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Complying With The Law (Part 6)

(originally launched into cyberspace on 02/02/2007)

( Note: Prior messages in this series can be found here: )

Dear Subscriber,

At this point, some of you may be thinking, "Well, if this guy went
to prison, what good is this info?" Good question. Let me add to
your apprehension by saying this: If you want to avoid trouble,
IGNORE the parts of the law that tell you to use 861 (and related
regulations) to determine your taxable domestic income. Oh, and
ignore the thing about some income being excluded because of the
Constitution. Oh, and ignore the fact that everywhere the tax laws
discuss the issue of commerce, only certain international trade is
mentioned. In fact, for the purely practical-minded among you, you
might want to pretend you never heard about any of this. And you
definitely don't want to hear what comes next, because we're about
to see evidence of the largest financial fraud in history,
perpetrated by the most powerful government in history.

As Plato said, it's dangerous to be right when the government is
wrong. I don't suggest that people do what I did, so if blissful
ignorance is your goal, you can stop reading now. If you don't want
to be faced with evidence that should anger and frustrate you,
don't continue. If you don't want to know when you're being
defrauded and robbed, and if you don't want to know what your
government has become, read no further. You can choose to be like
those Germans who didn't WANT to know what Hitler was up to, or the
Russians who turned a blind eye to what their country became. On
the other hand, you might have the attitude...

"We are apt to shut our eyes against a painful truth, and listen to
the song of that siren till she transforms us into beasts. Is this
the part of wise men, engaged in a great and arduous struggle for
liberty? Are we disposed to be of the number of those who, having
eyes, see not, and, having ears, hear not, the things which so
nearly concern their temporal salvation? For my part, whatever
anguish of spirit it may cost, I am willing to know the whole
truth; to know the worst, and to provide for it." [Patrick Henry]

For radicals with that attitude... on with the show!

As an exercise, try using the following section to determine your
taxable domestic income:

“(a) In the case of a nonresident alien 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:
    (1) Interest on bonds, notes, or other interest-bearing
    obligations of residents, corporate or otherwise;
    (2) The amount received as dividends from a domestic
    (3) Compensation for labor or personal services performed in the
    United States;
    (4) Rentals or royalties from property located in the United
    (5) Gains, profits, and income from the sale of real property
    located in the United States;
    (b) From the items of gross income specified in subdivision (a)
    there shall be deducted [the allowable deductions]. The remainder,
    if any, shall be included in full as net income from sources within
    the United States.”

    (* One could only be entitled to the benefits of section 262 if
    most of his income came from federal possessions, such as Guam or
    Puerto Rico.)

    So, did you have any trouble using that to determine YOUR taxable
    domestic income? It clearly says that U.S.-source income is taxable
    for CERTAIN people (probably not including you), but it said
    nothing about the income of the average American. So the rest of us
    can't do much of anything with it; it says nothing about OUR

    So why should we care? Because what you see above is the
    "grandfather" of Section 861 said back in the 1920's (back then it
    was Section 217). Would anyone mistake that to mean that domestic
    income is taxable for ALL American citizens and residents? No. It
    very specifically stated for WHOM such domestic income was taxable
    (foreigners and people with possessions income), and very
    conspicuously did NOT mention Americans who live and work only
    inside the 50 states. And THIS is where the current sections for
    determining one's taxable domestic income (861 and regs) came from.
    (Are you starting to see WHY the IRS is so desperate for us NOT to
    look at this part of the law?)

    Why on earth would the law specifically say that those types of
    domestic income, including wages earned inside the U.S., are
    taxable for FOREIGNERS and for CERTAIN Americans (who have
    possessions income), instead of saying that domestic income is
    taxable for EVERYONE? "Conventional wisdom" says that income earned
    in the U.S. is taxable for everyone. So why would the lawmakers go
    out of their way, using more words, to NOT say that it's taxable
    for ALL Americans?

    Recall that the Supreme Court has repeatedly said that we are NOT
    to interpret tax laws as if they apply to matters "not specifically
    pointed out." It would be hard to think of a better example of the
    law specifically pointing out certain things, while conspicuously
    omitting other things. If you really owe the tax, why on earth
    would the law say only that income from inside the U.S. is taxable
    for certain people OTHER THAN YOU? If they meant to say it's
    taxable for everyone, why didn't they?

    Now, you might wonder, how does the government explain this? They
    don't. I've never seen any IRS form letter, any notice or lower
    court ruling, talk at all about the history of Section 861. I have
    seen a couple people, who apparently are ignorant of the history of
    the section, claim that 861 means that domestic income is taxable
    for everyone (though IRS Chief Counsel lawyers know enough that
    they have never argued that). In the following messages we'll see
    why someone might think that, and why it's dead wrong. In the
    process we'll see clear evidence of cover-up and fraud, perpetrated
    by the federal lawmakers and regulation-writers.


    Larken Rose