I am not a Tax Lawyer, Nor do I play Dan Evans on the internet.
I am not a Certified Public Accountant, Nor do I play Paul Thomas on the internet.
I am not an Enrolled Agent, Nor do I play Richard Macdonald on the internet.
DO NOT TAKE MY WORD FOR ANYTHING ON THIS PAGE.
Go look it up for yourself.
I wrote this in regard to IRC section 61:
The Supreme Court tells us that the phrase "All income from whatever source derived" has a specific meaning:
House Ways and Means Committee, in a report to accompany H. R. 8300, a bill to revise the Internal Revenue Laws of the United States, Now known as the 1954 Internal Revenue Code, Dated March 9, 1954 states:
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Senate Committee on Finance, in a report to accompany H. R. 8300, a bill to revise the Internal Revenue Laws of the United States, Now known as the 1954 Internal Revenue Code, Dated June 16, 1954 states:
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Statutory gross income existed BEFORE the Constitutionally defined "All income from whatever source derived" phrase was included in the definition of Statutory gross income.
In the last chapter, you examined how "All income from whatever source derived" can only mean "All [Return on Investment Income] from whatever source [investment] derived".
Items of generic income such as compensation for services come from a different source2. A source2 that is not included in the "whatever source1" of section 61. With this new understanding, you probably should go back and re-read the chapter on the 861 evidence.
"All incomex from whatever source1 derived" does NOT mean "all incomey from whatever source2 derived."
Incomex - "Return on Investment".
Source1 - Invested property.
Incomey - Generic meaning
Source2 - Activity
With a proper knowledge of the U.S. Constitution in your mind, you can re-read IRC section 61 and clearly see the obfuscation and legerdemain.
With the word "source" in section 61 properly understood to mean the source of investment return, you now understand that the word income in section 61 is NOT the generic meaning of income.
Section 61 does NOT automatically make every single dollar of generic income you receive into statutory "gross income". From now on, you must remember the Constitutionally defined meaning is not the same as the generic meaning. Likewise a statutory definition is not the same as the generic meaning.
From section 61 we get a statutory definition that reads in effect like this:
It appears senseless until you understand that generic income is not statutory income. Law does not act upon generic definitions when statutory definitions are provided. The parse above is the case of taking a specific generic meaning of income and corralling it in the statutory meaning of gross income.
A previous question asked can now be answered.
Because the income described by "all" is return on investment (Constitutional) income brought into the statutory definition. This does NOT bring other monetary items of generic income into statutory gross income.
This certainly puts the Treasury Regulations that interprets the IRC statutes in a different light.