I’ve been having a discussion with one of my friends about the issue of what our responsibilities as American citizens are. My opinion: paying taxes is the cost of living in our society, even if the money doesn’t go to programs that we use directly.
My friend: If it doesn’t go toward something I personally use, I don’t want to pay taxes for it.
Lately, he’s been telling me that according to law, only income earned through international foreign commerce is technically taxable. He cited the following cites for me to look into:
Similarly, the items of income listed in the general definition of “gross income” (26 USC § 61), such as “compensation” and “interest,” are not always taxable, but are instead sometimes excluded for federal income tax purposes (26 CFR § 1.861-8(b)(1)). The regulations (26 CFR § 1.861-8T(d)(2)(iii)) give a specific list of those situations in which such items are not exempt (i.e., when they are taxable). Again, that list includes only activities related to international commerce.
Now he is saying that he is looking for ways out of paying taxes because, technically, it is illegal for the government to be taxing him. Any help here? Any logic/facts that can be used to reel him back into reality? Or does he actually have a point?
The Master sort of did a piece on this entitled Is U.S. income tax invalid because Ohio wasn’t legally a state when the 16th amendment was ratified? It obliquely addresses some of your friends points, as the 16th amendment is what give the government the right to tax the citizens.
You could also check out these two threads on the topic, in which Minty Green and I go into the specific provisions of the USC relating to income tax in considerable detail:
I’ve been going back and forth with my friend on this…listen to this…
"The income tax regulations state that the “items” of income listed in 26 USC § 61 (such as “interest” and “compensation for services”) make up “classes of gross income” (26 CFR § 1.861-8(a)(3)), which sometimes include income which is excluded for federal income tax purposes (26 CFR §§ 1.861-8(b)(1), 1.861-8T(d)(2)(ii)).
“After saying that the “items” of income listed in 26 USC § 61 sometimes include income which is excluded for federal income tax purposes, the regulations list the types of income which “are not considered to be exempt, eliminated, or excluded income” (26 CFR § 1.861-8T(d)(2)(iii)), and that list only includes activities related to international or foreign commerce.”
Dear Lord…I’ve been going back and forth on him with this…should I just give up? He is even saying that he wouldn’t face penalties because he isn’t willfully violating tax code…he “truly believes” he shouldn’t have to pay taxes on his income.
Tell him to read through the two links that Northern Piper supplied to earlier threads. If memory serves they went through the whole ‘income’ ‘gross income’ schtick there…and it was pretty throughly debunked. Afaik, NO ONE has managed to pull off this dodge when it went to court (which they all invariably do when they finally catch you)…and I’d say that pretty well should dispell the whole thing. If your friend has a cite for someone who successfully defended this position in court, by all means, have him share it with us.
If your friend thinks that “honest belief” that he doesn’t have to pay income taxes will save him from financial repercussions, he may be in for a rude awakening. Courts have been known to stomp on first-time defendants—especially if they put forth one of the myriad arguments that have been presented (and struck down) time after time after time.
My favorite source for information on the more bizarre strategies used to avoid paying income taxes is The Tax Protester FAQ. I have a sneaking suspicion that nothing in it will convince your friend, but you might find it entertaining.
I’ve sent him the links over IM, but then he just responds with links of his own. I think at this point, it’s a lost cause. Bless his heart…hope they go gentle on him in the clink.
Well, at least you’ll be able to say “I told you so” when he goes to jail. Hopefully he’ll enjoy the closeness of his new friend Bubbah who’s sure to think your friend has a perty mouff.
Your friend might also want to check out a site on “Idiot Legal Arguments,” by attorney Bernard J. Sussman (http://www.militia-watchdog.org/suss1.htm). It covers not only the arguments used by tax protestors, but also arguments used by various right-wing and militia groups to hold that a person can individually secede from the U.S. and become a “sovereign citizen,” or that “common-law courts” set up by such citizens have some legitimate authority, or that Federal Reserve notes are not lawful currency (because they’re not gold or silver), or that no court proceeding is valid if there is a gold-fringed “Admiralty flag” in the room, or . . . well, you get the idea.
Strangely, on a road trip I took with him and a couple other friends to Florida from Michigan this past March, I think he argued in favor of most of those points. :dubious:
I was fine listening to his P.O.V., but there was a very vocal and politically left-leaning friend in the car as well, who had little tolerance for what he termed “idiots.” Needless to say, they entertained the rest of us for most of Ohio, Kentucky and Tennessee.
FWIW, there is a book floating around out there called The Law that Never Was, which details how the 16th Amendment was not duly ratified by two thirds of the states. Apparently, several copies of the amendment came back unsigned by the governors of states, a few had slightly different wording, or misplaced commas- which sounds trivial, I know, but sometimes on word or a misplaced comma can change the whole meaning of a sentence. It’s a terribly dry read, though. I just skimmed it over enough to get the gist of it.
Also, I’ve heard several personal anecdotes of tax protesters who, when their cases did make it to court, had the judge find in their favor after an intensive review of the relevant documents, laws, etc. Of course, by that time, they had already sat in jail for a few months, lost their jobs, etc…
If he wants to make a point then the above posts are excellent sources of info that he ought to look into. If he just wants to avoid paying taxes he should consult with as many accountants as possible to find out all the tricks.
For instance, I seem to remember reading in one of Harry Dent’s books that you can set up a charity, which you control, and donate all your income to it…