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Science Forum Index » Energy - Hydrogen Forum » Non-taxable Under Fundamental Law
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| Guest |
 Posted: Sat Feb 10, 2007 2:31 pm |
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<From a subscriber listmail>
Dear Subscriber,
Just to remind you, the subject of this series
of messages is how to properly COMPLY with the federal tax laws.
For example, if your Uncle Fred gave you a gift of $200 last year,
you should NOT have reported it on your tax return, because the tax
code specifically says that gifts are NOT subject to the federal
income tax (26 USC 102). It's not patriotic or noble to have
reported such income on your return; it's an ERROR. It's income
you're NOT SUPPOSED TO pay taxes on (because it's non-taxable).
As
we saw in the last message, the older federal income tax
regulations used to clearly state that, in addition to the types of
income specifically exempted by the tax code, some OTHER income is
also NOT SUPPOSED TO BE included in your taxable income, because
such income is, "under the Constitution, not taxable by the Federal
Government." Near the bottom of the following link are scans of
many different years of regulations saying so (look for links
called "First," "Second," etc.):
http://home.hiwaay.net/%7Ebecraft/TaxActs.html
As also stated in
the last message, current tax professionals (with very rare
exceptions) DO NOT KNOW that this is the case. They are completely
unaware that ANY income is tax-free because of the Constitution
itself. As a result, they NEVER tell their clients about it, and
they NEVER take it into account when determining their clients' tax
liabilities. We haven't yet considered WHAT income might be
Constitutionally non-taxable (we will very soon), but whether it's
some obscure kind of investment income that only a few people have,
or something more significant, you HAVE TO KNOW what it is if you
are to properly COMPLY WITH the law. Why? Because if you happen to
have some of that Constitutionally non-taxable income, and you
report it on your return as if it were taxable, you are MISAPPLYING
the law, just as if you had reported that $200 gift from Uncle
Fred.
The link above shows older tax regulations (many years'
worth). An obvious question at this point would be, What about NOW?
Are those Constitutional limits still applicable? Do the current
regulations still mention them? Yes, and yes, though they make it a
lot let obvious now. There have been no Constitutional amendments
relative to Congress' taxing power since those older regulations
were written. So anything that was, "under the Constitution, not
taxable by the Federal Government" in 1956 (or 1925), is still not
taxable today. The current regulations defining "gross income" (26
CFR 1.61-1) just say "gross income" includes all income from
whatever source derived, "unless excluded by law." Unlike the older
regs, however, they do not specifically explain that income can be
exempted by statutory law OR by "fundamental law" (the Constitution
itself). However, the current 26 CFR 1.265-1 does still show that
something OTHER than the tax code can exempt income, and a fairly
obscure regulation at 26 CFR 1.312-6(b) does still plainly speak of
THREE types of income: 1) "all income exempted by statute"; 2)
"income not taxable by the Federal Government under the
Constitution"; and 3) income which is "includible in gross income
under section 61." In case you think I'm making this up, you can
see that regulation on the government's own web site at:
http://www.access.gpo.gov/nara/cfr/waisidx_05/26cfr1d_05.html
(It
should be noted that occasionally a tax professional will at least
guess at something that might be Constitutionally non-taxable, such
as the income of state governments, or interest on municipal bonds.
However, those things have been exempted by STATUTE from the
beginning (e.g., 26 USC 103, 115), so that is NOT what the regs
(past and present) were talking about. Remember, they mention
income exempted by statute, and then say that no OTHER income is
exempt, except for what is, "under the Constitution, not taxable by
the Federal Government.")
So while the older regulations were a
lot more obvious about it (you can wonder why if you'd like), the
principle still applies. Now, here is what may seem like a silly
question: Do those in government WANT us to know how to OBEY the
law? Presumably they would be eager to have us all understand the
law so we can comply with it. In fact, the IRS' "mission statement"
says that their reason for existing is to help people "UNDERSTAND"
and comply with their tax responsibilities. So, in light of what
we've seen above, wouldn't it make sense to ASK the government what
the regs mean when they talk about some income being excluded
because of the Constitution?
1) When I brought up that point at my
first meeting with the IRS, they had no comment at all. (I'm not
sure they even comprehended what the question was.) When we met
again, same thing: I quoted the regulations saying that, and they
had no response.
2) When I was a witness at someone else's meeting
with the IRS, the person explained to the IRS that it was his
position that "some of the income not specifically exempted by
statute is nonetheless exempted from taxation by the Constitution
itself," and cited the regs saying just that. The veteran IRS agent
responded, "Without further research, I don’t really have a
response for that one. I can’t really tell you without researching
an answer to that question." (As of today, many YEARS later, he
never answered that question.)
3) At another meeting with the IRS
(at which they were looking for an excuse to shut down my web
site), the following exchange occurred:
Me: "These are photocopies
of two of the sections of the 1956 regulations. Again, we’re
talking about 1956 at the moment. I’m about to tie it to the
current. As you’ll see on the last page of that, exemptions from...
exclusions from gross income. It’s on the right-hand side. It talks
about the items exempted by statute, and then it says no other
items may be excluded from gross income except "a," those items of
income which are, under the Constitution, not taxable by the
Federal Government. And then it mentions some other Acts of
Congress and things that exempt other income. That’s one of the
questions I have yet to hear anybody at the IRS or any tax
professional give me an explanation as to what that could be
talking about. If you’d like to offer any opinions, I’m open for
it."
IRS Agent Chris Roginksy: "It’s at outdated regulation. Not
going to comment on it."
Wow, that was a short discussion (or lack
of one).
4) Since then, hundreds of people have sent letters to
two IRS commissioners, two Secretaries of the Treasury, two
Assistant Secretaries of the Treasury, IRS Chief Counsel, the
Attorney General, the head of the Tax Division of the DOJ, and many
lower DOJ and IRS offices, asking several basic questions about how
we are to COMPLY with the federal tax laws. The last question was:
"What types of income (if any) are not exempted from taxation by
any statute, but are nonetheless 'excluded by law' (not subject to
the federal income tax) because they are, under the Constitution,
not taxable by the federal government?" (All six questions can be
seen here: http://www.petermacshow.com/content/view/55/45/ )
Guess
how many answers to the question we got? If you guessed ZERO, you
win.
5) When I went to trial, I filed a motion asking the judge to
inform the jury that "gross income" means all income, except for
what is exempted by statute OR exempted by the Constitution itself
(aka "fundamental law"). He refused to tell them that. When the
government called an IRS agent up to testify about the taxes they
thought I owed, based on my financial numbers, the following
exchange occurred:
Me: "When you go to total up these figures and
get to the bottom, do you keep your eyes open for any sorts of
income which may be specifically exempted by a section of the tax
code?"
IRS witness: "I normally did, but I did not see that in this
case."
Me: "Okay, but it's normal to keep your eyes open in case
there's some item, and that would enter into the equation. Is that
correct?"
IRS witness: "Sure, sure."
So far so good. This 24-year
veteran IRS agent obviously knew about statutory exemptions. Then
this happened:
Me: "My last question is, in coming to your total,
did you subtract any amounts of income which are exempt from
federal taxation because of the Constitution itself?"
DOJ attorney:
"Objection."
Judge: "I'm not sure I understand the question."
IRS
witness: "Yeah, I don't either."
Judge (to the witness): "Do you
understand the question?"
IRS witness: "No, I do not."
Judge (to
me): "Do you want to rephrase it?"
Me: "Did you subtract, to arrive
at your bottom number, any amounts of income which are excluded
from federal taxation due to the Constitution itself?"
DOJ
attorney: "Objection."
Me: "Well, she either did or didn't. It's a
fact."
Judge (to witness): "Well, you can answer that 'yes' or
'no,' if you understand it."
IRS witness: "I'm not sure I
understand the question. I mean, if you're asking if I subtracted
anything from these numbers, I did not."
Why is it that neither
the IRS witness nor the JUDGE had any idea what I was even asking?
Why did they not know that anything might be excluded because of
the Constitution itself? The IRS' own regulations say it--why don't
their employees know about it? And why does it seem that NO ONE in
government is able (or willing) to say what income that might be,
even when HUNDREDS of Americans politely ask them in writing? Why,
when I cite their OWN regulations to them, are those in government
so reluctant to discuss the matter?
Back to our seemingly silly
question: Given what you've seen above, would you still assume that
those in government WANT us to know how to properly COMPLY with the
law? Shouldn't they WANT us to know what is and what isn't taxable?
There must BE an answer to the question. Shouldn't they be not only
able, but EAGER to explain such things to common folk like you and
me? After all, it is literally IMPOSSIBLE to correctly determine
your taxes without first knowing what is and what isn't taxable. So
why are they unable (or unwilling) to tell us what is meant by some
income being exempt because it is, "under the Constitution, not
taxable by the Federal Government"? Is this all starting to seem a
wee tad curious to you yet?
Once again, let me conclude this
message with the following: In what I've said above, do you see me
encouraging anyone to break the law? Do you see me objecting to the
law? Do you see me arguing anything "frivolous"? (No, no, and no.)
Lastly, would you consider it okay for the government to try to
forcibly stop me from telling you what I've told you so far, or to
punish me for publicly talking about such things? (Me neither.)
Sincerely,
Larken Rose
<end email> |
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| Guest |
| Posted: Sat Feb 10, 2007 2:57 pm |
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On Feb 10, 10:31 am, knews4u2c...@yahoo.com wrote:
Quote: From a subscriber listmail
(If you missed any of the prior messages in this series, you can
find them at this address:
http://www.3rdear.com/ubb/ultimatebb.php?ubb=forum;f=16 )
Dear
Subscriber,
Suppose you were alive several decades ago, and you
knew several well-respected zoology experts, each of whom declared
to you that all mammals have live young. Since they were the
"experts," you'd probably assume they knew what they were talking
about. Then suppose someone visited you from Australia with his pet
platypus--an egg-laying mammal. Then you'd have a conflict: little
ol' you would have a piece of evidence (the platypus) that flew in
the face of what the supposed "experts" told you. So which would
you believe, your own eyes or the opinions of the professionals?
Well, now you have a REAL example: you've seen the regulations
saying that some income is exempt for federal income tax purposes
because of the Constitution itself, while the vast majority of tax
professionals have no idea that any such Constitutionally-exempt
income exists. (Then you saw how, for some reason, those in
government really don't like talking about the subject.)
How do
our rhetorical zoologists above explain the platypus? To begin
with, they don't. They didn't know it existed, so they didn't have
an explanation for it. After they've been shown it, they either
have to change their opinions, or deny that a platypus is a mammal,
or deny that it lays eggs (with the latter two being rather silly
things to argue). They can't just pretend it doesn't exist.
Likewise, there aren't very many rational responses a modern tax
professional can give to the regs we've seen, because he's never
seen that evidence before. He could (and should) say "I didn't know
it said that, and I'm not sure what income it's talking about."
(Hopefully he'd be curious enough to want to then go figure out
what it means before continuing to pass himself off as a tax
"expert.") But he can't rationally just ignore it and pretend it
doesn't exist... which I have found is what most of them do.
I
mention all this to make something clear: when I give you my
conclusions about the meaning of those regulations, I basically
have no competition from the government or the tax industry
"experts." You can poo-poo my conclusions all you want, but those
who have tantrums about my beliefs DO NOT HAVE an alternative
explanation for the evidence. Instead, they use the time-honored
method of ignoring the evidence and vilifying anyone who would dare
to contradict the provably false proclamations of the self-
appointed "experts." So if anyone can come up with a DIFFERENT
explanation of the evidence, I'd love to see it. (I've been begging
the government to give me their explanation for the last eight
years, and they won't.)
Now we finally get to the question, WHAT
income might be non-taxable because it is, "under the Constitution,
not taxable by the Federal Government"? Well, there is only ONE
thing that the Constitution specifically says that Congress can't
tax: state exports. But in Peck v. Lowe (before all the regulations
we've looked at), the Supreme Court specifically said that just
because the income tax gets applied to income from exporting things
does NOT make it an unconstitutional tax on state exports per se,
so that can't be what the regulations were talking about.
Nothing
else in the Constitution specifically prohibits Congress from
taxing anything. HOWEVER, the Supreme Court has stated that there
are “certain virtual limitations†on the taxing power, arising
from
the principles of the Constitution itself [United States v. Butler,
297 U.S. 1]. As one silly example, the Constitution does not
empower the U.S. government to tax everyone in China. Obviously the
feds don't have jurisdiction over everyone in China, even though
the Constitution doesn't bother to specifically say they CAN'T tax
everyone there.
So, under the Constitution, what was Congress
intended to tax? In Federalist #45, James Madison (often called
"The Father of the Constitution") explained that under the new
Constitution the federal government would have only a few, limited
powers, and went on to say that the federal power “will be
exercised principally on external objects, as war, peace,
negotiation, and FOREIGN commerce; with which last [foreign
commerce] the power of TAXATION will, for the most part, be
connected.†So the Father of the Constitution said that federal
taxes would primarily apply to FOREIGN commerce, meaning trade
which crosses country borders.
But what does that have to do with
an income tax? Anything? As you may or may not know, the
Constitution specifically gives Congress jurisdiction over
INTERNATIONAL trade (aka "commerce with foreign nations"). So that
kind of trade IS Congress' business. On the other hand, “very
different considerations apply to the internal commerce or domestic
trade of the states. Over this commerce and trade Congress has NO
POWER of regulation nor any direct control. This power belongs
exclusively to the states. No interference by Congress with the
business of citizens TRANSACTED WITHIN A STATE is warranted by the
Constitution, except such as is strictly incidental to the exercise
of powers clearly granted to the legislature†[License Tax Cases,
72 U.S. 462 (1866)].
So, as James Madison explained, under the
Constitution Congress' powers mainly had to do with international
matters, while purely domestic matters were the business of state
governments. But again, does this have any relation to taxation?
Well, in one of the earliest cases about the 1913 federal income
tax (from which the current tax evolved), the Supreme Court ruled
that because the Constitution grants Congress the general power to
tax, AS WELL AS giving Congress specific jurisdiction over
“commerce with FOREIGN nations,†the federal government could
therefore “undoubtedly†apply an income tax to an American
business
engaged in INTERNATIONAL trade [Peck v. Lowe, 247 U.S. 165].
(Before you bother writing any of this stuff down, I should let you
know that at the conclusion of these messages, I'll be telling you
how to download for free my complete "Taxable Income" report, with
all relevant quotes and citations, which is a lot more thorough
than what I'm trying to cover quickly here.)
Might that be the
answer to our question about what is Constitutionally taxable?
Might it be that Constitutionally, the income tax is only supposed
to be applied to income which comes from "commerce with foreign
nations"? Guess what. That's not for you or me to decide. Yes, you
heard me right. It's not OUR job to decide the proper application
of the law. Our system of written law is not supposed to be a
guessing game, where we each theorize about what is or is not
Constitutionally taxable. But if we don't do that, how are we ever
to know what is taxable and what is exempt? If it's not our job to
decide that, whose job is it? The answer is, it is the job of the
government's regulation-writers. The law must be knowable and
precise; the law books themselves must specifically TELL us what
our legal obligations are. And the regulations published by the
government are our official notice of what the law requires of us.
So, rather than theorizing (like I just did), let's see if we can
find where the regulations answer the question.
Once again, here
is a link to scans of the old regulations defining "gross income."
Last time we focused on where it talks about some income being
excluded because it is, "under the Constitution, not taxable by the
Federal Government." Okay, so what is to be included? Well, it says
that all income is "gross income" unless exempted by law--which we
are told means exempted by statute OR excluded because of the
Constitution. See for yourself what the regulation says after that:
http://irobyou.info/TaxableIncome_Net/exhibits/1956regs.html
As
you can see, the regs specifically say that income which citizens
and domestic companies receive from FOREIGN commerce "must be
included in their gross income." It then mentions nonresident
aliens, foreign corporations, and certain matters involving federal
possessions (e.g., Guam, Puerto Rico), but nowhere does it
specifically mention the DOMESTIC income of the average American.
(That matches my theorizing pretty well, don't you think?) Remember
all those different years of older regs talking about some income
being exempted by "fundamental law" (the Constitution)? Well EVERY
YEAR those same regulations specifically explained that income from
"FOREIGN commerce" was subject to the tax; NEVER did they mention
purely domestic income. (The only time income from inside the U.S.
was mentioned was when it was received by foreigners, which again
constitutes international trade.)
But surely that just means that
income from international trade is taxable in ADDITION to domestic
trade, right? I mean, we can't just assume that our income isn't
taxable because it's not mentioned there, right? Okay, it's a
little weird that they didn't just say that Americans are taxed on
income from "foreign OR domestic commerce," which would have been
easy to say. But it can't REALLY mean that the tax only applies to
international trade. Can it?
Once again, let me conclude today's
message with the following: In what I've said above, do you see me
encouraging anyone to break the law? Do you see me objecting to the
law? Do you see me arguing anything "frivolous"? (No, no, and no.)
Lastly, would you consider it okay for the government to try to
forcibly stop me from telling you what I've told you so far, or to
punish me for publicly talking about such things? (Me neither.)
Sincerely,
Larken Rose
<end email> |
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| Richard Macdonald |
| Posted: Sat Feb 10, 2007 4:17 pm |
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Guest
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<knews4u2chew@yahoo.com> wrote in message
news:1171134677.675670.65440@s48g2000cws.googlegroups.com...
<more questions>
Quote:
Section 1.861-8T(d)(2) gives a
All totally worthless blather as a regulation may not
have a valid interpretation that is no in accordance
with statute and you need to go back and read 861(b).
--
Richard A. Macdonald, CPA/EA
Be thankful we're not getting all
the government we're paying for.
-- Will Rogers |
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| Fred Kasner |
| Posted: Sat Feb 10, 2007 6:51 pm |
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Guest
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knews4u2chew@yahoo.com wrote:
Quote: From a subscriber listmail
Dear Subscriber,
Larken Rose
.... snip ...
Hey, Dummy, you know that counseling people to break the law is
punishable as a felony? This crap about constitutional restrictions on
so many sources of wealth as being nontaxable leads many people to get
themselves heavily fined in tax court. You know that this is so. Even if
you are unhappy about it and want it to be different. Lately the tax
court and even the circuit courts have been dealing rather harshly with
those who invent all sorts of exclusions from taxation. The I.R.S. looks
with great disfavor on those who evade taxes as opposed to avoiding taxes.
FK |
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| cpt banjo |
| Posted: Sat Feb 10, 2007 8:29 pm |
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Guest
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On Feb 10, 1:11 pm, knews4u2c...@yahoo.com, like a good little
lemming, posted some more Larken Rose bilge:
Quote: There is a principle of law, expressed in Latin as inclusio unius est
exclusio alterius, which dictates that where the law specifically lists
matters to which it applies, an irrefutable inference must be drawn that
what was NOT listed was intended to be omitted.
So when the Constitution lists only one thing that Congress can't tax
(exports), it follows that Congress can tax everything else, right?
Quote: The IRS has something called a "cumulative bulletin," in which all its
rulings are published. When it comes to income from INSIDE the U.S.,
the entries are always about foreigners. When the income is from
OUTSIDE of the U.S., American citizens and residents are mentioned.
But again, domestic income of the average American is NEVER
mentioned. Why?
This is a bald-faced lie. In fact, most published rulings deal with
the domestic income of U.S. citizens.
Quote: 5)
Subchapter N of the federal income tax statutes is titled "Tax
based on income from sources within or without the United States."
As the name implies, this is where the law addresses the issue of
COMMERCE: when domestic income is taxable, and when foreign income
is taxable. Once again, it's all about FOREIGN income of Americans
and domestic income of FOREIGNERS. And once again, the domestic
income of Americans is not mentioned at all. Why?
Because it's already covered in Section 61, moron.
Hey, Rosie, do you have the guts to explain why you and Tessa failed
to pay your Pennsylvania income taxes (especially when your moronic
861 argument has no application to PA tax law)? You don't? I thought
so...
Hey Rosie, if you think your 861 argument is so good, why didn't you
raise it in your own defense instead of relying solely on a lack-of-
willfulness defense? Could it be you're just a con artist who doesn't
believe in the snake oil he's selling? |
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| cpt banjo |
| Posted: Sat Feb 10, 2007 8:44 pm |
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Guest
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On Feb 10, 12:57 pm, knews4u2c...@yahoo.com wrote:
Quote: As you may or may not know, the Constitution specifically gives
Congress jurisdiction over INTERNATIONAL trade (aka "commerce with
foreign nations"). So that kind of trade IS Congress' business. On the
other hand, different considerations apply to the internal commerce or
domestic trade of the states. Over this commerce and trade Congress
has NO POWER of regulation nor any direct control. This power belongs
exclusively to the states. No interference by Congress with the
business of citizens TRANSACTED WITHIN A STATE is warranted by
the Constitution, except such as is strictly incidental to the exercise
of powers clearly granted to the legislature [License Tax Cases,
72 U.S. 462 (1866)].
I can't believe Rosie the Chowderhead is still citing this case, since
it holds that Congress has the power to tax purely intrastate
activities.
Quote: Might it be that Constitutionally, the income tax is only supposed
to be applied to income which comes from "commerce with foreign
nations"?
No.
Quote: Guess what. That's not for you or me to decide. Yes, you
heard me right. It's not OUR job to decide the proper application
of the law. Our system of written law is not supposed to be a
guessing game, where we each theorize about what is or is not
Constitutionally taxable. But if we don't do that, how are we ever
to know what is taxable and what is exempt? If it's not our job to
decide that, whose job is it? The answer is, it is the job of the
government's regulation-writers.
LOL!! Yeah, let's ignore all of the court decisions on constitutional
law, NONE of which say there's any kind of income that's currently
exempt.
Quote: But surely that just means that income from international trade is
taxable in ADDITION to domestic trade, right? I mean, we can't just
assume that our income isn't taxable because it's not mentioned there,
right? Okay, it's a little weird that they didn't just say that Americans are
taxed on income from "foreign OR domestic commerce," which would
have been easy to say.
And, in fact, the regs say just that:
Reg. 1.1-1(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. |
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