Let's start with the cross references, titles, and index from the various US Government Printing Office editions of the Annotated United States Code. While they're not probative, they are illuminating.
The title of Section 861 is "Income from sources within the United States."
In the annotated code, Section 61 has a cross reference as follows:
Income from sources -
Within the United States, see section 861 of this title.
Without the United States, see section 862 of this title.
The index of the code has something along the following lines:
Income tax -
Sources of income-
Determination, 26 § 861 et seq...
Within the U.S., 26 § 861
Now, digging in to the statutes, we have the following references to Section 861 that bolster the case that it is to be used to determine income from sources within the United States:
26 USC 79 - Group-term life insurance purchased for employees
(d) Nondiscrimination requirements
(3) Nondiscriminatory eligibility classification -
(B) Exclusion of certain employees -
For purposes of subparagraph (A), there may be excluded from consideration -
(iv) employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).
26 USC 105- Amounts received under accident and health plans
(h) Amount paid to highly compensated individuals under a discriminatory self-insured medical expense reimbursement plan -
(3) Nondiscriminatory eligibility classifications -
(B) Exclusion of certain employees -
For purposes of subparagraph (A), there may be excluded from consideration -
(iv) employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).26 USC 306 - Dispositions of certain stock
(f) Source of gain -
The amount treated under subsection (a)(1)(A) as ordinary income shall, for purposes of part I of subchapter N (sec. 861 and following, relating to determination of sources of income), be treated as derived from the same source as would have been the source if money had been received from the corporation as a dividend at the time of the distribution of such stock. If under the preceding sentence such amount is determined to be derived from sources within the United States, such amount shall be considered to be fixed or determinable annual or periodical gains, profits, and income within the meaning of section 871(a) or section 881(a), as the case may be.26 USC 410 - Minimum participation standards -
(b) Minimum coverage requirements -
(3) Exclusion of certain employees -
For purposes of this subsection, there shall be excluded from consideration -
(C) employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).26 USC 414 - Definitions and special rules -
(q) Highly compensated employee -
(8) Special rule for nonresident aliens -
For purposes of this subsection and subsection (r), employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)) shall not be treated as employees.26 USC 505 - Additional requirements for organizations described in paragraph 9, 17, or 20 of section 501c -
(b) Nondiscrimination requirements -
(2) Exclusion of certain employees -
For purposes of paragraph (1), there may be excluded from consideration -
(E) employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).
So as you can see, the statutes themselves repeatedly refer to Section 861 for determining income from sources within the United States.
Turning our attention to the regulations, again consulting the index first, you will find that under the term "Income taxes," there is an entry that reads "Income from sources inside or outside U.S., determination of sources of income, 26 CFR 1 (1.861-1--1.864-8T)." This is the only entry in the index relating to income from sources within the United States.
Under the CFR index term "determination of sources of income," and "income from sources inside or outside U.S.," the reader is again referred to 26 CFR § 1.861-1 and following, which are the regulations corresponding to Section 861 of the statutes.
Now, within the regulations themselves, we find that they begin as follows:
26 CFR 1.861-1 - Income from sources within the United States.
(a) Categories of income.
Part I (section 861 and following), subchapter N, chapter 1 of the Code, and the regulations thereunder determine the sources of income for purposes of the income tax. [...]
The income tax is imposed on "taxable income" from "whatever source derived," and Section 861 and following "determine the sources of income for the purposes of the income tax." The use of the word "whatever" does not change the fact that "Part I (section 861 and following), subchapter N, chapter 1 of the Code, and the regulations thereunder determine the sources of income for purposes of the income tax."
With respect to income from sources within the United States, the regulations say:
26 CFR 1.861-1 (a) ...The statute provides for the following three categories of income:
(1) Within the United States. The gross income from sources within the United States [...] See Secs. 1.861-2 to 1.861-7, inclusive, and Sec. 1.863-1. The taxable income from sources within the United States... shall be determined by deducting therefrom, in accordance with sections 861(b) and 863(a), [allowable deductions]. See Secs. 1.861-8 and 1.863-1."
The regulations refer to the section 861 regulations for determining gross income from sources within the United States.
Now, 26 CFR 1.861-8 is entitled, "Computation of taxable income from sources within the United States and from other sources and activities," and begins,
26 CFR 1.861-8 - Computation of taxable income from sources within the United States and from other sources and activities.
(a) In general--
(1) Scope. Sections 861(b) and 863(a) state in general terms how to determine taxable income of a taxpayer from sources within the United States after gross income from sources within the United States has been determined.
Another piece of these regulations further emphasizes that 861 and its regulations are to be used for determining taxable income:
26 CFR 863-1 (c) The taxpayer's taxable income from sources within or without the United States will be determined under the rules of Secs. 1.861-8 through 1.861-14T for determining taxable income from sources within the United States.
Note that it does not say "the nonresident alien," but rather, "the taxpayer."
If it didn't matter what source the income was derived from, then there would be no need for Section 861 and following, to "determine the sources of income for the purposes of the income tax." As for determining the sources, we find the following regulation:
26 CFR 1.861-8(a)(1) The rules contained in this section apply in determining taxable income of the taxpayer from specific sources and activities under other sections of the Code, referred to in this section as operative sections. See paragraph (f)(1) of this section for a list and description of operative sections.
And in paragraph (f)(1), we find the list of operative sections which require determination of taxable income:
26 CFR 1.861-8(f) Miscellaneous matters--
(1) Operative sections. The operative sections of the Code which require the determination of taxable income of the taxpayer from specific sources or activities and which give rise to statutory groupings to which this section is applicable include the sections described below.
And none of the "sections described below" apply to a US citizen residing and earning income within the US.
Now, as the Geezer pointed out, 26 USC 7701(c) states:
(c) Includes and including -
The terms "includes" and "including" when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.
This is an explicit exception to the canon of statutory construction which states "inclusio unius est exclusio alterius," "inclusion of one thing is the exclusion of others," but it is only applicable when the other things are otherwise within the meaning of the defined term.
The term "operative sections" does not have any other things otherwise within its meaning aside from those listed in (f)(1), unlike the various other definitions, such as for "corporation" in 7701(a)(3) (The term "corporation" includes associations, joint-stock companies, and insurance companies.)
Therefore, the only operative sections which require determination of taxable income of the taxpayer from specific sources or activities are those listed in (f)(1).
Therefore, the only operative sections which require determination of taxable income of the taxpayer from specific sources or activities are those listed in (f)(1).
I notice you look only at the regulation which can neither add to or take from the statute, while you do all you can to avoid the statutes from which regulations derive their authority.
Sorry that does not fly, for it is totally insufficient from the Court's point of view and the intention of Congress to which the courts are bound.
U S v. FISHER, 6 U.S. 358 (1805)
- "It is undoubtedly a well established principle in the exposition of statutes, that every part is to be considered, and the intention of the legislature to be extracted from the whole."
United States v. Condo, 741 F.2d 238 (9th Cir. 1984)
Argued that the Sixteenth Amendment only allows taxing income from "sources," not persons, and that the word "includes" is a term of limitation, not expansion.
You would have us ignore Sections 1, 61, 63 etc. in your single minded desire for us to accept what is a very weak argument that cannot serve as defense in the courtroom.
Sorry, I don't buy your scam and neither should anyone else who has any interest in preserving their freedom and property from the ravages of a tax case.
For purposes of subparagraph (A), there may be excluded from consideration -
(iv) employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).
Congratulations, you just proved my point right there.