"Gross income includes gains, profits, and income derived from salaries, wages, or compensation for personal service..." Section 22 GROSS INCOME: 79 (a); "Gross income and not 'gross receipts' is the foundation of income tax liability... 'gross income' means the total sales, less the cost of goods sold, plus any income ("derived" -author) from investments and from incidental or outside operations or sources." U.S. v. BALLARD, 535 F2d 400 (1976). (Emphasis added).
The IRS clearly makes no distinction between "wages" and "income" calling them the same thing, but wages are not "gain" or "profit, and certainly any other assets sitting in an account are not "income" unless proven to be "derived from" something else, and cannot be used as frivolous evidence of a tax liability, or for an unwarranted assessment or levy against any American.
Look at this historical record:
Are we to believe that there were so few (3.9%) Americans working for a wage, salary or compensation for services in 1939? Of course not. Most people then had NO lawful "income" (gain or profit "derived from" something...only the wealthy did) and their wages were not classified as "income." Seeing that wages were NOT defined as "income", i.e., "gain" or "profit", by what authority can the IRS claim such today, except, "because we say so" or "this is the way its been for decades", or "everyone knows that..."? Let's look further...
- 26 U.S.C.A. 499 '54, Sec. 61(a). "Under the Internal Revenue Act of 1954 if there is no gain, there is no income." (Emphasis added).
- "The true function of the words 'gains and profits' is to limit the meaning of the word 'income' and to show its use only in the sense of receipts which constituted an accretion to capital. So the function of the word 'income 'should be to limit the meaning of the words 'gains' and 'profits.'" Southern Pacific v. Lowe. Federal Reporter Vol. 238 pg. 850. See also, Walsh v. Brewster. Conn. 1921, 41 S.Ct. 392, 255 U.S. 536, 65 L.Ed. 762. (Emphasis added).
See that? "Accretion to capital". Your wage is your capital... anything that you "gain" from investing that capital into something else is "income."
- "I assume that every lawyer will agree with me that we can not legislatively interpret the meaning of the word "income." That is a purely judicial matter... The word 'income' has a well defined meaning before the amendment of the Constitution was adopted. It has been defined in all of the courts of this country... If we could call anything that we pleased income, we could obliterate all the distinction between income and principal. The Congress can not affect the meaning of the word 'income' by any legislation whatsoever..." 1913 Congressional Record, pg. 3843, 3844 Senator Albert B. Cummins. (Emphasis added).
- "Simply put, pay from a job is a 'wage,' and wages are not taxable. Congress has taxed income, not compensation." - Conner v. U.S. 303 F Supp. 1187 (1969).
Notice the Conner Court understood this fact but little came of it...
- "The poor man or the man in moderate circumstances does not regard his wages or salary as an income that would have to pay its proportionate tax under this new system." Gov. A.E. Wilson on the Income Tax (16th) Amendment, N.Y. Times, Part 5, Page 13, February 26, 1911.
- "Sec. 30 Judicial Definitions of income. By the rule of construction, noscitur a sociis, however, the words in this statute must be construed in connection with those to which it is joined, namely, gains and profits; and it is evidently the intention, as a general rule, to tax only the profit of the taxpayer, not his whole revenue." Roger Foster, A treatise on the Federal Income Tax Under the 556 Act of 1913, 142. (Emphasis added).
- More longstanding decided cases have also made the distinction between wages and income. See Peoples Life Ins. Co. v. United States, 179 Ct. Cl. 318, 332, 373 F.2d 924, 932 (1967); Humble Pipe Line Co. v. United States, 194 Ct. Cl. 944, 950, 442 F.2d 1353, 1356 (1971); Humble Oil & Refining Co. v. United States, 194 Ct. Cl. 920, 442 F.2d 1362 (1971); Stubbs, Overbeck & Associates v. United States, 445 F.2d 1142 (CA5 1971); Royster Co. v. United States, 479 F.2d, at 390; Acacia Mutual Life Ins. Co. v. United States, 272 F. Supp. 188 (Md. 1967).