Subject: The Artful Dodger -----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 Dear Subscriber, I received a response from Professor Siegel to my two questions, and I must say, I am quite impressed. I'm not impressed with his answers, because he didn't answer either question. But I am impressed with his quintessential lawyer-speak method of using lots of words to NOT answer two simple yes-or-no questions. I'll give you his entire response, with comments of mine inserted inside brackets [like this]. Here goes: - ----------< begin Siegel reply >----------- >> 1) Did Section 217(a)(3) of the Revenue Act of 1925 >> mean that compensation for services performed in >> the United States is taxable for ALL U.S. citizens? Mr. Rose, First of all, I note that you are, as usual, overly focused on studying arcane issues relating to what the law was many decades ago. [Wow, change the subject and insult the questioner. He's off to a good start.] We are governed by the current law, not by what the law was in the days of our grandparents. The 1920s Revenue Acts are long gone. Yes, the old law may in some cases have some influence on the interpretation of the current law, but what really matters is the current law. [For the record, both the Supreme Court (in the Wodehouse case) and the Secretary of the Treasury (in Treasury Decision 8687) looked to Section 217 to decide the correct interpretation of later statutes. But again, he starts by complaining about the questions, even though the questions connect it with the current law.] However, for the sake of argument, I took a look at these old acts. I don't see a Revenue Act of 1925, but I looked at the Revenue Act of 1924, 43 Stat. 253, and the Revenue Act of 1926, 44 Stat. 9. Unsurprisingly, I discovered that the income tax imposed by these old laws, like the current income tax, applied to the domestic income of U.S. citizens. [So far, no answer to what I actually asked. And I won't let him side-track the discussion by responding to every false statement he makes.] Specifically, the answer to your question [Here we go!] is yes, section 217 of the 1920s Revenue Acts, in connection with the other sections, particularly section 213, did mean that compensation for services performed in the United States was taxable for U.S. citizens. [Wow, nice dodge! I didn't ask if that section, "in connection with" anything else, said something. I didn't ask anything about any other section. I asked if Section 217(a)(3) meant that domestic wages are taxable for all U.S. citizens. Anyone can see that it does NOT. So why wouldn't he just say "No," and then give his explanation? Why change the QUESTION before answering it? Because the honest answer ("No, it did not") would be hard to reconcile with his previously stated position.] You make the same fundamental error for these old Revenue Acts as you do for the current Code: you focus only on the "sources" section (the only section mentioned in your question), when you should also be looking at the sections that define gross income. [So apparently I got the QUESTION wrong. How does that work? I won't bother pointing out all the things he gets wrong in these paragraphs, which I've done before. Again, I don't intend to let him change the topic of discussion in order to distract attention from the fact that he completely dodged the question, but to be fair I wanted to show his entire response.] Section 213(a) of the old Acts provided that gross income "includes gains, profits, and income derived from salaries, wages, or compensation for personal service . . . of whatever kind and in whatever form paid . . . ." However, section 213(c) provided that "In the case of a nonresident alien individual, gross income means only the gross income from sources within the United States, determined under the provisions of section 217." Thus, the basic structure was the same as today's. Section 213(a) was comparable to today's section 61. Section 213(c) was comparable to today's section 2(d). Then, as now, the Act first defined gross income as including compensation for personal service, without any restriction as to geographic source. But then, as now, it provided that *for nonresident aliens*, gross income means only gross income from sources within the United States. Therefore, nonresident aliens needed to know which part of their income was from sources within the United States. Section 217 answered that question. But, because there was no geographic restriction in section 213(a), gross income for U.S. citizens included compensation for services performed anywhere, as is true under today's section 61. The role of section 217, like the role of section 861 today, was to determine which income was from sources within the United States. Section 213, however, specified the scope of gross income: for nonresident aliens, only income from U.S. sources [213(c)]; but for U.S. citizens, all income without regard to geographic source [213(a)]. (The old Acts also put certain other taxpayers, such as U.S. citizens subject to then-section 262, in the same position as nonresident aliens.) Section 217 was a little different from current section 861 in that it only mentioned nonresident aliens (and others in special categories). That just makes it all the clearer that U.S. citizens did not need to determine which part of their income was from sources within the United States because section 213(a) defined their gross income without regard to geographic source. [Note how he's back to implying that we don't need to look to 861. Once again, he changes positions to try to cling to his incorrect conclusion.] So the bottom line is yes, the income tax imposed in those days, like the current income tax, applied to the domestic income of U.S. citizens, because it defined their gross income without regard to geographic source, as opposed to the gross income of nonresident aliens, which, then as now, was limited to gross income from U.S. sources. [Nice "bottom line," except that's not what I asked. It was a simple yes-or-no question, about one particular section, and he refused to answer it, even though the answer is painfully obvious. Why is that, do you suppose? Now, on to the second question...] The answer to this question makes it unnecessary to answer your second question. - -------------< end Siegel reply >---------- Well, that makes two questions and zero answers. Now, I don't mind people expounding to their heart's delight. I do it quite often myself. But it's one thing to do that AFTER answering a question, and another to do it INSTEAD OF answering a question, which is what Professor Siegel did. The answer to the first question is obviously "NO," but he refused to say that. As for the second question, he used his prior tap-dance as an excuse to not answer it. (I wonder how often his law students ask him a question, only to have him tell them that it's "unnecessary" for him to answer.) I'd now like to quote myself, from a recent message: "As I've often said, when watching the discussion of the 861 evidence, be mindful of human psychology as much as you are of the law. In the next few days I will be asking Mr. Siegel TWO simple questions. Watch carefully how he responds, and then decide if he is to be "trusted" (which is a term he likes to bring up)." Well, did he answer the questions, or did he tap-dance? This is why the back-and-forth, question-and-answer method is so much more informative than one-sided articles or speeches. (It's also why the status quo experts so rarely agree to engage in a rational discussion.) In a monologue you can make almost anything sound convincing. It's on "cross-examination" that mistakes and untruths get uncovered. And when someone dances around a question, changes it, insults it, complains about it, or says answering is not "necessary," what does that tell you? 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 wpwEAQECAAYFAkZVyYQACgkQGmVFo/iGj33S/QQAk7DWUeiUirAZkHugMxnkMfPFMeqZ QNvnNOEMRKHO6B1CVsZyiPv0G4CnqTN5YkQWji4IE85B1fO4XibBCxe/7DwYh1fsxa+R 4QmE15XHSCTOXvLvtbyuMqtQdkbcJoSNmllAD/aRa3n50dDfFgYywkLNrOnZ/I5mEikh lXEifUg= =KCJY -----END PGP SIGNATURE----- -- Need cash? 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