Taxable Income – A Legal Definition

April 21, 2012 by  Filed under: Taxes 

Let my intentions be clear. I offer no advice but only express an opinion related to information which I recently discovered. This discovery resulted from considering the issue and evaluating the question posed in the first paragraph below. It’s up to you to verify the information and draw your own conclusions.

As Americans, we are told that it is our duty to support our government by paying our “fair share” of taxes on the income we make, and that income means “everything that comes in”. We rely on the IRS to enforce this duty by threat of guns, jail, guilt and ridicule should we fail. Is this presumption supported by law or is it merely an illusion supported only by ignorance?

To answer that question, a legal definition of income is required. The ambiguous term “fair share” can then be replaced by “legal share” and our duty to comply with law, compelled by force, clarified. We have computers, search engines and programs capable of finding specific text within documents, so this should be a snap, right?

A good start would obviously be to search Title 26 of the United States Code which contains the Internal Revenue Code (IRC). There, definitions for “gross income”, “taxable income” and other similar phrases are offered but nowhere is the word income itself defined! How preposterous! Are we supposed to rely on an adjective to clarify a noun that is not defined within its context and then pay trillions in taxes based on this? Where is income defined as “everything that comes in”? The legal definition of income has to be available somewhere, but it’s not to be found in the IRS code.

The 16th Amendment to the US Constitution, enacted shortly after the private Federal Reserve bank was established, delegated Congress the power to “lay and collect taxes on income”. Perhaps the courts have given income a legal definition. Looking here, we finally strike gold!

In Doyle v. Mitchell Bros. Co., 247 U.S. 179, 185, the Supreme Court held that income had a meaning “importing something distinct from principal or capital, and conveying the idea of gain or increase arising from corporate activities..”. This is the landmark case regarding the definition of income and it is repeatedly cited in other cases brought to the SC. Again, in Eisner v. Macomber, 40 S. Ct. 189, 252 U.S. 189 (U.S. 1920), the SC reiterated that income is gain or profit when it held “Income may be defined as the gain derived from capital, from labor, or from both combined”. That little word is “gain” the cornerstone of the legal definition of income.

Based on these Supreme Court decisions, and others, the courts have held that compensation for labor cannot be regarded as income (profit or gain) within the meaning of the law. It is thus a false presumption of what constitutes legal income that causes most Americans to believe 100% of their wages, salaries and other compensations for services are taxable as income. It renders their experience, education and all other expenses incurred to be completely worthless.

If the IRS valued truth above deception, it would replace “income” with “profit” on all tax forms. Its demands for payments on “taxable income”, though technically legal and defensible in court, do not tell the truth that’s hidden in the law. Instead of demanding payments on “taxable profits”, only enough information is offered to ensure the end game of collecting as much money as possible. We, on the other hand, because of our ignorance and justifiable fear, pay dearly to exercise our unalienable and un-taxable human right to simply earn a living. How sad this is.

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Article Source:
http://EzineArticles.com/?expert=Richard_H_Scott

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