TAX FREE?

I FEW OF YOU FELLOW WORKERS ARE NOT PAYING FED INCOM TAX IS THIS LEGAL? THEY WANT ME TO DO IT IF I DO IAM I GOING TO JAIL WITH THEM ? THEY REFERED ME TO THE WEB SITE UNTAXERS.COM PLEASE CHECK IT OUT IS IT A SCAM? WHAT ARE THE PENALTEY FOR DOING THIS? THANKS YOU ..

dead link

The web site you listed doesn't work (at least when I tried it).

Answer this: Who do you work for, what do you do, and where are you at?

It it perfectly legal not to pay Federal Income Tax, but it does depend on a few things. If done by the law, there are no legal penelaties, but that doesn't mean you won't have to fight a bit.

i work in a factory in ohio and i dont want to denounce my citizan ship but what are the pros and cons of this thing? if it is legal then why doesnt everyone do it? iam only 21 and dont know alot about the tax world..lol




thanks ...

The system is based on voluntary compliance. You must decide (with the use of the law, not lawyers) if your income is taxable. See United States Code 1.861-8.

Denouncing citizenship is not the way to go, however the Supreme Court has shown there to be three (3) different definitions of the Term "United States." The one your interested, as it relates to Title 26 of the IRS Code, is United States = District of Columbia, Puerto Rico, Guam, U.S. Virgin Islands, Samoa, territories and possesions. The 50 United States are soverign to this other United States.

Two reason why "everyone" doesn't do it... they are ignorant of the law and/or they are afraid of the IRS.

Keep reading the law. Get your hand on everything you can, the good and the bad. Listen to what people have to say. Question authority and then, make your own mind up.

Failure to file, etc. is a crime.

Zoomer: To answer your question, if you earn over the exemption amount you are required by law to file a return and pay the tax. If you do not, you are guilty of a misdemeanor, and, in additions to civil penalties and interest for nonpayment and nonfiling, you are subject to a fine of not more than $25,000, or imprisoned not more than 1 year, or both, together with the costs of prosecution. The IRS does not always prosecute a failure to file, but nevertheless, it is a crime.

The exemption amounts for filing returns for 2000 tax years are $12,950 for married filing joint return, $13,800 for married filing joint return with one spouse age 65 or over, $14,650 for married filing joint return with both spouses age 65 or over, $2,800 for married filing separate return, $10,150 for surviving spouse, $11,000 for surviving spouse age 65 or over, $9,250 for head of household, $10,350 for head of household age 65 or over, $7,200 for unmarried, and $8,300 for unmarried age.

WARNING: ONCE AGAIN Crager34 is giving bad advice.

Here is the applicable statutory law:

Amendment XVI of the US CONSTITUTION: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.


SEC. 6012. PERSONS REQUIRED TO MAKE RETURNS OF INCOME.

6012(a) GENERAL RULE.--

Returns with respect to income taxes under subtitle A shall be made by the following:
6012(a)(1)(A) Every individual having for the taxable year gross income which equals or exceeds the exemption amount, except that a return shall not be required of an individual—
6012(a)(1)(A)(i) who is not married (determined by applying section 7703 ), is not a surviving spouse (as defined in section 2(a) ), is not a head of a household (as defined in section 2(b) ), and for the taxable year has gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual,
6012(a)(1)(A)(ii) who is a head of a household (as so defined) and for the taxable year has gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual,
6012(a)(1)(A)(iii) who is a surviving spouse (as so defined) and for the taxable year has gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual, or
6012(a)(1)(A)(iv) who is entitled to make a joint return and whose gross income, when combined with the gross income of his spouse, is, for the taxable year, less than the sum of twice the exemption amount plus the basic standard deduction applicable to a joint return, but only if such individual and his spouse, at the close of the taxable year, had the same household as their home.
Clause (iv) shall not apply if for the taxable year such spouse makes a separate return or any other taxpayer is entitled to an exemption for such spouse under section 151(c) .

IRC SEC. 7203. WILLFUL FAILURE TO FILE RETURN, SUPPLY INFORMATION, OR PAY TAX: Any person required under this title to pay any estimated tax or tax, or required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000 ($100,000 in the case of a corporation), or imprisoned not more than 1 year, or both, together with the costs of prosecution. In the case of any person with respect to whom there is a failure to pay any estimated tax, this section shall not apply to such person with respect to such failure if there is no addition to tax under section 6654 or 6655 with respect to such failure.

As to the constitutionality of the tax, see for example Guy S. Burroughs II and John W. Platt, Sr., Plaintiffs-Appellants v. Arthur E. Wallingford, Dora Nichols, R.D. Powell, Patrick Hayes, A.A. Muse, Jr., D.W. Cranford, Ruth Krebs, and Annette Rivera, Defendants-Appellees (CA-5), U.S. Court of Appeals, 5th Circuit, No. 85-2017, Summary Calendar, 1/13/86, 780 F2d 502, Affirming and remanding unreported District Court decisionThe constitutionality of income tax laws has been consistently upheld, Stites v. United States, 746 F.2d 1085 (5th Cir. 1984) (and cases cited). Additionally, the tax levy procedure in IRC §6331 does not violate due process.

Thanks loku. You saved me from posting the same info.

Read it yourself...I didn't write it.

"As to the Constitutionality of the tax" Who ever is arguing that point, will surely loose that argument. Not sure why you even brought that up.

"..you are require by law to file a return and pay a tax.." OF COURSE YOU ARE REQUIRED - BUT ONLY IF YOUR LIABLE FOR THAT TAX.

IRC SEC. 7203. "..Any person required under this title.." IF YOUR NOT REQUIRED, THIS SECTION DOESN'T APPLY.

The below two paragraphs (in quotes) are from your post loku.

"6012(a)(1)(A) Every individual having for the taxable year gross income which equals or exceeds the exemption amount, except that a return shall not be required of an individual"

"Amendment XVI of the US CONSTITUTION: The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

In the first one, it talks about "gross income." In the second one, it talks about "from whatever source derived."
My information comes directly from the same book you quote from, the IRS code. If your not liable to pay the Income tax, the rest doesn't matter.

Section 1 of the Title 26 statutes imposes the "income tax" in five different categories (unmarried people, married people filing jointly, etc.). In each case, the wording reads "there is hereby imposed on the taxable income of…" The law generally defines "taxable income" in the following section of the statutes:

"Sec. 63. Taxable income defined
(a) In general - …the term "taxable income" means gross income minus the deductions allowed by this chapter…" [26 USC § 63]

In other words, when someone determines his "gross income," and then subtracts all allowable deductions, the remainder is "taxable income." (So for income to be "taxable income," it must first be "gross income.") The following section of the statutes gives a general definition of "gross income":

"Sec. 61. Gross income defined
(a) General definition - … gross income means all income from whatever source derived, including (but not limited to) the following items:
(1) Compensation for services...;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;... [more items listed]" [26 USC § 61]

To review, the "income tax" is imposed on "taxable income," which means "gross income" minus deductions. "Gross income" is defined in 26 USC § 61 as "all income from whatever source derived." The phrase "from whatever source derived" may initially appear all-encompassing, but for the specifics about "income from sources," the reader of the law is repeatedly referred to Section 861 and following (of the statutes) and the related regulations. For example, in the full version of Title 26 (with all notes and amendments) which appears on Congress’ own web site, Section 61 itself has the following cross-reference:



"Income from sources -
Within the United States, see section 861 of this title.
Without the United States, see section 862 of this title."

The sections which are specifically for determining taxable income from sources within the United States are 26 USC § 861(b) of the statutes, and the corresponding regulations found at 26 CFR § 1.861-8. (The regulations under Section 63, the section defining "taxable income," do not explain how to determine taxable income.) While the relevance of these sections may quickly become obvious, the repeated documentation is important since most tax professionals are already aware that these sections are not about the income of most Americans.

Section 861(b) (as mentioned above) is entitled "Taxable income from sources within the United States." This section states that taxable income from sources within the United States is the gross income described in 861(a) minus allowable deductions. The regulations under Section 861 state (in the first paragraph):

"The statute provides for the following three categories of income:
(1) Within the United States. The gross income from sources within the United States… See Secs. 1.861-2 to 1.861-7, inclusive, and Sec. 1.863-1. The taxable income from sources within the United States… shall be determined by deducting therefrom, in accordance with sections 861(b) and 863(a), [allowable deductions]. See Secs. 1.861-8 and 1.863-1." [26 CFR § 1.861-1(a)(1)]

"The operative sections of the Code which require the determination of taxable income of the taxpayer from specific sources or activities and which gives rise to statutory groupings to which this section is applicable include the sections described below.
(i) Overall limitation to the foreign tax credit…
(ii) [Reserved]
(iii) DISC and FSC taxable income… [international and foreign sales corporations]
(iv) Effectively connected taxable income. Nonresident alien individuals and foreign corporations engaged in trade or business within the United States…
(v) Foreign base company income…
(vi) Other operative sections. The rules provided in this section also apply in determining--
(A) The amount of foreign source items…
(B) The amount of foreign mineral income…
(C) [Reserved]
(D) The amount of foreign oil and gas extraction income…
(E) (deals with Puerto Rico tax credits)
(F) (deals with Puerto Rico tax credits)
(G) (deals with Virgin Islands tax credits)
(H) The income derived from Guam by an individual…
(I) (deals with China Trade Act corporations)
(J) (deals with foreign corporations)
(K) (deals with insurance income of foreign corporations)
(L) (deals with countries subject to international boycott)
(M) (deals with the Merchant Marine Act of 1936)" [26 CFR § 1.861-8(f)(1)]

None of these "sources" apply to United States citizens who live and work exclusively within the United States. (Federal "possessions," such as Guam, Puerto Rico, etc., are considered "foreign" under the law.) This is the only list of "sources" in Part I of Subchapter N, or the regulations thereunder, which (as the regulations say) "determine the sources of income for purposes of the income tax."

Warning

Crager 34, once again you have misenterpreted a statute and a regulation.

Answer to Crager34

Crager34. Every time you argue a point, it proves your lack of legal or tax training and experience. You have a set idea, which is actually a political opinion, and you twist the law to agree with that opinion.

Here, in pertinent part, are the regulations that dispose of your argument. In essence they say that US citizens everywhere and resident aliens are liable for tax on all income from whatever source. Nonresident aliens are taxed by the US only on income received from “sources within the United States.” The Code section you talk about, Sec. 861, defines income from “sources within the United States. “ Thus, it is relevant only to nonresident aliens, NOT to US citizens or residents. I believe the only exception to that is that the concept is used in determining the amount of any foreign tax credit the US citizen or resident alien is entitled to.

Please stop wasting my time and please stop misleading people who are concerned about the tax. There are other sites that have forums full of people who believe as you do. Please go to one of those sites.

Treas Reg Sec. 1.1-1 (a) General rule.--(1) Section 1 of the Code imposes an income tax on the income of every individual who is a citizen or resident of the United States and, to the extent provided by section 871(b) or 877(b), on the income of a nonresident alien individual.

Treas Reg Sec. 1.1-1 (b) Citizens or residents of the United States liable to tax. In general, all citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States. Pursuant to section 876, a nonresident alien individual who is a bona fide resident of Puerto Rico during the entire taxable year is, except as provided in section 933 with respect to Puerto Rican source income, subject to taxation in the same manner as a resident alien individual. As to tax on nonresident alien individuals, see sections 871 and 877.

Treas Reg Sec. 1.871-1 (a) Classes of aliens. For purposes of the income tax, alien individuals are divided generally into two classes, namely, resident aliens and nonresident aliens. Resident alien individuals are, in general, taxable the same as citizens of the United States; that is, a resident alien is taxable on income derived from all sources, including sources without the United States. See §1.1-1(b). Nonresident alien individuals are taxable only on certain income from sources within the United States and on the income described in section 864(c)(4) from sources without the United States which is effectively connected for the taxable year with the conduct of a trade or business in the United States.

None of the "sources" apply to United States citizens who live and work exclusively within the United States. (Federal "possessions," such as Guam, Puerto Rico, etc., are considered foreign under the law.) This is the only list of "sources" in Part I of Subchapter N, or the regulations thereunder, which (as the regulations say) "determine the sources of income for purposes of the income tax."

26 USC Sec. 1 imposes the income tax on "taxable income."
26 USC Sec. 63 defines "taxable income" generally as "gross income" minus deductions.
26 USC Sec. 61 defines "gross income" generally as income "from whatever source derived."
26 USC Sec. 861-865, and related regulations, determine the taxable "sources of income."
26 CFR Sec. 1.861-8 show that the taxable "sources of income" apply only to those engaged in international or foreign commerce (including commerce within federal possessions).

Treas Reg Sec 1.1-1(a) & (b) doesn't define the income tax imposed on residents or citizens of the United States. What does?

If you feel I am wasting your time, then don't reply, otherwise....help me to understand it then.


[Edited by crager34 on 01-29-2001 at 11:52 PM]

For anyone who cares.

Loku's last point is exactly my point. The sections I quoted, and to quote loku "..is relevant only to nonresident aliens, NOT to US citizens or residents."

The Treasury Regulation do not specify what the Income Tax is for residents and citizens of the United States.

Last answer to Crager34

Below is an exerpt from what I said above. Try and understand it. Following that exerpt, I copies the pertinent code and regs. This is my last answer to this.

Here, in pertinent part, are the regulations that dispose of your argument. In essence they say that US citizens everywhere and resident aliens are liable for tax on all income from whatever source. Nonresident aliens are taxed by the US only on income received from “sources within the United States.” The Code section you talk about, Sec. 861, defines income from “sources within the United States. “ Thus, it is relevant only to nonresident aliens, NOT to US citizens or residents. I believe the only exception to that is that the concept is used in determining the amount of any foreign tax credit the US citizen or resident alien is entitled to.