You are a really smart guy and I can’t believe you don’t understand what you, yourself, is saying.
You are fundamentally flawed since you can’t differentiate between gain and labor (that’s income and wages). If you are relying on IRS language then you are going to be as vague as they are and take volumes to define simple statements especially when it comes to barter as the IRS wants to tax that transaction also using their own definitions.
Basically the IRS code is at odds with itself, mainly on definitions they call their own that conflict with long standing legal definitions.
The fact that the IRS code makes sense to you because it is legal is non sequitur.
You can sometimes beat the IRS in court, but not if you claim that "income from whatever source derived" doesn't include money you get paid for working.