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U.S. Federal Income Tax

Subjugation by taxation

Statutory Gross Income - 26 CFR 1.61-2

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        Compensation for services has its own regulation.

Code of Federal Regulations
From the U.S. Government Printing Office via GPO Access

Sec. 1.61-2  Compensation for services, including fees, commissions, and similar items.

(a) In general.
(1) [statutory] Wages, salaries, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses (including Christmas bonuses), termination or severance pay, rewards, jury fees, marriage fees and other contributions received by a clergyman for services, pay of persons in the military or naval forces of the United States, retired pay of employees, pensions, and retirement allowances are [statutory? generic? Constitutional?] income to the recipients unless excluded by law.

Several special rules apply to members of the Armed Forces, National Oceanic and Atmospheric Administration, and Public Health Service of the United States; see paragraph (b) of this section.

        This regulation clearly states that "compensation for services on the basis of a percentage of profits" is "income" to the recipient.  This is exactly correct.  As you have seen, "profit" is a "return on investment" and as such is "Constitutional income". 

        Wages is a statutorily defined term, as you will read in subsequent chapters.  If "compensation for services" included "wages", or "wages" included "compensation for services", both would not need to be listed as separate items.

        Were "wages" not statutorily defined elsewhere, construction of the paragraph would need to be examined.  Does "on the basis of a percentage of profits" mean; wages on the basis of a percentage of profits; salaries on the basis of a percentage of profits; commissions on the basis of a percentage of profits; as well as the aforementioned and noticed compensation for services on the basis of a percentage of profits?

       In any event, do you see "compensation for services" that are not based on a percentage of profit listed as being statutory gross income under this regulation?  I don't.

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