Tax Protester Told to Stop Giving Advice

Associated Press ^ | Mon, Jan. 13, 2003 | MARC LEVY

[heyhey]

HARRISBURG, Pa. - A tax protester who allegedly promotes a bogus legal loophole to convince people they owe no taxes was ordered by a federal judge to stop the practice and turn over his clients' records.

The order came Friday in the government's effort to force Thurston Bell of Hanover to stop giving clients allegedly false tax advice and charging large fees for filing tax returns.

[mvpel]

Sources of income are not taxed; the income ITSELF is taxed.

Actually, only "taxable income" is taxed. And the regulations set forth a list of operative sections which require the determination of taxable income from specific sources and activities, and Section 861 in general is used to determine the sources of income for the purpose of the income tax.

[Poohbah]

The fact remains the Income Tax is unjust, and should be done discarded.

Absolutely agreed--and PatrickHenry has previously stated his agreement.

However, your complaint is with the Congress, not with the IRS.

I applaud the the efforts of those that are trying to un-do it!

These people are NOT trying to undo the tax code--for many of them, if the Internal Revenue Code disappeared, they'd go bankrupt before they could find honest work.

I don't expect a pseudo-conservative to understand this sentiment!

Excuse me for asking this in a somewhat intemperate fashion...but WHO F***ING DIED AND APPOINTED YOU THE OFFICIAL MIKHAIL SUSLOV OF THE CONSERVATIVE MOVEMENT?

[mvpel]

I find it interesting to note that in the article that started this thread, Bell is being pegged by the IRS for selling advice, rather than failure to pay taxes.

[PatrioticAmerican]

" The following items of gross income shall be treated as income from sources(activities) within the United States"

That is the only sentence needed to be understood; "items of gross income shall be treated as income".

[mvpel]

Quoting from another article, but certainly germane here:

Readers familiar with the motion picture "The Sting" may recall that the cornerstone of the successful 'Sting' (fraud) was that the victim had to be unaware at the end of it all that they had been defrauded. Even if told, they would refuse to believe they had been dudded (conned).

[Destructor]

"Excuse me for asking this in a somewhat intemperate fashion...but WHO F***ING DIED AND APPOINTED YOU THE OFFICIAL MIKHAIL SUSLOV OF THE CONSERVATIVE MOVEMENT?"

I could ask you the same question!

Did it ever occur to you (in all of your status quo wisdom), if enough people stop paying the current system will collapse? Then, the politicos would be forced to deal with the issue, and come up with either a flat tax or a national sales tax. Either option would be better than what we have now! Argue that point.

[PatrioticAmerican]

"That is an item of income, not a source of income."

This is where your logic fails. "Source" and "item" are one in the same, scuh as what would be the difference? Income is ALWAYS from a source. It cannot be from the destination, such that an "item" of income is an item that comes from a source, and if that source is on US soil by a US citizen, it is taxable as income.

in·come ( P ) Pronunciation Key (nkm)
n.
1. The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as profit from financial investments.
2. The act of coming in; entrance.

[mvpel]

The point is that some sources are taxable, and other sources are not taxable. You can't calculate your tax without knowing what your taxable income is.

The sentence "items of gross income shall be treated as income" says nothing about taxable income, or sources.

[Poohbah]

Actually, only "taxable income" is taxed.

And "taxable income" is defined as "gross income minus allowed deductions and exemptions," which are spelled out in the tax code.

And the regulations set forth a list of operative sections which require the determination of taxable income from specific sources and activities, and Section 861 in general is used to determine the sources of income for the purpose of the income tax.

Please provide contextual citations for ALL references to Section 861 in the Internal Revenue Service regulations.

[mvpel]

This is where your logic fails. "Source" and "item" are one in the same, scuh as what would be the difference? Income is ALWAYS from a source. It cannot be from the destination, such that an "item" of income is an item that comes from a source, and if that source is on US soil by a US citizen, it is taxable as income.

Did you read post 87? In my example there, an item of gross income is compensation for labor, and the source is XYZ Corporation in Canada. XYZ Corporation is not an item of income, nor is compensation for labor a source of income.

How do you come to the conclusion that if the source is on US soil by a US citizen it is taxable income? Section 861 and its associated regulations, according to the regulations, is the section to be used when determining taxable income from sources within the United States. Can you lay out your reasoning, please?

[Poohbah]

Did it ever occur to you (in all of your status quo wisdom), if enough people stop paying the current system will collapse?

Did the second-order effects of such a collapse ever occur to you, or are you a complete idiot?

Then, the politicos would be forced to deal with the issue, and come up with either a flat tax or a national sales tax.

No, the politicos would be trying to get into whatever "Continuity Of Government" bunker was closest, and wait out the second-order effects I was talking about.

Either option would be better than what we have now! Argue that point.

Fine, I'll argue that point. At that point, America would be dead and buried. Whatever came out of the ashes would most likely be a myriad collection of minor tyrannies, where the law is whatever the guy with the biggest and baddest thugs says it is.

[Poohbah]

Section 1 of the Title 26 statutes imposes the "income tax" in five different categories (unmarried people, married people filing jointly, etc.). In each case, the wording reads "there is hereby imposed on the taxable income of…" The law defines "taxable income" in the following section of the statutes:

"Sec. 63. Taxable income defined
(a) In general - …the term "taxable income" means gross income minus the deductions allowed by this chapter…" [26 USC § 63]

In other words, when someone determines his "gross income," and then subtracts all legal deductions, the remainder is "taxable income."

So far, so good--but that's what the guy who jumped off the roof of the Sears Tower said as he went past the 80th floor.

The law specifically defines "gross income" in the following section of the statutes:

"Sec. 61. Gross income defined
(a) General definition - … gross income means all income from whatever source derived, including (but not limited to) the following items:" [26 USC § 61]

This section then lists "items" of income such as interest, compensation for services, etc.

So far, so good...

This is the point at which many tax "experts" err, either by assuming that the "items" of income listed constitute "sources" of income, or by assuming that "from whatever source derived" means that all of the "items" of income listed, regardless of where they come from, are subject to the "income tax." Both of these assumptions are incorrect. (The difference and relationship between "items" and "sources" will be explained below.)

And here is the problem.

The "sources" or "items" of income are not taxed. The income ITSELF is taxed.

[is_is]

Is it evil to tell someone up on the high dive, as they're jumping on the board, ready to do a Triple Lundy, that there's no frickin' water in the pool?

Only if there really is water in the pool and and doing a triple Lundy off of the high dive into the water is a requirement of U.S. Citizens by Constitutional amendment enforced by laws enacted by congress and a $100 Bizillion funded "Lifeguard/Pool Monitoring Agency", which is all there to make sure that each and everyone of us does our "Lundy" each year.......

[Poohbah]

Thank you for missing the point.

[is_is]

NO!!!!....thank you for missing the sarcasam in my post....

[Badray]

". . .where the law is whatever the guy with the biggest and baddest thugs says it is."

You mean like what we have now with asset forfeiture, consfiscatory taxation, no-knock raids, DUI checkpoints, 'FBI/ATF/TSA/IRS/INS' alphabet soup agencies that bring us Waco, Ruby Ridge, and a bureaucracy that refuses to seal the borders, etc, etc, etc?

I'm sure glad that the government is here to help me. /sarcasm

[Poohbah]

Badray, you think THAT'S bad? Go live in f***ing Somalia. THERE'S your ideal state.

[ancient_geezer]

The fact remains the Income Tax is unjust, and should be done discarded.

True, however it is currently the law of the land, regardless.

I would recommend changing the law rather than encouraging folks to violate the law making for even more lack of justice.

[Destructor]

"Fine, I'll argue that point. At that point, America would be dead and buried. Whatever came out of the ashes would most likely be a myriad collection of minor tyrannies, where the law is whatever the guy with the biggest and baddest thugs says it is."

No, I'm not a "complete idiot." I'm not the one singing the praises of a system of taxation that is an obvious a failure, either.

It would never get to that point of a collapse, unless Hillary Clinton was elected President. That was a poor choice of words on my part. Anyone else would address the problem at some point prior to the total collapse of our nation.

Since you're so smart what exactly is your plan? You say that you think the current system is bad, but you're paralyzed with fear when it comes to trying something else? So, what does America do? Continue down the same twisted path, because any alternative may turn out to be worse, or what? What is your solution Mr. Status Quo?

[ancient_geezer]

The "sources" or "items" of income are not taxed. The income ITSELF is taxed.

Careful Poohbah, that isn't exactly how it works, income is used to determine the amount of tax on a commercial activity such as selling one's labor for compensation. That is why it is classed as an indirect tax under the rule of uniformity.

House Congressional Record, March 27, 1943, pg. 2580:

• "The income tax is, therefore, not a tax on income as such. It is an excise tax with respect to certain activities and privileges (the type 3 and 4 taxes) which is measured by reference to the income which they produce. The income is not the subject of the tax; it is the basis for determining the amount of tax."

 

KNOWLTON v. MOORE, 178 U.S. 41 (1900)

• 'indirect taxes are levied upon the happening of an event or an exchange.'

BROMLEY v. MCCAUGHN, 280 U.S. 124 (1929)

• While taxes levied upon or collected from persons because of their general ownership of property may be taken to be direct, Pollock v. Farmers' Loan & Turst Co., 157 U.S. 429 , 15 S. Ct. 673; Id., 158 U.S. 601 , 15 S. Ct. 912, this court has consistently held, almost from the foundation of the government, that a tax imposed upon a particular use of property or the exercise of a single power over property incidental to ownership, is an excise which neet not be apportioned

Tyler v. U.S. 281 U.S. 497, 502 (1930)

• An indirect tax is a tax laid upon the happening of an event,as distinguished from its tangible fruits.