Subject: The Professor (Part 2) -----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 Dear Subscriber, It's time to look at what little substance there was in the radio debate between myself and Professor Siegel. Again, you can listen to the show here: http://www.getonyoursoapbox.com/podcast/ Unfortunately, the beginning of my questioning Professor Siegel is missing from the archived recording. What I first asked him was: What kinds of income are the regulations referring to when they say that some income is EXEMPT because of the Constitution itself? His guess was that those regulations were referring to the issue addressed by the Supreme Court in the Eisner v. Macomber case, in which they ruled that certain stock dividends don't constitute "income," and therefore couldn't be subject to the federal income tax. As I pointed out, there are several reasons why that is NOT what the regulations are talking about: 1) Years BEFORE the Eisner case happened, the regs were already talking about some income being Constitutionally non-taxable. They obviously could not have been referring to a ruling that hadn't happened yet. 2) From 1921 to 1936, AFTER Eisner, the tax statutes said "A stock dividend shall not be subject to tax"--in other words, the types of dividends discussed in Eisner were, BY STATUTE, identified as exempt. And the regulations said that IN ADDITION TO those things exempted by statute, some OTHER income was excluded because of the Constitution itself. Obviously that statement was NOT talking about "Eisner" stock dividends, which were specifically exempted by statute following the decision. 3) The Eisner case did NOT actually conclude that any income was Constitutionally non-taxable; instead, it concluded that the dividends in question WERE NOT EVEN INCOME. (When I pointed this out, Mr. Siegel said, "I think that's too fine a distinction." Well, since it proves him wrong, I'm not surprised.) So his one guess at what the regulations are referring to was proven dead wrong, for several reasons, yet he suggested no alternative explanation. He threw out a guess (and it was pretty obviously only a guess), because he knew that even a bad guess would look better than saying "I don't know," which obviously would have been the truth. He showed no curiosity and no desire to discuss it further, demonstrating that his agenda was not to DETERMINE the truth, but to try to convince the listener that he already KNOWS the truth (when he obviously does not). He clearly doesn't KNOW what all is exempt, and therefore cannot possible know what all is taxable (non-exempt), yet he has the gall to insult you and me for wanting to have a "reasonable debate" about it. "Arrogance and ignorance go hand in hand." - Metallica - -------------------------------------- About the only other point of substance that was covered had to do with the purpose of Section 861. Pay close attention, because the professor did on the show what he had done previously in e-mails. Early on, he said this: "Section 861 deals with the international aspects of taxation." His main position is that, as a U.S. citizen living and working in the U.S., you don't NEED to use 861 and its regulations. On the show, as you can hear for yourself, at one point he quoted from 26 CFR 1.1-1, which says that U.S. citizens are "liable to the taxes imposed by the code," whether their (taxable) income is "from sources within or without the United States." In response, I asked whether Mr. Siegel agreed that the taxes imposed by the code are only upon "TAXABLE income" (not all income). Mr. Siegel agreed. I then quoted from 26 CFR 1.863-1, which says that a taxpayer's TAXABLE income "from sources within or without the United States" WILL BE DETERMINED under the rules in Section 1.861-8 and following. His response was this: "And when you do that, you discover that it's all their worldwide income for a U.S. citizen." Now hold on. Before dealing with whether that statement is accurate, make note of his position CHANGE. He went from saying that 861 is just for international stuff--you don't need to look there--to apparently CONCEDING that you should look there. And this isn't the first time he's done that. In responding to an e-mail question from someone (who then sent me the entire exchange), Professor Siegel QUOTED directly from the regs at 1.861-1 and 1.861-8, which clearly state that one SHOULD be looking to 861 and related regs to determine his taxable domestic income. Then the law professor said this: "Therefore, the answer to your question is that, as these regulations provide, you, or anyone else, whether a U.S. citizen or not, can use section 861 and following of the code to figure your gross income from sources within the United States, and then your taxable income from sources within the United States. Go right ahead, be my guest." Hang on. What happened to those sections being irrelevant for us? What happened to those just being about "international aspects of taxation"? What happened to us just looking at Section 61, and assuming that the "source" of income doesn't matter? Now we ARE supposed to use those sections? This is important to note: for any given person, either you ARE supposed to use those sections, or you're NOT. It can't be both. (Oddly, Mr. Siegel says one "can" use those sections, as if it's optional.) Why did he just CHANGE his position, from "don't look there," to "well, even if you do..."? He follows his admission that you SHOULD look there (or at least you "can," whatever that means) by saying that, "If you are like most U.S. citizens, you will discover, if you do this, that it makes no difference as to your ultimate tax." In the next message I'll show why he is dead wrong about that. But don't overlook the significance of the classic lawyer-think stunt here: have one argument, and have a back-up, CONFLICTING argument to justify the same conclusion. I've seen other lawyers do this as well, including Dan Evans (who attempts, and fails, to refute the 861 evidence on his web site). They argue that you should IGNORE Section 861, until they are buried in so many citations saying the opposite that they revert to, "Well, even if you DO look there, it says your income is taxable." Then, to keep the water as muddy as possible, they say it doesn't "matter" whether you use those sections or not. Why try so hard to keep us from looking at those sections, if they say our income is taxable? On the other hand, why argue that those sections say we owe the tax, if we're not even supposed to be looking there? Why do these supposed "experts," who say the issue isn't even debatable, have to have two CONFLICTING positions about how to DETERMINE WHAT WE OWE? It reminds me of the lawyer joke, in which a lawyer argues something like: "My client didn't take this man's lawnmower. And if he did, it wasn't broken when he gave it back. And if it was, it was broken when he borrowed it." Why do they do this? The answer is simple: both of their positions are dead wrong, so they want to be able to jump back and forth between them each time one is proven incorrect. It's the classic, "Well, even if that's true" obfuscation technique. The truth is, we ARE supposed to use those sections--as you just saw the professor finally concede--and they do NOT show our income to be taxable (as you'll see in the next message). But they jump between multiple incorrect arguments in this manner so they always have a fall-back: each time one of their two huge mistakes is exposed, they change the subject to the OTHER argument. They can jump back and forth forever, keeping the average observer confused. So, as we go to the next message, be sure to have it cemented in your mind that Mr. Siegel, professor of law, admitted that the regulations say that "you, or anyone else, whether a U.S. citizen or not, can use section 861 and following of the code to figure your gross income from sources within the United States, and then your taxable income from sources within the United States." Don't forget that. Sincerely, Larken Rose www.larkenrose.com -----BEGIN PGP SIGNATURE----- Note: This signature can be verified at https://www.hushtools.com/verify Version: Hush 2.5 wpwEAQECAAYFAkZGM+AACgkQGmVFo/iGj33h+gQAgrFKvUMlQtmkrirnY8AC01OZ2W/Q JWzTMf9IQMkOclIszGH4q2racq+WtJNBqCN30g8IZp55JnXKVjgdV/E802KfbjKY2rvk fOxm0c7ZjY1VoByARps7US5JDauQ7RVoae51CBX8K4eqXp5dQC20WC+Su9W+WiwNpDj9 xOkJKLE= =rWM5 -----END PGP SIGNATURE----- -------------------------------------------------------------------- To subscribe, send a blank message to 861-on@mail-list.com To contact the list owner, send your message to 861-list-owner@mail-list.com