Friday, October 9, 2009

When wages and compensation is NOT Income

“Recognize what is in your sight, and that which is hidden from you will become plain to you.  For there is nothing hidden which will not become manifest.”
            Jesus, The Gospel of Thomas

Hello again world; welcome to my third blog; the third in my educational series to you!

"The truth will set you free, but first it will make you miserable".
James Garfield 1831-1881, 20th U.S. President

To be income or not to be income, that is the question!

Ten years ago, while attending graduate school earning my Master’s, I started a study on the American government at the graduate level, studying specifically the U.S. Federal Reserve and the Internal Revenue Service (IRS), both established in 1913, with the IRS being given birth under the 16th Amendment to the united States of America Constitution.  I wanted to do my doctorate on the relationship between the two organizations, but after a discussion with two of my professors at Graduate school, I was persuaded NOT to follow this line in taking on the U.S. Federal Government.  In the end, I lost my courage and took their advice, as I looked at the consequences what I could be facing in bringing this topic to light. To my own personal disappointment, I regret making that decision today.  So now I am taking this opportunity in bringing this information to you through my blog.  I will not present all my findings as that would take a 500-page book, but I will give you enough material to make you question things!  Nothing is what it appears to be, folks!  We are being led astray everywhere.

As I researched both government [italics is a clue here, folks] entities, I started to realize that there was far more to these two organizations than what met the eye of the general American public.  I split my time between the two topics and after some years of research, came to some startling conclusions, that much information had been quietly kept from the public, obviously, but is well known at the Congressional, Executive, Appellate and U.S. Supreme Court level.  I know this because each time Congress amends the tax codes, the writers of the code are very deliberate in maintaining the original meanings of words.  I will defer my blog on the Federal Reserve for a later date and will focus here on the IRS.  Startling as it may seem, income as defined by a number of U.S. Supreme court decisions, is NOT income as how we as individuals would define it.  And therein is the rub.  I don’t wish to call it willful deception, but you make the call on what it is after you read this blog.

I have cut and pasted research information from my prior study on the matter and have assembled bits and pieces for you to review.  There should be enough information for you to discern that we the public have been misinformed in many ways on this issue, and many others as well.

Title 26, The US Tax code is written in a special language authorized by the US Congress, similar to that which is called the Pesher Method. Please refer to the U.S. Supreme Court decision that describes this action in the following case. [[Malat v. Riddell, 383 U.S. 569 (1966), U.S. Supreme Court Case Summary Malat v. Riddell:  Congress may provide its own definitions for the terms used.  The student should be aware of a number of general definitions contained in the 26 IRS [Internal Revenue Code]…”]]

The Pesher Method is a cryptic biblical writing process, dating back to the writings of the Old and New Testament thousands of years ago, which is nothing more than using metaphors, puns, and allegory in communicating to disguise the original meaning or intent of words or phrases so that the casual reader would think they are reading something while in actuality, the real meaning is kept secret for those whom the message was intended for.  For more information on a description of the Pesher method please refer to the following website or Google the term for more much information:   [In a future blog covering Theology, I will write more about the Pesher Method and what it means.  Don’t worry: GOD really IS, but quite a bit different than what we think, and even more wonderful! Just thought I would mention this now, and it’s ok to disagree with me, but just do your research!]

Case in Point.  What follows below in my blog is just a sampling of court cases that define what income is and isn’t, and somehow, this was just never communicated down to us common folks by the legal system!  But you can bet that every tax and corporate attorney read the merits of tax related U.S. Supreme Court cases to understand the decision!  Immediately below is a court case summarizing that compensation for labor is NOT income.

In the case of Oliver v. Halstead, 86 S.E. Rep. 2d 859:  “There is a clear distinction between ‘profit’ and wages’ and compensation for labor.  Compensation for labor CANNOT be regarded as profit within the meaning of the law.  The word ‘profit’, as ordinarily used, means the gain made upon any business or investment—a different thing altogether from mere compensation for labor.”

In the following case noted above, please note the distinction between profit, wages, and compensation for labor.  Observe that compensation for labor or services rendered is NOT income, as defined under the U.S. Supreme Court.

In the case of Laureldale Cemetery Assoc. v. Mathews, 47 Atlantic 2d 277 (1946):  “…Reasonable compensation for labor or services rendered is not profit…”

In compensation for labor, there is an even exchange of time for an equal amount of money.  It’s an even barter.  It would be no different than trading a bushed of wheat for a bushel of rye, which were both the same price.  There would be no gain or profit.  I you provide $100 of labor for an equivalent $100 of pay, there is no gain; therefore there is no income!

Understanding now that ‘income’ is NOT everything that ‘comes in,’ but only ‘gains and profits, severed from capital,’ it is a simple matter to deduce that compensation is not ‘income’ in the true and lawful meaning of the word.

Black’s Law Dictionary, 6th edition defines the word “compensation” as follows:  “…Giving an equivalent or substitute of equal value…giving back an equivalent in either money, which is but the measure of value…”

Because by its true definition, compensation is an “equivalent and equal exchange,” there is no profit, there is no gain and, therefore, there is no income!

Immediately below is a U.S. Supreme Court case noting that income is corporate or business income, and not compensation!

Connor v. U.S., 303 F. Supp., 1187 ’69:  “…Congress has taxed income [profits and gains] not compensation.”

In a federal court case below, note that real income [gains and profits] is not derived for services rendered, such as my working for 40 hours a week and receiving pay in kind for services rendered.

In the federal case of Edwards v. Keith, 231 Fed. Rep. 1:  “The phraseology of form 1040 is somewhat obscure…But it matters little [what the forms says]:  the statute and the statute alone determines what is income to be taxed.  It taxes income ‘derived’ from many different sources; one does not ‘derive income’ [gains and profits] by rendering services and charging them.”

Do not confuse “compensation for labor” with “Wagesor “compensation for (personal) services,” which are ONLY earned by Government officers and employees and are includible in gross income under Title 26.  However, compensation for labor earned by American Citizens in any of the 50 states, working in the private sector, is a different thing altogether and is not taxable ‘wages’ and is excludible from Gross Income and is exempt from the graduated income tax!

            Huh? What? You mean that only government workers are required to pay Income taxes?  And why are American Citizens specifically noted, and not U.S. citizens [big clue here folks]? 

Then along comes the following act of 1939 that makes all government [federal, state, county, city] employees and their compensation TAXABLE INCOME!

The Public Salary Tax Act of 1939

Public Salary Act of 1939, Title 1—Section 1.:  “§22(a) of the Internal Revenue Code relating to the definition of ‘gross income,’ is amended after the words ‘compensation for personal service’ the following: ‘including [limited to] personal service as an officer or employee of a State, or any political subdivision thereof, or any agency or instrumentality of any one or more of the forgoing.” [Another clue here folks; the word ‘including’ actually means “only this.”  The word is no all encompassing as you would think]

“Wages” and “Compensation for personal services” are ONLY earned by Government employees.  This is why the Government argues “Wages are Gross Income.”  According to their ‘term’, they are correct.  However, by such definition, compensation for labor in the private sector is not “wages” and is not “compensation for personal services.

Elected and appointed government employees are considered to be public servants, exercising “official privileges,” while employed.  The income tax is applicable to those who chose to make themselves liable by entering into contracts with the U.S. Government.  Also, such paychecks come from the District of Columbia, giving them compensation ‘effectively connected to’ a federal area, under exclusive United States jurisdiction.

To understand the tax codes, you must start with the original 1939 Internal Revenue Code.  This Code combined all previous revenue laws into one Code and repealed all previous laws not included in the 1939 Code.  However, statutes and Codes which were enacted after the 1939 Code are still in force, if not specifically repealed or amended by subsequent statutes, Codes or Regulations.  That means that all portions of the 1939 and 1954 Codes and Regulations, the Public Salary Act, etc., not repealed, are still a part of the overall Tax Code and Regulations, even though they have never been transferred into the subsequent Codes.

On April 12, 1939, [76th Congress, 1st Session, Chap. 59. pgs. 574, 575] after the enactment of the Internal Revenue Code of 1939, and before the 1954 Code, Congress passed the Public Salary Act.  Because this Act is buried between the 1939 Code and the 1954 Code, many Citizens are not even aware it exists.  The following section of that Act has never been repealed.  This Act is extremely significant because it amends and redefines the words, “Gross Income,” [not “income”] which is the basis for calculating ‘taxable income,’ to include ONLY “compensation for services (as public servants) earned by officers and employees of a State.  As it has been documented in statutory construction, the word “including” means “only” and cannot be expanded to add other elements not within the exact “meaning of the definition.”  The meaning here is ‘government employee’ and can’t be expanded to also include “private sector employees.”

The strategy of the Government is to call anything that ‘comes in’ gross income.  Then to keep the Code in harmony with the Constitution and the law, the writers of tax legislation create exemptions and exclusions from ‘gross income’ for the exercise of nontaxable ‘Rights’ protected by the Constitution.  These are buried in previous Acts and Regulations that were never repealed but were not brought forward to the most recent “Code.”

So what does the 16th Amendment Really Say?

The Supreme Court has ruled that the 16th Amendment was applicable ONLY to INDIRECT, EXCISE taxes on privileges and revenue taxable activities.  The first U.S. Supreme Court case to challenge the erroneous idea that the 16th Amendment changed the Constitution and allowed direct taxes to be issued without apportionment was the Brushaber v. Union Pacific Railroad, (1916).  [Sorry for the legalese but you WILL muddle your way through it.]

In the U.S. Supreme Court case Brushaber v. Union Pacific RR Co., 240 U.S. 1, at 10, 11, 12, 18, 19:  “The confusion (by Brushaber)…arises from his conclusion that the Sixteenth Amendment provides for a hitherto unknown power of taxation, that is, a power to levy an income tax, which although direct, should not be subject to the regulation of apportionment…The far-reaching effect of Brushaber’s erroneous assumption…if acceded to, would cause one provision of the Constitution to destroy another; that is, it would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes must be apportioned…This result, instead of simplifying the situation and making clear the limitation on the taxing power, which obviously the Amendment must have been intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion…Indeed, from any other point of view, the Amendment demonstrates that no such purpose was intended and, on the contrary, shows that it was drawn with the object of maintaining the limitations of the Constitution and harmonizing their operations…The 16th Amendment contains nothing repudiating or challenging the ruling of the Pollock Case…The contention that the [16th] Amendment treats a tax on income as a direct tax is…wholly without foundation…”  The 16th Amendment, as correctly interpreted, was limited to indirect taxes and for that reason is constitutional.”

Furthermore, the Congressional Record goes on to state as far back as 1862 what income really is, and that the 16th Amendment did not change the framework of the Constitution, that a tax to the people could only be levied by direct apportionment, that is equally to each natural person after a taking of the census!

The Congressional House Record, Vol. 89, Part 2, March 27, 1943 pgs 2579, 2580:  “The income tax is an excise tax, and income is merely the basis for determining its amount…In 1862, in order to meet the need for continued war revenues, Congress passed the second income tax law.  This act took effect on July 1, 1862 (12 Stat.432).  The act of 1862 which used the word “duty” instead of “tax” provided that this “duty” should be levied, collected and paid in the year 1863 and each year thereafter until and including 1866 ‘and no longer’ (Sec. 92)…that investment income may be as a part of the basis for measuring an excise tax was recognized by Congress in the act of August 5, 1909 (36 Stat. 11, 12), ‘That every Corporation shall be subject to pay annually a special excise tax with respect to the [privilege of] carrying on or doing business by such Corporation.’  The sixteenth amendment authorizes the taxation of income ‘from whatever source derived’-thus taking in investment income—without apportionment among the several states…The Supreme Court has held that the sixteenth amendment did not extend the taxing power of the United States to new or excepted subjects…The [16th] Amendment made it possible to bring investment income within the scope of a general income-tax law, but did not change the character of the tax [as an excise tax].

In summary, compensation for labor is property.  Taxation on property constitutes a Direct Tax, subject to apportionment.  The Brushaber Supreme Court ruled that income taxes are limited ONLY to indirect excise taxes.  Excise taxes can only be imposed upon the exercise of a privilege.  Therefore, the American Citizen’s compensation for labor earned in the 50 states, in an occupation of common right and not in the exercise of a privilege is not the subject of the 16th Amendment or the income tax!

It would seem from the above that we have been deceived by the Congress, the U.S. Supreme Court, the White House, and a host of corporate and tax attorneys that know of the information above, but have ‘failed’ to communicate this to us common folks.  Why is this information not making headlines of every front page of the newspaper?  I would conclude that it is because “they” don’t wish for us to know.  You can figure out who the “they” are.

Now, I just don’t want you to take my word for what is written above.  I want you to research it yourself to find out the truth.  If you wish, take this information and turn it over to your trusted attorney to verify this.  I mention “trusted attorney” as all attorneys are an officer of the COURT, and as such, their loyalty is first to the Court, and then you as a client so be careful.

Disclaimer Disclaimer Disclaimer!

First, this blog you have just read is not an excuse for YOU to NOT file your Federal and State Income Tax every year!  Unless you know Federal and State Income Tax laws thoroughly [and you don’t] and have a great defense attorney [there is one really good defense attorney in Alabama who has never lost a case to the IRS for natural persons cases], don’t mess with this!  File your returns, pay your taxes every year, and just know that you will have to be satisfied knowing the truth, and that your government is lacking in communicating to the public the truth.  Truthfully, very few lawyers know of this, and those that do, are those who win their legal cases before the U.S. Supreme Court!  This blog is for your education!

Second, it is just not as simple as I have outlined in this blog.  There are many other issues to consider that were not considered by many people who eventually wound up in trouble and in federal prison for thinking they knew how to avoid paying taxes.  There is the matter of federal or state jurisdiction; which legal and judicial references the U.S. Supreme Court judges defer to, based upon the evidence you bring; where you as the natural person and NOT the Individual [big clue here] were born in the 50 states or federal territory; whether you were born before or after the territory became a state; whether your wages was a source within or without the United States [this little section in Title 26 is what has confused so many people and as such, landed them in prison]; which United States you are speaking from [there are many different definitions for it], what class of citizenship you have [yes, there are different classes as not all citizens are equal]; what class of citizenship you claim to be [sadly, nearly everyone gives up their rights by claiming the wrong citizenship]; what words [yes, many words used in the IRS have different meaning than what you would think and is another reason you lose] your attorney uses in presenting his/her written and oral arguments in court; whether the law referenced it is positive law or not, and a few more issues. 

Know that the U.S. Congress serves two masters: the 50 Republics [Sovereign Countries] known as the united States of America [U.S. Supreme Court case Hooven v. Evatt, 324 U.S. 674] covered under the Constitution, and the Federal Government seated in Washington D.C., a foreign country!  Two very different animals, however, presented to the public as one, and therein adds to more deliberate confusion.  Like I said, I can’t cover it all down in one simple blog, but I will cover this over many blogs.

I, the writer of this blog, am a 14th Amendment citizen, and a second class citizen, a naturalized U.S. citizen, and NOT a Sovereign American born Citizen as I was born in a foreign country, and because of my citizen class, MUST always pay a tax on ANY compensation I earn, regardless of which definition I use!  I chose my words carefully here for you to discern, folks.

            I’ll toss in this one last item below: In Title 31 of the United States Code, Section 301 through 310, guess who are NOT an agency of the United States!

31 USC §301 through §310 The Internal Revenue Service [IRS], Bureau of Alcohol Tobacco and Firearms [BATF] and Secret Service are not listed as Agencies of the United States.

            Another way to know is to go to your telephone directory and look up the agencies.  You will not find them listed under the Federal Government.  So then what type are these agencies?  They are private companies, of course, just like the U.S. Federal Reserve.  So who owns them?  Another time…

Until my next blog…keep reading and searching for knowledge and truth!

I report…you research and decide for yourself.