Talk:Income tax/Removed text

Removed text

I removed "Which gave no new taxing powers to the government to tax people directly on their wages. Income is defined as "corporate profit" according to Supreme Court decisions, which have not been overturned. Therefore, direct taxes on people wages is unconstitutional and is voluntary. " since it is an unsourced PoV position, not accepted by teh IRS or the US courts. Soem people hold this view, but anu statemetn of it should indicated that it is a minority view, and be properly attributed and sourced. DES ^(talk) 19:43, 3 November 2005 (UTC)

This should be put back since the original document does not list every single constitutional, law, Internal Revenue Code, statute, and Supreme Court decisions. That makes the original article unsourced PoV position. It is accepted by U.S. Courts, but not the IRS, even though the IRS cannot source the liability for income taxes. First have the original article sourced and especially the liability or you have to accept all further points of fact. If you want to do your own further research, you may. —The preceding unsigned comment was added by 206.111.181.109 (talk • contribs) 15:45, 3 November 2005.

I am sorry, but you are not correct. It may well be that more sources should be cited in this article, but it is generally summerizing the law as it is -- that is, as the courts universally interpret it and as it is actually being enforced. There is no need to "list every single constitutional, law, Internal Revenue Code, statute, and Supreme Court decision" or anything approaching that. if you have any source that indicates that thsi is not the effective law -- that any court or law enforcemet agency or taxing agency has accepted thsi position, please cite it. If not, anything beyone a brief sttement that some people oibject but have not been upheld should go to a separate article such as Dispute over the legal basis of US income tax. Continually trying to insert minority views as if they were commonly accepted or matter of fact violates WP:NPOV which as a basic policy here, and might be construed as vandalism. DES ^(talk) 20:59, 3 November 2005 (UTC)

You are incorrect. The law states it as I have said it and that's the way it should be put down. Not as generally accepted information with no laws backing it up. The constitution and Supreme courts back me up. I have listed my sources below yours under Sources for the Facts. — Preceding unsigned comment added by 206.111.181.109 (talk • contribs) on 3 November 2005.

Sources for the Mainstream view

• Relevant web links:
  • IRS "Dirty Dozen"
  • "Why do i have to pay taxes" IRS pub
  • "The Truth About Frivolous Tax Arguments" IRS PUB (PDF 392K)
  • "The Truth About Frivolous Tax Arguments" from quatloos.com
  • "IRS Debunks Frivolous Tax Arguments" (August 24, 2001 IRS news release)
  • "THE TAX PROTESTER FAQ" by by Daniel B. Evans
  • The Legal Information Institute's CRS annotated page on the 16th Admendment and Income tax
  • The Legal Information Institute's CRS annotated page on "Restriction of the Pollock Decision"

• Relevant court citations:
  • Providence Bank v. Billings, 29 U.S. 514, 563 (1830), "The power of legislation, and consequently of taxation, operates on all the persons and property belonging to the body politic. This is an original principle, which has its foundation in society itself. It is granted by all, for the benefit of all. It resides in government as a part of itself, and need not be reserved when property of any description, or the right to use it in any manner, is granted to individuals or corporate bodies. However absolute the right of an individual may be, it is still in the nature of that right, that it must bear a portion of the public burthens; and that portion must be determined by the legislature." (emphasis added). (opnion by Chief Justice Marshall)
  • United States v. Perkins, 163 U.S. 625, 627 (1896) "[T]he laws of all civilized states recognize in every citizen the absolute right to his own earnings, and to the enjoyment of his own property, and the increase thereof, during his life, except so far as the state may require him to contribute his share for public expenses...." ).
  • Brushaber v. Union Pacific R.R., 240 U.S. 1 (1916) The court upheld the constitutionality of the income tax laws enacted subsequent to ratification of the Sixteenth Amendment.
  • Stanton v. Baltic Mining Co., 240 U.S. 103 (1916), the court stated that "by the previous ruling [in Brushaber] it was settled that the provisions of the 16th Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of INDIRECT taxation to which it inherently belonged, and being placed in the category of direct taxation...." (emphasis added)
• Lucas v. Earl, 281 U.S. 111 (1930) "There is no doubt that the statute could tax salaries to those who earned them and provide that the tax could not be escaped by anticipatory arrangements and contracts however skilfully devised to prevent the salary when paid from vesting even for a second in the man who earned it. That seems to us the import of the statute before us and we think that no distinction can be taken according to the motives leading to the arrangement by which the fruits are attributed to a different tree from that on which they grew. (Emphasis added) (A man had a contract with his wife agreeing to share all income equally, and sought to eb taxed only on his half. The Supreme Court ruled against him. DES ^(talk) 00:57, 7 November 2005 (UTC))
  • Charles C. Steward Machine Co. v. Davis, 301 U.S. 548 (1937). "But natural rights, so called, are as much subject to taxation as rights of lesser importance. An excise is not limited to vocations or activities that may be prohibited altogether. It is not limited to those that are the outcome of a franchise. It extends to vocations or activities pursued as of common right."
  • Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 429-30 (1955) - referring to the statute's words "income derived from any source whatever," the Supreme Court stated, "this language was used by Congress to exert in this field 'the full measure of its taxing power.' . . . And the Court has given a liberal construction to this broad phraseology in recognition of the intention of Congress to tax all gains except those specifically exempted.
  • Commissioner v. Kowalski, 434 U.S. 77 (1977) - the Supreme Court found that payments are considered income where the payments are undeniably accessions to wealth, clearly realized, and over which a taxpayer has complete dominion.
  • Lonsdale v. Commissioner, 661 F.2d 71, 72 (5 th Cir. 1981) - the court rejected as "meritless" the taxpayer's contention that the "exchange of services for money is a zero-sum transaction"
  • United States v. Richards, 723 F.2d 646, 648 (8 th Cir. 1983) - the court upheld conviction and fines imposed for willfully failing to file tax returns, stating that the claim that filing a tax return is voluntary "was rejected in United States v. Drefke, 707 F.2d 978, 981 (8 th Cir. 1983), wherein the court described appellant's argument as 'an imaginative argument, but totally without arguable merit.'.
  • Rowe v. United States, 583 F. Supp. 1516, 1520 (D. Del. 1984) - the court upheld section 6702 against various objections, including that it was unconstitutionally vague because it does not define a "frivolous" return. "Frivolous is commonly understood to mean having no basis in law or fact," the court stated.
  • United States v. Tedder, 787 F.2d 540, 542 (10 th Cir. 1986) - the court upheld a conviction for willfully failing to file a return, stating that the premise "that the tax system is somehow 'voluntary' . . . is incorrect.
  • United States v. Stahl, 792 F.2d 1438, 1441 (9 th Cir. 1986), cert. denied, 479 U.S. 1036 (1987) - stating that "the Secretary of State's certification under authority of Congress that the sixteenth amendment has been ratified by the requisite number of states and has become part of the Constitution is conclusive upon the courts," the court upheld Stahl's conviction for failure to file returns and for making a false statement.
  • Miller v. United States, 868 F.2d 236, 241 (7 th Cir. 1989) (per curiam) - the court stated, "We find it hard to understand why the long and unbroken line of cases upholding the constitutionality of the sixteenth amendment generally, Brushaber v. Union Pacific Railroad Company . . . and those specifically rejecting the argument advanced in The Law That Never Was, have not persuaded Miller and his compatriots to seek a more effective forum for airing their attack on the federal income tax structure." The court imposed sanctions for having advanced a "patently frivolous" position.
  • In re Becraft, 885 F.2d 547 (9 th Cir. 1989) - the court affirmed a failure to file conviction, rejecting the taxpayer's "frivolous" position that the Sixteenth Amendment does not authorize a direct non-apportioned income tax.
  • United States v. Connor, 898 F.2d 942, 943-44 (3d Cir.), cert. denied, 497 U.S. 1029 (1990) - "[e]very court which has ever considered the issue has unequivocally rejected the argument that wages are not income."
  • United States v. Sloan, 939 F.2d 499, 499-500 (7 th Cir. 1991), "Like moths to a flame, some people find themselves irresistibly drawn to the tax protestor movement's illusory claim that there is no legal requirement to pay federal income tax. And, like moths, these people sometimes get burned."
  • Johnson v. Commissioner, T.C. Memo. 1999-312, 78 T.C.M. (CCH) 468, 471 (1999) - the court found Johnson liable for the failure to file penalty and rejected his argument "that the tax system is voluntary so that he cannot be forced to comply" as "frivolous".

• Relevant congressional quotes:
  • "the Committee is concerned with the rapid growth of deliberate defiance of the tax laws by tax protesters. The Committee believes that an immediately assessable penalty on the filing of protest returns will help deter the filing of such returns." S. Rep. No. 494, 97 th Cong., 2d Sess. 277, reprinted in 1982 U.S.C.C.A.N. 781, 1023-24. (on the pasage of a law providign a $500 penalty for makign a "frivolous income tax return")

Sources for an alternate viewpoint

[Deleted as copyright violation]

None of your links cite the liability to pay an income tax or file one. The IRS can print whatever they want on their own site, but they will never cite the code because it doesn't exist.

Editor's note: Regarding imposition of income tax, Internal Revenue Code sections 1 (26 U.S.C. § 1) and 11 (26 U.S.C. § 11) are examples of statutes that impose an income tax on taxable income, which in turn is defined in section 63 (26 U.S.C. § 63). For the requirement to file Federal income tax returns, see 26 U.S.C. § 6012. For the duty to pay the tax at the time prescribed for filing the related tax return, see 26 U.S.C. § 6151. For civil penalties for failure to timely file tax returns, see 26 U.S.C. § 6651(a)(1). For civil penalties for failure to timely pay taxes, see 26 U.S.C. § 6651(a)(2). For criminal penalties for failure to timely file tax returns or pay taxes, see 26 U.S.C. § 7203. Famspear 15:32, 21 December 2005 (UTC)

The second link on the second page of the first point citing Article 1 Section 8, Clause 1 omits the last part of the section which states "...shall be uniform throughout the U.S.", which is must be in order to be done. Nowhere does any of the links state where to find the definition of the word Income in the IRC book. If we are to pay a tax on something, it has to be defined and it has to show the statute.

Editor's note: The courts have stated that the uniformity clause of the Constitution requires that duties, imposts, and excises (indirect taxes) are required to be geographically uniform. That is, indirect taxes (and most income taxes are indirect taxes) cannot be imposed, say, just in New York and Montana, and not in other states. No court has ever ruled that any Federal income tax imposed under the Internal Revenue Code of 1986 violates the uniformity clause. Yours, Famspear 14:27, 26 May 2006 (UTC)

Editor's note: For purposes of the income tax, it is correct to say that the word "income" itself is not defined in the Internal Revenue Code (the IRC). The terms "gross income," "adjusted gross income," and "taxable income" are defined in sections 61, 62, and 63 respectively. More directly to the point -- and this may come as a shock to some people -- under the U.S. legal system there is no legal requirement that any particular word be "defined" in a statute (or anywhere else) in order for that statute to be valid. That goes for income tax statutes and any other statutes. In fact, most words in most statutes are not defined in those statutes. By the way, most words in the U.S. Constitution also are not defined in the Constitution, and that has no effect on legal validity. Regarding imposition of income tax, Internal Revenue Code sections 1 and 11 are examples of statutes that impose an income tax on taxable income, which is defined in section 63. Famspear 15:32, 21 December 2005 (UTC)

• • "Deceptive IRS Code Words" from supremelaw.org
  • "31 Questions and Answers about the IRS" by Paul Andrew Mitchell from supremelaw.org
  • List of State and Federal Court Cases in with the 31 Q&A were put into evidence
  • "Administrative Law" from supremelaw.org
  • house_senate.pdf from paynoincometax.com

Relevant tax cases:

Congress has taxed INCOME, not compensation." - [Conner v. U.S., 303 F Supp. 1187 (1969)]

[Note: The correct citation is Conner v. United States, 303 F. Supp. 1187 (S.D. Tex. 1969), aff’d in part and rev’d in part, 439 F.2d 974 (5th Cir. 1971). This appears to be a tax protester's attempt to create the false impression that this case was about taxability of wages as compensation. This case had nothing to do with wages or the taxability of wages. This case was about the taxability of compensation paid by an insurance company to a policy holder whose house had burned down. The insurance company was reimbursing the homeowner for the costs of renting a place to stay after the home burned down -- under the terms of the insurance policy. The insurance company was not paying "wages." The compensation was for the loss of a home by fire. Famspear 16:44, 17 December 2005 (UTC)]

"Income within the meaning of the 16th Amendment and the Revenue Act means, gain ... and, in such connection, gain means profit... proceeding from property severed from capital, however invested or employed and coming in, received or drawn by the taxpayer for his separate use, benefit and disposal." - [Staples v. U.S., 21 F Supp 737 U.S. Dist. Ct. ED PA, 1937] -

This case is Staples v. United States, 21 F. Supp. 737, 38-1 U.S. Tax Cas. (CCH) paragr. 9023 (E.D. Pa. 1937). In this case, the United States District Court for the Eastern District of Pennsylvania ruled that the value of a building erected by a tenant on the landlord's property is not income to the landlord until the land is sold or otherwise disposed of by the landlord. Famspear (talk) 04:20, 28 December 2008 (UTC)

A FEW CASES ON INCOME

"There is a clear distinction between `profit' and `wages', or a compensation for labor. Compensation for labor (wages) cannot be regarded as profit within the meaning of the law. The word `profit', as ordinarily used, means the gain made upon any business or investment -- a different thing altogether from the mere compensation for labor." [Oliver v. Halstead, 86 S.E. Rep 2nd 85e9 (1955)]

[Note: The correct citation is Oliver v. Halstead, 196 Va. 992, 86 S.E.2d 859 (1955). Oliver v. Halstead is not a tax case. This is a Virginia Supreme Court case, and no issues of taxation were presented to or decided by the court. Famspear 16:44, 17 December 2005 (UTC) ] The word "tax" does not even appear in the text. Note: Need to double check on citation; some sources show the Southeastern Reporter cite at "86 S.E.2d 858," others as "86 S.E.2d 859." Famspear (talk) 02:28, 28 April 2010 (UTC)

"The claim that salaries, wages, and conpensation for personal services are to be taxed as an entirety and therefore must be returned by the individual who has performed the services which produce the gain is without support, either in the language of the Act or in the decisions of the courts construing it. Not only this, but it is directly opposed to provisions of the Act and to regulations of the U.S. Treasury Department, which either prescribed or permits that compensations for personal services not be taxed as a entirety and not be returned by the individual performing the services. It is to be noted that, by the language of the Act, it is not salaries, wages, or compensation for personal services that are to be included in gains, profits, and income derived from salaries, wages, or compensation for personal services." - [falsely attributed to the court in Lucas v. Earl, 281 U.S. 111 (1930)]

Editor's note: This is not from the Court’s opinion in Lucas v. Earl. It is an almost direct quote from page 17 of the Respondent’s brief filed with the U.S. Supreme Court in connection with the government's petition for a writ of certiorari. Guy C. Earl, the taxpayer, was the Respondent. The brief was written by Earl’s attorneys: Warren Olney, Jr., J.M. Mannon, Jr., and Henry D. Costigan. In some versions of the case as reported, this statement and other quotes and paraphrases from pages 8, 10, 14, 15, 17, and 18 of the Respondent’s brief are re-printed as a headnote ABOVE the opinion of the Court itself by Justice Holmes. In the case reprints that include this headnote (and many of them don't even show it), these excerpts are not clearly identified as being from the brief, so a non-lawyer could easily miss the point that this verbiage, like any headnote or syllabus, is not part of the Court’s opinion. The Supreme Court in Lucas v. Earl rejected these arguments. As every tax lawyer knows, Mr. Earl lost the case. Famspear 16:52, 18 December 2005 (UTC)

"... whatever may constitute income, therefore, must have the essental feature of gain to the recipient. This was true when the 16th Amendment became effective, it was true at the time of Eisner v. Macomber Supra, it was true under Section 22(a) of the Internal Revenue Code of 1938, and it is likewise true under Section 61(a) of the I.R.S. Code of 1954. If there is not gain, there is not income ... Congress has taxed income not compensation." - [Conner v. U.S., 303 F Supp. 1187 (1969)]

[Note: Again, the full citation is Conner v. United States, 303 F. Supp. 1187 (S.D. Tex. 1969), aff’d in part and rev’d in part, 439 F.2d 974 (5th Cir. 1971). This case had nothing to do with wages or the taxability of wages. This case was about the taxability of compensation paid by an insurance company to a policy holder whose house had burned down. The insurance company was reimbursing the homeowner for the costs of renting a place to stay after the home burned down -- under the terms of the insurance policy. The insurance company was not paying "wages." The compensation was for the loss of a home by fire. Famspear 16:44, 17 December 2005 (UTC)]

Edwards (vs) Keith, 231 F110, 113 (1916) [Note: This is probably Edwards v. Keith, 231 F. 110, 113, 1 Amer. Fed. Tax Rep. 617 (2d Cir. 1916), cert. denied, 243 U. S. 638 (19 ? ). Stated: "The phraseology of form 1040 is somewhat obscure .... But it matters little what it does mean; the statute and the statute alone determines what is income to be taxed. It taxes only income "derived" from many different sources; one does not "derive income" by rendering services and charging for them... IRS cannot enlarge the scope of the statute."

The actual ruling in Edwards v. Keith is that an individual receiving life insurance sales commissions (for personal services rendered as a life insurance agent) before the effective date of the income tax statute (in this case, the Revenue Act effective on and after March 1, 1913) must pay federal income tax on the commissions received by that individual on or after March 1, 1913, even though the commissions were earned prior to that date.

The tax protesters appear to be trying to use the language that a person "does not derive income by rendering services and charging for them" to falsely imply that the Court in Edwards v. Keith had ruled that income from personal services (such as a wage, salary, or commission) is not taxable, when such income is taxable. The issue decided by the Court was the timing of the recognition of that income. The Court was simply pointing out that, for an ordinary individual taxpayer using the cash method, the income is recognized at the moment the cash is received, not at the moment the income is earned. In effect, the tax protesters who cite Edwards v. Keith are, as usual, trying to take a case where the Court ruled income to be taxable when received, and falsely implying that the Court ruled that the income was not taxable at all.

Edwards v. Keith, by the way, deals with an ordinary individual using the cash method for timing of income recognition. For taxpayers who use the accrual method (many business taxpayers, for example), the income is indeed recognized when the income is earned, and not when the money is received.

Although it would be correct to say that the Internal Revenue Service cannot generally "enlarge" the scope of a tax statute, the supposed "quote" from the Edwards case -- consisting of the wording "IRS cannot enlarge the scope of the statute" -- appears to be fake. Those words do not appear in the text of Edwards v. Keith. This is another trick used by tax protesters: adding fake quotations, which are then copied and pasted from one tax protester internet web site to another.

Congress does give the IRS fairly wide leeway in interpreting the statutes -- and the courts have so ruled, over and over. For example, Congress has made certain things non-taxable, such as interest income on municipal securities (IRC sec. 103). The IRS cannot simply say: "We don't care; we gonna make taxpayers pay tax on interest income on municipal securities." What the IRS can do is interpret the statutes. Sometimes, Congress uses the statutes to give the U.S. Treasury Department the authority to basically "add" something to the law by using a Treasury regulation. See, e.g., IRC sec. 1398(g)(8). The IRS itself cannot change the statute; only Congress can do that. Famspear (talk) 02:52, 24 December 2008 (UTC)

State court rulings coincide with the Federal courts. "... reasonable compensation for labor or services rendered is not profit."- [Lauderdale Cemetary Assoc. v. Mathews, 345 PA 239; 47 A. 2d 277, 280 (1946)]

[Note: Lauderdale is not a Federal tax case. The court did not rule on the issue of whether reasonable compensation for labor or services rendered is taxable for Federal income tax purposes. Famspear 16:44, 17 December 2005 (UTC)]

"There is a clear distinction between profit and wages, or compensation for labor. Compensation for labor cannot be regarded as profit within the meaning of the law." - [Oliver v. Halstead, 196 VA 992; 86 S.E. 2d 858 (1955).

[Note: Again, this is Oliver v. Halstead, 196 Va. 992, 86 S.E.2d 859 (1955). "The law" referred to here is not a tax law. This is a Virginia Supreme Court case, not a Federal tax case. Famspear 16:44, 17 December 2005 (UTC)]

Cox (vs) Louisiana, 379 US 559, 85 S Ct. 476 (1965) States that an American Citizen such as the Defendant has a right to rely upon representations and statements made by the government and appearing in official publications.

[Note: This is not a tax case. No issues of taxation were presented to or decided by the Court. Famspear 16:44, 17 December 2005 (UTC) ]

Economy Plumbing & Heating (vs) U.S., 456 F.2d. 713 Stated that the revenue laws apply to taxpayers, and NOT to nontaxpayers. No procedure is prescribed for nontaxpayers. Congress does not assume to deal with nontaxpayers, neither are they the subject of nor object of revenue laws.

Silence can only be equated with fraud where there is a legal or moral duty to speak, or where an inquiry left unanswered would be intentionally misleading. . . We cannot condone this shocking behavior by the IRS. Our revenue system is based on the good faith of the taxpayer and the taxpayers should be able to expect the same from the government in its enforcement and collection activities." U.S. v. Tweel, 550 F.2d 297, 299. See also U.S. v. Prudden, 424 F.2d 1021, 1032; Carmine v. Bowen, 64 A. 932.

"Keeping in mind the well settled rule, that the citizen is exempt from taxation, unless the same is imposed by clear and unequivocal language, and that where the construction of a tax is doubtful, the doubt is to be resolved in favor of those upon whom the tax is sought to be laid." Spreckles Sugar Refining Co. vs. McLain: 192 US 397

Note: The correct spelling and full citation: Spreckels Sugar Refining Co. v. McClain, 192 U.S. 397 (1904). Famspear 16:44, 17 December 2005 (UTC)

(Discussing the 16th Amendment) "It is clear on the face of this text that it does not purport to confer power to levy income taxes in a generic sense an authority already possessed and never questioned or to limit and distinguish between one kind of income taxes and another, but that the whole purpose of the Amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived" Brushaber vs. Union Pacific RR 240 US 1

"for 'income' may be defined as the gain derived from capital, from labor, or from both combined, and here we have combined operations of capital and labor." Stratton's Independence vs. Howbert 231 US 406

Note: The correct citation is Stratton's Independence, Limited v. Howbert, 231 U.S. 399 (1913). Famspear 16:44, 17 December 2005 (UTC)

Post-script: In Stratton's Independence, Limited v. Howbert, 231 U.S. 399 (1913), a mining corporation argued that the 1909 corporation tax act did not apply to that corporation. The U.S. Supreme Court ruled that the 1909 corporation tax act did apply to mining corporations, and that the proceeds of ores mined by the corporation from its own premises were income within the meaning of the 1909 tax act. The Court also ruled that the corporation was not entitled to deduct "the value of such ore in place and before it is mined" as depreciation within the meaning the 1909 act. Yours, Famspear 04:11, 27 May 2006 (UTC)

Emanuel J. Doyle vs. Mitchell Brothers Company 247 US 179 "Yet it is plain, we think, that by the true intent and meaning of the Act the entire proceeds of a mere conversion of capital assets were not to be treated as income. Whatever difficulty there may be about a precise and scientific definition of 'income' it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax; conveying rather the idea of gain or increase arising from corporate activities. As was said in Stratton's Independence vs. Howbert, 231 U.S. 399, 415: 'Income may be defined as the gain derived from capital, from labor, or from both combined.'"

Editor's Note: In Doyle v. Mitchell Bros. Co., 247 U.S. 179 (1918), the taxpayer was a corporation engaged in the manufacture of lumber. In 1903, the taxpayer purchased certain timber land at a cost of about $20 per acre. As of December 31, 1908, the value of the land had increased to about $40 per acre.

The Corporation Excise Tax Act of 1909 was enacted on August 5, 1909, and was effective retroactively to January 1, 1909.

For the years 1909 through 1912, the taxpayer filed tax returns under the 1909 Act, showing gross receipts from the sale of manufactured lumber and, in arriving at the amount of net income subject to tax under the 1909 Act, deducted an amount based on the $40 per acre value, rather than the actual cost of about $20 per acre.

The Commissioner of Internal Revenue argued that the taxpayer should be able to deduct only an amount based on the taxpayer’s historical cost basis of $20, rather than the $40 fair market value at the time the 1909 Act became effective. (Essentially, if the taxpayer were allowed to use the $40 per acre value as its basis rather than the actual $20 historical cost basis, a portion of the taxpayer’s gain -- the increase in value from 1903 to December 31, 1908 -- would go untaxed.)

The U.S. Supreme Court ruled, however, that under the 1909 Act – which had become effective January 1, 1909 -- the taxpayer should be taxed only on the increase in value after 1908. Increases in value prior to the effective date of the statute were not to be taxed under the terms of that statute. Thus, the taxpayer was entitled to deduct, from its gross receipts from the sale of finished lumber, a basis amount computed with reference to the $40 per acre value as of December 31, 1908.

The key point missed by some tax protesters is that this case involved what is known as statutory construction, not constitutional interpretation. In this case, the Court was interpreting the 1909 statute. No issues involving the constitutional definition of income, or of income under any other tax statutes, were presented to or decided by the Court. Notice also, that the taxpayer did not argue -- and the Court did not rule -- that as a general proposition taxes could not be imposed retroactively. Indeed, the tax in this case was imposed retroactively; the statute was enacted in August of 1909 but was made effective retroactively to January 1, 1909. Yours, Famspear 14:38, 27 May 2006 (UTC)

Southern Pacific Company vs. John Z. Lowe, Jr: 247 US 330 "We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 (Doyle v. Mitchell Brothers Co., ante, 179 and Hays v. Gauley Mountain Coal Co., ante, 189) the broad contention submitted in behalf of the Government that all receipts everything that comes in are income within the proper definition of the term 'gross income,' and that the entire proceeds of a conversion of capital assets, in whatever form and under whatever circumstances accomplished should be treated as gross income. Certainly the term 'income' has no broader meaning in the 1913 Act than in that of 1909 (see Stratton's Independence v. Howbert, 231 U.S. 399, 416, 417), and for the present purpose we assume there is no difference in its meaning as used in the two acts."

Editor's note: This case is Southern Pac. Co. v. Lowe, 247 U.S. 330 (1918). The Supreme Court ruled that where a shareholder receives a dividend representing earnings of a corporation realized by the corporation prior to January 1, 1913, the dividend is not includible in the gross income of the shareholder for purposes of the Federal Income Tax Act of 1913, Ch. 16, 38 Stat. 114 (Oct. 3, 1913). No issues regarding the definition of income with respect to wages, salary or other compensation for labor were presented to or decided by the Court. Yours, Famspear 02:58, 23 May 2006 (UTC)

Mark Eisner vs. Myrtle H. Macomber 252 US 189 "After examining dictionaries in common use (Bouv. L.D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.), we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert, 231 U.S. 399, 415; Doyle v. Mitchell Bros. Co, 247 U.S. 179, 185) "Income may be defined as the gain derived from capital, from labor, or from both combined," provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case (pp. 183, 185)

Merchant's Loan & Trust Company vs. Smietanka 255 US 509 "It is obvious that these decisions in principle rule the case at bar if the word 'income' has the same meaning as the Income Tax Act of 1913 that it had in the Corporation Excise Tax Act of 1909, and that it has the same scope of meaning was in effect decided in Southern Pacific Co. v. Lowe, 247 U.S. 330, 335, where it was assumed for the purposes of decision that there was no difference in its meaning as used in the Act of 1909 and in the Income Tax Act of 1913. There can be no doubt that the word must be given the same meaning and content in the Income Tax Acts of 1916 and 1917 that it had in the Act of 1913. When to this we add that in Eisner v. Macomber, Supra, arising under the Corporation Excise Tax Act of 1909, with the addition that it should include 'profit gained through a sale or conversion of capital assets,' there would seem to be no room to doubt that the word must be given the same meaning in all of the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act and that what that meaning is has now become definitely settled by decisions of this court.

Editor's note: This case is Merchants’ Loan & Trust Company, as Trustee of the Estate of Arthur Ryerson, Deceased, Plaintiff in Error v. Julius F. Smietanka, formerly United States Collector of Internal Revenue for the First District of the State of Illinois, 255 U.S. 509 (1921). The case is sometimes cited by tax protesters as somehow supporting the theory that only "corporate profits," and not wages, are taxable. Unfortunately, neither corporate profits nor wages were at issue in the case. The Supreme Court stated:

In determining the definition of the word "income" thus arrived at, this Court has consistently refused to enter into the refinements of lexicographers or economists and has approved, in the definitions quoted, what it believed to be the commonly understood meaning of the term which must have been in the minds of the people when they adopted the Sixteenth Amendment to the Constitution. [ . . . W]e continue entirely satisfied with that definition, and, since the fund here taxed was the amount realized from the sale of the stock in 1917, less the capital investment [. . .] it is palpable that it was a "gain or profit" [ . . .] and thereby became that "realized gain" which has been repeatedly declared to be taxable income within the meaning of the constitutional amendment and the acts of Congress [ . . .]

The Court in Merchants' Loan ruled that the gain on the sale of corporate stock by an estate was taxable to that estate as part of the income of that estate under the tax statute and the Sixteenth Amendment. The Court was not presented with, and did not decide, any issue involving the taxability of wages or corporate profits or any other kind of income except the gain on the sale of the stock. The term "corporate profit" does not even appear in the text of the Court's decision! Famspear 16:44, 17 December 2005 (UTC)

To show how bizarre the tax protesters' argument about the Merchants' Loan case really is, consider the following. Aside from the fact that the Court ruled in Merchants' Loan that the estate's gain on the sale of stock was income under the Sixteenth Amendment and the 1916 Act and was taxable under the Amendment and the Act, the tax protesters also conveniently ignore the plain text of the 1916 Act that the Court was interpreting. Forget about "estates" for a minute. With respect to individuals (not corporations), section 1(a) of the 1916 Act specifically imposes the income tax on "the entire net income received [ . . . ] from all sources by every individual, a citizen or resident of the United States [ . . . ]." Further, Section 2(a) of the Act specifically states that "the net income of a taxable person shall include gains, profits and income derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid, or from professions, vocations, businesses, trade, commerce, or sales, or dealings in property, [ . . . ] from interest, rent, dividends, securities [ . . . ] or gains or profits and income derived from any source whatever [ . . . ]." The 1916 Act tax on the income of corporations, by the way, was imposed under section 10 of the Act -- so there is no point in trying to argue that the term "taxable person" under the 1916 Act meant only a "corporation." The Congress specifically imposed the tax on both individuals (section 1) and corporations (section 10) under that Act. Yours, Famspear 21:50, 19 April 2006 (UTC)

Burnet vs. Harmel 287 US 103 "before the 1921 Act this Court had indicated (see Eisner v. Macomber, 252 U.S. 189, 207, 64L.ed 521, 9 A.L.R. 1570, 40 S. Ct. 189), what it later held, that 'income,' as used in the revenue acts taxing income, adopted since the 16th Amendment, has the same meaning that it had in the Act of 1909. Merchants; Loan & T. Co. v. Smietanka, 255 U.S. 509, 519, 65 L.ed. 751, 755, 15 A.L.R. 1305, 41 S. Ct. 386; see Southern Pacific Co. v. Lowe. 247 U.S. 330, 335, 62 L.ed. 114, 1147, 38 S. Ct. 540." Jurisdiction Procedural Misconduct And here's more of what the government refers to as "Frivolous Arguments"

From the Supreme Court, the Federal Circuit Court, quotes and Treasury Orders wherein labor is not taxable income. Courtesy of PaycheckPiracy To subscribe: Paycheck-Piracy-on@mail-list.com

1818: U.S. v. Bevans, 16 U.S.336. Establishes two separate jurisdictions within the United States Of America: 1. The "federal zone" and 2. "the 50 States". The I.R.C. only has jurisdiction within the "federal zone". "The exclusive jurisdiction which the United States have in forts and dock-yards ceded to them, is derived from the express assent of the states by whom the cessions are made. It could be derived in no other manner; because without it, the authority of the state would be supreme and exclusive therein," 3 Wheat., at 350, 351.

Note: This was a murder case where the parties were arguing over jurisdiction. The statement "[t]he I.R.C. [Internal Revenue Code] only has jurisdiction within the 'federal zone'" is not only not found in the Bevans case, it is incorrect as a matter of law, it is frivolous, and it is meaningless. The Internal Revenue Code is a set of statutes. Statutes do not have "jurisdiction." Courts do have jurisdiction. Hey, tax protesters -- at least try to use the right legal terms. No court has ever ruled that the Internal Revenue Code applies only within the "federal zone," and any argument to the contrary is frivolous. No issues regarding Federal income taxation or the Internal Revenue Code were presented to or decided by the Court in the Bevans case. By the way, the Internal Revenue Code did not yet even exist in 1818, when the Bevans case was decided. Famspear 16:44, 17 December 2005 (UTC)

1883: Butchers' Union Co. v. Crescent City Co., 111 U.S. 746. Defines labor as property, and the most sacred kind of property. "Among these unalienable rights, as proclaimed in the Declaration of Independence is the right of men to pursue their happiness, by which is meant, the right any lawful business or vocation, in any manner not inconsistent with the equal rights of others, which may increase their prosperity or develop their faculties, so as to give them their highest enjoyment...It has been well said that, THE PROPERTY WHICH EVERY MAN HAS IS HIS OWN LABOR, AS IT IS THE ORIGINAL FOUNDATION OF ALL OTHER PROPERTY SO IT IS THE MOST SACRED AND INVIOLABLE..."

Note: Butchers' Union Co. v. Crescent City Co., 111 U.S. 746 (1883) was a case involving interpretation of the Louisiana constitution and certain ordinances of the city of New Orleans. The statement above that the Supreme Court in this case defined labor as "property, and the most sacred kind of property," is false. In a concurring opinion, Justice Field quoted approvingly from Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1776), as follows:

that 'the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands, and to hinder his employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property.

However, the Adam Smith quote was not a ruling by the Court itself. Instead, the Court ruled that the Louisiana constitution and the New Orleans ordinances did not impermissibly impair a pre-existing obligation under a contract when those laws effectively ended a slaughter-house monopoly by the Crescent City Company. More directly to the point: Butchers' Union Co. v. Crescent City Co. is not a tax case. No issues regarding the power to tax incomes from businesses, vocations, or labor were presented to -- or decided by -- the Court. The word "tax" does not even appear in the text of the court's decision. Famspear 16:44, 17 December 2005 (UTC)

1894: Caha v. United States, 152 U.S. 211. Restricts jurisdiction of the federal government inside the states. "The law of Congress in respect to those matters do not extend into the territorial limits of the states, but have force only in the District of Columbia, and other places that are within the exclusive jurisdiction of the national government."

Note: This appears to be a tax protester's attempt to leave the false impression that the Court's reference to "those matters" somehow restricted the Federal government's jurisdiction over matters of taxation. The case is Caha v. United States, 152 U.S. 211 (1894). The case is not a tax case. It was a case involving a perjury conviction where the defendant argued -- unsuccessfully -- that the Federal court had no jurisdiction over a prosecution for the crime of perjury committed in a proceeding in a land office at Kingfisher, Oklahoma regarding ownership of real estate. The actual quote (as shown at the FindLaw web site), with emphasis added, is:

This statute [the perjury statute] is one of universal application within the territorial limits of the United States, and is not limited to those portions which are within the exclusive jurisdiction of the national government, such as the District of Columbia. Generally speaking, within any state of this Union the preservation of the peace and the protection of person and property are the functions of the state government, and are no part of the primary duty, at least, of the nation. The laws of congress in respect to those matters do not extend into the territorial limits of the states, but have force only in the District of Columbia, and other places that are within the exclusive jurisdiction of the national gover[n]ment.

Caha was not a tax case, and no issues of Federal tax law were decided. The reference to the "laws of congress in respect to those matters" was a reference to the matters of preservation of the peace and the protection of person and property; it was not a reference to Federal tax statutes. The Court rejected the argument that the Federal courts had no jurisdiction to hear a case under the perjury statute, and the defendant's conviction was affirmed. Famspear 16:44, 17 December 2005 (UTC) ]

1895: Pollack v. Farmer's Loan and Trust Company, 157 U.S. 429, 158 U.S. 601. Assertion: Prohibits direct taxes on the income of individuals.

[Note: The correct spelling and Bluebook citation: Pollock v. Farmer's Loan and Trust Co., 157 U.S. 429, aff'd on reh'g, 158 U.S. 601 (1895). The Court in Pollock did rule a Federal tax statute unconstitutional; however, the assertion that the Pollock case prohibited direct taxes on the income of individuals is only partially correct and is misleading. In any case, the effect of Pollock with respect to Federal income taxes was eliminated by ratification of the Sixteenth Amendment to the Constitution in 1913. Famspear 16:44, 17 December 2005 (UTC) ]

1900: Knowlton v. Moore, 178 U.S. 41. Defines the meaning of "direct taxes". "Direct taxes bear immediately upon persons, upon the possession and enjoyment of rights; indirect taxes are levied upon the happening of an event as an exchange."

Knowlton v. Moore, 178 U.S. 41 (1900) actually is a Federal tax case. It involved the constitutionality of the war revenue act of 1898 (Act of June 1898, Ch. 448, 30 Stat. 448) with respect to what we would now call Federal estate taxes (that is, a tax on the transfer of property by reason of death). This is not a good case for tax protesters to be citing, as it actually indirectly hurts their cause. The quote (from page 47 of the case) is correct. The Court was quoting, in an approving manner, a French definition of the term "direct taxes". One of the taxpayer's arguments had been that the estate tax was a direct tax and that, since the statute involved did not apportion the tax among the states according to population, the statute was unconstitutional.

The Court rejected the taxpayer's argument that the estate tax was a direct tax. Instead, the Court concluded that the estate tax "is not direct within the meaning of the Constitution, but, on the contrary, is a duty or excise [ . . . ]" Knowlton v. Moore, 178 U.S. 41, at 83. The significance of this is that duties and excises have never been required to be apportioned. Similarly, the Court in Brushaber (discussed elsewhere) noted that an income tax on income from employment was also an indirect tax (an excise). Again, with respect to Federal income taxes, the question of whether a particular kind of income tax is direct or indirect is moot after the Sixteenth Amendment. Famspear 00:08, 5 January 2006 (UTC)

1901: Downes v. Bidwell, 182 U.S. 244. Establishes that constitutional limits on the Congress do not apply within the "federal zone" and described where they do apply. "CONSTITUTIONAL RESTRICTIONS AND LIMITATIONS [Bill of Rights] WERE NOT APPLICABLE to the areas of lands, enclaves, territories, and possessions over which Congress had EXCLUSIVE LEGISLATIVE JURISDICTION"

Editor's note: The above "quote" is another fake. The above quote does not appear in the Supreme Court's decision in Downes v. Bidwell, 182 U.S. 244 (1901). The Court was not asked to decide, and did not decide, whether constitutional limits on the Congress apply within the "Federal zone." Also, the case was not an income tax case.

One of the issues addressed in Downes v. Bidwell was whether a Federal statute imposing a duty or impost on products shipped from Puerto Rico to the United States (in this case, from Puerto Rico to the Port of New York) violated the Constitutional provision that all imposts and duties be “uniform” throughout the United States. The Court also was asked to decide whether the same statute improperly required vessels moving from one state to another state to enter, clear, or pay duties in the other state (in this case, a ship moving from Puerto Rico to New York), in violation of the Constitution.

The Court in Downes v. Bidwell ruled that the statute was valid. The Court stated that “while[,] in an international sense[,] Porto Rico [i.e., Puerto Rico] was not a foreign country, since it was subject to the sovereignty of and was owned by the United States, it was foreign to the United States in a domestic sense, because the island had not been incorporated into the United States, but was merely appurtenant thereto as a possession.” 182 U.S. at 341-42 (emphasis added). The Court concluded that because Puerto Rico was “foreign” to the United States in the domestic sense, Congress did have the power to impose the “impost” on goods shipped from Puerto Rico to New York, and that the impost did not violate the Constitutional requirement that imposts be “uniform” throughout the United States. Famspear 03:40, 6 January 2006 (UTC)

1906: Hale v. Henkel, 201 U.S. 43. Defined the distinction between natural persons and corporations as it pertains to 5th Amendment protections within the U.S. Constitution. "...we are of the opinion that there is a clear distinction in this particular between an individual and a corporation, and that the latter has no right to refuse to submit its books and papers for an examination at the suit of the state. The individual may stand upon his constitutional rights as a citizen. He is entitled to carry on his private business in his own way. His power to contract is unlimited. He owes no duty to the state or to his neighbors to divulge his business, or to open his doors to an investigation, so far as it may tend to criminate him. He owes no such duty to the state, since he receives nothing therefrom, beyond the protection of his life and property. His rights are such as existed by the law of the land long antecedent to the organization of the state, and can only be taken from him by due process of law, and in accordance with the Constitution. Among his rights are a refusal to incriminate himself, and the immunity of himself and his property from arrest or seizure except under a warrant of the law. He owes nothing to the public so long as he does not trespass upon their rights.

Upon the other hand, the corporation is a creature of the state. It is presumed to be incorporated for the benefit of the public. It receives certain special privileges and franchises, and holds them subject to the laws of the state and the limitations of its charter. Its powers are limited by law. It can make no contract not authorized by its charter. Its rights to [201 U.S. 43, 75] act as a corporation are only preserved to it so long as it obeys the laws of its creation.

There is a reserved right in the legislature to investigate its contracts and find out whether it has exceeded its powers. It would be a strange anomaly to hold that a state, having chartered a corporation to make use of certain franchises, could not, in the exercise of its sovereignty, inquire how these franchises had been employed, and whether they had been abused, and demand the production of the corporate books and papers for that purpose. The defense amounts to this: That an officer of a corporation which is charged with a criminal violation of the statute, may plead the criminality of such corporation as a refusal to produce its books. To state this proposition is to answer it. While an individual may lawfully refuse to answer incriminating questions unless protected by an immunity statute, it does not follow that a corporation, vested with special privileges and franchises, may refuse to show its hand when charged with an abuse of such privileges. "

[Note: Hale v. Henkel was not a tax case. No tax issues were presented to or decided by the Court. Famspear 16:44, 17 December 2005 (UTC) ]

1911: Flint v. Stone Tracy Co., 220 U.S. 107. Defined excise taxes as taxes laid on corporations and corporate privileges, not in natural persons. "Excises are taxes laid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations and upon corporate privileges...the requirement to pay such taxes involves the exercise of [220 U.S. 107, 152] privileges, and the element of absolute and unavoidable demand is lacking...Conceding the power of Congress to tax the business activities of private corporations.. the tax must be measured by some standard...It is therefore well settled by the decisions of this court that when the sovereign authority has exercised the right to tax a legitimate subject of taxation as an exercise of a franchise or privilege, it is no objection that the measure of taxation is found in the income produced in part from property which of itself considered is nontaxable."

Editor's note: In Flint v. Stone Tracy Co., 220 U.S. 107 (1911), the U.S. Supreme Court ruled that the corporation tax act of 1909 did not violate the constitutional requirement that revenue measures originate in the U.S. House of Representatives. Contrary to the statement in the text above, the Court did not rule that excise taxes consisted only of taxes on corporations and corporate privileges, to the exclusion of taxes on "natural persons." The issue of the validity of an income tax imposed on "natural persons" was neither presented to the Court nor decided by the Court. Sorry, tax protesters. Yours, Famspear 04:04, 7 March 2006 (UTC)

1914: Weeks v. U.S., 232 U.S. 383. Established that illegally obtained evidence may not be used by the court or admitted into evidence. This case is very useful in refuting the use by the IRS of income tax returns that were submitted involuntarily (note that these returns must say "submitted under compulsion in violation of 5th Amendment rights" or some such thing at the bottom.

"The effect of the 4th Amendment is to put the courts [232 U.S. 383, 392] of the United States and Federal officials, in the exercise of their power and authority, under limitations and restraints as to the exercise of such power and authority, and to forever secure the people, their persons, houses, papers, and effects, against all unreasonable searches and seizures under the guise of law. This protection reaches all alike, whether accused of crime or not, and the duty of giving to it force and effect is obligatory upon all intrusted under our Federal system with the enforcement of the laws. The tendency of those who execute the criminal laws of the country to obtain conviction by means of unlawful seizures and enforced confessions, the latter often obtained after subjecting accused persons to unwarranted practices destructive of rights secured by the Federal Constitution, should find no sanction in the judgments of the courts, which are charged at all times with the support of the Constitution, and to which people of all conditions have a right to appeal for the maintenance of such fundamental rights.

The case in the aspect in which we are dealing with it involves the right of the court in a criminal prosecution to retain for the purposes of evidence the letters and correspondence of the accused, seized in his house in his absence and without his authority, by a United States marshal holding no warrant for his arrest and none for the search of his premises. The accused, without awaiting his trial, made timely application to the court for an order for the return of these letters, as well or other property. This application was denied, the letters retained and put in evidence, after a further application at the beginning of the trial, both applications asserting the rights of the accused under the 4th and 5th Amendments to the Constitution. If letters and private documents can thus be seized and held and used in evidence against a citizen accused of an offense, the protection of the 4th Amendment, declaring his right to be secure against such searches and seizures, is of no value, and, so far as those thus placed are concerned, might as well be stricken from the Constitution. The efforts of the courts and their officials to bring the guilty to punishment, praiseworthy as they are, are not to be aided by the sacrifice of those great principles established be years of endeavor and suffering which have resulted in their embodiment in the fundamental law of the land. The United States marshal could only have invaded the house of the accused when armed with a warrant issued as required by the Constitution, upon sworn information, and describing with reasonable particularity the thing for which the search was to be made. Instead, he acted without sanction of law, doubtless prompted by the desire to bring further proof to the aid of the government, and under color of his office undertook to make a seizure of private papers in direct violation of the constitutional prohibition against such action. Under such circumstances, without sworn information and particular description, not even an order of court would [232 U.S. 383, 394] have justified such procedure; much less was it within the authority of the United States marshal to thus invade the house and privacy of the accused.

[Note: Weeks v. United States, 232 U.S. 383 (1914), discussed above, is not a tax case. No issues regarding the admissibility of tax returns were decided by the Court. A leading case on the use of tax returns against a criminal defendant is Garner v. United States, 424 U.S. 648 (1976). In that case, the Supreme Court upheld the admissibility and use, by the prosecution against the defendant in a criminal case, of statements made by the defendant in his tax return. Famspear 17:04, 17 December 2005 (UTC) ]

In Adams v. New York, 192 U.S. 585 , 48 L. ed. 575, 24 Sup. Ct. Rep. 372, this court said that the 4th Amendment was intended to secure the citizen in person and property against unlawful invasion of the sanctity of his home by officers of the law, acting under legislative or judicial sanction. This protection is equally extended to the action of the government and officers of the law acting under it.

Boyd Case, 116 U.S. 616 , 29 L. ed. 746, 6 Sup. Ct. Rep. 524. To sanction such proceedings would be to affirm by judicial decision a manifest neglect, if not an open defiance, of the prohibitions of the Constitution, intended for the protection of the people against such unauthorized action.

1916: Brushaber vs. Union Pacific Railroad, 240 U.S. 1. Established that the 16th Amendment had no affect on the constitution, and that income taxes could only be sustained as excise taxes and not as direct taxes. [Editor's note: This is false. See below.]

"...the proposition and the contentions under [the 16th Amendment]...would cause one provision of the Constitution to destroy another; That is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned; [Editor's note: This is a false quote, in that the words "the 16th Amendment" have been inserted. This statement did not refer to the 16th Amendment, but instead to the losing arguments of Mr. Brushaber. See below.]

This result, instead of simplifying the situation and making clear the limitations of the taxing power, which obviously the Amendment must have intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion.

Moreover in addition the Conclusion reached in the Pollock Case did not in any degree involve holding that income taxes generically and necessarily came within the class of direct taxes on property, but on the contrary recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and consider substance alone and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it.

....the Amendment demonstrates that no such purpose was intended and on the contrary shows that it was drawn with the object of maintaining the limitations of the Constitution and harmonizing their operation."

....the [16th] Amendment contains nothing repudiating or challenging the ruling in the Pollock Case that the word direct had a broader significance since it embraced also taxes levied directly on personal property because of its ownership, and therefore the Amendment at least impliedly makes such wider significance a part of the Constitution -- a condition which clearly demonstrates that the purpose was not to change the existing interpretation except to the extent necessary to accomplish the result intended, that is, the prevention of the resort to the sources from which a taxed income was derived in order to cause a direct tax on the income to be a direct tax on the source itself and thereby to take an income tax out of the class of excises, duties and imposts and place it in the class of direct taxes...

Indeed in the light of the history which we have given and of the decision in the Pollock Case and the ground upon which the ruling in that case was based, there is no escape from the Conclusion that the Amendment was drawn for the purpose of doing away for the future with the principle upon which the Pollock Case was decided, that is, of determining whether a tax on income was direct not by a consideration of the burden placed on the taxed income upon which it directly operated, but by taking into view the burden which resulted on the property from which the income was derived, since in express terms the Amendment provides that income taxes, from whatever source the income may be derived, shall not be subject to the regulation of apportionment.

Editor's note: Brushaber is a terrible case for tax protesters to be citing! The statement that Brushaber established that "the 16th Amendment had no affect [sic; should be "effect"] on the constitution, and that income taxes could only be sustained as excise taxes and not as direct taxes" is misleading. What the Court essentially said was that the 16th Amendment did not give the Congress a new power to tax incomes, as Congress already had that power.

The 16th Amendment -- as interpreted by the Supreme Court in the Brushaber decision -- made the dichotomy between direct and indirect taxes essentially no longer constitutionally relevant with respect to apportionment of Federal income taxes -- as apportionment is not required for any Federal income tax after the Sixteenth Amendment. A detailed summary of Brushaber is beyond the scope of this comment; however, the following statement by the Supreme Court in Brushaber (ironically, quoted above by the tax protesters!), in referring to the prior decision in Pollock, is revealing (emphasis added):

Moreover, in addition, the conclusion reached in the Pollock Case did not in any degree involve holding that income taxes generically and necessarily came within the class of direct taxes on property, but, on the contrary, recognized the fact that taxation on income was in its nature an excise [i.e.,, an indirect tax] entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form [i.e., its form as an indirect tax, or excise tax, which is not required to be apportioned] and consider substance alone [i.e., to treat it as a direct tax, required to be apportioned], and hence subject the tax to the regulation as to apportionment [i.e., to treat the tax as a direct tax] which otherwise[,] as an excise[,] would not apply to it. Nothing could serve to make this clearer than to recall that in the Pollock Case, in so far as the law taxed incomes from other classes of property than real estate and invested personal property, that is, income from 'professions, trades, employments, or vocations', its validity was recognized; indeed, it was expressly declared that no dispute was made upon that subject, and attention was called to the fact that taxes on such income [i.e., income from professions, trades, employments or vocations] had been sustained as excise taxes in the past.

The quote above "...the proposition and the contentions under [the 16th Amendment]...would cause one provision of the Constitution to destroy another" is, with the bracketed words "[the 16th Amendment]" a falsification of what the Court actually said. The "proposition and the contentions" to which the Court referred were not those of the 16th Amendment. The "proposition and the contentions" to which the Court was referring were the arguments of Mr. Brushaber's attorneys, Julien T. Davies, Brainard Tolles, Garrard Glenn, and Martin A. Schenck -- arguments against the validity of the income tax -- arguments that the Court rejected. The actual quote from the text of the Court's decision is as follows (with emphasis added):

But it clearly results that the proposition and the contentions under it, if acceded to, would cause one provision of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes be apportioned. Moreover, the tax authorized by the Amendment, being direct, would not come under the rule of uniformity applicable under the Constitution to other than direct taxes, and thus it would come to pass that the result of the Amendment would be to authorize a particular direct tax not subject either to apportionment or to the rule of geographical uniformity, thus giving power to impose a different tax in one state or states than was levied in another state or states. This result, instead of simplifying the situation and making clear the limitations on the taxing power, which obviously the Amendment must have been intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion.

But the Court did not "accede to" Mr. Brushaber's arguments. The Court went on to reject these arguments, and Mr. Brushaber lost the case. The result of Brushaber is that although an income tax on income from property was deemed (under Pollock) to be a direct tax and an income tax on wages, etc., was deemed to be an indirect tax (an excise), the Sixteenth Amendment allows a tax on incomes without apportionment regardless of "source" -- that is, regardless of whether the tax is deemed direct (for example, a tax on income from property) or indirect (for example, a tax on income from labor).

Even in the Pollock case, taxes on income from professions, trades, employments or vocations were NOT considered direct taxes and were NOT required to be apportioned, as these were indirect taxes (i.e., excises). Further, nothing in Pollock, the 16th Amendment, or Brushaber changed that. The Court in Pollock decided that an income tax on income from property was treated as a direct tax, and therefore had to be apportioned (prior to the 16th Amendment in 1913). The Brushaber Court was saying that nothing in Pollock required that a tax on, say, wages (i.e., an indirect, or excise tax) would have to be apportioned to be constitutional.

The 16th Amendment, as interpreted by the Court in Brushaber, made the distinction between direct taxes (required to be apportioned) and indirect taxes (not required to be apportioned) irrelevant with respect to the apportionment rule. In other words, after the 16th Amendment the Congress can constitutionally impose a tax (whether direct or indirect) on any income, regardless of "source" (i.e., regardless of whether the tax would be considered direct or indirect) without the requirement of "apportionment" among the states, and without regard to any "census or enumeration." Brushaber is a very complex case with a terrible outcome for tax protesters -- perhaps the worst case a tax protester would want to be citing! Famspear 16:10, 18 December 2005 (UTC)

1916: Stanton v. Baltic Mining, 240 U.S. 103. Declared that the 16th Amendment conferred no new powers of taxation to the U.S. government, but simply prevented income taxes from being taken out of the category of indirect (excise) taxes to which they inherently belonged. "..by the previous ruling it was settled that the provisions of the Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged and being placed in the category of direct taxation subject to apportionment by a consideration of the sources from which the income was derived, that is by testing the tax not by what it was -- a tax on income, but by a mistaken theory deduced from the origin or source of the income taxed. "

Editor's note: In Stanton v. Baltic Mining Co., 240 U.S. 103 (1916), the U.S. Supreme Court rejected the argument that the income tax imposed by the tax act of October 3, 1913 (Ch. 16, 38 Stat. 166) violated the Sixteenth Amendment. The Court upheld the constitutionality of the income tax under the 1913 Act. Another dead end for tax protesters. Yours, Famspear 03:14, 23 May 2006 (UTC)

1918: Peck v. Lowe, 247 U.S. 165. Stated that the 16th Amendment does not extend the taxing power to new or excepted subjects, but removed the need to apportion direct taxes on income.

The plaintiff is a domestic corporation chiefly engaged in buying goods in the several states, shipping them to foreign countries and there selling them. In 1914 its net income from this business was $30,173.66, and from other sources $12,436.24. An income tax for that year, computed on the aggregate of these sums, was assessed against it and paid under compulsion. It is conceded that so much of the tax as was based on the income from other sources was valid, and the controversy is over so much of it as was attributable to the income from shipping goods to foreign countries and there selling them.

The tax was levied under the Act of October 3, 1913, c. 16, 11, 38 Stat. 166, 172, which provided for annually subjecting every domestic corporation to the payment of a tax of a specified per centum of its 'entire net income arising or accruing from all sources during the preceding calendar year.' Certain fraternal and other corporations, as also income from certain enumerated sources, were specifically excepted, but none of the exceptions included the plaintiff or any part of its income. So, tested merely by the terms of the act, the tax collected from the plaintiff was rightly computed on its total net income. But as the act obviously could not impose a tax forbidden by the Constitution, we proceed to consider whether the tax, or rather the part in question, was forbidden by the constitutional provision on which the plaintiff relies.

The Sixteenth Amendment, although referred to in argument, has no real bearing and may be put out of view. As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects, but merely removes all occasion, which otherwise might exist, for an apportionment among the states of taxes [247 U.S. 165, 173] laid on income, whether it be derived from one source or another. Brushaber v. Union Pacific R. R. Co., 240 U.S. 1, 17-19, 36 Sup. Ct. 236, Ann. Cas. 1917B, 713, L. R. A. 1917D, 414; Stanton v. Baltic Mining Co., 240 U.S. 103, 112-113, 36 Sup. Ct. 278.

Editor's note: The above verbiage regarding the case of William E. Peck & Co. v. Lowe, 247 U.S. 165 (1918), is basically accurate. This is another case that tax protesters cite -- apparently because they do not understand what they are reading! Particularly devastating for tax protesters is the statement that the Sixteenth Amendment "does not extend the taxing power to new or excepted subjects, but merely removes all occasion, which otherwise might exist, for an apportionment among the states of taxes laid on income, whether it be derived from one source or another." Also, the Constitutionality of the tax in this case was upheld. Another dead end for tax protesters! Famspear 17:49, 7 January 2006 (UTC)

1920: Evens v. Gore, 253 U.S. 245. Overturned by O'Malley v. Woodrough (307 U.S. 277). Court ruled that income taxes on federal judges were unconstitutional. "After further consideration, we adhere to that view and accordingly hold that the Sixteenth Amendment does not authorize or support the tax in question. " [A direct tax on salary income of a federal judge]

Editor's note: The correct spelling of the "Evens" case is Evans v. Gore, 253 U.S. 245 (1920). The effect of Evans v. Gore was indeed overruled in O'Malley v. Woodrough, 307 U.S. 277 (1939), where the Supreme Court upheld the constitutionality of the Federal income tax. In O'Malley the Court said:

[ . . . ] the question immediately before us is whether Congress exceeded its constitutional power in providing that United States judges appointed after the Revenue Act of 1932 shall not enjoy immunity from the incidences of taxation to which everyone else within the defined classes of income is subjected. Thereby, of course, Congress has committed itself to the position that a non-discriminatory tax laid generally on net income is not, when applied to the income of a federal judge, a diminution of his salary within the prohibition of Article III, 1 of the Constitution. To suggest that it makes inroads upon the independence of judges who took office after Congress had thus charged them with the common duties of citizenship, by making them bear their aliquot share of the cost of maintaining the Government, is to trivialize the great historic experience on which the framers based the safeguards of Article III, 1.9 To subject them [i.e., U.S. judges] to a general tax is merely to recognize that judges are also citizens, and that their particular function in government does not generate an immunity from sharing with their fellow citizens the material burden of the government whose Constitution and laws they are charged with administering.

The "bottom line" of O'Malley v. Woodrough is essentially that the Constitution does not exempt Federal judges from liability for Federal income tax. Famspear 06:11, 25 December 2005 (UTC)

1920: Eisner v. Macomber, 252 U.S. 189. Defined income within the meaning of the 16th Amendment as "profit". Prohibited direct, unapportioned taxation of income of a stockholder. The Sixteenth Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted.

[Note: This description of Eisner v. Macomber is misleading. Further, the statement that the Court prohibited the direct, unapportioned taxation of income of a stockholder is false. The case actually dealt with a stock dividend on stock that was essentially equivalent to a stock split, as opposed to a cash dividend on stock. In the case of this kind of "dividend" the stockholder does not receive anything or realize any additional value. For example, if a stockholder owns 100 shares of stock having a value of $4 per share, the total value is $400. If the corporation declares, say, a "two for one" stock dividend that is essentially similar to a stock split (and the corporation distributes no money or other property), the stockholder now has 200 shares with a value of $2 each, which is still $400 in value - i.e., no increase in value and no income. The pie is still the same size -- but it's sliced into more pieces, each piece being proportionately smaller. More directly to the point, there has been no "sale or other disposition" of the stock. The taxpayer still owns the same asset (i.e., the same interest in the corporation) he owned prior to the stock dividend. So, even if his basis amount (generally, the amount he originally paid for the stock) is less than the $400 value (i.e., even if he has an unrealized or potential gain), he still has not yet "realized" the gain. This kind of stock dividend is not treated as "income" to a shareholder. The Court did not rule on any issue involving the taxability of ordinary "cash" dividends -- where the stockholder actually receives a check from the company, etc. This is definitely not a good case for tax protesters to be citing. Famspear 16:44, 17 December 2005 (UTC) ]

In Pollock v. Farmers' Loan & Trust Co., 158 U.S. 601 , 15 Sup. Ct. 912, under the Act of August 27, 1894 (28 Stat. 509, 553, c. 349, 27), it was held that taxes upon rents and profits of real estate and upon returns from investments of personal property were in effect direct taxes upon the property from which such income arose, imposed by reason of ownership; and that Congress could not impose such taxes without apportioning them among the states according to population, as required by article 1, 2, cl. 3, and section 9, cl. 4, of the original Constitution.

Editor's note: The above verbiage regarding the Pollock case is basically correct. However, the legal effect of Pollock with respect to Federal income taxes was eliminated by ratification of the Sixteenth Amendment to the Constitution in 1913. After the Sixteenth Amendment, income taxes that were deemed to be direct taxes in Pollock (i.e., income taxes on income from property) are no longer required to be apportioned. Stated another way, Congress may constitutionally tax incomes from whatever source derived without apportionment among the states, and without regard to any census or enumeration. Yours, Famspear 20:37, 25 May 2006 (UTC)

Editor's note: The following paragraphs are from Eisner v. Macomber, 252 U.S. 189 (1920). This case is often cited by tax protesters for the false claim that ordinary dividends on stock are not taxable, etc. See the discussion of this case elsewhere on this page on what the Court actually ruled. Yours, Famspear 20:05, 23 May 2006 (UTC)

Afterwards, and evidently in recognition of the limitation upon the taxing power of Congress thus determined, the Sixteenth Amendment was adopted, in words lucidly expressing the object to be accomplished: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among [252 U.S. 189, 206] the several states, and without regard to any census or enumeration.'

As repeatedly held, this did not extend the taxing power to new subjects, but merely removed the necessity which otherwise might exist for an apportionment among the states of taxes laid on income. Brushaber v. Union Pacific R. R. Co., 240 U.S. 1 , 17-19, 36 Sup. Ct. 236, Ann. Cas. 1917B, 713, L. R. A. 1917D, 414; Stanton v. Baltic Mining Co., 240 U.S. 103 , 112 et seq., 36 Sup. Ct. 278; Peck & Co. v. Lowe, 247 U.S. 165, 172 , 173 S., 38 Sup. Ct. 432.

A proper regard for its genesis, as well as its very clear language, requires also that this amendment shall not be extended by loose construction, so as to repeal or modify, except as applied to income, those provisions of the Constitution that require an apportionment according to population for direct taxes upon property, real and personal. This limitation still has an appropriate and important function, and is not to be overridden by Congress or disregarded by the courts. [.]

After examining dictionaries in common use (Bouv. L. D.; Standard Dict.; Webster's Internat. Dict.; Century Dict.), we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136, 140 [58 L. Ed. 285]; Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185 , 38 S. Sup. Ct. 467, 469 [62 L. Ed. 1054]), 'Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case, 247 U.S. 183, 185, 38 S. Sup. Ct. 467, 469 (62 L. Ed. 1054).

Brief as it is, it indicates the characteristic and distinguishing attribute of income essential for a correct solution of the present controversy. The government, although basing its argument upon the definition as quoted, placed chief emphasis upon the word 'gain,' which was extended to include a variety of meanings; while the significance of the next three words was either overlooked or misconceived. 'Derived-from- capital'; 'the gain-derived-from-capital,' etc. Here we have the essential matter: not a gain accruing to capital; not a growth or increment of value in the investment; but a gain, a profit, something of exchangeable value, proceeding from the property, severed from the capital, however invested or employed, and coming in, being 'derived'-that is, received or drawn by the recipient (the taxpayer) for his separate use, benefit and disposal- that is income derived from property. Nothing else answers the description. [.]

Thus, from every point of view we are brought irresistibly to the conclusion that neither under the Sixteenth Amendment nor otherwise has Congress power to tax without apportionment a true stock dividend made lawfully and in good faith, or the accumulated profits behind it, as income of the stockholder. The Revenue Act of 1916, in so far as it imposes a tax upon the stockholder because of such dividend, contravenes the provisions of article 1, 2, cl. 3, and article 1, 9, cl. 4, of the Constitution, and to this extent is invalid, notwithstanding the Sixteenth Amendment.

Editor's note: The above paragraphs are from Eisner v. Macomber, 252 U.S. 189 (1920). This case is often cited by tax protesters for the false claim that ordinary dividends on stock are not taxable, etc. See the discussion of this case elsewhere on this page on what the Court actually ruled. Yours, Famspear 20:05, 23 May 2006 (UTC)

1922: Bailey v. Drexel Furniture Co., 259 U.S. 20. Prohibited Congress from legislating or controlling benefits that employers provide to their employees. [Editor's Note: This is false. The issue of the power of Congress to legislate or control benefits provided by employers to employees was neither presented to the Court nor decided by the Court. See below. Famspear 17:35, 22 January 2006 (UTC)] A major blow against socialism in America! "Out of a proper respect for the acts of a co-ordinate branch of the government, this court has gone far to sustain taxing acts as such, even though there has been ground for suspecting, from the weight of the tax, it was intended to destroy its subject. But in the act before [259 U.S. 20, 38] us the presumption of validity cannot prevail, because the proof of the contrary is found on the very face of its provisions. Grant the validity of this law, and all that Congress would need to do, hereafter, in seeking to take over to its control any one of the great number of subjects of public interest, jurisdiction of which the states have never parted with, and which are reserved to them by the Tenth Amendment, would be to enact a detailed measure of complete regulation of the subject and enforce it by a socalled tax upon departures from it. To give such magic to the word 'tax' would be to break down all constitutional limitation of the powers of Congress and completely wipe out the sovereignty of the states. "

Editor's Note: In Bailey v. Drexel Furniture Co., 259 U.S. 20 (1922), the Supreme Court ruled the 1919 Child Labor Tax Law unconstitutional as an improper attempt by Congress to penalize employers using child labor by disguising the penalty as a tax. Further, the Court later moved away from the philosophy of the Bailey case. For example, see United States v. Kahriger, 345 U.S. 22 (1953), overruled on other grounds, Marchetti v. United States, 390 U.S. 39 (1968). Famspear 17:35, 22 January 2006 (UTC)

1924: Cook v. Tait, 265 U.S. 47. The Supreme Court ruled that Congress has the power to tax the income received by a native citizen of the United States domiciled abroad from property situated abroad and that the constitutional prohibition of unapportioned direct taxes within the states of the union does not apply in foreign countries.

Editor's note: Pretty close. In Cook v. Tait, 265 U.S. 47 (1924), the Court did not mention "unapportioned direct taxes" and did not talk about whether the apportionment rule did or did not apply in foreign countries. The Court did rule that the Revenue Act of 1921, imposing an income tax on income of a natural born U.S. citizen living abroad (where the property generating the income was also outside the United States), did not exceed the Federal taxing power. In other words, the income tax was not unconstitutional. Not a good case for tax protesters to be citing. Famspear 18:08, 22 January 2006 (UTC)

1930: Lucas v. Earl, 281 U.S. 111. The Supreme Court ruled that wages and compensation for personal services were not to be taxed in their entirety, but instead, the gain or profit derived indirectly from them.

[Note: This is not the ruling in Lucas v. Earl. This is a paraphrase from certain language -- taken out of context -- found in the taxpayer's brief in the case, and reprinted as a headnote in some but not all reprints concerning the case. The Court rejected the taxpayer's arguments and ruled against the taxpayer. The Court ruled that the taxpayer was taxed on all his income as he earned it, regardless of the validity of contract under state law to assign some of his future income to another person (namely his wife). Tax protesters who don't know enough about analysis of legal documents to tell a taxpayer's brief containing a losing argument from the decision of the Court itself probably shouldn't be quoting from such documents. Definitely a terrible case for tax protesters to be citing. Famspear 16:44, 17 December 2005 (UTC) ]

1935: Railroad Retirement Board v. Alton Railroad Company, 295 U.S. 330.

The Supreme Court ruled that Congress that it has no constitutional authority whatsoever to legislate for the social welfare of the worker. The result was that when Social Security was instituted, it had to be treated as strictly voluntary. "The catalog of means and actions which might be imposed upon an employer in any business, tending to the comfort and satisfaction of his employees, seems endless.

Provisions for free medical attendance and nursing, for clothing, for food, for housing, for the education of children, and a hundred other matters might with equal propriety be proposed as tending to relieve the employee of mental strain and worry.

Can it fairly be said that the power of Congress to regulate interstate commerce extends to the prescription of any or all of these things?

Is it not apparent that they are really and essentially related solely to social welfare of the worker, and therefore remote from any regulation of commerce as such? We think the answer is plain. These matters obviously lie outside the orbit of Congressional power."

Editor's note: Railroad Retirement Board v. Alton Railroad Company, 295 U.S. 330 (1935) was not a tax case. No issues of taxation were presented to or decided by the Court. Famspear 05:48, 25 December 2005 (UTC)

1938: Hassett v. Welch, 303 U.S. 303. Ruled that disputes over uncertainties in the tax code should be resolved in favor of the taxpayer. "In view of other settled rules of statutory construction, which teach that... if doubt exists as to the construction of a taxing statute, the doubt should be resolved in favor of the taxpayer..."

1939: O'Malley v. Woodrough, 307 U.S. 277. Overturned portions of Evens v. Gore, 253 U.S. 245, but not the part about the 16th Amendment. [Editor's note: Regarding the language "but not the part about the 16th Amendment" -- incorrect. See separate discussion. The "bottom line" of O'Malley v. Woodrough is essentially that the Constitution does not exempt Federal judges from liability for Federal income tax. And the name is "Evans," not "Evens." Famspear 18:33, 28 December 2005 (UTC) ] "However, the meaning which Evans v. Gore, supra, imputed to the history which explains Article III, 1 was contrary to the way in which it was read by other English-speaking courts.[1] The decision met wide and steadily growing disfavor from legal scholarship and professional opinion. Evans v. Gore, supra, itself was rejected by most of the courts before whom the matter came after that decision [2]"

1945: Hooven & Allison Co. v. Evatt, 324 US 652. Ruled that there are three distinct and separate definitions for the term "United States". The income tax only applies to one of the three definitions! "The term 'United States' may be used in any one of several senses. It may be merely the name of a sovereign occupying the position analogous to that of other sovereigns in the family of nations. It may designate the territory over which the sovereignty of the United States ex- [324 U.S. 652, 672] tends, or it may be the collective name of the states which are united by and under the Constitution."

Editor's Note: The above implication -- that according to the Supreme Court in the case of Hooven & Allison Co. v. Evatt, 324 U.S. 652 (1945), the "income tax only applies to one of the three definitions [of the term United States]" -- is false. The term "United States" as used in the Internal Revenue Code has at least two separate meanings.

When used in a geographical sense, the term means "only the States and the District of Columbia" (see 26 U.S.C. § 7701(a)(9)). When used in a political sense, the term means the nation known as the United States of America, or the government of the United States of America, as in: "[a] suit or proceeding referred to in subsection (a) [i.e., a Federal tax refund suit] may be maintained only against the United States, and not against any officer or employee of the United States [ . . . ]" (see 26 U.S.C. § 7422(f)(1)).

The term "United States" can be and is used in the Internal Revenue Code with respect to Federal income taxes and other Federal taxes in both of these senses -- sometimes in both ways in the same sentence. See, for example, 26 U.S.C. § 7701(a)(4).

Further, the case of Hooven & Allison Co. v. Evatt involved the issue of whether an Ohio state ad valorem tax on bales of hemp and other fibers from the Philippine Islands was an impermissible state tax on imports (Article I, section 10, clause 2 of the U.S. Constitution). The case of Hooven & Allison Co. v. Evatt did not involve Federal income taxes or any other kind of Federal taxes. The term "income tax" does not even appear in the text of the Court's decision in this case. Yours, Famspear 18:44, 24 May 2006 (UTC)

1959: Flora v. United, 362 US 145. Ruled that our tax system is based on voluntary assessment and payment, not on force or coercion. "Our system of taxation is based upon voluntary assessment and payment, not upon distraint."

Note: This particular decision in Flora was rendered in 1960 (not 1959). The decision in question is Flora v. United States, 362 U.S. 145 (1960), which was a decision on a rehearing confirming the decision in a case decided and reported as Flora v. United States, 357 U.S. 63 (1958). And why do tax protesters keep citing the leading cases? Don’t they realize that all the tax lawyers have already studied these? In Flora, the Supreme Court ruled that a Federal District Court does not have jurisdiction to hear a lawsuit by a taxpayer for a Federal income tax refund where the taxpayer has not paid the entire amount assessed (the rule does not apply to U.S. Tax Court cases or bankruptcy cases). Tax protesters sometimes cite cases like this for the false argument that filing of tax returns and paying taxes is not legally required, i.e., that the filing of returns and paying of taxes is, in that sense, “voluntary”. Not so.

The quoted language from Flora refers to the Federal income tax: “Our system of taxation is based upon voluntary assessment and payment, not upon distraint.” The key words are "voluntary" and “distraint.” Like many legal terms, “voluntary” has more than one legal meaning. In the context of the quoted sentence, the income tax is voluntary in that the person bearing the economic burden of the tax is the one required to compute (assess) the amount of tax and file the related tax return. In this sense, a state sales tax is not a voluntary tax - i.e., the purchaser of the product does not compute the tax or file the related tax return. The store at which he or she bought the product computes the sales tax, charges the customer, collects the tax from him at the time of sale, prepares and files a monthly or quarterly sales tax return and remits the money to the taxing authority.

In Flora, the Court used the word “voluntary” in opposition to the word “distraint.” Distraint is a legal term used in various contexts. For example, distraint is used to refer to the act of a landlord who withholds property of the tenant already in the landlord’s possession to secure payment of past due rent. The property held for ransom, if you will, is said to be “distrained,” or “distressed.” The key connotation of the word “distraint” is that there is often a forcible taking of possession or withholding of non-cash property to induce a debtor to pay an obligation -- with money. Once the debt is paid, the property is released. Obviously, the Internal Revenue Service does not go around seizing everyone’s property every January just to get everyone to file a tax return and pay the tax by April 15th. That’s not our system. We rely on "voluntary" compliance. Hey tax protesters! Get the drift?

However, in another legal sense of the word "voluntary," the obligation to pay the tax and file the return is NOT voluntary -- for either income tax or sales tax. For example, the Internal Revenue Code is full of statutes specifically imposing the obligation to file returns and pay taxes, and imposing civil and criminal penalties for willful failure to do so on a timely basis. The difference is that in the case of the income tax, the taxpayer files the return, whereas in the case of the sales tax, the seller (not the customer) files the return.

Folks, this is not rocket science. If you're going to try to interpret law, you have to understand that a given word can have multiple meanings. By the way, courts do use the term “voluntary” in both senses, which of course confuses the tax protesters even more. And this is the EASY part of tax law! Oh, just in case you tax protesters missed the hint: The Supreme Court in Flora did not rule that people do not have to file Federal income tax returns or pay income taxes. Famspear 17:04, 18 December 2005 (UTC)

1961: James v. United States, 366 US 213, p. 213, 6L Ed 2d 246. Income that is taxed under the 16th Amendment must derive from a "source". Also established that embezzled money is taxable as income. "...the Sixteenth Amendment, which grants Congress the power "to lay and collect taxes on incomes, from whatever source derived."

Helvering v. Clifford, 309 US 331, 334; Douglas v. Willcuts, 296 US 1,9. It has long been settled that Congress' broad statutory definitions of taxable income were intended "to use the full measure of taxing power." The Sixteenth Amendment is to be taken as written and is not to be extended beyond the meaning clearly indicated by the language used." Edwards v. Cuba R. Co. 268 US 628, 631 [From separate opinion by Whittaker, Black, and Douglas, JJ.] (Emphasis added)

1970: Brady v. U.S., 397 U.S. 742 at 748. Supreme Court ruled that: "Waivers of Constitutional Rights not only must be voluntary, they must be knowingly intelligent acts, done with sufficient awareness of the relevant circumstances and consequences."

1975: Garner v. United States, 424 U.S. 648. Supreme Court ruled that income taxes constitute the compelled testimony of a witness: "The information revealed in the preparation and filing of an income tax return is, for the purposes of Fifth Amendment analysis, the testimony of a witness." "Government compels the filing of a return much as it compels, for example, the appearance of a `witness' before a grand jury."

Editor's note: The correct date on Garner is 1976, not 1975. As explained in a Wikipedia article elsewhere, the defendant was convicted in connection with a conspiracy to "fix” sporting contests and to transmit illegal bets. During the trial the prosecutor introduced, as evidence, the taxpayer's Federal income tax returns for various years. In one return the taxpayer had showed his occupation to be “professional gambler.” In various returns the taxpayer had reported income from “gambling” or “wagering.” The prosecution used this to help contradict the taxpayer's argument that his involvement in gambling was innocent. The taxpayer tried unsuccessfully to keep the prosecutor from introducing the tax returns as evidence, arguing that since the taxpayer had been legally required to report the illegal income on the returns, he was being compelled to be a witness against himself. The Supreme Court agreed that he was legally obligated to report the illegal income on the returns, but ruled that the privilege against self-incrimination still did not apply. The Court stated that "if a witness under compulsion to testify makes disclosures instead of claiming the privilege, the Government has not 'compelled' him to incriminate himself." In other words, Mr. Garner had simply failed to assert the privilege on the tax return itself, when he filed the return.

Garner and other cases are viewed by some legal scholars as standing for the proposition that on a required Federal income tax return a taxpayer would probably have to report the amount of the illegal income, but might validly claim the privilege by labeling the item with the words "Fifth Amendment" (instead of "illegal gambling income," "illegal drug sales," etc.) Famspear 17:04, 17 December 2005 (UTC)

1978: Central Illinois Public Service Co. v. United States, 435 U.S. 21. Established that wages and income are NOT equivalent as far as taxes on income are concerned.

Editor's Note: Wrong, and misleading. In the case of Central Illinois Public Serv. Co. v. United States, 435 U.S. 21 (1978), the U.S. Supreme Court did not “establish” that “wages” and “income” are “not equivalent.” (Indeed, the two have never been “equivalent,” as “income” includes more than just “wages.” That was not the issue decided in the case.) Instead, the Court ruled that under Internal Revenue Code section 3401, an employer who reimbursed employees for lunch expenses during company travel was not required to withhold federal income tax on those reimbursements. The lunch reimbursements did not qualify as "wages" for purposes of the section 3401(a) withholding requirements. The Supreme Court did not rule that wages are not taxable. Famspear 17:46, 17 December 2005 (UTC)

"Decided cases have made the distinction between wages and income and have refused to equate the two in withholding or similar controversies.

Peoples Life Ins. Co. v. United States, 179 Ct. Cl. 318, 332, 373 F.2d 924, 932 (1967);

Humble Pipe Line Co. v. United States, 194 Ct. Cl. 944, 950, 442 F.2d 1353, 1356 (1971);

Humble Oil & Refining Co. v. United States, 194 Ct. Cl. 920, 442 F.2d 1362 (1971);

Stubbs, Overbeck & Associates v. United States, 445 F.2d 1142 (CA5 1971);

Royster Co. v. United States, 479 F.2d, at 390; Acacia

Mutual Life Ins. Co. v. United States, 272 F. Supp. 188 (Md. 1967)."

1985: U.S. v. Doe, 465 U.S. 605. The production of evidence or subpoenaed tax documents cannot be compelled. "We conclude that the Court of Appeals erred in holding that the contents of the subpoenaed documents were privileged under the Fifth Amendment. The act of producing the documents at issue in this case is privileged and cannot be compelled without a statutory grant of use immunity pursuant to 18 U.S.C. 6002 and 6003."

Note: United States v. Doe is a 1984 case, not 1985. Doe is an "act of production" doctrine case. The act of production doctrine basically says that the act of producing documents may itself have a testimonial aspect for purposes of the Fifth Amendment privilege against compelled self-incrimination -- i.e., if the person producing the documents is effectively testifying as to the documents' existence, custody (possession) or authenticity. Unfortunately, nothing in United States v. Doe says that the production of evidence or subpoenaed tax documents "cannot be compelled" as a general proposition. The key language above is: "The act of producing the documents at issue in this case is privileged [ . . . ]" The whole point is that it depends on the facts of the case. If, for example, the government already has an independent basis for proving existence, custody, and authenticity, then the defendant's act of producing the documents might have no testimonial aspect, and might therefore be required even if the contents of those documents included information incriminating to the person producing the documents. It all depends on how the "existence, custody, and authenticity" parameters would be met. Other leading cases on the act of production doctrine are United States v. Hubbell, 530 U.S. 27 (2000) and Fisher v. United States, 425 U. S. 391 (1976). Famspear 19:49, 20 December 2005 (UTC)

1991: Cheek v. United States, 498 U.S. 192. Held that if the defendant has a subjective good faith belief no matter how unreasonable, that he or she was not required to file a tax return, the government cannot establish that the defendant acted willfully in not filing an income tax return. In other words, that the defendant shirked a legal duty that he knew existed.

Note: After the U.S. Supreme Court remanded the Cheek case, Mr. Cheek was again tried, convicted and sentenced. See United States v. Cheek, 3 F.3d 1057 (7th Cir. 1993), cert. denied, 510 U.S. 1112 (1994). He failed to convince the jury that he had a subjective good faith belief that he was not required to file, etc. This is not a good case for tax protesters to be citing. Further, the Court distinguished between arguments about the constitutionality of income taxes and all other tax protester arguments. The Court ruled that a belief that the Federal income tax is unconstitutional is not a defense on the element of willfulness, even if the defendant actually held that belief in good faith. By contrast, a subjective good faith belief that, for example, wages are not taxable, MIGHT be a defense, even though the belief is irrational and unreasonable. The burden of proof is on the prosecution. However, if the prosecution presents a reasonably strong case, a good faith belief is an effective defense, for all practical purposes, only if the defendant convinces the jury that he or she actually held that belief. The jury, not the defendant, makes the call. Famspear 17:04, 17 December 2005 (UTC)

1992: United States v. Burke, 504 U.S. 229, 119 L Ed 2d 34, 112 S Ct. 1867. Court held that income that is taxed under the 16th Amendment must come from a "source". Congress's intent through 61 of the Internal Revenue Code [26 USCS 61(a)]--which provides that gross income means all income from whatever source derived, subject to only the exclusions specifically enumerated elsewhere in the Code... and 61(a)'s statutory precursors..."

Editor's Note: Income that is taxed must certainly come from a "source" -- but that was not the issue presented to the Court in United States v. Burke, 504 U.S. 229 (1992), and that was not what the Court "held" in Burke. In Burke, the Court held that backpay awards in settlement of claims under Title VII of the Civil Rights Act of 1964 are not excludable from gross income under Internal Revenue Code section 104(a)(2) -- i.e., these backpay awards are taxable. For tax protesters, this is just another case that is of no help to them at all. Famspear 06:28, 25 December 2005 (UTC)

1995: U.S. v. Lopez, 000 U.S. U10287. Establishes strict limits on the constitutional power and jurisdiction of the federal government inside the 50 States. "We start with first principles. The Constitution creates a Federal Government of enumerated powers. See U.S. Const., Art. I, 8. As James Madison wrote, "[t]he powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite." The Federalist No. 45, pp. 292-293 (C. Rossiter ed. 1961). This constitutionally mandated division of authority "was adopted by the Framers to ensure protection of our fundamental liberties."

Editor's note: This is United States v. Lopez, 115 S. Ct. 1624 (1995). Another total dead end for tax protesters. This was a case where a high school student was arrested for carrying a hand gun and five bullets at school, in violation of the Gun-Free School Zones Act of 1990, then codified at 18 U.S.C. 922(q)(1)(A). The issue presented to the Supreme Court was "whether the Commerce Clause authorizes Congress to enact a statute that makes it a crime to possess a gun in, or near, a school." The Supreme Court upheld the judgment of the Court of Appeals, ruling that section 922(q)(1)(A) exceeded the authority of Congress under the Commerce Clause of the U.S. Constitution. This was not a tax case. No issues involving the validity of Federal taxes were presented to or decided by the Court. Famspear 23:19, 7 February 2006 (UTC)

Gregory v. Ashcroft, 501 U.S. 452, 458 (1991) (internal quotation marks omitted). "Just as the separation and independence of the coordinate branches of the Federal Government serves to prevent the accumulation of excessive power in any one branch, a healthy balance of power between the States and the Federal Government will reduce the risk of tyranny and abuse from either front." Ibid.

Editor's note: In Gregory v. Ashcroft, 501 U.S. 452 (1991), the Supreme Court ruled that Missouri's mandatory retirement requirement for state judges did not violate the Age Discrimination in Employment Act of 1967, codified at 29 U.S.C. § 621 through 29 U.S.C. § 634. The Court also ruled (among other things) that the Missouri law did not violate the Equal Protection Clause of the U.S. Constitution. Can you guess what's coming next? Right: This is not a tax case. No issues involving the validity of Federal taxes were presented to or decided by the Court. The words "tax" and "taxation" do not even appear in the decision. Ho hum. Famspear 23:29, 7 February 2006 (UTC)

The Constitution delegates to Congress the power "[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." U.S. Const., Art. I, 8, cl. 3. The Court, through Chief Justice Marshall, first defined the nature of Congress' commerce power in Gibbons v. Ogden, 9 Wheat. 1, 189-190 (1824): "Commerce, undoubtedly, is traffic, but it is something more: it is intercourse. It describes the commercial intercourse between nations, and parts of nations, in all its branches, and is regulated by prescribing rules for carrying on that intercourse."

The commerce power "is the power to regulate; that is, to prescribe the rule by which commerce is to be governed. This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the constitution." Id., at 196. The Gibbons Court, however, acknowledged that limitations on the commerce power are inherent in the very language of the Commerce Clause.

"It is not intended to say that these words comprehend that commerce, which is completely internal, which is carried on between man and man in a State, or between different parts of the same State, and which does not extend to or affect other States. Such a power would be inconvenient, and is certainly unnecessary.

"Comprehensive as the word `among' is, it may very properly be restricted to that commerce which concerns more States than one. . .

. . . The enumeration presupposes something not enumerated; and that something, if we regard the language or the subject of the sentence, must be the exclusively internal commerce of a State." Id., at 194-195.

For nearly a century thereafter, the Court's Commerce Clause decisions dealt but rarely with the extent of Congress' power, and almost entirely with the Commerce Clause as a limit on state legislation that discriminated against interstate commerce. See, e.g., Veazie v. Moor, 14 How. 568, 573-575 (1853) (upholding a state-created steamboat monopoly because it involved regulation of wholly internal commerce); Kidd v. Pearson, 128 U.S. 1, 17, 20-22 (1888) (upholding a state prohibition on the manufacture of intoxicating liquor because the commerce power "does not comprehend the purely domestic commerce of a State which is carried on between man and man within a State or between different parts of the same State"); see also L. Tribe, American Constitutional Law 306 (2d ed. 1988). Under this line of precedent, the Court held that certain categories of activity such as "production," "manufacturing," and "mining" were within the province of state governments, and thus were beyond the power of Congress under the Commerce Clause. See Wickard v. Filburn, 317 U.S. 111, 121 (1942) (describing development of Commerce Clause jurisprudence). [.]

Consistent with this structure, we have identified three broad categories of activity that Congress may regulate under its commerce power. Perez v. United States, supra, at 150; see also Hodel v. Virginia Surface Mining & Reclamation Assn., supra, at 276-277. First, Congress may regulate the use of the channels of interstate commerce. See, e.g., Darby, 312 U.S., at 114 ; Heart of Atlanta Motel, supra, at 256. "`[T]he authority of Congress to keep the channels of interstate commerce free from immoral and injurious uses has been frequently sustained, and is no longer open to question.'" [quoting Caminetti v. United States, 242 U.S. 470, 491 (1917)]. Second, Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities. See, e.g., Shreveport Rate Cases, 234 U.S. 342 (1914); Southern R. Co. v. United States, 222 U.S. 20 (1911) (upholding amendments to Safety Appliance Act as applied to vehicles used in intrastate commerce); Perez, supra, at 150 ("[F]or example, the destruction of an aircraft (18 U.S.C. 32), or . . . thefts from interstate shipments (18 U.S.C. 659)"). Finally, Congress' commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce, Jones & Laughlin Steel, 301 U.S., at 37 , i.e., those activities that substantially affect interstate commerce. Wirtz, supra, at 196, n. 27.

FEDERAL CIRCUIT COURT CASES:

U.S. v. Tweel, 550 F.2d 297, 299-300 (1977) "Silence can only be equated with fraud when there is a legal or moral duty to speak, or when an inquiry left unanswered would be intentionally misleading... We cannot condone this shocking conduct...If that is the case we hope our message is clear. This sort of deception will not be tolerated and if this is routine it should be corrected immediately"

Lavin v. Marsh, 644 F.2nd 1378, 9th Cir., (1981) "Persons dealing with government are charged with knowing government statutes and regulations, and they assume the risk that government agents may exceed their authority and provide misinformation"

Bollow v. Federal Reserve Bank of San Francisco, 650 F.2d 1093, 9th Cir., (1981) "All persons in the United States are chargeable with knowledge of the Statutes-at-Large.. It is well established that anyone who deals with the government assumes the risk that the agent acting in the government's behalf has exceeded the bounds of his authority"

Economy Plumbing and Heating v. U.S., 470 F.2d 585 (Ct. Cl. 1972) "Persons who are not taxpayers are not within the system and can obtain no benefit by following the procedures prescribed for taxpayers, such as the filing of claims for refunds."

Long v. Rasmussen, 281 F. 236, at 238 "The revenue laws are a code or a system in regulation of tax assessment and collection. They relate to taxpayers, and not to non-taxpayers. The latter are without their scope. No procedures are prescribed for non-taxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. With them Congress does not assume to deal, and they are neither the subject nor the object of the revenue laws."

This case is Long v. Rasmussen, 281 F. 236, 4 Amer. Fed. Tax Rep. 3561 (D. Mont. 1922). In this case, the federal tax collector (Rasmussen) had distrained, and was trying to sell, certain property to satisfy the tax liability of one person --a taxpayer by the name of Wise -- but the Federal District Court concluded that the property was actually owned by someone else, by the name of Ms. Edna Long. The result was predictable: the court ordered that the tax collector's proposed sale of the property of Edna Long (the non-taxpayer) be cancelled, and that Ms. Long's property be returned to her. With respect to the tax in question, she was not the "taxpayer," and the property she owned was not owned by the "taxpayer." Ho hum. No brainer. Tax protesters love to play with words, and falsely cite this case over and over as somehow meaning something it does not mean, and it doesn't help them at all. Famspear (talk) 18:54, 1 January 2009 (UTC)

Redfield v. Fisher, 292 P. 813, 135 Or. 180, 294 P.461, 73 A.L.R. 721 (1931) "The individual, unlike the corporation, cannot be taxed for the mere privilege of existing. The corporation is an artificial entity which owes its existence and charter powers to the state; but the individuals' rights to live and own property are natural rights for the enjoyment of which an excise cannot be imposed."

Editor's note: Redfield v. Fisher is an Oregon case, not a Federal tax case. No issues on the validity of Federal income taxes or the power of Congress to impose, by law, an "excise" were decided in this case. Famspear 21:29, 17 December 2005 (UTC)

Also, the date of decision in Redfield v. Fisher was 1930, not 1931. This was an Oregon Supreme Court decision. Redfield v. Fisher, 135 Or. 180, 292 P. 813 (1930), and the case involved Oregon state taxes, not U.S. Federal taxes. Famspear (talk) 19:02, 1 January 2009 (UTC)

U.S. v. Ballard, 535 F2d 400, cert denied, 429 U.S. 918, 50 L.Ed.2d 283, 97 S.Ct. 310 (1976) "income" is not defined in the Internal Revenue Code

Editor's note: The statement that "income" (for purposes of the Federal income tax) is not defined in the Internal Revenue Code is correct. Income is not defined in the Constitution either. In fact, most words in statutes, etc., are not defined in those statutes. Under the U.S. legal system, there is no law requiring that all words in statutes be defined in the statutes, although some are. For example, "gross income," "adjusted gross income" and "taxable income" are defined in the Internal Revenue Code. Another red herring used impotently by tax protesters. Famspear 22:13, 17 December 2005 (UTC)

Note: A more precise citation is: United States v. Ballard, 535 F.2d 400 (8th Cir. 1976), cert denied, 429 U.S. 918 (1976).

"Congress has taxed INCOME, not compensation." Conner v US 303 F Supp. 1187 (1969) "There is a clear distinction between `profit' and wages', or a compensation for labor. Compensation for labor (wages) cannot be regarded as profit within the meaning of the law. The word `profit', as ordinarily used, means the gain made upon any business or investment- - - a different thing altogether from the mere compensation for labor."

[Note: The full citation is Conner v. United States, 303 F. Supp. 1187 (S.D. Tex. 1969), aff’d in part and rev’d in part, 439 F.2d 974 (5th Cir. 1971). The Conner case ("Congress has taxed income, not compensation") had nothing to do with wages or the taxability of wages. Conner was about the taxability of compensation paid by an insurance company to a policy holder whose house had burned down. The insurance company was reimbursing the homeowner for the costs of renting a place to stay after the home burned down -- under the terms of the insurance policy. The insurance company was not paying "wages." The compensation was for the loss of a home by fire. The quote beginning with "There is a clear distinction" and ending with "mere compensation for labor" is not from Conner. It is from the Oliver v. Halstead case (discussed elsewhere), which was not even a tax case. It was a Virginia Supreme Court decision about Virginia law (not tax law). More examples of deception by tax protesters. Famspear 17:41, 17 December 2005 (UTC) ]

Treasury Order 150-1, Paragraph 5 States: "US Territories and Insular Possessions. "The commissioner shall, to the extent of authority otherwise vested in him, provide for the administration of the United States internal revenue law [ small i ] in the U.S. territories and insular possessions and OTHER AUTHORIZED AREAS OF THE WORLD."

TO's 150-1 thru 150- 29 are the Delegation of authority orders for the IRS from the Dept. Of Treasury. No section or paragraph is found in any of these which authorize the Commissioner to administer the internal revenue laws anywhere other than the above paragraph.

Editor's Note: The references to Treasury Order 150-1 through 150-29 are incorrect. As of September 8, 2005, the relevant orders are Treasury Order 107-03, 107-07, and 150-02, -07, -08, -09, -10, -12, -15, -17, -18, -19, -25, -33, -35, -39, and perhaps parts of certain other orders. (In fact, as of September 8, 2005, Treasury Orders 150-1 and 150-29 were not even listed by the Treasury Department as operative orders.)

The statement "[n]o section or paragraph is found in any of these which authorize the Commissioner to administer the internal revenue laws anywhere other than the above paragraph" is legally meaningless, as nothing in Order 150-1 or any other Treasury Order has ever limited the authority of the Commissioner of Internal Revenue in terms of geography in the general administration and enforcement of the internal revenue laws of the United States in the area that is within the United States. Some orders, such as Order 150-18, do refer to specific geographical areas (for example, the Northern Mariana Islands). However, there is no general legal requirement that a Treasury Order specifically state that the Commissioner has authority within a geographical area called the "United States" in order for that authority to be effective within the fifty states and the District of Columbia. In fact, there is no general legal requirement that a Treasury Order specifically have any particular language regarding "geographical areas."

The current order is Treasury Order 150-10, which states in relevant part: "The Commissioner of Internal Revenue shall be responsible for the administration and enforcement of the Internal Revenue laws." Again, nothing in Treasury Order 150-10 or in any other Treasury Order limits the Commissioner's "geographical" authority within the United States. Notice also that the term used is "Internal Revenue laws" which is even broader than "Internal Revenue Code." The term "Internal Revenue laws" includes the Internal Revenue Code but also includes uncodified statutes, Treasury regulations, etc. Famspear 00:15, 22 December 2005 (UTC)

Bente v. Bugbee 137 A. 552, 553, 103 N. J. Law 608 . In that case the court held: A tax is a legal imposition exclusively of statutory origin (37 Cyc.724, 725), and, naturally, liability to taxation must be read in the statute, or it does not exist. (Emphasis added).

Editor's note: Bente v. Bugbee is not a Federal tax case. No issues involving the validity of Federal tax laws were decided by the court. Yours, Famspear 19:06, 22 May 2006 (UTC)

In State v. Chicago & N.W.R. Co., 112 N.W. 515, 520; 132 Wis. 345, quoting and adopting the definition in State v. Certain Lands in Redwood County, 42 N.W. 473, 40 Minn. 512, the court held: That a tax is a liability created by statute we think admits of no doubt, either upon principle or authority. (Emphasis added)

Editor's note: State v. Chicago & N.W.R. Co. is not a Federal tax case. No issues involving the validity of Federal tax laws were decided by the court. Yours, Famspear 19:06, 22 May 2006 (UTC)

"The taxpayer must be liable for the tax. Tax liability is a condition precedent to the demand. Merely demanding payment, even repeatedly, does not cause liability". [Boathe v. Terry, 713 F.2d 1405, at 1414 (1983).]

Editor's note: The correct spelling (with a more full citation) for this case is Bothke v. Fluor Engineers and Constructors, Inc. and W. J. Terry, 713 F.2d 1405, 83-2 U.S. Tax Cas. (CCH) paragr. 9556 (9th Cir. 1983), vacated and remanded, 468 U.S. 1201, 104 S. Ct. 3566, 84-2 U.S. Tax Cas. (CCH) paragr. 9617 (1984). The plaintiff's name was "Bothke" (not "Boathe"). In some case reports the name of the company "Fluor" is misspelled as "Flour." The quotation is basically accurate. Yours, Famspear 19:29, 22 May 2006 (UTC)

A FEW CASES ON INCOME

US Supreme Court. So. Pacific v. Lowe, 247 U.S. 330 (1918) "income; as used in the statute should be given a meaning so as not to include everything that comes in."

Editor's note: This case is Southern Pac. Co. v. Lowe, 247 U.S. 330 (1918). The Supreme Court ruled that where a shareholder receives a dividend representing earnings of a corporation realized by the corporation prior to January 1, 1913, the dividend is not includible in the gross income of the shareholder for purposes of the Federal Income Tax Act of 1913, Ch. 16, 38 Stat. 114 (Oct. 3, 1913). No issues regarding the constitutionality of the Federal income tax were presented to or decided by the Court. The "quote" regarding a "meaning so as not to include everything that comes in" is a fake. The words do not appear in the text of Southern Pac. Co. v. Lowe. Yours, Famspear 14:15, 23 May 2006 (UTC)

House Congressional Record March 27th 1943, page 2580, by F. Morse Hubbard, Treasury Dept. legislative draftsman: "The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges which is measured by reference to the income which they produce. The income is not the subject of the tax."

C.R.S. Report Congress 92-303A (1992) by John R. Lackey, Legislative attorney with the library of Congress: "When a court refers to an income tax as being in the nature of an excise, it is merely stating that the tax is not on the property itself, but rather it is a fee for the privilege of receiving gain from the property. The tax is based upon the amount of the gain, not the value of the property."

Murdock v. Pennsylvania 319 U.S. 105 480-487 (1943) "It could hardly be denied that a tax laid specifically on the exercise of those freedoms would be unconstitutional."

Editor's note: Murdock v. Pennsylvania, which may also be cited as Jones v. City of Opelika, 319 U.S. 105 (1943), was not a Federal income tax case. The tax protester who cited the above quote out of context conveniently failed to mention what the phrase "those freedoms" refers to. The tax protester also conveniently failed to indicate what kind of "tax" (if any) was at issue in the case. This was actually a case involving the validity of a city ordinance in Jeannette, Pennsylvania, worded as follows:

That all persons canvassing for or soliciting within said Borough, orders for goods, paintings, pictures, wares, or merchandise of any kind, or persons delivering such articles under orders so obtained or solicited, shall be required to procure from the Burgess a license to transact said business and shall pay to the Treasurer of said Borough therefore the following sums according to the time for which said license shall be granted.

'For one day $1.50, for one week seven dollars ($7.00), for two weeks twelve dollars ($12.00), for three weeks twenty dollars ($20.00), provided that the provisions of this ordinance shall not apply to persons selling by sample to manufacturers or licensed merchants or dealers doing business in said Borough of Jeannette.

A group of people who were Jehovah's Witnesses went from door to door distributing literature. They failed to obtain the license under the ordinance. The Court stated:

There was evidence that it was their practice in making these solicitations to request a 'contribution' of twenty-five cents each for the books and five cents each for the pamphlets but to accept lesser sums or even to donate the volumes in case an interested person was without funds. [ . . . ] The First Amendment, which the Fourteenth makes applicable to the states, declares that 'Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press ....' [ . . . ] It could hardly be denied that a tax laid specifically on the exercise of those freedoms would be unconstitutional.

Citing this case is an apparent attempt by tax protesters to leave the false impression that this case was about the Federal income tax. A question about the validity of the Federal income tax was neither presented to nor decided by the Court. Famspear 22:07, 17 December 2005 (UTC)

American Airways v. Wallace 57 F.2d 877, 880; "The terms "excise tax" and "privilege tax" are synonyous. The two are often used interchangeably."

This case is American Airways, Inc. v. Wallace, 57 F.2d 877 (M.D. Tenn. 1932) (per curiam). This was a Federal District Court decision in Tennessee. However, the case did not involve Federal income tax or any other kind of Federal tax. In this case, American Airways sued a Tennessee state official (Wallace, the Tennessee State Comptroller at the time) to prevent the State of Tennessee from collecting a state gasoline tax imposed under a Tennessee law. American Airways argued that the state tax impermissibly imposed a burden on interstate commerce, in violation of the United States Constitution, article I, section 8. The Court ruled in favor of the State of Tennessee, and against American Airways.

Tax protesters often cite cases like this one because of the references to the terms "excise" and "privilege." Many tax protesters argue that the federal income tax can be imposed only where the taxpayer is using a "privilege." Some protesters even argue that the "privilege" must be a Federal privilege in order for the federal income tax to be valid. Since the Federal income tax is, generally, an "excise" in the U.S. constitutional law sense, tax protesters love to quote references that seem, at least in the minds of tax protesters, to "equate" an "excise" with a "privilege tax." There are several reasons why this tactic is completely erroneous. The American Airways case partially illustrates this.

First, the tax in this case was not a Federal tax, it was a Tennessee tax. The Court did not rule that the Federal income tax must involve a "privilege" of any kind, whether Federal or state. The Court made no ruling on Federal taxes at all.

Second, the Court was using the term "excise" in the statutory sense, not the constitutional sense. Even under Federal law, a tax can be an "excise" in the general constitutional law sense and yet not be an "excise" in a more restricted statutory sense. In a more restricted statutory sense, the term excise is used in the Internal Revenue Code to refer only to what are called "miscellaneous excise taxes". The Federal income tax, the Federal gift tax, and the Federal estate tax are examples of taxes that are, generally speaking, "excises" under the Constitution, but are not "miscellaneous excises" in the statutory sense. By contrast, the Federal communications tax and the Federal firearms tax would be examples of taxes that are excises in the constitutional sense AND "miscellaneous excises" in the statutory sense. Law is full of examples where the same word has different meanings and shadings of meanings, depending on where the word is used. This is true of law in general, not just tax law. Tax protesters love to take advantage of this confusing legal terminology -- to no avail.

Third, no federal court has ever ruled that the Federal income tax must be tied to a privilege or to the exercise of a privilege, whether it be a Federal privilege, a state privilege, or any other kind of privilege whatsoever. There is nothing at all in the Constitution or the Internal Revenue Code or any Treasury regulation or any federal court ruling whatsoever that ties the Federal income tax to any "privilege." Famspear (talk) 03:41, 2 January 2009 (UTC)

Nicol v. Ames 173 U.S. 509 (1899): "A tax upon the privilege of selling property at the exchange,differs radically from a tax upon every sale made in any place." "A sale at an exchange differs from a sale made at a man's private office or on his farm, or by a partnership, because, although the subject-matter of the sale may be the same in each case, there are at an exchange certain advantages, in the way of finding a market, obtaining a price, the saving of time, and in the security of payment, and other matters, which are more easily obtained there than at an office or a farm."

Editor's note: Whew! Not that it makes any difference, but the exact quote on the first sentence above is: "A tax upon the privilege of selling property at the exchange, and of thus using the facilities there offered in accomplishing the sale, differs radically from a tax upon every sale made in any place." In this case, Nicol v. Ames, 173 U.S. 509 (1899), the Court upheld the validity of a tax law called the War Revenue Act of 1898. The Court stated:

In searching for proper subjects of taxation to raise moneys for the support of the government, congress must have the right to recognize the manner in which the business of the country is actually transacted; how among other things, the exchange of commodities is effected; what facilities for the conduct of business exist; what is their nature, and how they operate; and what, if any, practical and recognizable distinction there may be between a transaction which is effected by means of using certain facilities, and one where such facilities are not availed of by the parties to the same kind of a transaction. Having the power to recognize these various facts, it must also follow that congress is justified, if not compelled, in framing a statute relating to taxation, to legislate with direct reference to the existing conditions of trade and business throughout the whole country, and to the manner in which they are carried on.

Nicol v. Ames, 173 U.S. at 516 (emphasis added).

As usual, the tax protesters are citing cases that hurt their cause! Famspear 21:21, 17 February 2006 (UTC)

26 CFR §39.22(b)-1 (1956): "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."

Coppage v. Kansas 236 U.S. 1 (1915): "Included in the right of personal liberty and the right of private property- partaking of the nature of each- is the right to make contracts for the acquisition of property. Chief among such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property."

Editor's note: Coppage v. Kansas, 236 U.S. 1 (1915), was a criminal case involving a defendant convicted, under a Kansas statute, of firing an employee for refusing to resign as a member of a labor union. No issues of taxation were presented to or decided by the Court. Famspear 19:00, 28 December 2005 (UTC)

Jack Cole Company v. Alfred T. MacFarland, Commissioner, 206 Tenn, 694, 337 S.W.2d 453 Supreme Court of Tennessee (1960): "Since the right to receive income or earnings is a right belonging to every person, this right cannot be taxed as privilege."

Editor's note: Jack Cole Co. v. MacFarland is not a Federal tax case. No issues regarding the validity of Federal tax law were decided by the court. Famspear 18:42, 28 December 2005 (UTC)

Follow-up note: The quotation from the case of Jack Cole Co. v. MacFarland was a reference to a provision of Article II section 28 of the Tennessee state constitution. Tax protesters cite the case to give the false impression that the quoted statement from the case applies to the U.S. Federal income tax. Famspear (talk) 19:23, 19 July 2014 (UTC)

Simms v. Ahrens, 271 SW 720 (1925): "An income tax is neither a property tax nor a tax on occupations of common right, but is an excise taxThe legislature may declare as 'privileged' and tax as such for state revenue, those pursuits not matters of common right, but it has no power to declare as a 'privilege' and tax for revenue purposes, occupations that are of common right."

Editor's note: Simms v. Ahrens, or Sims v. Ahrens, 167 Ark. 557, 271 S.W. 720 (1925), is not a Federal tax case. No issues regarding the validity of Federal tax law were decided by the court. Famspear 18:42, 28 December 2005 (UTC)

Pollock v. Farmers Loan & Trust, 157 U.S. 429 and 158 U.S. 601 (1895): "The power to tax real and personal property and the income from both, there being an apportionment, is conceded: that such a tax is a direct tax in the meaning of the Constitution has not been, and, in our judgment, cannot be successfully deniedOrdinarily, all taxes paid primarily by persons who can shift the burden upon some one else, or who are under no legal compulsion to pay them, are considered indirect [excise] taxestaxation on income is in its nature an excise entitled to be enforced as such."

Editor's note: The effect of the decision in Pollock was overturned by the ratification of the Sixteenth Amendment in 1913. Famspear 05:45, 25 December 2005 (UTC)

Wikipedia:Three-revert rule

Instead of reverting each other, each claiming "copyvio" on the part of the other, what about this idea:

Each point of view can be fully expressed under your own heading. Each person agrees not to deface the text under the other's heading. Then, the community can weigh in by adding their comments as they see fit. Remember to refrain from personal attacks, to be civil, and to assume good faith.—GraemeMcRae^talk 23:11, 3 November 2005 (UTC)

The anonymous user inserted text copied from another web site (e.g., [1], [2]). I deleted that text as a copyright violation, since it was clearly copied from other, copyrighted sources. The anon then responded with a comment claiming that "I did all that work and you didn't even read any of it" and calling me a "fascist". He then proceeded to repeatedly delete, without explanation, (public domain) court citations posted by User:DESiegel. I did not make any personal attacks in my edits—I made no comment other than saying they were copyright violations—and I was completely civil. The other signed-in users were civil as well.

The anon's contributions was a copyright violation, and his repeated deletions of another's work is vandalism. It is perfectly acceptable to break the 3RR when reverting vandalism. Mateo SA | talk 23:29, 3 November 2005 (UTC)

Not true. Mateo copied from another site as well, but claimed when I did the same thing that it was copyvio when he was doing the same thing. I called him a fascist because I cited my sources after he asked me to, and then he erased it all when it didn't agree with him or his view or the view that was already posted. He can't stand to see proof of my views so he deletes them. So, I deleted his for the same reason and I can't go back as easily as him and post all mine again. I worked very hard and long to find those sources. So, what do you call that? A fascist and a hypocrite? I don't find that so civil. There were no other signed in users to show an example of civility based on the same thing happening to them. Mateos contribution is a copyright violation, and his repeated deletions of anothers's work is vandalism. —The preceding unsigned comment was added by 216.27.181.235 (talk • contribs) 23:10 EST, 3 November 2005.

No matter how much work you do finding and assmepbling text from other sites, it is not acceptable to smply paste large chucks of copyrighted content into a wikipedia page, and such additions may be freely removed. It would be bettr to siamply say "arguments for this position are made by Person A or this site, and by person B on this site" (giving links to the sites in question) not only does this avoid a copyright issue, but it better allows others to evaluate the source of your authorities. by simply pasting in test, un-attributed, you mke it appear as if it were your own work. This not only robs the actual author of the proper credit, but actualy reduces the value of the arguemt here. Claims that have been made publicly bu a significant group of people are proper subjects for wikipedia to report on. Conclusions, however valid or reasonable, worked out by an individual wikipedian and not supported by outside sources are not proper subjects for wikipedia. See our original research policy. Also, please sign posts on talk pages. DES ^(talk) 16:55, 4 November 2005 (UTC)

This is what the original poster (sources from the mainstream view) had done and was thought to be acceptable. Going forward, author and site will be quoted. It is not proper for Wikipedia or any source to publish untrue statements no matter the size of the group without stating that "this may not be true, but this is the belief held by the group". Corrections will be allowed to posts without proper sourcing. I do not understand what you mean by "please sign posts on talk pages." Can you please tell me where to find these talk pages and the relevance.

This is a talk page. Pages whose title begins with "talk" such as "Talk:Income tax". Also some pages whose titles begin with "Wikipedia:" like Wikipedia:Help desk. They are also caled "discussion pages". They are pages to disccsue what should be in wikipeda articels, or how wikipedia sohould operate, ratehr than articel pages. On such pages people are strogly encouraged to sign posts with four tildas (like this ~~~~. The software will convert this into a registerd user's User ID (or custom nickname) and a link to that user's user page (and possible the corresponding talk page, as mine does). A user who is not logged in will have there IP address displayed with a link to the list of that IP's edits. A timestamp will also be displayed. DES ^(talk) 19:11, 4 November 2005 (UTC)

I am the person who created and largely populated "Sources for the mainstream view" as you can see from the hsitory tab. I am not clar what you mean by "This is what the original poster had done and was thought to be acceptable". I belive that I indicated clearly where each piece of information that I put into that section came from. It is generally true that unsourced information may be removed from wikipedia articles. Talk pages are a little different, but even there it is better to cite proper sources. DES ^(talk) 19:11, 4 November 2005 (UTC)

Thanks for bearing with me in learning the Wikipedia methods and nomenclature. I didn't see your name on the history page. I don't even know where to find the history page. What I meant is that the original poster (you, I guess) grabbed information from another website (IRS) and posted it and so I did the same thing yet mine was deleted. The only difference I can see, is that I didn't source it. I have changed the wikipedia article and provided source now. 206.111.181.109 19:30, 4 November 2005 (UTC)BB

At the top of each wikipedia page you will see a tab labeled "History" clicking on this will show a list of edits, each with a time stamp, the user ID or IP address of the person who made the edit, the ediot reason given, if any; and links to see exactly what changes the edit made.

The difference was 1) I gave sources for the info i inserted; 2) When that info was from copyrighted soruces, i proveded a link, rather than copying the content. Court decisions, laws, and government regulations are not copyrighted (in the U.S.), so they can be freely quoted and copied. DES ^(talk) 19:44, 4 November 2005 (UTC)

The three-revert rule does apply to this article. It applies to the straight reversion more than three times of any edit which is not simple vandalism. Content disputes are not simple vandalism. I have warned three users today about the rule (all three have broken it). If any of them breaks reverts again within 24 hours, they can be blocked for the next 24 hours. --Gareth Hughes 17:22, 8 November 2005 (UTC)

Shite

If there is any more shite added to this article about Income tax in the USA, I am going to move that section off into its own article. The disruption to this page is becomming tiresome. Jooler 19:13, 6 November 2005 (UTC)

Agreed. Leave it as it appears at this minute. 216.27.181.235 02:55, 7 November 2005 (UTC)BB

Wow, there are many great cases cited and many great comments made, however, none of it pertains to the lawful sovereign that does not have a contract, adhesion or otherwise, with the federal/national government. Any talented discerner, that has read the Congressional Record, the Income tax Thesis by the author of Black's Law Dictionary, and a myriad of letters that have been recorded, will certainly come to the conclusion, and, excuse me, also will have read the Constitution of the united States of America, that nothing that the federal/national government does has any authority/Jurisdiction over the lawful sovereign. First, the Constitution of the united States of America is a design of limited and restricted government; nothing else. The primary function of the federal/national government is to protect the States from foreign intervention. The Statutes nor any of the other actions of the federal/national government only pertain to what powers and authority that the federal/national government may have over the states: For What other reason was the Ninth and Tenth Amendments created? The Congressional Record stated, iterated and reiterated that the intention of the Sixteenth Amendment was to be the extension of the Corporation Tax Act of 1909 to individuals and copartnerships that were "doing business". Since the average wage in 1909 was ONLY $250 approximately, then it certainly 'stands to reason' that the income tax was never intended to be assessed upon any of the lawful sovereigns because the first deduction allowance was $5,000. Again, therefore, it 'stands to reason' that it was fully understood at that time in history that only those entities that were "doing business" were to be the subject of the income tax and whatever profit they were making was to be the object of the income tax: No one with half a brain would ever have thought otherwise (but I will bet that there were those whom I will call the 'powers that are' definitely had long range avaricious plans. In 1920, the Eisner v MAcomber SUPREME Court case, 252 US 189, 1920, clearly stated that any income, in order to be taxable,must be derived from profit. Also, since the Infernal Revenue Code states that in order for an income to become taxable, it must be 'effectively-connected to a taxable event', ergo, "doing business". Therefore, it 'stands to reason' that in order for an income to be taxable, there MUST be a federal/national authority/Jurisdiction which would require some form of contract, adhesion or otherwise, and it MUST be statutorally (sp?) approved: Since the Constitution of the united States of America does not have ANY authority/jurisdiction over a lawful sovereign, then it, again, 'stands to reason' that the Sixteenth Amendment does not pertain to a lawful sovereign. Here is where the aforementioned tale of what is about to become a mendacious, scurillious and nefarious tale of government lies and fraud. In 1935 the Congress approved the withholding of Social Security. In 1941, approximately, the government enacted the Victory Tax and in 1942 ,approximately, the government changed the name of the Victory Tax to the Extended Income tax and the fraud that induced the 'dumbed-down' americans to accept the Victory Tax was expanded to dupe them into accepting/believing that the income tax was compulsory: Even the Commissioner of the Infernal REvenue (dis)service admitted, a while back, that the tax was voluntary: Who would "volunteer" to pay a tax that was not compulsory? Where were all of the so-called income tax protest gurus doing their research when all of the above is clearly recorded in the Congressional Record? When I realized that something was "amiss" in 1979, I challenged both my alleged employer and the irs and when no intelligent answers were forthcoming I quit submitting tax returns. It only took a few years and I have not been bothered other than twice where I was called to attend a meeting and both times I was asked to leave. I am recorded as "uncollectible" and that is good enough for me! Jurisdiction is the key word. The federal/national government has been granted no authority that would grant it any form of Jurisdiction over the lawful sovereign; that is, unless you volunteer by submitting any type of federal/national form that you sign admitting that you ARE a taxpayer: Not I!!!!!!!!!!! — Preceding unsigned comment added by Patriot2013 (talk • contribs) 22:45, 29 November 2012 (UTC)

Dear user Patriot2013:

Baloney. There is no such thing as a "lawful sovereign" in the sense that you have used the term. A citizen of the United States or a non-citizen resident of the United States is subject to the U.S. Federal income tax, regardless of whether that person has a "contract, adhesion or otherwise, with the federal/national government." Liability for tax is not based on "contract."

The term "sovereign citizen" is a term that has been used by the courts from time to time, but it does not mean what you think it means. NO COURT HAS EVER USED THE TERM TO MEAN THAT SOMEONE IS NOT SUBJECT TO THE U.S. FEDERAL INCOME TAX OR ANY OTHER FEDERAL OR STATE LAWS. Never.

The United States Supreme Court has ruled that the definition of income in Eisner v. Macomber is not an exclusive definition of income for federal income tax purposes. Look, Eisner v. Macomber is a leading case. Every tax law student studies the case. The case has nothing to do with whether the income you realize from (for example) working for a living, is taxable. We have covered this point over and over and over and over and over and over again. Tax protesters love to cite Eisner v. Macomber, and they're always wrong when they do cite it.

No, the Internal Revenue Code does not state that in order for an income to become taxable, it must be 'effectively-connected to a taxable event', ergo, "doing business". No. Completely false. There is no provision of any Federal tax law that says any such thing.

The statement that "the Constitution of the united States of America does not have ANY authority/jurisdiction over a lawful sovereign" is complete, utter hogwash.

As anyone who has actually studied federal tax law knows, the term "voluntary" as used in relation to the Federal income tax means that you file a tax return. It does not mean that filing the return is not required by law, or that payment of the tax is not required by law.

No, the Commissioner of Internal Revenue has never stated that the federal income tax is voluntary in the sense in which you are using that term. Complete utter baloney.

No, "jurisdiction" is not the key word. "Jurisdiction" is one of those legal terms that tax protesters use over and over and over again, often without any understanding of what it means.

No, your liability for federal income tax is not depending upon your submitting a "federal/national form that you sign admitting that you ARE a taxpayer". No.

And, no, a statement in the Congressional Record is not the law. There are many correct and incorrect statements in the Congressional Record, but NOTHING IN THE CONGRESSIONAL RECORD IS LAW MERELY BECAUSE IT'S FOUND IN THE CONGRESSIONAL RECORD. Famspear (talk) 23:16, 29 November 2012 (UTC)

Oh, and by the way, as far as I know, you're also wrong about what the Congressional Record has stated. I know of no provision in the Congressional Record that has stated that the "intention" of the Sixteenth Amendment was to be "the extension of the Corporation Tax Act of 1909 to individuals and copartnerships that were doing business." If there is such a statement somewhere in the Congressional Record, it's incorrect. Again, under our legal system, you have to look to court decisions for the authoritative interpretations of the law, not to the Congressional Record. The courts have ruled that the purpose of the Sixteenth Amendment was to remove the requirement imposed in the Pollock case that the income tax on dividends, interest, and rent be apportioned among the states according to population.

Your argument that the Federal income tax is somehow associated with a "contract" is incorrect. From the United States Supreme Court:

Taxation is neither a penalty imposed on the taxpayer nor a liability which he assumes by contract.

---from the U.S. Supreme Court decision in Welch v. Henry, 305 U.S. 134 (1938) (bolding added).

There is no impediment, under the Constitution, to levying an income tax on compensation for a taxpayer's labor. From the United States Court of Appeals for the Eighth Circuit, in the Funk case:

They [Mr. and Mrs. Funk] argue that compensation for labor is not constitutionally subject to the federal income tax, that an individual's labor is capital in which he or she possesses a property right, that an individual has the right to exchange that property for other property, i.e. money, and that such a transaction is an equal exchange which does not give rise to any profit. [ . . . ] Taxpayers' argument that compensation for labor is not constitutionally subject to the federal income tax is without merit. There is no constitutional impediment to levying an income tax on compensation for a taxpayer's labors. [ . . . ]

--from Funk v. Commissioner, 687 F.2d 264 (8th Cir. 1982) (per curiam) (bolding added).

Federal income taxation is not tied to the exercise of a "privilege." From the United States Court of Appeals for the Seventh Circuit:

Coleman [one of the parties in the case] thinks that only net income may be taxed under the Sixteenth Amendment — net income as Coleman defines it, rather than as Congress does. Holder [another party], who styles himself a "private citizen," insists that wages may not be taxed because the Sixteenth Amendment authorizes only excise taxes, and in Holder's world excises may be imposed only on "government granted privileges." Because Holder believes that he is exercising no special privileges, he thinks he may not be taxed. These are tired arguments. The code imposes a tax on all income. See 26 U.S.C. § 61.

--from Coleman v. Commissioner, 791 F.2d 68 (7th Cir. 1986).

The Tenth Amendment was not created to limit the power of Congress to impose taxes. Indeed, the Amendment was not ratified for the purpose of limiting any power delegated to the national government. From the U.S. Supreme Court:

The Tenth Amendment does not operate as a limitation upon the powers, express or implied, delegated to the national government. ... The amendment has clearly placed no restriction upon the power delegated to the national government to lay an excise tax qua tax [to lay an excise tax as a tax].

---from the U.S. Supreme Court decision in Fernandez v. Wiener, 326 U.S. 340, 66 S. Ct. 178, 45-2 U.S. Tax Cas. (CCH) ¶10,239 (1945) (bolding added).

No federal court has ever upheld any of the arguments you have provided regarding taxation. Famspear (talk) 18:56, 30 November 2012 (UTC)