Skip to comments.Supremes docket income tax challenge
Posted on 09/26/2012 4:42:57 AM PDT by wesagain
"Colorado man's challenge to IRS says wages don't count"
The government calls those who argue the income tax has no legal foundation tax protesters and labels their arguments frivolous. And usually judges toss their arguments out of court, assess them court costs on top of taxes, interest and penalties, and sometimes even threaten them if they file further cases.
But now the U.S. Supreme Court the nine judges who sit on the bench in Washington by virtue of their selection by presidents and confirmation by the U.S. Senate has docketed exactly that type of case.
The results? Who knows, considering the radical arguments offered by the pro se plaintiff, Jeffrey Thomas Maehr, a Colorado chiropractor who has been involved in a number of business ventures, including PureHealthSystems.com.
Among Maehrs contentions is that while the government has the legal authority to tax, the Internal Revenue Service has used unlawful, unconstitutional, unfair and biased manipulations to assess income taxes on that which is not income essentially salaries and wages.
Basing his argument on 10 years worth of research into tax law, he concludes that salaries and wages are the result of the mutual agreement among participants to exchange labor for money and thats not income.
Income, he said, is the increased value of an asset, such as interest on money in a bank account, which can be subjected ........
(Excerpt) Read more at wnd.com ...
The curse of employer withholding from our paychecks was started to support the “war tax” of WWII. However when the war tax was eliminated by Congress the withholding was continued by the IRS.
It isn’t a tax, it’s a penalty....
The definition of ‘is’ might actually work in our favor for once.
I could just as easily argue interest on money in my bank is a mutually agreed upon exchange of me letting them say they’re holding my money for money. That is not fundamentally different from a n exchange of laborious for wages.
Regardless of case law, the entire concept of seizing what belongs to a man more than anything except his soul (the fruit of his physical or mental labor) is an evil concept. It is legalized slavery to the state.
That's why we have more than half the U.S. Citizens paying NO INCOME TAX AT ALL, while the productive ones are FORCED to pay for handouts. If you wanna tax "income", then start taxing ALL Welfare, Medicaid, Food Stamps, EBT's, etc., and let's ALL pay our "Fair and Equal Share".
That said, I'm not sure I buy this particular argument.
Short of outright repeal, which I would dearly love to see, I think the better Constitutional arguments against the current tax system are those that address the following:
Notwithstanding our 5th Amendment rights against self-incrimination, as well as our 9th Amendment right to privacy (see Roe v. Wade), the government requires us to provide a tax return signed under penalty of perjury, in which we are obligated to provide detailed testimony regarding every aspect of our most private financial activities and relationships, legal or otherwise.
Notwithstanding our 4th Amendment rights against search and seizure, any American citizen is subject at any time -- even in the complete absence of probable cause to an intrusive federal audit in which the government has the unlimited power to demand and search our private papers and financial records.
So even though the 16th amendment is, by definition, "the supreme law of the land," I don't see where it authorizes the federal government to violate our other Constitutional rights, which were NOT repealed by the 16th amendment.
I can see the logic of his argument about wages and salaries not being income. Unfortunately for all of us the Supreme Court is totally politicized. In an ideal world these cases would be looked at on a logical basis. In this one though? Ain’t gonna happen.
Well, it is an exchange of something for something. It’s not them giving you something (money) for nothing.
It’s not like winning the lottery which would be almost (except for the cost of the ticket) all pure profit.
“Sometimes the law places the whole apparatus of judges, police, prisons, and gendarmes at the service of the plunderers, and treats the victim when he defends himself as a criminal. In short, there is a legal plunder...”
“Socialism Is Legal Plunder”
Good post, good thread.
No, that’s a baby
Here are two questions that the IRS is not able to answer.
1) Which statute establishes my liability for a federal income tax?
2) Which statue establishes the requirement that I file a federal income tax return?
For each question above, please cite the title, subtitle, section and operative language.
The IRS never answers these questions. The answers do not exist.
What I have never understood about the income tax is how applying it unequaly is constitutional.
It seems the equal protection clause would prevent the government from taxing different people a different rate.
Yes, that’s how I see it. Of course the probable outcome is that the Supreme Court will set down a definitive definition of the term “income”. And we will go on from there.
Of course if that happens then a lot of wiggle room will be taken away from the IRS and Employers and Employees just might come up with a different form of compensation. Now that would be interesting, don’t you think?
When America was founded you could not tax a man’s labor nor his property. My how things have changed!
I wish someday the “Progressive Tax”, ie, the more you make, the higher the Tax Rate, was found Un-Constitutional from the fact that it is not “Applied Equally” to all.
This was the point where it is no longer the Government by the people but Government versus the people.
Interestingly, the case even appears on the Supreme Court Docket:
Just because a piece of paper was accepted onto the docket does not mean that anything will happen, though.
I will not get particularly excited until the Supremes actually agree to hear the case, as opposed to simply having the IRS respond that the case has no merit, and the Supremes dismissing it without a hearing.
“Notwithstanding our 5th Amendment rights against self-incrimination, as well as our 9th Amendment right to privacy (see Roe v. Wade), the government requires us to provide a tax return signed under penalty of perjury, in which we are obligated to provide detailed testimony regarding every aspect of our most private financial activities and relationships, legal or otherwise.”
Think of the 1040 form as a written confession for a crime(s) that’s you have committed. The District of Criminals continued war against the States never ceased after the Civil War.
All withholding should cease, and tax day moved to Oct 31, before the first tuesday in November,
and everyone writes one big, painful check on that day.
ALL the things that the Government was LIMITED TO were forgotten, in pursuit of $$$$$ and endless employment and perks, PLUS, you could hire all kinds of staff and create Regulatory Agencies to control businesses to favor your supporters. The USSC was (and is) complicit in this, as Appointments to the Federal Courts ALWAYS are made to further this Agenda.
This Country needs a do-over, badly.
BTW, worth digging into this case a bit more to see why it's docketed ~ is the real issue something else perhaps?
Supreme court cases against the 16th amendment
Chapter 4 of the TRUTH!
The TRUTH About Income!
In the last chapter we learned the truth about income tax. In this chapter we will learn the truth about the real definition of income itself! Nowhere in the Internal Revenue Code (IRC) is income defined.
So the big question becomes, what IS income? And did you have any that was taxable?
The word “income” is not defined in the Internal Revenue Code, as the court stated in U.S. v. Ballard 535 F.2d 400 at 404, but the Supreme Court has defined it for us in numerous cases.
Stratton’s Independence v. Howbert 231 U.S. 399 (1913) “As has been repeatedly remarked, the corporation tax act of 1909 was not intended to be and is not, in any proper sense, an income tax law. This court has decided in the Pollock Case that the income tax of 1894 amounted in effect to a direct tax upon property, and was invalid because not apportioned according to population, as prescribed by the Constitution. The act of 1909 avoided this difficulty by imposing not an income tax, but an excise tax upon the conduct of business in a corporate capacity, measuring, however, the amount of tax by the income of the corporation, . . .”
“As to what should be deemed “income” within the meaning of Sec. 38, it of course need not be such an income as would have been taxable as such, for at that time (the 16th amendment not having been as yet ratified) income was not taxable as such by Congress without apportionment according to population, and this tax was not apportioned. Evidently Congress adopted the income as the measure of the tax to be imposed with the respect to the doing of business in corporate form because it desired that the excise should be imposed, approximately at least, with regard to the amount of benefit presumably derived by such corporations from the current operations of the government.”
The Supreme Court defines “income tax”, as an excise tax “imposed with respect to the doing of business in corporate form”. If you are not engaged in any corporate activities then you are not liable for an “excise income tax.” This Supreme Court decision also states that Congress cannot tax an individual’s income directly. All direct taxes must be imposed on the states with apportionment. U.S. Constitution Art. 1 Sect 2. Cl. 3 and Sect 9 Cl. 4.
The above case applies to corporations, so if you are not a corporation, then the Corporation Excise tax does not apply to you. The important thing here is the clarification that the income tax is an excise tax, imposed upon the doing of business in corporate form. An the tax is determined by how much income is received. But WHAT is income? The Supreme Court again tells us:
Eisner vs. Macomber 252 U.S. 189 pg 205 (1920) 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. In Pollock v. Farmers’ Loan and Trust 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 the 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 Art 1 Sect. 2 Cl. 3 and Sect. 9 Cl. 4 of the original Constitution.
Afterwards, and evidently in recognition of the limitations upon the taxing power of Congress thus determined, the Sixteenth Amendment was adopted: . . . As repeatedly held, this did not extend the taxing power to new subjects, but merely removed the necessity which might otherwise exist for an apportionment among the states of taxes laid on income. . . . it becomes essential to distinguish between what is and what is not “income’, as the term is there used;
After examining dictionaries in common use we find little to add to the succinct definition adopted in two cases arising under the Corporation (Excise) Tax Act of 1909 (Stratton’s Independence v. Howbert 231 US 399, 415; Doyle v. Mitchell Bros. Co. 247 US 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.
“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.
That Congress has power to tax stockholders upon their property interests in the stock of corporations is beyond question; and that such interests might be valued in view of the condition of the company, including its accumulated and undivided profits, is equally clear. But this would be taxation of property because of ownership, and hence would require apportionment under the provisions of the Constitution, is settled beyond peradventure by previous decisions of this court.
Clearly, the definition of corporate income means a gain or profit received from an excise taxed activity. But does this same definition apply to individual income tax? To the Supreme Court again:
Merchants’ Loan & Trust Co. v. Smietanka 255 U.S. 509 (1921) “It is obvious that these decisions in principle rule the case at bar if the word “income” has the same meaning in 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, a case arising under the same Income Tax Act of 1916 which is here involved, the definition of “income” which was applied was adopted from Strattons’ Independence v. Howbert, arising under the Corporation Excise Tax Act of 1909, with the addition that it should include “profit gained through 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 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.”
The word “income” has the same meaning in ALL the income tax acts of Congress. That meaning has been declared to be corporate profits and gains and has been definitely settled by the Supreme Court. So, did you have income that is taxable? Did you have a gain or profit from a corporate activity? Remember that the income tax is an excise tax on the doing of business in a corporate capacity. That is the ONLY way that you can receive taxable income, as legally defined by the Supreme Court.
If you relied on these never overturned Supreme Court rulings in your beliefs, does your reliance on these plain rulings constitute a frivolous position? The IRS says it does!
So, if you had NO corporate income tax liability for this year, you had zero “income” as legally defined by the U.S. Supreme Court. A corporation is NOT taxed on ALL its income, from whatever source. It is only taxed on it’s profit. If that is the case then why are YOU taxed on ALL your income from whatever source? You are also allowed to deduct SOME expenses. Does that mean that if you work for a corporation and you exchange 40 hours of your labor for $600, that you had $600 of profit, minus deductions? If a corporation exchanges $600 for 40 hours of your labor, did they also have a profit? NO! They can claim ALL your labor as a deductible operating expense. So why is it that why you exchange one property (your labor) for another property ($600) that in that exchange, you had a profit and the corporation had a deduction? Why is it a profit for you but not for the corporation? The answer is that it is not a profit for EITHER of you! And therefore it is not taxable income, as defined by the Supreme Court.
The Supreme Court has ruled:
Eisner vs. Macomber 252 U.S. 189 pg 205 (1920): “ 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. . . .taxes upon rents and profits of real estate and upon returns from investments of personal property (labor) were in effect direct taxes upon the property from which the income arose, . . . that Congress could not impose such taxes without apportioning them among the states”
The Supreme Court has plainly stated that an individual’s income cannot be taxed directly: But an individual’s income CAN be taxed with an excise tax, IF it was received in a corporate activity. More on this later.
Stratton’s Independence v. Howbert 231 U.S. 399 (1913) “As has been repeatedly remarked, the corporation tax act of 1909 was not intended to be and is not, in any proper sense, an income tax law.
Corporate “income” (profits and gains) CAN be taxed with an excise tax, but the income itself is not taxed because it is property. Therefore income tax is not on income, it is on profits. It is not an income tax law, it is a profits tax law. Are you engaged in, or did you receive income in connection with, any corporate activities? Receipts received from labor or private investments are not corporate “income” and therefore do not fall within the legal definition of “income” as defined by the Supreme Court.
“Income” is legally defined as a corporate gain of profit in the Internal Revenue Code. Nowhere is there any different definition.
The definition of income used in the Corporate Excise Tax Act of 1909 is the same definition used in ALL the income tax statutes.
“Gross income” would then be the total income of a corporation, from all sources.
“Taxable income” would therefore be corporate gross income, minus allowable deductions. Also known as profit. If a corporation had no profit, then it had no taxable income. If you are an officer of a corporation, then you had individual income that is taxable.
Anytime the Internal Revenue Code mentions the word “income” it is talking about corporate income.
More info on this is in the chapter on the 16th Amendment.
If you are paying bulk rate postage with a 3602 the form is the law! There are Supreme Court decisions behind that.
The rules are the same for everyone. They suck, but they are applied equally (in theory, excluding Congress and Administration officials). If you make $10,000 a year, your marginal rate is X. If you make $100,000 a year, your marginal rate is Y. If I make $10,000 a year, my marginal rate is X. If I make $100,000 a year, my marginal rate is Y. We are treated the same. This is equality of opportunity.
Claiming that a person who makes $100,000 is treated differently than one who makes $10,000 is arguing for equality of outcome.
What about the 13th amendment?
When was it repealed???
To learn more about this subject, read here:
ABOUT IRS FORM W-8BEN
TABLE OF CONTENTS:
1. Why must We Use It?
2. Citizenship, Domicile, and Tax Status Options Summary
3. Withholding on Nonresident Aliens
4. Why the government agrees with this article on the liabilities of “nonresident aliens” not engaged in a “trade or business”
5. Traps to Avoid with this Deceptive Form-WATCH OUT!
5.1 You’re NOT a statutory “U.S. resident”, “U.S. citizen”, “citizen”, or “U.S. person”
5.2 You’re NOT a statutory “Beneficial owner”
5.3 You’re NOT a statutory “Individual”, but rather a “transient foreigner” or “Union state Citizen”
5.4 You’re NOT a statutory “alien”, but rather a “nonresident alien”
5.5 Tricks pulled by usually unscrupulous institutions
5.6 Deception in IRS Publication 519 about the definition of “United States”
6. How to Complete IRS Form W-8BEN
8. Opening bank accounts as a nonresident alien not engaged in a “trade or business” without a Taxpayer Identification Number
9. Backup Withholding
10. Frequently Asked Questions
11. Saving and reusing completed forms
12. Further Reading and Research
1. Why Must We Use It?
The most important aspect of your relationship to the IRS and state taxing authorities is the withholding forms you fill out which identify your citizenship, domicile, and taxpayer status. They are the first contact most people ever have with the tax system and they can have a profound and long-lasting affect on the future interactions one might have with the government. If you either fill out the wrong withholding form or you fill out the right form incorrectly, you can severely prejudice your rights under the law. Nearly every American knows about the IRS Form W-4 withholding form because the private company they work for has most likely mandated (illegally, we might add) that it be filled out and submitted before they are allowed to start work. Not many people, however, know that this is the wrong form to fill out for most Americans and that there is another, better form that more truthfully and accurately represents their status to the payroll department. That form is the IRS Form W-8BEN. Those who submit this form are exempt from backup withholding and 1099 reporting:
“Foreign persons who provide Form W8BEN, Form W8ECI, or Form W8EXP (or applicable documentary evidence) are exempt from backup withholding and Form 1099 reporting.”
[IRS Publication 515, year 2000, p. 3]
The IRS form W-8BEN identifies the submitter as a “nonresident alien” (OFFSITE LINK), which is the status that Americans born anywhere in the country and domiciled within constitutional states of the Union have. We won’t explain here all the nuances of why this is the case, because you can read as much detail about the subject as you like in the following sources:
It isnt a tax, its a penalty....
The system is the punishment.
I’m working on an IRS audit for a client right now. (I did not prepare the return)
The marginal tax & penalty from the audit is 28% Fed Tax Rate + 15% Self Employment tax + a 20% IRC 6662 Penalty (automatic is the tax assessment is greater than $5,000 or 10% of the tax on the return. That does not include interest on the total tax and penalties assessed.
28% FIT + 15% SE = 43% + (.43 x.20 Penalty)= 51% assessment marginal rate. Now add interest + state + local taxes and you are over 60% marginal rate.
To top it off, the IRS field agent says that the individual took approximately $5,200 per year in personal living expenses from the drawer in cash and $7,800 in personal use of CGS (cost of goods sold). There is no evidence. This is based upon the agent’s personal opinion.
$5,200 + $7,800 = $13,000 per year x 3 yrs x 60% = $23,400 in assessment and the only way to fight them is to appeal to tax court and pay all the costs to prove you are correct.
These are actual numbers and circumstances of a case I am handling right now. The system is the punishment, especially for small businesses who are struggling to survive.
End result could be the owner walks away from the business as they have been struggling to make a go of it for years. They stiff the bank for the $200,000 loan on the business. Never pay the IRS assessment. Declare bankruptcy and stiff all the other small businesses that are in accounts payable, and now, being in poverty, collect Social Security and Medicare as well as all the government handouts to survive!
I have another client who is complaining that his employees don’t want to work more than 25 hours per week as they will lose their food stamps.
If you take away the motivation to work and reward laziness, you will get a lot more laziness!
Don’t kid yourself. The fix is in!
After what the USSC did to Obamacare, all they will do is to find a way to rule in the Government’s favor, reinterpreting laws as necessary to fit the preordained outcome.
“Of course if that happens then a lot of wiggle room will be taken away from the IRS and Employers and Employees just might come up with a different form of compensation.”
You should see how the IRC defines “employee.”
using your reasoning it would be ok to tax black people X and white people Y because all black people and all white people are taxed equally.
The income tax was first introduced during the American Civil War.
That does not follow Darth Reardon’s reasoning at all.
You are using the same arguments that the IRS uses. Your answers are NOT answers to the specific questions posed. You have bought into IRS double-speak.
1) The IRC does not define the raw term “income” anywhere. The term “income” was defined by the Brushaber decision. It effectively means “corporate profit.” As an individual, I do not have “corporate profit.” It does NOT apply to me. I do not and cannot have “income.”
2) You have waved your hand at 26 U.S.C. § 6012 with the implication that “the answer is in there somewhere.” It is NOT. This statute only applies to an entity that has income. That would be a corporation. That would not be a plain old human being. See point number 1 above. I DO NOT have “corporate profits.” Therefore, I DO NOT have “income.”
Therefore the statute DOES NOT apply to me.
The United States penalizes wealth and rewards poverty. It’s no mystery how we got here.
Now go find the definition of ‘income’.
The link in my post [#30] will lead you through the deception of the IRS.
Income is legally defined as a corporate gain of profit in the Internal Revenue Code. Nowhere is there any different definition.
The definition of income used in the Corporate Excise Tax Act of 1909 is the same definition used in ALL the income tax statutes.
Gross income would then be the total income of a corporation, from all sources.
Taxable income would therefore be corporate gross income, minus allowable deductions. Also known as profit. If a corporation had no profit, then it had no taxable income. If you are an officer of a corporation, then you had individual income that is taxable.”
Did you know a corporation is a “person”? By simply re-defining a “citizen” into a “person” you can tax him or her, too!
What is the legal definition of a “person”?
n. 1) a human being. 2) a corporation treated as having the rights and obligations of a person. Counties and cities can be treated as a person in the same manner as a corporation. However, corporations, counties and cities cannot have the emotions of humans such as malice, and therefore are not liable for punitive damages unless there is a statute authorizing the award of punitive damages.
You are being willfully blind.
“I” am not a “corporation.”
The liability and filing requirements apply to corporations. I did not ask which statutes exist. I asked which statutes apply to “me” personally.
Keep spreading the word
The courts have NO LEGAL AUTHORITY over a live, living person, only a ficticous entity also known as a ‘corporation.
I believe, and I'm paying more in taxes annually now than I made most years I have worked.
One year, when the oil patch was slow, I dealt blackjack for a charitable organization. Pay was minimum wage and tips, and (thankfully) the tips were only allowed in the form of chips, and mercilessly tracked.
These were $2.00 limit tables, (then the state-allowed maximum wager), and the IRS came in and wanted to sieze our entire paycheck on the basis of "allocated tips", calculated (from thin air) as if we had been dealing to high rollers in Vegas or Atlantic City.
Thankfully, their penchant for larceny was held in check by the charitable organizations which ran gaming operations fighting back with their accounting of who had made what when, right down to the half-dollar chip. Otherwise, we'd have all been on the street.
It seems so, yes. But SCOTUS applies the magic “legitimate state interest” formula. What is the state’s interest? Raising money, I kid you not. Because they have an interest in rais/ng money they are allowed to tax unequally. Whatever.
Not that I don’t think states should br able to discriminate on various bases, such as age and sex, wherein a sort of seoerate but equal applies. But different levels of income don’t make you different kinds of people to my mind, and therefore equal protection should apply.
But if those live, living citizens voluntarily choose to define themselves as a “person” then Fedzilla is more than happy to enslave them.
If you can con a nation into slavery then what does that say about the people who allowed it to happen?
"And the argument is supported by the fact that when tax filings were made in the first quarter of the century the "standard deduction" was $4000 per year."
Actually, just the opposite. If wages were excluded by definition there would be no need for a $4000 deduction to exclude them.
Speaking of the 5th amendment, that’s always troubled me vis a vis the Al Capone case. I wonder why failing to report illegal income is a crime when you can’t be compelled to incriminate yourself according to the Constitution. That applies to reporting income at all, it occurs to me. Have tax returns ever been challenged on such grounds? Did the courts proffer a better answer than it would burden the government.
The rules are not the same for everyone. There are different rules for people with different amounts of income. This isn’t complicated.
Equality of opportunity and outcome have nothing to do with it.