Thread: IRS to Criminals: Report the Value of the property you stole, it’s Taxable Income!

In regard to income from illegal activities being taxable by the feds, that happens to be true. But, studying this aspect of federal taxation reveals some interesting facts which wage earners need to learn.


According to our Supreme Court ___ EISNER v. MACOMBER , 252 U.S. 189 (1920) ___ all money that comes in is not “income” within the meaning of the 16th Amendment. Income is the gain or profit “severed from the capital, however invested or employed, and coming in.”


Now, let us keep in mind a working person, unlike those who invest money as their “capital”, the working person invests the capital, or property, each has in their own labor, i.e., eight hours of their life which they surrender daily to their employer, the actual sweat and labor provided during working hours, their skills and education are all part of the “investment” made by our laboring class, and according to the Court, it would appear the value of such “capital” or property invested must be severed from money coming in, in order to arrive at the calculated profit and or gain which may then be taxed.


It should also be noted that the income from a business which is wholly illegal was held subject to income tax in United States v. Sullivan, 274 U.S. 259. Nevertheless, it was necessary to determine what that income was, and the cost of an illegal purchase of liquor was subtracted from proceeds of the illegal sale of the liquor in order to arrive at the gain from the illegal transaction which were subjected to income tax in that case.


And, in Sullenger vs. Commissioner, the Court allowed the business owner [who made illegal purchases of meat] to deduct the cost of meat purchased at a higher price then set by the Office of Price Administration, a World War II price control agency, which he then resold for profit. The “income” from those sales was being taxed which was at issue in the case. The Court went on to cite Sullivan and concluded: “No authority has been cited for denying to this taxpayer the cost of goods sold in computing his profit, which profit alone is gross income for income tax purposes.”


The point being, even crooks engaged in illegal and criminal activities are to deduct their outlays and expenses in computing a “profit” which may then be taxed.


So, with regard to the comment that we often hear, “Wages are not income”, and taking into account what our courts have emphatically stated regarding how profit and or gain is calculated in order to arrive at taxable income, one thing seems to be irrefutable . . . all money coming in to a wage earner when investing the property each has in their own labor cannot be reasonably said to be income within the meaning of the 16th Amendment.


Are we not to apply the same rules to a wage earner in calculating an alleged profit and or gain from their “investment”, as we do with those who invest money as their capital in order to realize a gain or profit which is then asserted to be subject to federal taxation?


And let us not forget the very intention of those who promoted the 16th Amendment was . . . “An income tax seeks to reach the unearned wealth of the country and to make it pay its share.” Congressional Record, July 12th, 1909, page 4420, Mr. HEFLIN


Are we to ignore the intended distinction between earned wages and un-earned “incomes” within the meaning of the 16th Amendment?


The bottom line is, the comment that “Wages are not income” ___ assuming it was made in respect of the 16th Amendment and calculating a federal tax ___ seems to have significant merit in my opinion as the “capital” or property invested must be severed from money coming in, in order to arrive at a calculated profit and or gain which may then be taxed. And that is according to the Court.


So, the question seems to present itself . . . what portion of a working person’s earned wage, if any, is considered a profit and or gain within the meaning of “incomes” as the word appears in the 16th amendment?


Additionally, if a federal tax on a working person’s earned wage is a direct tax within the meaning of our Constitution, and it is levied without being apportioned, would it not then violate our Constitution’s protective rule that:


"No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken."


JWK


“If the Constitution was ratified under the belief, sedulously propagated on all sides that such protection was afforded, would it not now be a fraud upon the whole people to give a different construction to its powers?”___ Justice Story

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I wonder if Hunter Biden will fraudulently deduct the value of flights on Air-Force 1 or 2 when going to China and elsewhere to conduct shady business deals.

See: Biden's trip to China with son Hunter in 2013 comes under new scrutiny

“What wasn't known then was that as he accompanied his father to China, Hunter Biden was forming a Chinese private equity fund that associates said at the time was planning to raise big money, including from China. Hunter Biden has acknowledged meeting with Jonathan Li, a Chinese banker and his partner in the fund during the trip, although his spokesman says it was a social visit.”

“The Chinese business license that brought the new fund into existence was issued by Shanghai authorities 10 days after the trip, with Hunter Biden a member of the board.”

And, how about the "Big Guy", will he make deductions from the ten percent he gets from Hunter's shady business deals to arrive at his taxable income?

JWK