The whole point is that what I say or claim isn’t as important as what the words in the law says. I think there is ample reason based on those citations that we do look to 861 to determine sources of income. I couldn’t say it any clearer then the law does. If you think there are other portions of those citations that discount the 861 position then copy and paste them just like I did, it’s easy.
Wick
Forget “other portions” of those citations discounting your position – the very text you quoted discounts your position, as I pointed out in my last post.
If you can’t be bothered to think critically about the words you are blindly cutting and pasting, then you have no business participating in this forum.
Wick, if you were a professional liability underwriter, would you write malpractice insurance for any lawyer who advised his or her clients along the lines you suggest? If the answer is yes, you’d put your coimpany into liquidation in about 6 months.
Why are some people so determined to cheat on their taxes? None of us (in the USA) pays enough Federal income tax anyway. IMO we get off pretty easy compared to most civilized nations… you know, like the ones that pay for their citizens’ education and healthcare-- therefore saving big bucks down the road in emergency/intensive care medical costs and also on things like prisons.
We’re still a young country though, give us a few hundred years. If we survive, we’ll probably grow up and wake up-- eventually.
Also-- this wick guy doesn’t spell very well. It makes me question whether he is a tax guru/activist, or just another Hannity/Limbaugh lovin’ member of the Michigan Militia…
…or maybe the Idaho Militia… not sure which.
I know what you mean.
I try and try to educate people about their MetaConsciousMinds. They ignore me.
I try to show people how to Actuallize their MCMs and attain real psychic ability. Instead, they put their faith in frauds like John Edward and Sylvia Browne.
I try to show people the prison they’re kept in, how they’ve been deceived about the very nature of reality itself. Instead, they waste their time raising groundless objections to tax laws.
Wick, you’re their puppet. They’ve started you on a fight you can’t win. They’ve tricked you into focusing on a pinata instead of looking about for the real enemy.
I try to focus on the MetaConsciousMind, but I keep waking up in the same bed that I fell asleep in the night before. What am I doing wrong?
Sincerely, “truther”
You’re expecting the bed to change.
You must change.
Consider this-that bed is part of a dead star. In the wake of the Big Bang, only two elements existed in the universe: helium and hydrogen. These condensed to form stars. Every other element in nature was formed through reactions in these stars. Indeed, anything heavier than iron was formed by supernova. The bed you sleep on is star stuff. Think about that until you can see your bed as starstuff.
The bed hasn’t changed. But you have.
Man… Doc, you’re so deep I can’t hear the waves. Must focus on star stuff… MCM… must attain meta cosmic consciousness, cosmic couscous, umm…couscous … Damn my short attention span!
Wow, I was debating really boring tax stuff and now I’m in some strange parallel universe.
DocCathode, who/what is the real enemy. People like me who peaceably debate topics on the internet?
Dewey…. “Upon what basis do you say that 861 is used to “determine our taxable income”?
On the basis that the very phrase determine taxable income appears in most of the citations I quoted stating to use 861 and following for that very purpose.
Dewey …”Section 861 (again, linked above) begins with the following declaration: “The following items of gross income shall be treated as income from sources within the United States:”
“Determination of taxable income. 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.” [26 CFR § 1.863-1©]
26USC861 states that compensation for labor will be treated as income from sources within the U.S. To determine what taxable income from sources within the U.S. is we refer to 26CFR1.861-8 through 14 just like the law says.
Item A is treated as x . section 1.861-8 defines x.
Dewey Unless you quit or keep calling me crazy your going to end up spending as much time on this thread as if you just let me send you a video. Then you’ll have something else to bash anyway, you can log on and say I saw it and it’s full of !@#$#@. In fact you’ll understand the argument so well that you will surely be able to squash the tar out of it.
http://www.taxableincome.net/debate/otherside/assert5.html
http://www.achadwick.com/documents/irsvslaw.pdf
Wick
Read the WHOLE SENTENCE. Don’t just zoom in on one particular phrase and ignore the rest. Read the whole damned thing. It doesn’t mean what you say it means. **
Again, read the WHOLE SENTENCE. Note the phrases “from sources within or without the United States” and “from sources within the United States.” Now think about how these phrases alter the meaning of the sentence.
I’m going to presume Doc indulged his ontological whimsy, because in many ways your argument become almost metaphysical in nature, where you are operating on a different vibrational plane than the rest of the universe. Your points and those of your fellow 861 protesters have been considered in more depth than they deserve, both here and IRL by people who are trained to interpret the complexities of the tax code and the legal and adminstrative judgements rendered concerning them.
Your silly argument has been taken apart like a tinkertoy, logically and judicially on so many levels I fear that that only remaining step is is to pool our resources and get you a copy of “Hooked on Phonics for Big Stubborn Kids” to assist your reading comprehension.
But in the end that is a vain hope. The truth is you read perfectly well, and that it’s not that you can’t wrap your heap around the 2+2=4 nature of Taxguy’s and DC&H’s points, but that you won’t because of it’s negative impact on your larger agenda, and this edges into willful ignorance which you cannot fight, but only pity and/or mock if in a less patient and charitiable mood.
Your fervent pleas that if someone would only open their eyes and their minds they would see the shining truth of your interpretation of this section of the tax code is a retarded argument at root, no matter how politely you want to prance around. There is a considerable administrative entity that exists mainly to interpret and render judgements on the U.S. tax code. They have ruled again and again and again that you and your 861 protesters are so full of crap you don’t know whether you are coming or going. That’s pretty much the end of the story code interpretation wise.
In a larger sense, even if you had a valid point about some section of the tax laws or other parts of tax code or other legal codes having loose ends or a muddy interpretation, the administrative machinery of the judicary, on numerous levels, exists in part to interpret and address these loose ends and their judgements are the thread that binds them up on a practical level. If you were arguing larger and more over arching constitutional or philosophical issues you might have a point, but *(and here is the important point you really, really, really, really need to get) *
You are arguing about the interpretation of a sub-section of the tax code. There are administrative bodies that exist specifically to render judgements of how this code should be operationally interpreted. Their judgements are considered to have the practical force of law. They have said you are wrong. That is the end of the story.
At least think big, militate to change the tax code, eliminate the the income tax, move to a VAT tax etc., etc., but realize what a pointless exercise in intellectual onanism this absurd little game regarding code interpretation you are indulging yourself in, is. You are searching for some loose master thread or trick lever or switch that will being the entire system unraveling down. It’s not going to happen. The man you are looking to for guidance is a con man and you have been scammed so hard you can’t see daylight. Own this and get on with your life.
Wick asked me who the enemy was. Astro just provided an excellent answer.
Their are real battles that need fighting. The enemy is not only the ones who seek to control humanity, it is those who draw the fight away from the real issues to windmills.
There is a real battle going on all around you.
Reality is defined by consensus. People believe a thing is a certain way. Their collective will makes it so. They remain unaware of this. However, most humans are working with only their conscious mind. Besides the conscious and the subconscious, the human mind has a third part. I call this the MetaConscious mind. As I said, in most humans the MetaConscious is UnActualized. They cannot access its capabilities and are not even aware of its existence. But, some humans have Actualized MetaConscious minds. These people may actively and consciously redefine reality. This has many advantages and applications. But, it is not omnipotence.
The majority of humans have agreed on a definition reality. They subconsciously enforce this belief, the Consensus. If UnActualized people see an Actualized one violating the Consensus, there is a great conflict. The Actualized person knows that whatever incredible thing they have done or demonstrated is real. The UnActualized person believes that such a thing cannot be real. Backed by the power of all UnActualized minds, the Consensus wins and reality is forced to conform. This can be quite nasty for the Actualized person in question.
I and many other Actualized people work to Actualize all humans. Every human would have more freedom and power than ever before. Such a world is the stuff of dreams and fairy tales. But there are dangers. One group of Actualized humans(I call them the Greyfaces due to their Orwellian crushing of hope and individuality) believes that the best thing for the human race is a rigidly defined reality where all things are ordered, homogenous and predictable. If this calls to mind 1984 or Brave New World, it should. These are part of a long propaganda battle.
Wick, you’ve been duped.
Instead of fighting the Greyfaces, you’re fighting the tax code. You’re wasting your ammunition and energy on a cardboard silhouette, while the real enemy laughs and encourages you.
Wick asked me who the enemy was. Astro just provided an excellent answer.
Their are real battles that need fighting. The enemy is not only the ones who seek to control humanity, it is those who draw the fight away from the real issues to windmills.
There is a real battle going on all around you.
Reality is defined by consensus. People believe a thing is a certain way. Their collective will makes it so. They remain unaware of this. However, most humans are working with only their conscious mind. Besides the conscious and the subconscious, the human mind has a third part. I call this the MetaConscious mind. As I said, in most humans the MetaConscious is UnActualized. They cannot access its capabilities and are not even aware of its existence. But, some humans have Actualized MetaConscious minds. These people may actively and consciously redefine reality. This has many advantages and applications. But, it is not omnipotence.
The majority of humans have agreed on a definition reality. They subconsciously enforce this belief, the Consensus. If UnActualized people see an Actualized one violating the Consensus, there is a great conflict. The Actualized person knows that whatever incredible thing they have done or demonstrated is real. The UnActualized person believes that such a thing cannot be real. Backed by the power of all UnActualized minds, the Consensus wins and reality is forced to conform. This can be quite nasty for the Actualized person in question.
I and many other Actualized people work to Actualize all humans. Every human would have more freedom and power than ever before. Such a world is the stuff of dreams and fairy tales. But there are dangers. One group of Actualized humans(I call them the Greyfaces due to their Orwellian crushing of hope and individuality) believes that the best thing for the human race is a rigidly defined reality where all things are ordered, homogenous and predictable. If this calls to mind 1984 or Brave New World, it should. These are part of a long propaganda battle.
Wick, you’ve been duped.
Instead of fighting the Greyfaces, you’re fighting the tax code. You’re wasting your ammunition and energy on a cardboard silhouette, while the real enemy laughs and encourages you.
This is turning into a George Orwell animal farm spin off. We started by writing a few things on the side of the barn. Later the words have all been changed and we are all standing around trying to remember what they used to say. The lead Pig (Napolean?) comes out and says four legs good two legs better, then everybody (sheeps) chants it.
Tax court has come out and said 861 bad and everybody chants it even though it’s not binding case law.
Astro
“You are arguing about the interpretation of a sub-section of the tax code. There are administrative bodies that exist specifically to render judgements of how this code should be operationally interpreted. Their judgements are considered to have the practical force of law. They have said you are wrong. That is the end of the story.”
If your talking about tax court. I respect your opinion that that is the end of the trail as far as your concerned. I think some readers may take note that……
(“The Service is bound by the regulations” (IRM, [4.2]7.2.3.4)).
“The Federal Income Tax Regulations (Regs.) are the official Treasury Department interpretation of the Internal Revenue Code.” [IRM, [4.2] 7.2.3.1
3.) Decisions made by lower courts, such as Tax Court, District Courts, or Claims Court, are binding on the Service ONLY for the particular taxpayer and the years litigated. Adverse decisions of lower courts do not require the Service to alter its position for other taxpayers. [4.2] 7.2.9.8 (05-14-1999) Importance of Court Decisions
That’s okay if that’s as far as you wish to know about the 861 evidence. It is everyone’s free will and choice not to look any further. I don’t need a phonics book to realize that tax court is as high as most of the people on this thread need to hear from. Tax court judgments are considered to have the practical force of law for that specific case during that specific year and no more. The IRS does not have to change their position because of a tax court decision. Why in the world would you call that a metaphysical argument?
That’s like saying every black guy who murders his ex-wife is innocent because O.J. wasn’t convicted.
My thrust is that tax court doesn’t make case law and this point needs to be dealt with by those who say the 861 position is wrong because tax court said so.
I had to look up onanism . http://dictionary.reference.com/search?q=onanism&r=67 Jeeze Astro. What kind of debate do you want? You want to act like the catholic church dealing with Copernicus Galileo and Bruno in the 1500s? Your posts basically cite the power of government to tell the people what words mean. You are free to believe in such power but I tend to question it. I aint no Copernicus I’m just comparing power structures reaction to revolutionary ideas. The good part is whether you choose to defer your own powers of reason to tax court or not you still have the option of making up your own mind.
Wick
You are dead-on right, and you stated it beautifully.
wick, you should be grateful that people at the SDMB actually care enough to talk to you about this BS in which you believe so strongly. Many other people would just tell you to buzz off instead of trying to show you how much of a doofus you’re being. Hopefully one day you’ll shake this monkey off your back and be grateful for everyone’s contributions to this thread.
Dewey- “Again, read the WHOLE SENTENCE. Note the phrases “from sources within or without the United States” and “from sources within the United States.” Now think about how these phrases alter the meaning of the sentence.”
Yes those are very important words in the sentences that I quoted. I do not mitigate their meaning. Since gross income is from whatever source derived, why would I not seek to determine sources of income? Taxable sources of income from within the U.S. Why is that not determining my tax liability? The term source really does matter as part of the definition of gross income and to determine what constitutes taxable income.
“(ii) Relationship of sections 861, 862, 863(a), and 863(b). Sections 861, 862, 863(a), and 863(b) are the four provisions applicable in determining taxable income from specific sources. Each of these four provisions applies independently… [T]wo or more of these provisions may have to be applied at the same time to determine the proper allocation and apportionment of a deduction.” [26 CFR § 1.861-8(f)(3)(ii)]
Tax law, you give me nothing to respond to. Doofus and monkey off your back aren’t terms in title 26 that can look up and read. As an attorney at law I would think citations would be the name of the game.
Tax law do you agree that tax court doesn’t make case law therefore it is not a court you could cite to support your position in a court of law? Do you disagree with the DOJ on this when Dan Evens stated that “…the government is not saying that this argument is frivolous because the Tax Court has ruled on it…”
Wick
Here is a study guide. If you think the line of questions is unfair, please indicate which ones and why.
(“Exhibit A”) The “items” listed in 26 USC § 61 may included income that is exempt for federal income tax purposes.
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit A”) To determine in what circumstances the “items” listed in 26 USC § 61 are exempt from taxation, one should refer to 26 CFR § 1.861-8T(d)(2).
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit B”) Some income not specifically exempted by statute is nonetheless exempted from taxation by the Constitution itself.
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit C”) 26 CFR § 1.861-8T(d)(2)(iii) gives an exclusive list of the types of commerce which are not constitutionally exempt for purposes of the federal income tax.
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit C,” and “Exhibit G”) My income is not included on the list of non-exempt income in 26 CFR § 1.861-8T(d)(2)(iii).
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit D & E”) 26 USC § 61 lists the more common “items” of income subject to the tax, but that those items are not “sources of income” as that phrase is used in the law.
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit D”) 26 USC § 861 and following, and the related regulations, determine what legally constitutes a “source” of income for purposes of the income tax.
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit D”) Only the income to which 26 USC § 861 and the related regulations apply legally constitutes “income from sources within the United States.”
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit F”) When an individual receives both foreign source and domestic source income, 26 USC § 861(b) and 26 CFR § 1.861-8 are the sections to be used for determining one’s taxable income from sources within the United States.
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit F”) 26 USC § 861(b) and 26 CFR § 1.861-8 are the sections to be used for determining one’s taxable income from sources within the United States, even if the individual received no income from outside of the United States.
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit G”) 26 USC § 861(b) and 26 CFR § 1.861-8 only show income from within the United States to be taxable when it derives from one of the specific sources or activities described in the “operative sections” throughout Subchapter N (listed in 26 CFR § 1.861-8(f)(1)*).
Agree___________ Disagree___________ That’s Frivolous__________
(“Exhibit H”) In 1999 I received no income from any of the specific sources and activities listed in 26 CFR § 1.861-8(f)(1),* or from any activity described in the statutes of Parts II and following of Subchapter N, and that I also received no income from sources “without” the United States.
Agree___________ Disagree___________ That’s Frivolous__________
(* The “operative sections,” specifically those related to rules regarding federal possessions (26 USC § 931 and following), have changed somewhat since the current 26 CFR § 1.861-8 was written, but it is my position that there is still no “operative section” anywhere in Subchapter N showing my income from 1999 to be taxable.)
Exhibit A
“(3) Class of gross income. For purposes of this section, the gross income to which a specific deduction is definitely related is referred to as a ‘class of gross income’ and may consist of one or more items (or subdivisions of these items) of gross income enumerated in section 61, namely:
(i) Compensation for services, including fees, commissions, and similar items;
(ii) Gross income derived from business;
(iii) Gains derived from dealings in property;
(iv) Interest;
(v) Rents;
(vi) Royalties;
(vii) Dividends;… [other “items” listed]” [26 CFR § 1.861-8(a)(3)]
“For purposes of this section, the gross income to which a specific deduction is definitely related is referred to as a ‘class of gross income’ and may consist of one or more items of gross income… See… paragraph (d)(2) of this section which provides that a class of gross income may include excluded income.” [26 CFR § 1.861-8(b)(1)]
“[Reserved] For guidance, see Sec. 1.861-8T(d)(2).” [26 CFR § 1.861-8(d)(2)]
“(ii) Exempt income and exempt asset defined–(A) In general. For purposes of this section, the term exempt income means any income that is, in whole or in part, exempt, excluded, or eliminated for federal income tax purposes.” [26 CFR § 1.861-8T(d)(2)(ii)]
Exhibit B
“Sec. 1.61-1 Gross income. (a) General definition. Gross income means all income from whatever source derived, unless excluded by law.” [26 CFR § 1.61-1]
The above section is often misinterpreted to refer only to income exempted by statute. The historical regulations show that “excluded by law” means excluded by statute, or by the Constitution itself.
Federal Income Tax Regulations from 1956:
Ҥ 39.21-1 Meaning of net income.
(a) The tax imposed by chapter 1 is upon income. Neither income exempted by statute or fundamental law, nor expenses incurred in connection therewith, other than interest, enter into the computation of net income as defined by section 21. (See section 24(a)(5).) In the computation of the tax various classes of income must be considered:
(1) Income (in the broad sense), meaning all wealth which flows in to the taxpayer other than as a mere return of capital…
(2) Gross income, meaning income (in the broad sense) less income which is by statutory provision or otherwise exempt from the tax imposed by chapter 1. (See section 22.)
(3) Net income, meaning gross income less statutory deductions…”
Ҥ 39.22(a)-1 What included in gross income.
Gross income includes in general compensation for personal and professional services, business income, profits from sales of and dealings in property, interest, rent, dividends, and gains, profits, and income derived from any source whatever, unless exempt from tax by law. (See section 22(b) and 116.)”
Ҥ 39.22(b)-1 Exemption; exclusions from gross income
Certain items of income specified in section 22(b) are exempt from tax and may be excluded from gross income. These items, however, are exempt only to the extent and in the amount specified. No other items may be excluded from gross income except (a) those items of income which are, under the Constitution, not taxable by the Federal Government; (b) those items of income which are exempt from tax on income under the provisions of any act of Congress still in effect; and © the income excluded under the provisions of the Internal Revenue Code (see particularly section 116).”
Exhibit C
“Sec. 1.61-1 Gross income. (a) General definition. Gross income means all income from whatever source derived, unless excluded by law.” [26 CFR § 1.61-1]
A “class of gross income” “may consist of one or more items of gross income… See… paragraph (d)(2) of this section which provides that a class of gross income may include excluded income.” [26 CFR § 1.861-8(b)(1)]
("[Reserved] For guidance, see Sec. 1.861-8T(d)(2)." [26 CFR § 1.861-8(d)(2)])
“[T]he term exempt income means any income that is, in whole or in part, exempt, excluded, or eliminated for federal income tax purposes.” [26 CFR § 1.861-8T(d)(2)(ii)]
“(iii) Income that is not considered tax exempt. The following items are not considered to be exempt, eliminated, or excluded income and, thus, may have expenses, losses, or other deductions allocated and apportioned to them:
(A) In the case of a foreign taxpayer…
(B) In computing the combined taxable income of a DISC or FSC…
© …the gross income of a possessions corporation…
(D) Foreign earned income as defined in section 911…” [26 CFR § 1.861-8T(d)(2)(iii)]
Apart from statutory changes regarding DISC’s and FSC’s, and specific possessions rules (mainly 26 USC § 931), the current list matches the prior regulations, which describe what must be included as “gross income”:
“§ 39.22(a)-1 What included in gross income (a) Gross income includes in general [items of income listed] derived from any source whatever, unless exempt from tax by law. See sections 22(b) and 116.” [26 CFR § 39.22(a)-1 (1956)]
Ҥ 39.22(b)-1 Exemption; exclusions from gross income
Certain items of income specified in section 22(b) are exempt from tax and may be excluded from gross income… No other items may be excluded from gross income except (a) those items of income which are, under the Constitution, not taxable by the Federal Government;…” [26 CFR § 39.22(b)-1 (1956)]
Exhibit D
“Sec. 61. Gross income defined
(a) General definition
Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services…;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;… [other items listed]
(b) Cross references
For items specifically included in gross income, see part II (sec. 71 and following). For items specifically excluded from gross income, see part III (sec. 101 and following).” [26 USC § 61]
Cross-reference such as the following appear under 26 USC § 61 in all three major printings of the Code (USC, USCS, and USCA):
“Income from sources -
Within the United States, see section 861 of this title.
Without the United States, see section 862 of this title.”
(Though the current cross-reference is not part of the actual text of the law, the 1939 Code included the following: “(g) Gross income from sources within and without United States - For computation of gross income from sources within and without the United States, see Section 119” (Section 22(g), 1939 Code). Section 22 was the predecessor of 26 USC § 61, and Section 119 was the predecessor of 26 USC § 861 and following. Congress stated that the scope of “gross income” did not change from the 1939 Code to the 1954 Code.)
“Sec. 861. Income from sources within the United States
(a) Gross income from sources within United States
The following items of gross income shall be treated as income from sources within the United States:…” [26 USC § 861]
“Determination of sources of income
Sec. 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.” [26 CFR § 1.861-1]
Exhibit F
“(b) Taxable income from sources within United States
From the items of gross income specified in subsection (a) as being income from sources within the United States there shall be deducted [allowable deductions]. The remainder, if any, shall be included in full as taxable income from sources within the United States.” [26 USC § 861(b)]
"Sec. 1.861-1 Income from sources within the United States.
(a) Categories of income… The statute provides for the following three categories of income:
(1) Within the United States. The gross income from sources within the United States, consisting of the items of gross income specified in section 861(a) plus the items of gross income allocated or apportioned to such sources in accordance with section 863(a). See Secs. 1.861-2 to 1.861-7, inclusive, and Sec. 1.863-1. The taxable income from sources within the United States, in the case of such income, shall be determined by deducting therefrom, in accordance with sections 861(b) and 863(a), the expenses, losses, and other deductions properly apportioned or allocated thereto and a ratable part of any other expenses, losses, or deductions which cannot definitely be allocated to some item or class of gross income. See Secs. 1.861-8 and 1.863-1.
(2) Without the United States…
(3) Partly within and partly without the United States…
(b) Taxable income from sources within the United States. The taxable income from sources within the United States shall consist of the taxable income described in paragraph (a)(1) of this section plus the taxable income allocated or apportioned to such sources, as indicated in paragraph (a)(3) of this section.
(1) Within the United States. The gross income from sources within the United States, consisting of the items of gross income specified in section 861(a) plus the items of gross income allocated or apportioned to such sources in accordance with section 863(a). See Secs. 1.861-2 to 1.861-7, inclusive, and Sec. 1.863-1. The taxable income from sources within the United States, in the case of such income, shall be determined by deducting therefrom, in accordance with sections 861(b) and 863(a), the expenses, losses, and other deductions properly apportioned or allocated thereto and a ratable part of any other expenses, losses, or deductions which cannot definitely be allocated to some item or class of gross income. See Secs. 1.861-8 and 1.863-1.
(2) Without the United States…
(3) Partly within and partly without the United States…
(b) Taxable income from sources within the United States. The taxable income from sources within the United States shall consist of the taxable income described in paragraph (a)(1) of this section plus the taxable income allocated or apportioned to such sources, as indicated in paragraph (a)(3) of this section." [26 CFR § 1.861-1(a)]
“Sec. 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.” [26 CFR § 1.861-8]
“Determination of taxable income. 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.” [26 CFR § 1.863-1©]
“(b) Taxable income. The taxable income from sources without the United States… shall be determined on the same basis as that used in Sec. 1.861-8 for determining the taxable income from sources within the United States.” [26 CFR § 1.862-1]
“Rules are prescribed for determination of gross income and taxable income derived from sources within and without the United States, and for the allocation of income derived partly from sources within the United States and partly without the United States or within United States possessions. §§ 1.861-1 through 1.864. (Secs. 861-864; ’54 Code.)” [T.D. 6258]
“(g) Gross income from sources within and without United States -
For computation of gross income from sources within and without the United States, see Section 119 [predecessor to 26 USC 861 and following]” [1939 Code, § 22(g)]
The following citation, in addition to several of the above, show that 26 USC § 861 applies even if no foreign source income was received.
“(ii) Relationship of sections 861, 862, 863(a), and 863(b). Sections 861, 862, 863(a), and 863(b) are the four provisions applicable in determining taxable income from specific sources. Each of these four provisions applies independently… [T]wo or more of these provisions may have to be applied at the same time to determine the proper allocation and apportionment of a deduction.” [26 CFR § 1.861-8(f)(3)(ii)]
Exhibit G
“(ii) Relationship of sections 861, 862, 863(a), and 863(b). Sections 861, 862, 863(a), and 863(b) are the four provisions applicable in determining taxable income from specific sources.” [26 CFR § 1.861-8(f)(3)(ii)]
“The rules contained in this section [1.861-8] 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.” [26 CFR § 1.861-8(a)(1)]
“[T]he term ‘statutory grouping’ means the gross income from a specific source or activity which must first be determined in order to arrive at ‘taxable income’ from which specific source or activity under an operative section. (See paragraph (f)(1) of this section.)” [26 CFR § 1.861-8(a)(4)]
“The operative sections of the Code which require the determination of taxable income of the taxpayer from specific sources or activities and which gives rise to statutory groupings [see prior citation] to which this section [1.861-8] is applicable [1.861-8] is applicable include the sections described below…” [26 CFR § 1.861-8(f)(1)]
" § 861. Income from sources within the United States
§ 862. Income from sources without the United States
§ 863. Items not specified in section 861 or 862
§ 864. Definitions
These sections, which are identical with sections 861-864 of the House bill, correspond to section 119 of the 1939 Code. No substantive change is made, except that section 861(a)(3) would extend the existing 90-day $3,000 rule…" [Senate Report, 1954 Code]
“Sec. 29.119-1. Income from sources within the United States.
Nonresident alien individuals, foreign corporations, and citizens of the United States or domestic corporations entitled to the benefits of section 251 [predecessor to 26 USC § 931 of the 1954 Code] are taxable only upon income from sources within the United States… The Internal Revenue Code divides the income of such taxpayers into three classes:
(1) Income which is derived in full from sources within the United States;
(2) Income which is derived in full from sources without the United States;
(3) Income which is derived partly from sources within and partly from sources without the United States.” [26 CFR § 29.119-1 (1945)]
“Sec. 217. (a) That in the case of a nonresident alien individual or of a citizen entitled to the benefits of section 262, the following items of gross income shall be treated as income from sources within the United States:… (b) From the items of gross income specified in subdivision (a) there shall be deducted [allowable deductions]. The remainder, if any, shall be included in full as net income from sources within the United States.”
[Section 217, Revenue Act of 1921 (predecessor of 26 USC 861 and following)]
Exhibit H
“(iii) Income that is not considered tax exempt. The following items are not considered to be exempt, eliminated, or excluded income and, thus, may have expenses, losses, or other deductions allocated and apportioned to them:
(A) In the case of a foreign taxpayer…
(B) In computing the combined taxable income of a DISC or FSC…
© …the gross income of a possessions corporation…
(D) Foreign earned income as defined in section 911…” [26 CFR § 1.861-8T(d)(2)(iii)]
“The operative sections of the Code which require the determination of taxable income of the taxpayer from specific sources or activities… include the sections described below.
(i) Overall limitation to the foreign tax credit…
(ii) [Reserved]
(iii) DISC and FSC taxable income…
(iv) Effectively connected taxable income. Nonresident alien individuals and foreign corporations engaged in trade or business within the United States…
(v) Foreign base company income…
(vi) Other operative sections. The rules provided in this section also apply in determining–
(A) The amount of foreign source items…; (B) The amount of foreign mineral income…; © [Reserved] (D) The amount of foreign oil and gas extraction income…; (E) The tax base for citizens entitled to the benefits of section 931 and the section 936 tax credit of a domestic corporation…; (F) The exclusion for income from Puerto Rico…; (G) The limitation… on the… reduction in… liability incurred to the Virgin Islands; (H) The income derived from Guam…; (I) The… deduction granted to China Trade Act corporations…; (J) …income excluded from… income of a controlled foreign corporation…; (K) The amount of income… under section 953(b)(5); (L) The international boycott factor…; and (M) The taxable income… under section 607 of the Merchant Marine Act…” [26 CFR § 1.861-8(f)(1)]
Hmmm …[ul][li]Your usename is “wick”[/li][li]You’re citing a webpage on the domain achadwick.com[/li]According to your profile (publically available here on the SDMB), your e-mail address ends in @achadwick.com.[/ul]Citing your own handiwork?