[6]The 1911 case of Montello Salt Co. v. Utah,[7] the Supreme Court stated that the term "including" is generally interchangeable with "also" but not necessarily, and can sometimes have a meaning of exclusivity.
§ 7343 only applies to business entities and their employees ignores the word "includes" in the statute delineating the class of persons liable.
[13] The argument that the United States does not include all or a part of the physical territory of the fifty states, and variations of this argument, have been officially identified as legally frivolous Federal tax return positions for purposes of the $5,000 frivolous tax return penalty imposed under Internal Revenue Code section 6702(a).
The statute then goes on to define various exceptions to this broad definition of wages in certain categories of private employment, such as in the agricultural and domestic service fields, newspaper delivery, the clergy, and for wages incurred by individuals working for employers "other than the United States or an agency therof" within Puerto Rico or a possession of the United States.
[21]Joseph Alan Fennell's argument — that the compensation he received in exchange for "non-federally privileged private sector labor" was not taxable—was rejected by the United States Tax Court.
"[23] Similarly, in United States v. Buras, the argument that the taxpayer can be subject to the federal income tax only if he benefits from a "privilege extended by a government agency" was ruled to be without merit.
[26] A penalty of $1,000 under Internal Revenue Code section 6673 was imposed by the U.S. Tax Court on Patrick Michael Mooney for presenting frivolous arguments.
A New York Times article on July 31, 2006, states that when filmmaker Aaron Russo asked an IRS spokesman for the law requiring payment of income taxes on wages and was provided a link to various documents including title 26 of the United States Code (the Internal Revenue Code), Russo denied that title 26 was the law, contending that it consisted only of IRS "regulations" and had not been enacted by Congress.
The Code was approved (signed into law) by President Dwight D. Eisenhower at 9:45 A.M., Eastern Daylight Time, on Monday, August 16, 1954, and was published as volume 68A of the United States Statutes at Large.
According to "plaintiff's answer to the court in re of defendant's pleadings," "It is a Fact that the Internal Revenue Code is NOT Positive [sic] Law.
In short, this court has the discretion to recognize the Internal Revenue Code as the applicable law, or require proof of the underlying statute.
Consistent with that discretion, this court recognizes that the Internal Revenue Code is positive law applicable to disputes concerning whether taxes are owned by someone like the plaintiff.
[33]Similarly, the United States Court of Appeals for the Tenth Circuit has rejected the argument that "the Internal Revenue Code has not been enacted into 'positive law'".
[42] The official Internal Revenue Service web site contains references to specific code sections and case law,[43] including 26 U.S.C.
§ 6151 duty to pay the tax) and court decisions and a page with a link to the entire Internal Revenue Code as published by the Legal Information Institute at Cornell University Law School.
The jury was so instructed, and its verdict shows that it found, beyond a reasonable doubt, that Patridge [the taxpayer] knew that he had to pay taxes on what he made from his business.
It is scarcely possible to imagine otherwise: the system of offshore trusts, and the fictive "loans," show that Patridge was trying to hide income that he knew to be taxable.
Yet Patridge, in common with many other people who know what the law requires, could not say just which provisions of the Code make income taxable and prevent evasion.
Some tax protesters claim the following language from a court decision in Schulz v. Internal Revenue Service (2005)[48] means that a taxpayer has a due process right to demand a response from the IRS as to why he or she is subject to taxation: .
The Court of Appeals for the Second Circuit affirmed the dismissal of the taxpayer's motions for a lack of subject matter jurisdiction because there was no actual case or controversy as required by Article III of the Constitution.
In the Schulz case the court left open the possibility that the IRS might decide to drop the investigation and never enforce the summonses, or that the plaintiff might voluntarily comply with the request.
While there is disagreement over exactly how "imminent" an injury has to be before a taxpayer can obtain relief from a court, this is separate from the obligation to timely file a tax return (which is imposed by statute).
[52] On August 9, 2007, the United States District Court for the Northern District of New York issued an order including an injunction permanently barring Schulz and his We the People Foundation from (1) advising or instructing persons or entities that they are not required to file federal tax returns or pay federal taxes; (2) selling or furnishing any materials purporting to enable individuals to discontinue or stop withholding or paying federal taxes; (3) instructing, advising or assisting anyone to stop withholding or stop paying federal employment or income taxes; and (4) obstructing or advising anyone to obstruct IRS examinations, collections, or other IRS proceedings.
The quoted language from Flora refers to the Federal income tax: "Our system of taxation is based upon voluntary assessment and payment, not upon distraint."
The key connotation of the word "distraint" is that there is often a taking of possession or withholding of property to induce a debtor to pay an obligation.
[65] Indeed, until the enactment of the Bankruptcy Reform Act of 1994,[66] the section 362(a)(6) prohibition on assessment without prior court approval applied to valid pre-petition taxes.
[82] Courts have uniformly held this interpretation to be incorrect, and proponents of the argument who have used it as a basis for not paying taxes have been penalized and even jailed.
For example, actor Wesley Snipes was found guilty on three misdemeanor counts of failing to file Federal income tax returns, although he was acquitted of charges to conspire to defraud the US government.
[83][84][85] One contention by some tax protesters is that a taxpayer should be allowed to introduce, as evidence in court, copies of statutes, cases or other materials to persuade the jury about what the law is.
An actual good faith belief based on a misunderstanding caused by the complexity of the tax law negates the "willfulness" requirement for a conviction (see Cheek v. United States).