Definition of Income

[joseph sugarman]

Thank you, Free From Contract.

I have just read your post in which you mention your analysis of Stratton's as provided to Lawdog. I was going to work on it next, but you have already done so. No purpose in flogging a dead horse, except, of course, for the pure derisive joy I might experience. Would you please direct me to your anaysis, though, as I would like to read it.

I will look for another case referred to by Lawdog in this thread.

[farmer_giles_of_ham]

avoid addressing the deficiency, switch tracks and go to another topic. This is straight out of high school debate club tactics.

that is what attorneys do- and it all starts in high school, that's what education is there for, to train in the ways of the temple.

Really, everything is high school, when you think about it. Demerits, detentions, homework, clubs, sports teams, hall monitors, credits, grades, lunch room, recess, permission slip, hall pass, graduation, school service, teachers, principals...

These sort of conversations help us to refine the ideas and concepts. Here we are demanded to argue about something that isn't, like cases that aren't heard and appeals that arent made.

There is no Supreme Court case giving me the right to scratch, either, but I do it anyway, and they dont mind.

This is why it is so important to control the pleadings, to set the terms of the controversy. So far in this thread I dont notice any controversy, I sense ruffled feathers but no actual point of disagreement. Lawdog says gross income is taxable, and we say gross income is from
"derived sources" The two points actually agree with one another, so all thats left is the high school fake debate club.

[joseph sugarman]

Good Morning Smith,

While I am taking a breath, it occured to me none of this would be taking place had it not been for you, your posts, and the time and effort expended by you to prepare them. All of the rest has taken place and I have not yet recognized nor thanked you properly. THANK YOU!.

I do not know, though, because of your absence since then, what your thoughts might be on the last few days of discourse. Do you wish to share any?

I certainly hope you come back in, and soon.

Joseph Sugarman, design@dream-home.com

[FreeFromContract]

Originally Posted by farmer_giles_of_ham

So far in this thread I dont notice any controversy, I sense ruffled feathers but no actual point of disagreement. Lawdog says gross income is taxable, and we say gross income is from
"derived sources" The two points actually agree with one another, so all thats left is the high school fake debate club.

f_g_o_h, I suggest you re-read LD's posts, as that clearly not what he is saying. Especially here:

Originally Posted by lawdog

Wages are taxable income. Salaries are taxable income. Section 1 of the Internal Revenue Code has a table for "Married persons filing jointly". Can a corporation be married?

The title of the thread is Definition of Income, not Definition of Gross Income.

It is on the point of income he is creating controversy, distortion and misrepresentation.

[joseph sugarman]

Originally Posted by Lawdog

Oh yes. If you consider quoting the decisions of the courts to be distortion, opinion, and misdirection. The fact of the matter is, they are NOT my opinions. This is what the courts have said. Their decisions and opinions matter. Mine do not. As the Supreme Court put it:

It is emphatically the province and duty of the judicial department to say what the law is. Those who apply the rule to particular cases, must of necessity expound and interpret that rule. If two laws conflict with each other, the courts must decide on the operation of each. [5 U.S. 137, 178] So if a law be in opposition to the constitution: if both the law and the constitution apply to a particular case, so that the court must either decide that case conformably to the law, disregarding the constitution; or conformably to the constitution, disregarding the law: the court must determine which of these conflicting rules governs the case. This is of the very essence of judicial duty.

(I had to copy this from the case, as Lawdog's copy would not copy to this post)

Marbury v. Madison, 5 U.S. (1 Cranch) 137 at 177-178 (1803).

This case is over 200 years old. The concept is hardly new. If you don't like the idea that the courts get to interpret the law and expound upon its meaning, then you need to either try to get the Constitution changed, or find another country to live in.

This paragraph, supplied by Lawdog, taken on its own without the previous or succeeding paragraphs actually in the decision seem to support his position. The courts, in a vacuum, decide what the law states and they are free to expound on it without restraint. If you do not like it, he states, change the Constitution or leave the country.

But when the preceeding and succeeding paragraphs are added to the one, a different analysis is required.

Let us look at the preceeding paragraph:

"If an act of the legislature, repugnant to the constitution, is void, does it, notwithstanding its invalidity, bind the courts and oblige them to give it effect? Or, in other words, though it be not law, does it constitute a rule as operative as if it was a law? This would be to overthrow in fact what was established in theory; and would seem, at first view, an absurdity too gross to be insisted on. It shall, however, receive a more attentive consideration."

And now with the added succeeding paragraph:

"If then the courts are to regard the constitution; and t(he) [sic] constitution is superior to any ordinary act of the legislature; the constitution, and not such ordinary act, must govern the case to which they both apply."

When the three are read in concert, as to the intent of the court in this matter, a much different meaning is derived than the one which Lawdog intended. The courts are constrained to read statutes, regulations and everything else in the light of the Constitution, and rule accordingly.

In this regard there is no need to change the Constitution. As properly administered, it provides all the protection one needs.

Even if Lawdog reads and understands the law in a vacuum, a condition the Supreme Court considers a gross absurdity; none of the rest of us are required to do so.

I think when we are all finished with him, should he still want us to leave the country, he will be buying the tickets.

As a complete aside from the above. Without the help of Free From Contract I would still not have a clue how to properly quote from another's posts. Folks, it wasn't easy for him. I thank him publicly for his help and patience.

[indago]

joseph sugarman wrote:

If he was at all open to finding the solution we are looking for; he would be commenting on Tommy Cryer's win, and the facts and law that man used to accomplish the victory. ...Most of the early victors demanded anonymity from those who knew about the cases. The only outstanding example I can think of concerning one who did not is Vivian Kellems.

RECENT1

RECENT2

Mr. Justice Pitney, delivering an opinion of the United States Supreme Court, declared: "We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 (Doyle v Mitchell Bros. Co., 247 US 179; other citations omitted) the broad contention submitted in behalf of the government that all receipts - everything that comes in - are income within the proper definition of the term "gross income", and that the entire proceeds of a conversion of capital assets, in whatever form and under whatever circumstances accomplished, should be treated as gross income. Certainly the term "income" has no broader meaning in the 1913 Act than in that of 1909 (see Stratton's Independence v Howbert, 231 US 399, 416, 417)" — Southern Pacific Co. v John Z. Lowe, Jr. 247 US 330 (1918)

Government still insists that "everything that comes in" is income, and taxable, using the economic term. But the Supreme Court has shot down that argument nearly a hundred years ago. When is government going to "catch up"?

[joseph sugarman]

Indago,

Perhaps you read my post early is this thread in which I requested Lawdog supply just one case decided by the Supreme Court, brought by any one human or a married couple, in which the relief sought, in part, was a legal definition of income as it applies, if it applies, to only him, her or them. You may have noticed not one has been proferred by him.

The government will not, in my opinion, ever grant political relief on this question, and the Supreme court, until now, has refused to grant judicial relief by continuous denial of certiorari of any case brought by a human or a married couple.

There have been cases, not on point in the slightest manner, referred to by Lawdog dealing with married couples. A condition I am still working my way through, and will present the evidence soon.

Of course, in defense of the court, I can not be sure the question has ever been elegantly posited.

[farmer_giles_of_ham]

the broad contention submitted in behalf of the government that all receipts - everything that comes in - are income within the proper definition of the term "gross income", and that the entire proceeds of a conversion of capital assets, in whatever form and under whatever circumstances accomplished, should be treated as gross income.

If income can be defined then "gross income" follows- I like to use this term because that is what is said to be taxable, as seen above.

Even if "everything that comes in" ..."of a conversion of capital assets" can be treated as 'gross income'- no gain, no pain, and no worries. I didn't make this up and it might not have a court cite: it's just how all tax systems work. ("capital gains tax") Only 'gains' get reported.

To my mind that is the key, because any transaction can be characterized in many ways, (or none at all!) one of which is an even-exchange conversion of capital assets w/o gain or benefit.

[indago]

joseph sugarman wrote:

the Supreme court, until now, has refused to grant judicial relief by continuous denial of certiorari of any case brought by a human or a married couple.

And why should they? They've already explained the sixteenth amendment "income tax" nearly a hundred years ago. Government was never granted the power to lay a direct tax upon the inhabitants of the States. If a toady people can't get their **** together, then it's no problem for the Supreme Court to fix.

"I often wonder whether we do not rest our hopes too much upon constitution, upon laws and courts. These are false hopes, believe me, these are false hopes. Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can even do much to help it." — Judge Learned Hand

[mrg]

Internal Revenue Manual 4.10.7.2.9.8 (05-14-99).

1. "Decisions made at various levels of the court system are considered to be interpretations of tax laws and may be used by either examiners or taxpayers to support a position."


"Certain court cases lend more weight to a position than others.

A case decided by the U.S. Supreme Court becomes the law of the land and takes precedence over decisions of lower courts.

The Internal Revenue Service must follow Supreme Court decisions.

For examiners, Supreme Court decisions have the same weight as the Code."

BRUSHABER V. UNION PACIFIC R. CO., 240 US 1.11 (1916):

"... the confusion is not inherent, but rather arises from the conclusion that the 16th Amendment provides for a hitherto unknown power of taxation;

that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes.

And the far reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it..."

STANTON V. BALTIC MINTNG CO.. 240 US 103,112 (1916):
"... it manifestly disregards the fact that by the previous ruling it was settled that the provisions of the 16th Amendment conferred no new power of taxation.."

BOWERS V. KERBAUGH-EMPIRE CO.. 271 U.S. 170,174 (1926):

"The Sixteenth Amendment declares that Congress shall have power to levy and collect taxes on income, 'from whatever source derived without apportionment among the several states, and without regard to any census or enumeration.

It was not the purpose or effect of that amendment to bring any new subject within the taxing power."

PECK V.LOWE. 247 U.S. 165,173 (1918):
"The Sixteenth Amendment, although referred to in argument, has no real bearing and may be put out of view.

As pointed out in recent decisions, it does not extend the taxing power to new or excepted subjects,..."

DOYLE V. MITCHELL BROS.. 247 U.S. 179,183 (1918):
"An examination of these and other provisions of the Act (The 16th Amendment) make it plain that the legislative purpose was not to tax property as such, or the mere conversion of property, but to tax the conduct of the business of corporations organized for profit upon the gainful returns from their business operations."

EISNER V. MACOMBER. 252 U.S. 189,205,206 (1920):
"The 16th 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."

"As repeatedly held, this did not extend the taxing power to new subjects..."

EVANS V. GORE. 253 U.S. 245,259 (1920):
"Does the Sixteenth Amendment authorize and support this tax and the attendant diminution;

that is to say, does it bring within the taxing powers subjects theretofore excepted?


The court below answered in the negative; and counsel for the government say: It is not, in view of recent decisions, contended that this amendment rendered anything taxable as income that was not so taxable before'.11

Just as the issue of wages was settled in countless Supreme Court decisions, the IRS chooses to look the other way.

What the Supreme Court established in EVANS v. GORE was that not only did the 16th Amendment NOTconfer new taxing powers to Congress to tax the American Citizen living and working within the United States of America, but it also acknowledged the definition of INCOME as defined by the Supreme Court in FLINT VSTONE TRACY CO.

FLINT v. STONE TRACY CO.. 220 U.S. 107,144 (1911)
"A reading of this portion of the statute (1909 corporation tax act) shows the purpose and design of Congress in its enactment and the subject-matter of its operation.

It is at once apparent that its terms embrace corporations and joint stock companies or associations which are organized for profit and have a capital stock represented by shares.

Such joint stock companies, while differing somewhat from corporations, have many of their attributes and enjoy many of their privileges."

MERCHANTS' LOAN & TRUST CO. v. SMTETANKA. 255 U.S. 509,519 (1921) "There would seem to be no room to doubt that the word 'income' must be given the same meaning in all of the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act, and what that meaning is has now become definitely settled by decisions of this Court"

BOWERS vs. KERBAUGH-EMPIRE. 271 U.S. 170 (1926)
"Income has been taken to mean the same thing as used in the Corporation Excise Tax Act of 1909, in the 16th Amendment, and in the various revenue acts subsequently passed."

HELVERING v. EDISON BROTHERS' STORES. 8 Cir. 133 F2d 575 (1943)
"The Treasury cannot by interpretive regulation make income of that which is not income within the meaning of the revenue acts of Congress, nor can Congress, without apportionment, tax that which is not income within the meaning of the 16th Amendment."

SOUTHERN PACIFIC CO. v. LOWE. 247 U.S. 330,335 (1918)
"We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909, the broad contention submitted on behalf of the government that all receipts, everything that comes in, are income within the proper definition of the term 'gross income'.

Certainly the term "income' has no broader meaning in the Income Tax Act of 1913 than in that of 1909, and for the present purpose we assume there is no difference in its meaning as used in the two acts."

BUTCHER'S UNION CO. v. CRESENT CTTY CO.. Ill U-S. 746,757 (1814) "The common business and callings of life, the ordinary trades and pursuits, which are innocuous in themselves, and have been followed in all communities from time immemorial, must therefore be free in this country to all alike upon the same applied to all persons of the same age, sex and condition, is a distinguishing privilege claim as their birthright.

It has been well said that 'the property which every man has in bis own labor, as it is the original foundation of all other property, so it is the most of his own hands, and to hinder his employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property.

It is a manifest encroachment upon the just liberty both of the workman and of those who might be disposed to employ him."

There are essentials to any case or controversy, whether administrative or judicial, arising under the Constitution and laws of the United States (Article in § 2, U.S. Constitution, "arising under" clause).

See Federal Maritime Commission v. South Carolina Ports Authority, 535 U.S. (2002)

The following elements are essential:

1. When Challenged, standing, venue and all elements of subject matter
jurisdiction, including compliance with substantive and procedural due
process requirements, must be established in record.

2. Facts of the case must be established in record.

3. Unless stipulated by agreement, facts must be verified by competent
witnesses via testimony (affidavit, deposition or direct oral examination).

4. The LAW of the case must affirmatively appear in record, which in the
instance of a tax controversy necessarily includes taxing and liability statutes with attending regulations

(See United States of America v.
MenL 260 F. Supp. 784 at 787

and United States of America v.
Community TV. Inc.. 327 F.2d 79 (10th Cir.. 1964V

5. The advocate of a position must prove application of law to stipulated or
otherwise provable facts.

6. The trial court, whether administrative or judicial, must render a written decision that includes findings of fact and conclusions of law.

Invocation of.............