need good advice from a professional accredited attorney

[farmer_giles_of_ham]

Looks like we are getting somewhere...

I notice the lack of any attorney response to the actual issue presented- if there is a controversy, any helpful suggestions for the accused, from HIS point of view, presenting HIS interest- how to effectively deny/rebut the accusation.

Without entering into "sympathies"- shouldn't these be irrelevant?

The case, if there is one, is how to assert a proper adversarial position towards a certain object- quashing these W2 claims. Overcoming the presumption/bias you attorneys clearly hold...

I must admit that my original post is too defensive. The point about "circumlocutions" is valid, since these create too much tension.

On the other hand each of the alternative scenarios presented are clearly excluded from "gross income", loan proceeds etc.

It is possible to structure a transaction so that it conforms with a given recognized account modality that works for a particular interest, in this case that of my relative and his goal to keep free from attack (such as the one represented by a W2 information).

I did gather from one poster that documentation must be offered that controverts the W2. Well I knew that already. However the accused doesn't amend W2's, he has to use another form since he is not the author of the W2.

yes, these are tax denier arguments. Of course they are! Whad'ya think, he was gonna admit to the charge? It is entirely within the realm of normal to deny an accusation. Its called a pleading of "not guilty", or "failure to state a cause of action", or whichever. The attorneys would have us believe it is illegal to deny overcome or otherwise defend against an attack. Ha! At least they are going to have to work for this one...earn your pay like the rest of us.

These are exactly some of the scenarios that occur every day that deny any basis for "gross income". I never heard of anyone liable for tax on borowed or paid-back money (or any other 'fair-market value). Or on insurance pay-out for losses.

The whole point of this thread is "how to effectively deny". Do attorneys ever represent this interest?

I submit that 90% of all actual transactions that take place every day are legally excluded from 'gross income' without any debate in general.

That means that overall my relative has a 9 out of 10 chance of being correct, so any assertions about "usually" should be in HIS favor, just based on the statistics.

So let me re-phrase the original post-

Here are the facts:

My relative is accused by W2 of about 100 grand in "received gross income". This information is a mere data entry without any personal guarantee.

My relative denies this by way of demurrer. His answer is "I don't know what they are talking about", and "not enough info to enable a responsive answer", which legally is a pleading with the effect of a denial, without joining in the merits of the assertion or offering a positive defense.

Also he objects to the conclusions offered, mere account characterizations. Just stating personal beliefs are not a cause of any action criminal or civil.

He offers this rebuttal under penalty of perjury.

I dont care whether any of you are more sympathetic to W2's or to tax denials. What is missing here is attorney advice to help the accused present his position on the matter. Not your sympathies, HIS position.

You know what they say about assumptions now... these make an ASS of U an ME.

And the example of a series of arguments in defense of an accusation of murder is very good, actually. That's exactly how it works-"even if it is determined that one set of facts are proven then here is my defense".

That makes perfect sense, and these are the issues presented for conclusion by a judicial authority.

Thats what judgement is- weighing the varying proofs against one another to reach an outcome. If any one of them succeeds the defendant wins...and lets keep in mind the presumption of innocence and the burden of proof- every element of the offense must be claimed, charged, proven and conclusive. And any doubts must be resolved in favor of the accused.

I'll make every argument I can, good bad and ugly. Just like the prosecution does- throw everything possible at the adversary and hope something sticks. I only need one failure on the part of the prosecution and the whole case falls apart.

Originally Posted by KarenM

It will come down to this: Is the Court going to believe the testimony and documentation of the disinterested party who paid the salary/wages/whatever or the testimony of a person who is attempting to characterize income as non-taxable?

So no it doesn't come down to this at all, you have misleadingly created an entirely different controversy. The W2 maker has no offered no testimony (that requires an oath) and has no 1st hand knowledge other than their own very interested beliefs, since they clearly went to some lengths just to make this claim which shows where their interests and "sympathies" lie. There is no such thing as a 'dis-interested claim': in fact in order to make a claim like this, one needs standing and that requires an interest in the matter.

Whereas my relative is denying receipt of any income period, without characterization. The burden of proof is on the prosecution.

This is a process, you know.

[Shoonra]

Originally Posted by farmer_giles_of_ham

What is missing here is attorney advice to help the accused present his position on the matter. Not your sympathies, HIS position.

The reason, bluntly, is that the facts are not being presented to us in a straightforward way. Instead of the simple facts, we have conclusory assertions, the conclusions being drawn up by someone who's definitely partial to one side and definitely not a lawyer.

I doubt you'll find any lawyer willing to commit to this case on the basis of the presentation you have made. My suggestion is that, instead of badmouthing the legal profession, you ought to set forth the bare facts of the situation and let the lawyer decide for himself if there had been "equal exchange", etc.

By the way, you offer a number of different conclusory assertions about the same single fact (whether there was a positive flow of income) to justify your desired outcome. In the real world, usually one and only one explanation is plenty and multiple ways of justifying the same outcome, especially when couched in this sort of strained language, make things very suspicious.

[Ecclesiastes]

Originally Posted by farmer_giles_of_ham

A relative has received a W2 statement in the mail accusing him of receiving about 100,000 bux of "salary", an item of gross income. His personal bank records indicate deposits in exactly these amounts on the same dates.

He says that the characterization is false, he paid for that money with equal value.

Your relative (and you) have made a very common law school mistake, which is that you are trying to calculate "gain" based on the values of what have been exchanged.

Gain is NOT the difference between the value of what is received and the value of what is transferred away. It is the difference between the value of what is received and the BASIS of what is transferred away, and "basis" is what you paid for it and not what it's worth.

For example, if I buy stock of the XYZ corporation at $100 per share, and then later sell the same stock for $120 per share on a day when the stock is trading on an open exchange at $120 per share, I have received $120 for stock with a value of $120 (which is an exchange of equal values) AND I have a gain of $20 because I originally paid only $100 for the stock and the $20 represents the increase in value that I have realized.

Similarly, if I own a plumbing business and I hire a plumber for $20 per hour, I send him to do work for one of my customers, and I charge the customer $30 for one hour of work, I have a gain of $10. The gain is not the difference between what I was paid ($30) and the value of the services, but the difference between what I was paid for the services ($30) and what I had paid for those services ($20).

So if your relative received $100,000 for his services, the measure of his gain is not the difference between the $100,000 and the value of his services, but the difference between the $100,000 received and what your relative paid for his own services. Your relative paid himself nothing for his own services, so the entire amount is gain, and therefore income.

Congress, the IRS, and the courts (i.e. all three branches of the government) all agree that the entire amount received is income. You can disagree if you want, but your disagreement will not change the reality of what the law is.

[mertensv16]

Originally Posted by indago

I asked him if his wife worked on the farm. He said yes to this. I asked him if he had any children. He said that he did have, and that they all had their chores to do on the farm. I asked him if he declared on the form the value of all of their labor. He thought for a moment, and then declared that he did not; that there was no place on the form for this.

Did he pay his wife and children for working? If not, then he has no deduction in this connection. In calculating your deduction for business expenses, you never deduct the value of what you receive; you deduct the amount you paid.

Also keep in mind Section 262(a) of the Code:

(a) General rule
Except as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.

[Jerry Pitts]

My condolences on the loss of your Mother. I can definitely relate to what you have said in this regard.

Originally Posted by Lawdog

That doctors admitted to you that they do not know for sure what causes cancer ought to tell you that they are being honest, because they admit the limits of their knowledge.

So with them knowing the limits of their knowledge, why do they make representations of 'helping' when in fact they don't know enough about the subject to justify making such offers of 'help'? The reason they extend those EMPTY offers of 'help' is due to the almighty so-called dollar and their greed toward obtaining more. What do the CEO's of the big Pharmaceutical companies take home as a compensation of providing ineffective assistance of medical care? And what do those who are adversely affected by the ineffective assistance have to pay for that feeble attempt at assisting (while those assisting are also knowing that they are incapable of providing TRUE assistance)?

The same is TRUE of the legal profession. By your own admission, no-one is all knowing; the laws are ever changing; and the moods of the judges are so varied as to be changed on a basis of whether or not he/she got lucky with the spouse the night before. The legal system, secular law, is just an illusion that has the capacity of wrecking the lives of other people based upon what some jack-ass with a black robe on feels is the right thing to do, regardless of his/her rationale for a decision. Not one doctor or one lawyer that I have met, would dare state with PURE HONEST INTENT that they are not in the game for the sake of making money a bigger priority than the sanctity of freedom and justice as applied to another flesh and blood man or woman. This fact is evident, when you look through the AmJur 2d volumes and see case after case by the hundreds showing where it is permissible for state agents to introduce false evidence into the court process and still they retain immunity from prosecution... even in the admitted (judicially admitted) process of entering false evidence.

You also admit that 'the law' is not "fixed". Meaning that it is not always the same and is ever changing. Why is it changing? Because with every change made, there is more and more confusion created; the confusion always creates the possibility of more and more men and women making 'mistakes' due to a flexible law system that one minute can be 'this way' and the next moment be 'another way'; that flexibility is nothing more than job security; job security means that with flexible laws, there is always going to be cases to be tried and subsequently more and more fiat money to be gained by the greedy blood sucking attorneys and DOCTORS and CEO's of corporations that don't really give a damn about anyone but their own avarice ridden souls.

Jerry Carlos

Originally Posted by Lawdog

It's people like David Merrill who, on top of having lost every verifiable time, are so sure of themselves that ought to give you pause.

I've never been married, so I admittedly don't know exactly what it feels like to lose your spouse. But I lost my mother to complications from diabetes back in 2003. That my mother died at the relatively young age of 59 is not "proof" that her doctors were ignorant or incompetent.

It hurt like hell to lose my mother. Not only was she fairly young, but I was the one who found her body. Death isn't pleasant. I know that you are feeling depressed right now. That is totally normal.

No human being is all knowing or all powerful, be that human being a doctor, a lawyer, or a member of any other profession.

You ask what "the law" or "just plain law" is. Your question is too vague to be answered. Secular law, religious law? If you mean religious law, which religion? Jewish law? Christian? Muslim?

In any event, if you mean the secular law...which includes the Constitution of the United States...the law is always changing. New statutes are passed by Congress and the state legislatures. New cases are decided. The law is not fixed. It changes. Society changes, and the law reflects that change. Sometimes, the law leads that change.

Of course I don't know all the law. I'm only licensed as an attorney in Georgia. Thanks to things such as the 10th Amendment, the law can vary widely from one of the fifty states to another. Even considering the state I AM licensed in, the laws passed by the legislature make up about 50 thick books of annotated statutes. Caselaw from the Court of Appeals and Supreme Court of this state are another huge body of law I have to consider whenever I take a case. And if the U.S. Constitution or U.S. Code contradict the laws of my state, I have a Supremacy Clause issue to consider.

The law is rarely cut and dried. If it were, every Supreme Court case would be 9 justices on the official opinion of the court, none contra. Many Supreme Court cases now are 5-4 votes. If some of the best legal minds in America can be so sharply divided, your expectation that I (or anyone else) can give you "the law" or "just plain law" in a few paragraphs on an internet bulletin board is shockingly naive.

Words to ponder....

[farmer_giles_of_ham]

Originally Posted by Ecclesiastes

Your relative (and you) have made a very common law school mistake, which is that you are trying to calculate "gain" based on the values of what have been exchanged.

Gain is NOT the difference between the value of what is received and the value of what is transferred away. It is the difference between the value of what is received and the BASIS of what is transferred away, and "basis" is what you paid for it and not what it's worth.

Then teach us how to structure the basis so that it equals at least any alleged "gross income".

However I deny we have made this mistake here. I do correct my words:

the characterization is false, he paid for that money with equal basis.

That was helpful and I shall from now on use the proper word to express my meaning.

Originally Posted by Ecclesiastes

So if your relative received $100,000 for his services, the measure of his gain is not the difference between the $100,000 and the value of his services, but the difference between the $100,000 received and what your relative paid for his own services. Your relative paid himself nothing for his own services, so the entire amount is gain, and therefore income.

If I said that I withdrew the claim. It was offered by mistake. My relative has no idea what anybody is talking about or where they got this "gross income" from. Let's see who can offer a statement of equal value in controversy for a judicial decision.

However basis may consist of money or other "fair-market value"...works both ways, now. So value is relevant as far as determining the basis cost.

My understanding is the the Treasury Dept or the IRS or someone has to make a "general tax assessment" under the same penalty of perjury for false statements in order to even establish a controversy of different claims. This is a rule of procedure and the Dept.

I also understand this is very rare and they usually try to hornswoggle the private accountant's unsworn W2 data entries as evidence.

Correct me if this is wrong but that is inferior to the proper pleading of my relative. The only testimony in front of any court is that of my relative and the other side can only show that they made labeled account-entries without 1st hand knowledge of the facts, just offhand characterizations/conclusions. Why should these be more right, they aren't even sworn testimony.

Mere suspicion is not probable cause or even a civil cause.

[indago]

mertensv16 wrote:

Did he pay his wife and children for working? If not, then he has no deduction in this connection. In calculating your deduction for business expenses, you never deduct the value of what you receive; you deduct the amount you paid.

And what about his own labor in the operation of the dairy farm?

[farmer_giles_of_ham]

Did he pay his wife and children for working? If not, then he has no deduction in this connection. In calculating your deduction for business expenses, you never deduct the value of what you receive; you deduct the amount you paid.

Yes, he did pay for their work. His basis cost was the product of their work, which was lost to them in the transaction. This is no "expense"; this is an original pre-paid credit.

It's the same as if I have a pair of shoes and sell them. The basis cost was the fair-market value of the same, as indicated by the sale price.

Had the same item been damaged or stolen this would be a loss in the same amount. It's equally a loss when I give them up. I dont have the shoes anymore. I am out one (1) pair of shoes. The cost here is the sum total of this pair of shoes.

[indio007]

Originally Posted by Ecclesiastes

Gain is NOT the difference between the value of what is received and the value of what is transferred away. It is the difference between the value of what is received and the BASIS of what is transferred away, and "basis" is what you paid for it and not what it's worth.

For example, if I buy stock of the XYZ corporation at $100 per share, and then later sell the same stock for $120 per share on a day when the stock is trading on an open exchange at $120 per share, I have received $120 for stock with a value of $120 (which is an exchange of equal values) AND I have a gain of $20 because I originally paid only $100 for the stock and the $20 represents the increase in value that I have realized.

It's not the increase in strict value i.e. purchase value vs sales value. That sale was a conversion of one issuance of stock say General Electric for another issuance such as federal reserve notes. You converted a currency and had a gain relative the FRN's. The stock had a certain dollar value in FRN's at purchase and had a higher value in FRN's at sale. That gain relative to the federal reserve must get taxed back to balance your books in relation with FRN's. Conversion of assets is where the tax lies. Conversion of assets is evidence of commerce. Commercial law dictates the books be balanced between merchants.

[farmer_giles_of_ham]

Originally Posted by indio007

Conversion of assets is where the tax lies. Conversion of assets is evidence of commerce.

good point. certain conversions are what triggers "gross income"; but the method is always a hook, like tax#'s etc. If the conversion is registered accordingly then the presumption is naturally in favor of revenue.

This is why a missing piece of info here is the need to stamp every document with some kind of qualifier "loan proceeds" or whatever.

Thats what structures a transaction, since someone without opinions could land tomorrow and just see things moving around, like things do every day 9 times out of 10, without creating a taxable event.

Just by way of analogy- sales tax forms ("asset conversion register") like those for real estate, in my experience always contain several exclusions from tax. Reasons that one must check to claim.

Including, "secured transaction" (that's what it says!) and "transfer to trust".