless logic. This is not to say however, that there are many areas of the law that are not gray. I would not go in a bank, brandish a gun, tell the teller to empty the vault, kill a few people in the process, then say I am innocent because the murder and robbery laws in my jurisdiction have some gray areas. Similarly, I would not refuse to pay taxes on items that are clearly income, like wages, just because there might be some ambiguities in the way the law defines "income."
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I am using a "rule of thumb" in order to illustrate a broad concept. There are several court cases, treasury regulations, and other sources that give a precise definition as to what "income" really is for tax purposes. I am not willing to spend a few weeks researching them all, and most of you are not willing to read a 200 page law review article that summarizes my findings.

In a real life situation, if there were a dispute as to whether a particular transaction constituted "income" to an individual, a lawyer or a judge would pull up all the relevant statutes, regulations, and cases to the situation at hand.

As far as my profession being "noble and worthy," unfortunately, the legal profession as a whole is neither noble or worthy. There are some morally decent lawyers out there, and I would like to count myself as one of them. Unfortunately there are plenty of dirt bags out there. If you are looking for a "noble and worthy" profession, try nursing.

[edit on 9-1-2010 by hotpinkurinalmint]

[edit on 9-1-2010 by hotpinkurinalmint]

reply to post by Jean Paul Zodeaux


You might be focusing too narrowly on statutory language. The law does not just constitute statutes, it constitutes court opinions and regulations as well. If you read my post about Chevron, agencies like the IRS have broad authority under the law to write extensive regulations that clarify or amplify ambiguous statutes.

Congress often intentionally creates statutes that are ambiguous because it lacks expertise in certain highly technical areas of the law like tax law. It implicitly or even explicitly invites the Treasury (executive branch) to make all the rules. If you read IRC Section 61, you will see the definition of income does include specific items like: compensation, gains derived from dealings in property, rents, interests, etc.

If you would like an example of this look up IRC Section 704(b) and 704(c). 704(b)(2) uses the phrase "substantial economic effect." There are dense treasury regulations (see Treasury Regulations 1.704-1 et. seq.) that flush out with a high degree of precision what the three words "substantial economic effect" mean. If you look up Section 704(c)(1), the statute explicitly invites "the Secretary" (i.e. the Secretary of the Treasury and her employees at the IRS) to make regulations.

reply to post by hotpinkurinalmint


Thank you for responding my friend, I do appreciate it. I am saddened to read that you do not think your profession, as a whole, a noble or worthy profession. I am somewhat skeptical about the specialty of tax law being noble or worthy, and I certainly mean no disrespect to you by stating my skepticism, but I do think there is a quality of nobility, (in the general sense and not to be confused with royalty or entitlement), and worthiness. I do believe, as I have probably made clear, that this profession is now inundated with a priest class of mystical specialists who have polluted the profession, however, the profession itself is as every bit as noble and worthy as nursing.

As to your bank robber analogy, I have a hard time believing there is a "gray area" when it comes to such laws. Indeed, to illustrate the simplicity of such a law one only needs to look to the Ten Commandments, and "Thou shall not steal" seems to be pretty black and white.

I don't really see the point of getting all caught up on what is or is not "income" and doing so only becomes a distraction. If a tax attorney has to spend two weeks researching all the relevant case law and then write a 200 page article reporting these findings, then there has clearly been some confusion on the matter of what constitutes and what does not constitute "income".

As it has been made clear the Internal Revenue Code has not laid a tax upon income, but has laid a tax upon "taxable income". Furthermore, when one turns to the exact section that has imposed this tax, what is stated is this:

Section 1: Tax imposed

a) Married individuals filing joint returns and surviving spouses
There is hereby imposed on the taxable income of -

26 U.S.C. 1 (In part.)

While the title of this section; "Tax imposed" seems to be fairly straight forward, what is clear is that from the get go, the language is not so clear. Before even addressing what the tax is imposed upon, which is "taxable income" it begins with "Married individuals filing joint returns and surviving spouses...". The importance of this lies in the fact that any one filing a return joint or otherwise has clearly been made liable for a tax and is therefore subject to the law, otherwise why would they be filing?

Is this some elaborate smoke and mirrors intended to confuse? Why is it necessary to speak to those who have all ready been made liable for the tax before addressing what the tax has been imposed upon?

Before even getting into what constitutes or does not constitute "income" in regards to the code, shouldn't it be well established who is and who isn't liable for the tax? As I have argued, either the tax is a direct tax upon the property of income or it is an indirect tax upon some sort of activity and income is merely used to measure how much tax is owed. Again, I ask you, is this "Personal Income Tax" a direct tax upon property or is it an indirect tax upon some specific activity?

If you do not know the answer to that question I will accept that as a valid answer, and will not expect you to spend two weeks researching the issue in order to find out. As I have stated, I do not understand the Internal Revenue Code nor have I met anyone else who does. It is perfectly acceptable and indeed, would even be noble of you to admit that you don't understand it either. If you do understand it, then surely you know if this tax is a direct tax or an indirect tax.

If I have unfairly questioned your ethics I apologize. It is a frustration for me that there is such a predominance of priest class lawyers who attempt to hide behind mystical incantations reciting case law by merely referring to the name of the court case followed by a series of numbers and the court it was heard in and the date it was heard under, as if such an utterance would mean anything to the laity. You have not done this in this thread and I appreciate the fact that you acknowledged in your last post that doing such a thing would not go very far anyway.

Much legislation has been written by lawyers and the more confusing a piece of legislation is the more likely it was written by lawyers with the full on intent of creating confusing legislation. If a bank robber tries to argue in his defense that he robbed the bank because he wasn't certain if it were legal or not because of a gray area within the law itself, I can't imagine any jury that would acquit this bank robber based upon such a ludicrous argument.

However, if a person first challenges the jurisdiction of tax collectors, demanding these tax collectors show on record how they have gained jurisdiction over this person and how that person was made liable for a tax and therefore subject to the income tax laws, and the response of the tax collector is to charge this person with tax evasion and/or willful failure to file a valid return, and the person still continues to challenge the jurisdiction in court but the judge dismisses the challenges as frivolous and imposes a plea of not guilty on that person in lieu of that persons refusal to plead because he or she does not understand the charges brought against them, then wouldn't it be a valid defense for them to continue insisting that no one has shown through credible evidence that he or she has been made liable for a tax?

If this person who has plainly stated on record that they did not file a valid tax return because they do not understand the five volume set of legislation written that is now threatening to imprison this person, and because they did not understand this legislation they could not, in good conscience, sign under penalty of perjury that all the above was true and correct, and if they are able to show a jury that no one really understands this law, then what jury of sound mind would convict such a person?

There is just no comparison between a bank robber and someone who refuses to sign under penalty of perjury that they are a "taxpayer" as specifically defined by the code. One is a criminal the other is a person of prudence who expects the law to be clear, concise and easy enough to understand for any person of average intelligence.

Do not waste your time researching the issues, answer my questions with your own opinions and speak as honestly as I believe you have been. I appreciate your efforts.

reply to post by Jean Paul Zodeaux


One of the things you bring up here Jean Paul is poignant to say the least.

In Federal Tax Court you are not given the right to have a jury. That little piece of information is all their has to be stated.

The judge has been given the power that was usurped away from the people. Federal Tax judges are appointed by the President.

No jury can be allowed near tax courts because the jury will see the truth behind all the lies. I still have not gotten any info in regards to my request for a trial. June was when I sent in the request for trial, only one form sent to me about them petitioning the court to throw out my case. What a joke, petitioning to throw out a case! Like I am guilty even without a trial, what a frelling JOKE. They did try one sneaky trick of sending me a request to fill out tax forms for the years I did not file.

Good luck with that IRS, like I am going to sign something that would give them the very key to my prison cell.

This frelling despotic country's very nature, needs to changed from the bottom up.

Originally posted by endisnighe
reply to post by Jean Paul Zodeaux

 

One of the things you bring up here Jean Paul is poignant to say the least.

In Federal Tax Court you are not given the right to have a jury. That little piece of information is all their has to be stated.

The judge has been given the power that was usurped away from the people. Federal Tax judges are appointed by the President.

No jury can be allowed near tax courts because the jury will see the truth behind all the lies. I still have not gotten any info in regards to my request for a trial. June was when I sent in the request for trial, only one form sent to me about them petitioning the court to throw out my case. What a joke, petitioning to throw out a case! Like I am guilty even without a trial, what a frelling JOKE. They did try one sneaky trick of sending me a request to fill out tax forms for the years I did not file.

Good luck with that IRS, like I am going to sign something that would give them the very key to my prison cell.

This frelling despotic country's very nature, needs to changed from the bottom up.

If a person has not been made liable for a tax and/or subject to the income tax law then it would be foolish to enter into a tax court. Tax courts only deal with "taxpayers" as specifically defined by the code. If one is a "taxpayer" then they are no doubt liable for a tax and very much subject to the revenue laws in question. No one can force a person into a tax court situation. If one is being charged with tax evasion or willful failure to file a valid tax return these charges will not be brought to a tax court but will brought to a court with proper jurisdiction.

If a person walks into a tax court and challenges the jurisdiction they have made a fundamental mistake. In order to make any arguments before a tax court one must first grant them jurisdiction to begin with. It is folly to grant jurisdiction just to then challenge the jurisdiction.

What is tragic is that properly challenging the jurisdiction almost certainly assures that criminal charges of failure to file or "tax evasion" will brought against that person. If jurisdiction has been properly challenged it is incumbent upon the party asserting jurisdiction to prove on record they indeed have it. There is an arbitrary assumption made by tax collectors and even judges that the mere act of earning income is what makes a person liable for this tax, but there is nothing in the code itself that makes this clear.

Our friend the tax attorney has done a noble job in answering questions in this thread and has shown the courage to maintain civility and acknowledge the understandable confusion that comes with this five volume set of legislation, but for those who have read the tax code and understand that they don't understand it, but however, understand that signing under penalty of perjury that all the above is true and correct is imprudent and therefore are not able to file a valid tax return, can not be helped by a tax attorney who will all too often march a person right into the very tax courts that would establish proper jurisdiction.

I may not understand the code but I do understand that the system our friend the tax attorney claims generally works, is rigged to work against the innocent and deny people their right to due process of law. A tragicomedy indeed.

Note: I have edited this post to establish that I am in no way qualified to give legal advice nor am I doing so. I am merely discussing these so called "myths" and misconceptions of the tax code.

[edit on 9-1-2010 by Jean Paul Zodeaux]

Originally posted by hotpinkurinalmint
reply to post by Jean Paul Zodeaux

 

You might be focusing too narrowly on statutory language. The law does not just constitute statutes, it constitutes court opinions and regulations as well. If you read my post about Chevron, agencies like the IRS have broad authority under the law to write extensive regulations that clarify or amplify ambiguous statutes.

Congress often intentionally creates statutes that are ambiguous because it lacks expertise in certain highly technical areas of the law like tax law. It implicitly or even explicitly invites the Treasury (executive branch) to make all the rules. If you read IRC Section 61, you will see the definition of income does include specific items like: compensation, gains derived from dealings in property, rents, interests, etc.

If you would like an example of this look up IRC Section 704(b) and 704(c). 704(b)(2) uses the phrase "substantial economic effect." There are dense treasury regulations (see Treasury Regulations 1.704-1 et. seq.) that flush out with a high degree of precision what the three words "substantial economic effect" mean. If you look up Section 704(c)(1), the statute explicitly invites "the Secretary" (i.e. the Secretary of the Treasury and her employees at the IRS) to make regulations.

I have focused on the statutes in this thread because you have, my friend. You have brought up the Chevron ruling and I said I would speak to that at a later point, and what I will say to that now is that this ruling was made in 1984 and there are numerous Supreme Court rulings and lower court rulings regarding tax law that have come before Chevron. Indeed, if I remember correctly, I think I asked you about the Eisner ruling, did I not?

As to your claim that Congress lacks expertise in certain areas like tax law, this my friend is profoundly disingenuous. First of all, it is Congress who has the complete and plenary power of taxation. Thus, there should be no greater expert at tax law then Congress. In fact, they have been tasked with legislation itself and as such should be experts at the law they legislate or avoid legislating it.

I do not understand why you continually insist that the code has defined income. Section 61 is not a definition of income but is a definition of "gross income".

In terms of the CFR, this a code of regulations in pursuance to the law and is not law itself. The CFR operates on the assumption that those who are turning to it are indeed liable for a tax and/or subject to the law, and this assumption is wholly acceptable. However, just because the Chevron ruling has granted a certain amount of latitude for administrative agencies to interpret the statutes does not mean it has granted them the power broaden their own scope of jurisdiction to arbitrarily make people liable for a tax and/or subject to the revenue law.