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U.S. Federal Income Tax

Subjugation by taxation

All Income From Whatever Source Derived

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Internal Revenue Code
Sec. 61.

[G]ross income means all income from whatever source derived.

        "All income from whatever source derived" does NOT mean "all income from whatever source derived."

        Preposterous! Bunk! B.S.! Illogical! So you think emphatically as you read that sentence above... Nod your head in agreement. I know that is what I would think if I read such a sentence.

        However, stay with me and I will prove the statement.

        The phrase is found in IRC section 61(a):

Internal Revenue Code
Sec. 61. Gross income defined

(a) General definition
Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:

"Except as otherwise provided" clearly informs us that there are situations where the statement "All income from whatever source derived" is false. "Except as otherwise provided" negates or erases the word "All".

Next, IRC section 61(b) tells us:

Internal Revenue Code
Sec. 61. Gross income defined

(b) Cross references
For items specifically included in gross income, see part II
(sec. 71 and following). For items specifically excluded from
gross income, see part III (sec. 101 and following).

        If gross income means all income from whatever source derived, why would there be a need to specifically include certain items in gross income?

        Just as obvious, the exclusion of specific items also negates or erases the word "All".

        Even the Supreme Court weighs in on this issue:

Southern Pacific Co. v. Lowe , 247 U.S. 330 (1918)

We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 (Doyle v. Mitchell Brothers Co., and Hays v. Gauley Mountain Coal Co., the broad content on submitted in behalf of the government that all receipts-everything that comes in-are income within the proper definition of the term 'gross income,' and that the entire proceeds of a conversion of capital assets, in whatever form and under whatever circumstances accomplished, should be treated as gross income.

"All income from whatever source derived" does NOT mean "all income from whatever source derived."

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