Thursday, January 25, 2007

Larken Rose - Complying with the Tax Law (Part 3)

Suppose you were alive several decades ago, and you knew several well-respected zoology experts, each of whom declared to you that all mammals have live young. Since they were the "experts," you'd probably assume they knew what they were talking about. Then suppose someone visited you from Australia with his pet platypus--an egg-laying mammal. Then you'd have a conflict: little ol' you would have a piece of evidence (the platypus) that flew in the face of what the supposed "experts" told you. So which would you believe, your own eyes or the opinions of the professionals? Well, now you have a REAL example: you've seen the regulations saying that some income is exempt for federal income tax purposes because of the Constitution itself, while the vast majority of tax professionals have no idea that any such Constitutionally-exempt income exists. (Then you saw how, for some reason, those in government really don't like talking about the subject.)

Read more here.


Anonymous bob said...

Larken, I have read your taxable income and it is very clear, however, I have always wanted to know where in the corporate tax return my wages are written off as an expense. The regulations you listed are interesting because it forbids the corporation from writing off our labor as expense if the income is not taxable and also makes the income taxable by the act of writing it off. Do we have to deal with the way corporations define our labor and pay or is that a seperate issue.

5:26 AM  
Blogger FredMarshall1937 said...

Since neither the statutes at large nor the regulations (26 U.S.C. and 26 C.F.R.) require you to report your income to the federal government, or to pay a tax on it, what difference does it make WHAT the corporations do?

5:42 AM  
Blogger FredMarshall1937 said...

Bob, I misread your post. I did not initially notice you said that (the regulations) "also makes the income taxable by the act of writing it off." Unless I've lost my senses, that means the corporation DETERMINES whether or not your income is taxable. Please refer me to that particular regulation. I'd love to see that in writing.

5:45 AM  
Anonymous bob said...

Fred, The question was from a reading of 26 cfr 1.265-1 and 26 cfr 1.312-6(b) posted by larken rose. My interest is how certain items are treated differently at different times for a mis application of the regs. by IRS. I want to put the IRS in the corner when I go to court, so questions that seem harmless to the court may help me get my ideas across to any jury. I have seen other areas of law that have simular interest for me where items written as an expense can not also be used elsewhere. I don't remember the stat, but it has always stuck in my mind. Bob

6:53 AM  

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