One of the most interesting web sites about the so-called Income Tax that I’ve come across is that of a lawyer in Shreveport.
As near as I can tell, he was charged with criminal activities for not filing/paying (both? or which one?) his duly-owed income taxes. It’s been a while since I looked at it, but it certainly appeared when I did that he had dotted all the i’s and crossed all the t’s… and he convinced a jury. His materials include court transcripts including all motions and the trial itself. He is, of course, putting out the information in an attempt to let other people know how he did it and what his legal points were. He goes so far as to list all the things you have to bear in mind if you decide to follow his path, not the least of which are the facts that it’s going to cost you a substantial amount of money, and that there is every possibility that you will get royally fucked, as the king’s men figure out how to bend you over in front of the jury without the jurors being aware (or caring).
I think (although I’ll have to go back and check) that his basic defense is lack of INTENT to defraud (or whatever term it is) the government. He set the stage with preliminary motions to make certain that his defense was not going to be denied a hearing before the jury (this is their favorite bendover tactic: simply not letting you tell the jury what the facts are because [insert current bullshit excuse]). The primary point was that there appears to be no law which specifically makes anyone’s wages, salaries, fees, et cetera, “income”.
This has been argued quite often, and it has been successful in some cases and not in others. To take this position, it seems to be the case that you have to collect evidence - ADMISSIBLE evidence - that you have repeatedly contacted IRS to ask for citation of the laws which make the money you receive for your labors taxable.
The fact is (as of this writing) that there is nothing in the laws, regulations, codes, etc which either makes your receipts “income”, or in fact even defines “income” at all. There are numerous references to “taxable income”, “gross income” and so on, but none specifically defining “income”. There are references to “sources” of income, but not to income itself.
Absent such definition, the common man (keep in mind that this is going to include almost certainly the jurors) must rely on his own understanding. The fact is, we have been propagandized for many. many years to believe specifically that our wages are “income”, and as a result, it may be difficult to persuade all of the members of the jury of the fact that there is no such law, no such definition, and that - in effect - they have been voluntarily butt-fucking themselves all the years they’ve been paying taxes. Fortunately, you don’t have to persuade all of them, only at least one who will adamantly refuse to convict you and will further be able to sway the rest of them to return a verdict of acquittal.
Now, anyone knows that when you do some work, and someone gives you some money, that all you’re doing is trading your time for that money.
It’s not a heck of a lot different from trading your car for a truck. You now have a truck, but you don’t have a car. It’s an even swap. Is there any “income” resulting? No. You got something, but you gave up something of equal value.
In everyday terms, “income” is a net gain. In any trade, barter, or other straight-across swap, neither you nor the other person has any gain - you both give up something and get something in return.
Here is what I call the “Basic Equation of Taxation”, the BET. You are going to hear this, see it, and remember it.
You will remember it every single time you hear the word BASIC.
You will remember it every single time you hear the word EQUATION.
You will remember it every single time you hear the word TAX.
You will remember it every single time you hear the word BET.
First, think of - not yourself, but a simple BUSINESS, because you are in business, you’re at least selling your time in exchange for money. And it’s a little easier to follow as we start up.
Let’s pick a business that everyone has at least some experience with, one that is selling exactly what you’re selling when you work for someone in return for pay: your time. Let’s talk about an auto repair shop.
Now, what happens when you go to an auto repair shop? Well, he (let’s call the person “he” - most mechanics are male. Not all, not all, I agree. Heck, one of my daughters-in-law worked as a mechanic… and we can’t foprget that movie “My Cousin Vinny” about the kid from Brooklyn who gets arrested for murder in Alabama, and has his cousin who just got his lawyer license to come and defend him, and the cousin’s fiancee saves the day with her auto mechanic knowledge… now, where was I? oh, right -) he fixes your car for you, and you pay him. Let’s say that you pay him $100, okay? Now. Is that $100 “income”? Yes? No? Hmmmm… well, it turns out that it is NOT. It’s “receipts”. He has to deduct “costs” from that, right - he might’ve boutght some parts, or paid someone else to do part of the work, so he doesn’t get to keep the whole $100. So here’s the first part of the BET:
So there it is. This is “income”, right?
Not so fast. He has to pay for his shop - rent, lights, water, garbage pickup, insurance, tools… lots and lots of stuff. If he doesn’t pay for that stuff, he doesn’t have a business. These are called “expenses”. SO here’s the second part of the BET:
= GROSS INCOME (a favorite financial person called it..? or no GROSS?)
So there it is. This is “income”, right?
No. It’s “GROSS” income. There’s more to it.
= TAXABLE INCOME
So… is this it? Finally?
Sort of. It’s “TAXABLE” income, anyway.
Here’s the whole thing, the BET, the Basic Equation of Taxation:
TAXABLE INCOME = RECEIPTS - COSTS - EXPENSES - DEDUCTIONS
Now, how does this relate to you and me?
Just this: the government wants you to believe that everything you get paid by someone else is “INCOME” and is therefore fully taxable, subject only to certain deductions. They want you to believe this, even though it isn’t true. It isn’t true because they aren’t taking into account your costs and expenses! Either that, or they’re implying that your time, the time you sell to your employer or your customers, clients, patients or whatever you call them, is worth nothing and that you have neither costs nor expenses. In order to make that true, the government would have to specifically - and legally - define that wages (fees, or whatever you call the money you receive in return for your time) are in fact “income”… which I believe we have just shown they are NOT.
Now, since the government does not define “income”, there cannot be any requirement for you or I to file an “income tax return” based exclusively on your wages, salaries, fees, et cetera.
The essence of the lawyer’s argument is (or was) that after going through the same exercise we have just done, and coming to the same essential conclusions, he spent considerable time and effort to get the IRS to point to any such laws or definitions, and as mentioned previously, did so in a manner carefully documented in the form of admissable evidence. The result was that no such law or definition was forthcoming, and no reasonable person can conclude that there would be any reason for such a result except that there is no such law or definition.
I believe that the contacts made with IRS took the general form of “I want to obey the law, just as any good citizen does. For example, in my home town, there is a law that requires property owners to keep their property free of overgrowth, as a result of which, I regularly either mow or clear it myself or pay someone to do it. That law is, as they say “on the books” and it can be found and cited by title, chapter, paragraph and so on. But with regard to the income tax laws, I have searched diligently and have so far been unable to find any place in the thousands of pages and hundreds of thousands of words where there is anything that defines my wages, fees, et cetera to be income. If in fact there is any such, I would greatly appreciate your informing me of its specific location so that I can follow the law properly.”
So far, I have never seen a single case in which IRS (or anyone else) has been able to point out such laws. What they almost always do is point to some section (I’ll bet someone will comment on this and tell us exactly which one) which makes some statement(s) which refer to wages etc. as a SOURCE of income (along with some other things that are also SOURCES of income)… and I don’t think that any reasonable person can deny that is so - certainly, money you receive for whatever reason is generally a SOURCE of income, but it is not income… there are costs and expenses to be taken out, and deductions to be taken out before there is actual income. And that’s the whole point. Your time is not without value, so when you trade it for money, the money is not totally income… it’s a receipt.
… oh, there’s another point made by some, which is that the requirement for filing a form 1040 appears to be as a supporting document to filing a Form 2555 (this has to do with the law requiring OMB Document # such-and-such to be filed, and that specific document is the Form 2555). That form has to do with foreign income, and since remarkably few of us have any such, there doesn’t seem to be any requirement at all for the filing of Form 1040. I have not investigated this, but it’s something that should be looked into.
There’s an additional point made, that what makes your wages taxable is that you and your employer have filed the “real” return, in the forms of the W-4 and W-2 “forms” in which you have both agreed that your wages are income and reported the amounts thereof. The lawyer whose web site reports his victory in court was “self-employed” (as in fact all of us really are, unless we agree otherwise) and did not withhold or report income… although he did repeatedly request citation of laws making his receipts equal to “income”.
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