Dale R. Eastman
P.O. Box XXX
XXXXX, Wisconsin
XXXX-XXXX

        It is, and always has been, my intention to pay any bona fide tax I am bona fide liable for.
        It is, and always has been, my intention to submit returns on any bona fide tax I am bona fide liable for.
        I do not agree that I have any bona fide tax liability under Title 26, Subtitle A.
        Therefore,  I do not agree with the tax and penalties shown in the Form 4549 report.
        It is, and always has been, my intention to NEVER let any of my UNALIENABLE RIGHTS, as listed in the Declaration of Independence, and as protected by the Constitution of the United States, to be limited, diminished, or usurped by interlopers in any way, shape or form, Thus I reserve ALL my rights under the Constitution, including those given away by purported contract, when the loss of said rights was not clearly and succinctly noticed.

1.

-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 75 - CRIMES, OTHER OFFENSES, AND FORFEITURES
    Subchapter A - Crimes
    PART I - GENERAL PROVISIONS
 
-HEAD-
    Sec. 7214. Offenses by officers and employees of the United States
 
-STATUTE-
    (a) Unlawful acts of revenue officers or agents
      Any officer or employee of the United States acting in connection
    with any revenue law of the United States -
        (1) who is guilty of any extortion or willful oppression under
      color of law; or
        (2) who knowingly demands other or greater sums than are
      authorized by law, or receives any fee, compensation, or reward,
      except as by law prescribed, for the performance of any duty; or

        (7) who makes or signs any fraudulent entry in any book, or
      makes or signs any fraudulent certificate, return, or statement;
      or

    shall be dismissed from office or discharged from employment and,
    upon conviction thereof, shall be fined not more than $10,000, or
    imprisoned not more than 5 years, or both. 

    The court also shall render judgment against the said officer or
    employee for the amount of damages sustained in favor of the party
    injured, to be collected by execution.

Sincerely,



Dale R. Eastman

2.

3.

    Sec. 6001. Notice or regulations requiring records, statements, and
        special returns
 
-STATUTE-
      Every person liable for any tax imposed by this title, or for the
    collection thereof, shall keep such records, render such
    statements, make such returns, and comply with such rules and
    regulations as the Secretary may from time to time prescribe.
    Whenever in the judgment of the Secretary it is necessary, he may
    require any person, by notice served upon such person or by
    regulations, to make such returns, render such statements, or keep
    such records, as the Secretary deems sufficient to show whether or
    not such person is liable for tax under this title.  The only
    records which an employer shall be required to keep under this
    section in connection with charged tips shall be charge receipts,
    records necessary to comply with section 6053(c), and copies of
    statements furnished by employees under section 6053(a).

    Sec. 6011. General requirement of return, statement, or list
 
-STATUTE-
    (a) General rule
      When required by regulations prescribed by the Secretary any
    person made liable for any tax imposed by this title, or with
    respect to the collection thereof, shall make a return or statement
    according to the forms and regulations prescribed by the Secretary.
    Every person required to make a return or statement shall include
    therein the information required by such forms or regulations.

    Sec. 1461. Liability for withheld tax
 
-STATUTE-
      Every person required to deduct and withhold any tax under this
    chapter is hereby made liable for such tax and is hereby
    indemnified against the claims and demands of any person for the
    amount of any payments made in accordance with the provisions of
    this chapter.

        Sec. 6012. Persons required to make returns of income
 
-STATUTE-
    (a) General rule
      Returns with respect to income taxes under subtitle A shall be
    made by the following:
        (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 -

Sec. 1.6012-1  Individuals required to make returns of income.

    (a) Individual citizen or resident--(1) In general. Except as
provided in subparagraph (2) of this paragraph, an income tax return
must be filed by every individual for each taxable year beginning before
January 1, 1973, during which he receives $600 or more of gross income,
and for each taxable year beginning after December 31, 1972, during
which he receives $750 or more of gross income, if such individual is:
    (i) A citizen of the United States, whether residing at home or
abroad,
    (6) Form of return. Form 1040 is prescribed for general use in
making the return required under this paragraph.

We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 (Doyle, Collector, v. Mitchell Brothers Co., 247 U.S. 179 , 38 Sup. Ct. 467, 62 L. Ed. --, and Hays, Collector, v. Gauley Mountain Coal Co., 247 U.S. 189 , 38 Sup. Ct. 470, 62 L. Ed. --,

4.

decided May 20, 1918), 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..
Southern Pacific V. Lowe, 247 U.S. 330 (1918)

'From whatever source derived,' as it is written in the Sixteenth Amendment, does not mean from whatever source derived. Evans v. Gore, 253 U.S. 245 , 40 S.Ct. 550, 11 A.L.R. 519. See, also, Robertson v. Baldwin, 165 U.S. 275, 281 , 282 S., 17 S.Ct. 326; Gompers v. United States, 233 U.S. 604, 610 , 34 S.Ct. 693, Ann.Cas.1915D, 1044; Bain Peanut Co. v. Pinson, 282 U.S. 499, 501 , 51 S.Ct. 228, 229; United States v. Lefkowitz, 285 U.S. 452, 467 , 52 S.Ct. 420, 424, 82 A.L.R. 775.
WRIGHT v. UNITED STATES, 302 U.S. 583 (1938)

    26 USC Sec. 61                                             01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter B - Computation of Taxable Income
    PART I - DEFINITION OF GROSS INCOME, ADJUSTED GROSS INCOME, TAXABLE
         INCOME, ETC.
 
-HEAD-
    Sec. 61. Gross income defined
 
-STATUTE-
    (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).

    Sec. 61. Gross income defined
 
-STATUTE-
    (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:

[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.861-1]

[Page 119-120]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.861-1  Income from sources within the United States.

    (a) Categories of income. Part I (section 861 and following),
subchapter N, chapter 1 of the Code, and the regulations thereunder
determine the sources of income for purposes of the income tax.

5.

[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.861-8]

[Page 135-162]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.861-8  Computation of taxable income from sources within
the United States and from other sources and activities.

    (a) In general--(1) Scope. Sections 861(b) and 863(a) state in
general terms how to determine taxable income of a taxpayer from sources
within the United States after gross income from sources within the
United States has been determined…
The rules contained in this section apply in determining taxable
income of the taxpayer from specific sources and activities
under other sections of the Code, referred to in this section as
operative sections.

See paragraph (f)(1) of this section for a list and description of
operative sections.

[Code of Federal Regulations]
[Title 26, Volume 9, Parts 1.851 to 1.907]
[Revised as of April 1, 1998]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.862-1]

[Page 250-251]
 
                       TITLE 26--INTERNAL REVENUE
 
CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED)
 
Sec. 1.862-1  Income specifically from sources without the United States.
    (b) Taxable income. The taxable income from sources without the
United States, in the case of the items of gross income specified in
paragraph (a) of this section, shall be determined on the same basis as
that used in Sec. 1.861-8 for determining the taxable income from
sources within the United States.



[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.863-1]

[Page 262-266]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.863-1  Allocation of gross income under section 863(a).
    (c) Determination of taxable income. The taxpayer's taxable income
from sources within or without the United States will be determined
under the rules of Secs. 1.861-8 through 1.861-14T for determining
taxable income from sources within the United States.

6.

    26 USC Sec. 6651                                          01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 68 - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS,
               AND ASSESSABLE PENALTIES
    Subchapter A - Additions to the Tax and Additional Amounts
    PART I - GENERAL PROVISIONS
 
-HEAD-
    Sec. 6651. Failure to file tax return or to pay tax
 
-STATUTE-
    (a) Addition to the tax
      In case of failure -
        (2) to pay the amount shown on tax on any return specified in
      paragraph (1) on or before the date prescribed for payment of
      such tax (determined with regard to any extension of time for
      payment), unless it is shown that such failure is due to
      reasonable cause and not due to willful neglect,

    26 USC Sec. 6651                                          01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 68 - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES
    Subchapter A - Additions to the Tax and Additional Amounts
    PART I - GENERAL PROVISIONS
 
-HEAD-
    Sec. 6651. Failure to file tax return or to pay tax
 
-STATUTE-
    (a) Addition to the tax
      In case of failure -
        (1) to file any return required under authority of subchapter A
      of chapter 61 (other than part III thereof),

7.

“Consent to Assessment and Collection - I do not wish to exercise my appeal rights with the Internal Revenue Service or to contest in the United States Tax Court the findings of this report.  Therefore,  I give my consent to the immediate assessment and collection of any increase in tax and penalties, and accept any decrease in tax and penalties shown above, plus additional interest as provided by law.  It is understood that this report is subject to acceptance by the Area Director, Area Manager or Director of Field Operations.”

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 79 - DEFINITIONS
 
-HEAD-
    Sec. 7701. Definitions
 
-STATUTE-
      (a) When used in this title, where not otherwise distinctly
    expressed or manifestly incompatible with the intent thereof -
      (14) Taxpayer
        The term ''taxpayer'' means any person subject to any internal
      revenue tax.

"The revenue laws are a code or system in regulation of tax assessment and collection. They relate to taxpayers, and not to nontaxpayers. The latter are without their scope. No procedure is prescribed for nontaxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. With them [nontaxpayers] Congress does not assume to deal, and they are neither of the subject nor of the object of the revenue laws". [emphasis added]
Economy Plumbing and Heating Co. v. United States, 470 F. 2d 585 (1972)
Quoted as found at http://www.originalintent.org/edu/fedincometax.php

    26 USC Sec. 6203                                        01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 63 - ASSESSMENT
    Subchapter A - In General
 
-HEAD-
    Sec. 6203. Method of assessment
 
-STATUTE-
      The assessment shall be made by recording the liability of the
    taxpayer in the office of the Secretary in accordance with rules or
    regulations prescribed by the Secretary. Upon request of the
    taxpayer, the Secretary shall furnish the taxpayer a copy of the
    record of the assessment.

    26 USC Sec. 6201                                        01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 63 - ASSESSMENT
    Subchapter A - In General
 
-HEAD-
    Sec. 6201. Assessment authority
 
-STATUTE-
    (a) Authority of Secretary
      The Secretary is authorized and required to make the inquiries,
    determinations, and assessments of all taxes (including interest,

8.

    additional amounts, additions to the tax, and assessable penalties)
    imposed by this title, or accruing under any former internal
    revenue law, which have not been duly paid by stamp at the time and
    in the manner provided by law.  Such authority shall extend to and
    include the following:
      (1) Taxes shown on return
        The Secretary shall assess all taxes determined by the taxpayer
      or by the Secretary as to which returns or lists are made under
      this title.
      (2) Unpaid taxes payable by stamp

[Code of Federal Regulations]
[Title 26, Volume 17]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6201-1]

[Page 151-152]
 
                       TITLE 26--INTERNAL REVENUE
 
   CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY--
                               (Continued)
 
PART 301--PROCEDURE AND ADMINISTRATION--Table of Contents
 
Sec. 301.6201-1  Assessment authority.

    (a) In general. The district director is authorized and required to
make all inquiries necessary to the determination and assessment of all
taxes imposed by the Internal Revenue Code of 1954 or any prior internal
revenue law. The district director is further authorized and required,
and the director of the regional service center is authorized, to make
the determinations and the assessments of such taxes. However, certain
inquiries and determinations are, by direction of the Commissioner, made
by other officials, such as assistant regional commissioners. The term
``taxes'' includes interest, additional amounts, additions to the taxes,
and assessable penalties. The authority of the district director and the
director of the regional service center to make assessments includes the
following:

    (1) Taxes shown on return. The district director or the director of
the regional service center shall assess all taxes determined by the
taxpayer or by the district director or the director of the regional
service center and disclosed on a return or list.

    (2) Unpaid taxes payable by stamp. (i) If without the use of the
proper stamp:

    (a) Any article upon which a tax is required to be paid by means of
a stamp is sold or removed for sale or use by the manufacturer thereof,
or
    (b) Any transaction or act upon which a tax is required to be paid
by means of a stamp occurs;

The district director, upon such information as he can obtain, must
estimate the amount of the tax which has not been paid and the district
director or the director of the regional service center must make
assessment therefor upon the person the district director determines to
be liable for the tax. However, the district director or the director of
the regional service center may not assess any tax which is payable by
stamp unless the taxpayer fails to pay such tax at the time and in the
manner provided by law or regulations.

We must reject in this case, as we have rejected in cases arising under the Corporation Excise Tax Act of 1909 (Doyle, Collector, v. Mitchell Brothers Co., 247 U.S. 179 , 38 Sup. Ct. 467, 62 L. Ed. --, and Hays, Collector, v. Gauley Mountain Coal Co., 247 U.S. 189 , 38 Sup. Ct. 470, 62 L. Ed. --, decided May 20, 1918), 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..
Southern Pacific V. Lowe, 247 U.S. 330 (1918)

'From whatever source derived,' as it is written in the Sixteenth Amendment, does not mean from whatever source derived. Evans v. Gore, 253 U.S. 245 , 40 S.Ct. 550, 11 A.L.R. 519. See, also, Robertson v. Baldwin, 165 U.S. 275, 281 , 282 S., 17 S.Ct. 326; Gompers v. United States, 233

9.

U.S. 604, 610 , 34 S.Ct. 693, Ann.Cas.1915D, 1044; Bain Peanut Co. v. Pinson, 282 U.S. 499, 501 , 51 S.Ct. 228, 229; United States v. Lefkowitz, 285 U.S. 452, 467 , 52 S.Ct. 420, 424, 82 A.L.R. 775.
WRIGHT v. UNITED STATES, 302 U.S. 583 (1938)

    TITLE 44 - PUBLIC PRINTING AND DOCUMENTS
    CHAPTER 35 - COORDINATION OF FEDERAL INFORMATION POLICY
    SUBCHAPTER I - FEDERAL INFORMATION POLICY
 
-HEAD-
    Sec. 3512. Public protection
 
-STATUTE-
      (a) Notwithstanding any other provision of law, no person shall
    be subject to any penalty for failing to comply with a collection
    of information that is subject to this subchapter if -
        (1) the collection of information does not display a valid
      control number assigned by the Director in accordance with this
      subchapter; or
        (2) the agency fails to inform the person who is to respond to
      the collection of information that such person is not required to
      respond to the collection of information unless it displays a
      valid control number.
      (b) The protection provided by this section may be raised in the
    form of a complete defense, bar, or otherwise at any time during
    the agency administrative process or judicial action applicable
    thereto.

Privacy Act and Paperwork Reduction Act Notice. We ask
for the information on these forms to carry out the Internal
Revenue laws of the United States. You are required to give us
the information. We need it to figure and collect the right
amount of tax.

Sections 220(h), 408, 408A, 529, 530, 6041, 6041A, 6042,
6043, 6044, 6045, 6047, 6049, 6050A, 6050B, 6050D, 6050E,
6050H, 6050J, 6050N, 6050P, 6050Q, 6050R, 6050S, 6050T
and their regulations require you to file an information return
with the IRS and furnish a statement to recipients. Section 6109
and its regulations require you to provide your taxpayer
identification number on what you file.

Routine uses of this information include giving it to the
Department of Justice for civil and criminal litigation, and to
cities, states, and the District of Columbia for use in
administering their tax laws. We may also disclose this
information to Federal and state agencies to enforce Federal
withholding nontax criminal laws and to combat terrorism.
If you fail to provide this information in a timely manner,
you may be subject to penalties.

You are not required to provide the information requested on
a form that is subject to the Paperwork Reduction Act unless
the form displays a valid OMB control number. Books or
records relating to a form or its instructions must be retained as
long as their contents may become material in the
administration of any Internal Revenue law. Generally, tax
and simple returns and return information are confidential, as required by
section 6103.

10.

    26 USC Sec. 6109                                         01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 61 - INFORMATION AND RETURNS
    Subchapter B - Miscellaneous Provisions
 
-HEAD-
    Sec. 6109. Identifying numbers
 
-STATUTE-
    (a) Supplying of identifying numbers
      When required by regulations prescribed by the Secretary:
      (1) Inclusion in returns
        Any person required under the authority of this title to make a
      return, statement, or other document shall include in such
      return, statement, or other document such identifying number as
      may be prescribed for securing proper identification of such
      person.
      (2) Furnishing number to other persons
        Any person with respect to whom a return, statement, or other
      document is required under the authority of this title to be made
      by another person or whose identifying number is required to be
      shown on a return of another person shall furnish to such other
      person such identifying number as may be prescribed for securing
      his proper identification.
      (3) Furnishing number of another person
        Any person required under the authority of this title to make a
      return, statement, or other document with respect to another
      person shall request from such other person, and shall include in
      any such return, statement, or other document, such identifying
      number as may be prescribed for securing proper identification of
      such other person.

[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6109-1]

[Page 83-90]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
                               (CONTINUED)
 
Sec. 301.6109-1  Identifying numbers.   
(c) Requirement to furnish another's number. Every person required
under this title to make a return, statement, or other document must
furnish such taxpayer identifying numbers of other U.S. persons and
foreign persons that are described in paragraph (b)(2)(i), (ii), (iii),
or (vi) of this section as required by the forms and the accompanying
instructions.

11.

The taxpayer identifying number of any person furnishing a withholding certificate referred to in paragraph (b)(2)(vi) of this section shall also be furnished if it is actually known to the person making a return, statement, or other document described in this paragraph (c).

    If the person making the return, statement, or other document does not know the taxpayer identifying number of the other person, and such other person is one that is described in paragraph (b)(2)(i), (ii), (iii), or (vi) of this section, such person must request the other person's number.

The request should state that the identifying number is required to be furnished under authority of law.

When the person making the return, statement, or other document does not
know the number of the other person, and has complied with the request
provision of this paragraph (c), such person must sign an affidavit on
the transmittal document forwarding such returns, statements, or other
documents to the Internal Revenue Service, so stating.

A person required to file a taxpayer identifying number shall correct any errors in such filing when such person's attention has been drawn to them.

Sec. 301.6109-1  Identifying numbers.   
    (b) Requirement to furnish one's own number--
    (2) Foreign persons.

The provisions of paragraph (b)(1) of this
section regarding the furnishing of one's own number shall apply to the
following foreign persons--

    (i) A foreign person that has income effectively connected with the
conduct of a U.S. trade or business at any time during the taxable year;

    (ii) A foreign person that has a U.S. office or place of business or
a U.S. fiscal or paying agent at any time during the taxable year;

    (iii) A nonresident alien treated as a resident under section
6013(g) or (h);

    (vi) A foreign person that furnishes a withholding certificate
described in Sec. 1.1441-1(e)(2) or (3) of this chapter or Sec. 1.1441-
5(c)(2)(iv) or (3)(iii) of this chapter to the extent required under
Sec. 1.1441-1(e)(4)(vii) of this chapter.

   TITLE 26 - INTERNAL REVENUE CODE
   Subtitle F - Procedure and Administration

12.

   CHAPTER 79 - DEFINITIONS
 
-HEAD-
    Sec. 7701. Definitions
 
-STATUTE-
    (c) Includes and including
  The terms ''includes'' and ''including'' when used in a definition  contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.

Sec. 7701. Definitions
     (c) Includes and including
  The terms ''includes'' and ''including'' when used in a definition  contained in this title shall not be deemed to exclude other things otherwise within the plain meaning of the word as defined in a dictionary.

Noscitur a sociis
"The ancient and well known maxim noscitur a sociis, literally "it is known from its associates," is a common sense aid to the construction of doubtful language. Its effect is that the meaning of a word or phrase which may be obscure or doubtful when considered in isolation may be clarified or ascertained by reference to those words or phrases with which it is associated. It simply means that, taken in context, a word may have a broader or narrower meaning than it might have if used alone.

Expressio unius est exclusio alterius
One of the linguistic canons applicable to the construction of legislation.  By expressing one thing is [by implication] to exclude another. There is no room for the application of this principle where some reason other than the intention to exclude certain items exists for the express mention in question. Thus what is said may be intended merely as an example or be included for abundance of caution or for some other reason; or the thing supposed to have been impliedly excluded may not have existed at the passing of the enactment.

A principle in statutory construction: when one or more things of a class are expressly mentioned others of the same class are excluded.

The expression of one (specific) thing is the exclusion of another.   
 
Ejusdem generis
(eh-youse-dem generous) v adj. Latin for "of the same kind," used to interpret loosely written statutes. Where a law lists specific classes of persons or things and then refers to them in general, the general statements only apply to the same kind of persons or things specifically listed. Example: if a law refers to automobiles, trucks, tractors, motorcycles and other motor-powered vehicles, "vehicles" would not include airplanes, since the list was of land-based transportation.

  13.

    26 USC Sec. 6041                                           01/22/02
 
-EXPCITE-
    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 61 - INFORMATION AND RETURNS
    Subchapter A - Returns and Records
    PART III - INFORMATION RETURNS
    Subpart B - Information Concerning Transactions With Other Persons
 
-HEAD-
    Sec. 6041. Information at source
 
-STATUTE-
    (a) Payments of $600 or more
      All persons engaged in a trade or business and making payment in
    the course of such trade or business to another person, of rent,
    salaries, wages, premiums, annuities, compensations, remunerations,
    emoluments, or other fixed or determinable gains, profits, and
    income (other than payments to which section 6042(a)(1),
    6044(a)(1), 6047(e), 6049(a), or 6050N(a) applies, and other than
    payments with respect to which a statement is required under the
    authority of section 6042(a)(2), 6044(a)(2), or 6045), or $600 or
    more in any taxable year, or, in the case of such payments made by
    the United States, the officers or employees of the United States
    having information as to such payments and required to make returns
    in regard thereto by the regulations hereinafter provided for,
    shall render a true and accurate return to the Secretary, under
    such regulations and in such form and manner and to such extent as
    may be prescribed by the Secretary, setting forth the amount of
    such gains, profits, and income, and the name and address of the
    recipient of such payment.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 79 - DEFINITIONS
 
-HEAD-
    Sec. 7701. Definitions
 
-STATUTE-
      (a) When used in this title, where not otherwise distinctly
    expressed or manifestly incompatible with the intent thereof -
      (26) Trade or business
        The term ''trade or business'' includes the performance of the
      functions of a public office.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 2 - TAX ON SELF-EMPLOYMENT INCOME
 
-HEAD-
    Sec. 1402. Definitions
 
-STATUTE-
    (a) Net earnings from self-employment
      The term ''net earnings from self-employment'' means the gross
    income derived by an individual from any trade or business carried
    on by such individual, less the deductions allowed by this subtitle
    which are attributable to such trade or business…
    (c) Trade or business
      The term ''trade or business'', when used with reference to
    self-employment income or net earnings from self-employment, shall
    have the same meaning as when used in section 162 (relating to
    trade or business expenses), except that such term shall not
    include -
        (1) the performance of the functions of a public office, other
      than the functions of a public office of a State or a political
      subdivision thereof…

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 64 - COLLECTION
    Subchapter D - Seizure of Property for Collection of Taxes

14.

    PART II - LEVY
 
-HEAD-
    Sec. 6331. Levy and distraint
 
-STATUTE-
   (b) Seizure and sale of property
      The term ''levy'' as used in this title includes the power of
    distraint and seizure by any means.  Except as otherwise provided
    in subsection (e), a levy shall extend only to property possessed
    and obligations existing at the time thereof.  In any case in which
    the Secretary may levy upon property or rights to property, he may
    seize and sell such property or rights to property (whether real or
    personal, tangible or intangible).

 In the interpretation of statutes levying taxes it is the
established rule not to extend their provisions, by implication,
beyond the clear import of the language used, or to enlarge
their operations so as to embrace matters not specifically
pointed out. In case of doubt they are construed most strongly
against the government, and in favor of the citizen. United
States v. Wigglesworth, 2 Story, 369, Fed. Cas. No. 16,690;
American Net & Twine Co. v. Worthington, 141 U.S. 468, 474 , 12
S. Sup. Ct. 55; Benziger v. United States, 192 U.S. 38, 55 , 24
S. Sup. Ct. 189.
GOULD v. GOULD , 245 U.S. 151 (1917)

    Sec. 6331. Levy and distraint
    (a) Authority of Secretary
      If any person liable to pay any tax neglects or refuses to pay
    the same within 10 days after notice and demand, it shall be lawful
    for the Secretary to collect such tax (and such further sum as
    shall be sufficient to cover the expenses of the levy) by levy upon
    all property and rights to property (except such property as is
    exempt under section 6334) belonging to such person or on which
    there is a lien provided in this chapter for the payment of such
    tax.  Levy may be made upon the accrued salary or wages of any
    officer, employee, or elected official, of the United States, the
    District of Columbia, or any agency or instrumentality of the
    United States or the District of Columbia, by serving a notice of
    levy on the employer (as defined in section 3401(d)) of such
    officer, employee, or elected official.

    Sec. 3401. Definitions
    (c) Employee
      For purposes of this chapter, the term ''employee'' includes an
    officer, employee, or elected official of the United States, a
    State, or any political subdivision thereof, or the District of
    Columbia, or any agency or instrumentality of any one or more of
    the foregoing.  The term ''employee'' also includes an officer of a
    corporation.

Amendment VII
In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.

Amendment VI
In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have

15.

compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 64 - COLLECTION
    Subchapter C - Lien for Taxes
    PART II - LIENS
 
-HEAD-
    Sec. 6321. Lien for taxes
 
-STATUTE-
      If any person liable to pay any tax neglects or refuses to pay
    the same after demand, the amount (including any interest,
    additional amount, addition to tax, or assessable penalty, together
    with any costs that may accrue in addition thereto) shall be a lien
    in favor of the United States upon all property and rights to
    property, whether real or personal, belonging to such person.

More Issues

        TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 75 - CRIMES, OTHER OFFENSES, AND FORFEITURES
    Subchapter A - Crimes
    PART I - GENERAL PROVISIONS
 
-HEAD-
    Sec. 7203. Willful failure to file return, supply information, or
        pay tax
 
-STATUTE-
      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.  In
    the case of a willful violation of any provision of section 6050I,
    the first sentence of this section shall be applied by substituting
    ''felony'' for ''misdemeanor'' and ''5 years'' for ''1 year''.

A good-faith misunderstanding of the law or a good-faith belief that one is not violating the law negates willfulness, whether or not the claimed belief or misunderstanding is objectively reasonable.

Statutory willfulness, which protects the average citizen from prosecution for innocent mistakes made due to the complexity of the tax laws, is the voluntary, intentional violation of a known legal duty.

Characterizing a belief as objectively unreasonable [*] transforms what is normally a factual inquiry into a legal one, thus preventing a jury from considering it. And forbidding a jury to consider evidence that might negate willfulness would raise a serious question under the Sixth Amendment's jury trial provision, which this interpretation of the statute avoids.
CHEEK v. UNITED STATES, 498 U.S. 192 (1991)
[* or frivolous]

16.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle F - Procedure and Administration
    CHAPTER 75 - CRIMES, OTHER OFFENSES, AND
                                FORFEITURES
    Subchapter D - Miscellaneous Penalty and Forfeiture Provisions
 
-HEAD-
    Sec. 7343. Definition of term ''person''
 
-STATUTE-
      The term ''person'' as used in this chapter includes an officer
    or employee of a corporation, or a member or employee of a
    partnership, who as such officer, employee, or member is under a
    duty to perform the act in respect of which the violation occurs.

That the terms of a penal statute creating a new offense must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties is a well- recognized requirement, consonant alike with ordinary notions of fair play and the settled rules of law; and a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process of law. International Harvester Co. v. Kentucky, 234 U.S. 216, 221 , 34 S. Ct. 853; Collins v. Kentucky, 234 U.S. 634, 638 , 34 S. Ct. 924

The dividing line between what is lawful and unlawful cannot be left to conjecture. The citizen cannot be held to answer charges based upon penal statutes whose mandates are so uncertain that they will reasonably admit of different constructions. A criminal statute cannot rest upon an uncertain foundation. The crime, and the elements constituting it, must be so clearly expressed that the ordinary person can intelligently choose, in advance, what course it is lawful for him to pursue. Penal statutes prohibiting the doing of certain things, and providing a punishment for their violation, should not admit of such a double meaning that the citizen may act upon the one conception of its requirements and the courts upon another.'
CONNALLY v. GENERAL CONST. CO., 269 U.S. 385, 393 (1926)

 In the interpretation of statutes levying taxes it is the
established rule not to extend their provisions, by implication,
beyond the clear import of the language used, or to enlarge
their operations so as to embrace matters not specifically
pointed out. In case of doubt they are construed most strongly
against the government, and in favor of the citizen.
GOULD v. GOULD , 245 U.S. 151 (1917)

17.

1. The “tax” collected, the amount of "money" to be paid over to the U.S. Treasury.
2. The rate of tax imposed, to be used with the measure (#3) to calculate the “tax” (#1).
3. The thing measured, used with the rate of tax (#2) to create the amount of tax (#1).
4. The person liable, the one who must pay the tax (#1) to the treasury.
5. The "thing", the nexus of the tax. The excuse for the tax.
5a. The nexus may be an object or property.
5b. The nexus may be a privilege.
5c. The nexus may be an activity.
5c1. The activity may be one that is done by Privilege.
5c2. The activity may be one that is done by RIGHT.
5c3. The activity may be one that is done in contravention of a proscription.
6. What the tax money is to be spent on. (listed and ignored)

Sec. 6001
    Every person liable for any tax imposed by this title, or for the  
    collection thereof, shall keep such records, render such statements, 
    make such returns, and comply with such rules and regulations as the
    Secretary may from time to time prescribe.

Sec. 6151. Time and place for paying tax shown on returns
(a) General rule
    Except as otherwise provided in this subchapter, when a return of tax
    is required under this title or regulations, the person required to 
    make such return shall, without assessment or notice and demand from
    the Secretary, pay such tax to the internal revenue officer with whom
    the return is filed, and shall pay such tax at the time and place fixed
    for filing the return (determined without regard to any extension of
    time for filing the return).

Sec. 5007. Collection of tax on distilled spirits
(a) Tax on distilled spirits removed from bonded premises
    The tax on domestic distilled spirits and on distilled spirits
    removed from customs custody under section 5232 shall be paid in
    accordance with section 5061.
(b) Collection of tax on imported distilled spirits
    The internal revenue tax imposed by section 5001(a)(1) and (2)
    upon imported distilled spirits shall be collected by the Secretary
    and deposited as internal revenue collections, under such
    regulations as the Secretary may prescribe.

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

Sec. 5005. Persons liable for tax
(a) General
     The distiller or importer of distilled spirits shall be liable for the

18.

     taxes imposed thereon by section 5001(a)(1).
(b) Domestic distilled spirits
(1) Liability of persons interested in distilling
    Every proprietor or possessor of, and every person in any manner
    interested in the use of, any still, distilling apparatus, or
    distillery, shall be jointly and severally liable for the taxes imposed
    by law on the distilled spirits produced therefrom.

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

5a. The nexus may be an object or property.
5b. The nexus may be a privilege.
5c. The nexus may be an activity.
5c1. The activity may be one that is done by Privilege.
5c2. The activity may be one that is done by RIGHT.

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

No capitation, or other direct, tax shall be laid,
unless in proportion to the census or enumeration
herein before directed to be taken.

Sec. 5001.
(a) Rate of tax
(1) General
    There is hereby imposed on all distilled spirits produced in or
    imported into the United States a tax at the rate of $13.50 on
    each proof gallon and a proportionate tax at the like rate on all
    fractional parts of a proof gallon.

19.

TITLE 26 - INTERNAL REVENUE CODE
Subtitle E - Alcohol, Tobacco, and Certain Other Excise Taxes
CHAPTER 51 - DISTILLED SPIRITS, WINES, AND BEER
Subchapter A - Gallonage and Occupational Taxes
PART I - GALLONAGE TAXES
Subpart A - Distilled Spirits

TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter A - Determination of Tax Liability
PART I - TAX ON INDIVIDUALS

Sec. 6001
    Every person liable for any tax imposed by this title, or for the  
    collection thereof, shall keep such records, render such statements, 
    make such returns, and comply with such rules and regulations as the
    Secretary may from time to time prescribe.

Sec. 6151. Time and place for paying tax shown on returns
(a) General rule
    Except as otherwise provided in this subchapter, when a return of tax
    is required under this title or regulations, the person required to 
    make such return shall, without assessment or notice and demand from
    the Secretary, pay such tax to the internal revenue officer with whom
    the return is filed, and shall pay such tax at the time and place fixed
    for filing the return (determined without regard to any extension of
    time for filing the return).

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter A - Determination of Tax Liability
    PART I - TAX ON INDIVIDUALS
 
-HEAD-
    Sec. 1. Tax imposed
 
-STATUTE-
    (a) Married individuals filing joint returns and surviving spouses
      There is hereby imposed on the taxable income of -
    (b) Heads of households
      There is hereby imposed on the taxable income of
    (c) Unmarried individuals (other than surviving spouses and heads of 
        households)
      There is hereby imposed on the taxable income of
    (d) Married individuals filing separate returns
      There is hereby imposed on the taxable income of
    (e) Estates and trusts
      There is hereby imposed on the taxable income of -

a tax determined in accordance with the following table:

20.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 3 - WITHHOLDING OF TAX ON NONRESIDENT
                            ALIENS AND FOREIGN CORPORATIONS
    Subchapter B - Application of Withholding Provisions
 
-HEAD-
    Sec. 1461. Liability for withheld tax
 
-STATUTE-
      Every person required to deduct and withhold any tax under this
    chapter is hereby made liable for such tax and is hereby
    indemnified against the claims and demands of any person for the
    amount of any payments made in accordance with the provisions of
    this chapter.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter A - Determination of Tax Liability
    PART I - TAX ON INDIVIDUALS
 
-HEAD-
    Sec. 2. Definitions and special rules
    (d) Nonresident aliens
      In the case of a nonresident alien individual, the taxes imposed
    by sections 1 and 55 shall apply only as provided by section 871 or
    877.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter N - Tax Based on Income From Sources Within or Without
         the United States
    PART II - NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
    Subpart A - Nonresident Alien Individuals
 
-HEAD-
    Sec. 871. Tax on nonresident alien individuals
    (b) Income connected with United States business - graduated rate
        of tax
      (1) Imposition of tax
        A nonresident alien individual engaged in trade or business
      within the United States during the taxable year shall be taxable
      as provided in section 1 or 55 on his taxable income which is
      effectively connected with the conduct of a trade or business
      within the United States.

    TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter N - Tax Based on Income From Sources Within or Without
         the United States
    PART I - SOURCE RULES AND OTHER GENERAL RULES RELATING TO FOREIGN
         INCOME
 
-HEAD-
    Sec. 864. Definitions and special rules
    (b) Trade or business within the United States
      For purposes of this part, part II, and chapter 3, the term
    ''trade or business within the United States'' includes the
    performance of personal services within the United States at any
    time within the taxable year, but does not include -

21.

5. The "thing", the nexus of the tax. The excuse for the tax.
5a. The nexus may be an object or property.
5b. The nexus may be a privilege.
5c. The nexus may be an activity.
5c1. The activity may be one that is done by Privilege.
5c2. The activity may be one that is done by RIGHT.

Sec. 1. Tax imposed
(a) There is hereby imposed on the taxable income of -
(b) There is hereby imposed on the taxable income of
(c) There is hereby imposed on the taxable income of
(d) There is hereby imposed on the taxable income of
(e) There is hereby imposed on the taxable income of -

   TITLE 26 - INTERNAL REVENUE CODE
    Subtitle A - Income Taxes
    CHAPTER 1 - NORMAL TAXES AND SURTAXES
    Subchapter B - Computation of Taxable Income
    PART I - DEFINITION OF GROSS INCOME, ADJUSTED GROSS
                    INCOME, TAXABLE INCOME, ETC.
 
-HEAD-
    Sec. 63. Taxable income defined
 
-STATUTE-
    (a) In general
      Except as provided in subsection (b), for purposes of this
    subtitle, the term ''taxable income'' means gross income minus the
    deductions allowed by this chapter (other than the standard
    deduction).
    (b) Individuals who do not itemize their deductions
      In the case of an individual who does not elect to itemize his
    deductions for the taxable year, for purposes of this subtitle, the
    term ''taxable income'' means adjusted gross income, minus -
        (1) the standard deduction, and
        (2) the deduction for personal exemptions provided in section
      151.
    (c) Standard deduction
      For purposes of this subtitle -

22.

    Sec. 61. Gross income defined
 
-STATUTE-
    (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:

Article I, Section 8.
The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

Article I, Section 9.
No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken.

No tax or duty shall be laid on articles exported from any state.

The bill charged that the provisions in respect of said alleged income
tax incorporated in the act of congress were unconstitutional, null, and
void, in that the tax was a direct tax in respect of the real estate
held and owned by the company in its own right and in its fiduciary
capacity as aforesaid, by being imposed upon the rents, issues, and
profits of said real estate, and was likewise a direct tax in respect of
its personal property and the personal property held by it for others
for whom it acted in its fiduciary capacity as aforesaid, which direct
taxes were not, in and by said act, apportioned among the several
states, as required by section 9 of article 1 of the constitution; and
that, if the income tax so incorporated in the act of congress aforesaid
were held not to be a direct tax, nevertheless its provisions were
unconstitutional, null, and void, in that they were not uniform
throughout the United States, as required in and by section 8 of article
1 of the constitution of the United States, upon many grounds and in
many particulars specifically set forth.

The contention of the complainant is:

First. That the law in question, in imposing a tax on the income or
rents of real estate, imposes a tax upon the real estate itself; and in
imposing a tax on the interest or other income of bonds or other
personal property, held for the purposes of income or ordinarily
yielding income, imposes a tax upon the personal estate itself; that
such tax is a direct tax, and void because imposed without regard to the
rule of apportionment; and that by reason thereof the whole law is
invalidated.

23.

And although there have been, from time to time, intimations that there
might be some tax which was not a direct tax, nor included under the
words 'duties, imports, and excises,' such a tax, for more than 100
years of national existence, has as yet remained undiscovered,
notwithstanding the stress of particular circumstances has invited
thorough investigation into sources of revenue. [157 U.S. 429, 558] 
The first question to be considered is whether a tax on the rents or
income of real estate is a direct tax within the meaning of the
constitution. Ordinarily, all taxes paid primarily by persons who can
shift the burden upon some one else, or who are under no legal
compulsion to pay them, are considered indirect taxes; but a tax upon
property holders in respect of their estates, whether real or personal,
or of the income yielded by such estates, and the payment of which
cannot be avoided, are direct taxes. Nevertheless, it may be admitted
that, although this definition of direct taxes is prima facie correct,
and to be applied in the consideration of the question before us, yet
the constitution may bear a different meaning, and that such different
meaning must be recognized. But in arriving at any conclusion upon this
point we are at liberty to refer to the historical circumstances
attending the framing and adoption of the constitution, as well as the
entire frame and scheme of the instrument, and the consequences
naturally attendant upon the one construction or the other.

The real question is, is there any basis upon which to rest the contention
that real estate belongs to one of the two great classes of taxes, and
the rent or income which is the incident of its ownership belongs to the
other? We are unable to perceive any ground for the alleged distinction.
An annual tax upon the annual value or annual user of real estate
appears to us the same in substance as an annual tax on the real estate,
which would be paid out of the rent or income. This law taxes the income
received from land and the growth or produce of the land. Mr. Justice
Paterson observed in Hylton's Case, 'land, independently of its produce,
is of no value,' and certainly had no thought that direct taxes were
confined to unproductive land.

The result is that the decree of the circuit court is reversed and the
cause remanded, with directions to enter a decree in favor of the
complainant in respect only of the voluntary payment of the tax on the
rents and income of the real estate of the defendant company, and of
that which it holds in trust, and on the income from the municipal bonds
owned or so held by it.

Before coming, however, to the text of the Amendment, to the end that its significance may be determined in the light of the previous legislative and judicial history of the subject with which the Amendment is concerned, and with a knowledge of the conditions which presumptively led up to its adoption, and hence of the purpose it was intended to accomplish, we make a brief statement on those subjects.

[I]n 1894... an act was passed laying a tax on incomes from all classes of property and other sources of revenue which was not apportioned, and which therefore was of course assumed to come within the classification of

24.

excises, duties, and imposts which were subject to the rule of uniformity, but not to the rule of apportionment.

The constitutional validity of this law was challenged on the ground that it did not fall within the class of excises, duties, and imposts, [240 U.S. 1, 16]   but was direct in the constitutional sense, and was therefore void for want of apportionment, and that question came to this court and was passed upon in Pollock v. Farmers' Loan

The court, fully recognizing in the passage which we have previously quoted the all embracing character of the two great classifications, including, on the one hand, direct taxes subject to apportionment, and on the other, excises, duties, and imposts subject to uniformity, held the law to be unconstitutional in substance for these reasons:

    Concluding that the classification of direct was adopted for the purpose of rendering it impossible to burden by taxation accumulations of property, real or personal, except subject to the regulation of apportionment, it was held that the duty existed to fix what was a direct tax in the constitutional sense so as to accomplish this purpose contemplated by the Constitution. ( 157 U.S. 581 .)

Coming to consider the validity of the tax from this point of view, while not questioning at all that in common understanding it was direct merely on income and only indirect on property, it was held that, considering the substance of things, it was direct on property in a constitutional sense, since to burden an income by a tax was, from the point of substance, to burden the property from which the income was derived, and thus accomplish the very thing which the provision as to apportionment of direct taxes was adopted to prevent.

Moreover, in addition, the conclusion reached in the Pollock Case did not in any degree involve holding that income taxes generically and necessarily came within the class [240 U.S. 1, 17]   of direct taxes on property, but, on the contrary, recognized the fact that taxation on income was in its nature an excise entitled to be enforced as such unless and until it was concluded that to enforce it would amount to accomplishing the result which the requirement as to apportionment of direct taxation was adopted to prevent, in which case the duty would arise to disregard form and consider substance alone, and hence subject the tax to the regulation as to apportionment which otherwise as an excise would not apply to it.

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.

This tax, it is expressly stated, is to be equivalent to 1 per centum of the entire net income over and above $5,000 received from all sources during the year,-this is the measure of the tax explicitly adopted by the statute. The income is not limited to such as is received from property used in the business, strictly speaking, but is expressly declared to be upon the entire net income above $5,000 from all sources, excluding the amounts received as dividends on stock in other corporations, joint stock companies or associations, or insurance companies also subject to the tax. In other words, the tax is imposed upon the doing of business of the character described, and the measure of the tax is to be income, with the deduction stated, received not only from property used in business, but from every source.

25.

And in the same connection the chief justice, delivering the opinion of the court in Thomas v. United States, 192 U.S. 363 , 48 L. ed. 481, 24 Sup. Ct. Rep. 305, in speaking of the words 'duties,' 'imposts,' and 'excises,' said:

      'We think that they were used comprehensively, to cover customs and excise duties imposed on importation, consumption, manufacture, and sale of certain commodities, privileges, particular business transactions, vocations, occupations, and the like.'

Duties and imposts are terms commonly applied to levies made by governments on the importation or exportation of commodities. Excises are 'taxes laid upon the manufacture, sale, or consumption of commodities within the country, upon licenses to pursue certain occupations, and upon corporate privileges.' Cooley, Const. Lim. 7th ed. 680.

The tax under consideration, as we have construed the statute, may be described as an excise upon the particular privilege of doing business in a corporate capacity, i.e., with the advantages which arise from corporate or quasi corporate organization; or, when applied to insurance companies, for doing the business of such companies. As was said in the Thomas Case, 192 U. S. supra, the requirement to pay such taxes involves the exercise of [220 U.S. 107, 152]   privileges, and the element of absolute and unavoidable demand is lacking. If business is not done in the manner described in the statute, no tax is payable.

The thing taxed is not the mere dealing in merchandise, in which the actual transactions may be the same, whether conducted by individuals or corporations, [220 U.S. 107, 162]   but  the tax is laid upon the privileges which exist  in conducting business with the advantages which inhere in the corporate capacity of those taxed, and which are not enjoyed by private firms or individuals. These advantages are obvious, and have led to the formation of such companies in nearly all branches of trade.

The continuity of the business, without interruption by death or dissolution, the transfer of property interests by the disposition of shares of stock, the advantages of business controlled and managed by corporate directors, the general absence of individual liability, these and other things inhere in the advantages of business thus conducted, which do not exist when the same business is conducted by private individuals or partnerships. It is this distinctive privilege which is the subject of taxation, not the mere buying or selling or handling of goods, which may be the same, whether done by corporations or individuals.

      'Considering that the constitutional rule of apportionment had its origin in the purpose to prevent taxes on persons solely because of their general ownership of property from being levied by any other rule than that of apportionment, two things were decided by the court: First, that no sound distinction existed between a tax levied on a person solely because of his general ownership of real property, and the same tax imposed solely because of his general ownership of personal property. Secondly, that the [220 U.S. 107, 150]   tax on the income derived from such property, real or personal, was the legal equivalent of a direct tax on the property from which said income was derived, and hence must be apportioned.

26.

But when a company is digging pits, sinking shafts, tunneling, drifting, stoping, drilling, blasting, and hoisting ores, it is employing capital and labor in transmuting a part of the realty into personalty, and putting it into marketable form. The very process of mining is, in a sense, equivalent in its results to a manufacturing process. And, however the operation shall be described, the transaction is indubitably 'business' within the fair meaning of the act of 1909; and the gains derived from it are properly and strictly the income from that business; for 'income' may be defined as the gain derived from capital, from labor, or from both combined, and here we have combined operations of capital and labor.

As to what should be deemed 'income' within the meaning of 38, it of course need not be such an income as would have been taxable as such, for at that time (the 16th Amendment not having been as yet ratified) income was not taxable as such by Congress without apportionment according to population, and this tax was not so apportioned.

Evidently Congress adopted the income as the measure of the tax to be imposed with respect to the doing of business in corporate form because it desired that the excise should be imposed, approximately at least, with regard to the amount of benefit presumably derived by such corporations from the current operations of the government.

In Flint v. Stone Tracy Co.… it was held that Congress, in exercising the right to tax a legitimate subject of taxation as a franchise [231 U.S. 399, 417]   or privilege, was not debarred by the Constitution from measuring the taxation by the total income, although derived in part from property which, considered by itself, was not taxable. It was reasonable that Congress should fix upon gross income, without distinction as to source, as a convenient and sufficiently accurate index of the importance of the business transacted.

… [O]n the contrary shows that it was drawn with the object of maintaining the limitations of the Constitution and harmonizing their operation.

We say this because it is to be observed that although from the date of the Hylton Case, because of statements made in the opinions in that case, it had come to be accepted that direct taxes in the constitutional sense were confined to taxes levied directly on real estate because of its ownership, the Amendment contains nothing repudiation or challenging the ruling in the Pollock Case that the word 'direct' had a broader significance, since it embraced also taxes levied directly on personal property because of its ownership, and therefore the Amendment at least impliedly makes such wider significance a part of the Constitution…

We are of opinion, however, [240 U.S. 1, 11]   that the confusion is not inherent, but rather arises from the conclusion that the 16th Amendment provides for a hitherto unknown power of taxation; that is, a power to levy an income tax which, although direct, should not be subject to the regulation of apportionment applicable to all other direct taxes.

And the far-reaching effect of this erroneous assumption will be made clear by generalizing the many contentions advanced in argument to support it, as follows:

But it clearly results that the proposition [*] and the contentions [240 U.S. 1, 12]   under it, if acceded to, would cause one provision of the Constitution to destroy another; that is, they would result in bringing the provisions of the Amendment exempting a direct tax from apportionment into irreconcilable conflict with the general requirement that all direct taxes

27.

be apportioned.
                [*] The erroneous assumption from above.

Moreover, the tax authorized by the Amendment, being direct, would not come under the rule of uniformity applicable under the Constitution to other than direct taxes, and thus it would come to pass that the result of the Amendment would be to authorize a particular direct tax not subject either to apportionment or to the rule of geographical uniformity, thus giving power to impose a different tax in one state or states than was levied in another state or states.

This result, instead of simplifying the situation and making clear the limitations on the taxing power, which obviously the Amendment must have been intended to accomplish, would create radical and destructive changes in our constitutional system and multiply confusion.

That as the 16th Amendment authorizes only an exceptional direct income tax without apportionment, to which the tax in question does not conform, it is therefore not within the authority of that Amendment.

As the first proposition is plainly in conflict with the meaning of the 16th Amendment as interpreted in the Brushaber Case, it may also be put out of view.

But, aside from the obvious error of the proposition, intrinsically considered, it manifestly disregards the fact that by the previous ruling it was settled that the provisions of the 16th Amendment conferred no new power of taxation, but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged, and being placed [240 U.S. 103, 113]   in the category of direct taxation subject to apportionment by a consideration of the sources from which the income was derived,-that is, by testing the tax not by what it was, a tax on income, but by a mistaken theory deduced from the origin or source of the income taxed.

Mark, of course, in saying this we are not here considering a tax not within the provisions of the 16th Amendment, that is, one in which the regulation of apportionment or the rule of uniformity is wholly negligible because the tax is one entirely beyond the scope of the taxing power of Congress, and where consequently no authority to impose a burden, either direct or indirect, exists.

In other words, we are here dealing solely with the restriction imposed by the 16th Amendment on the right to resort to the source whence an income is derived in a case where there is power to tax for the purpose of taking the income tax out of the class of indirect, to which it generically belongs, and putting it in the class of direct, to which it would not otherwise belong, in order to subject it to the regulation of apportionment.

Yet it is plain, we think, that by the true intent and meaning of the act the entire proceeds of a mere conversion of capital assets were not to be treated as income. [247 U.S. 179, 185]   Whatever difficulty there may be about a precise and scientific definition of 'income,' it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax; conveying rather the idea of gain or increase arising from corporate activities. As was said in Stratton's Independence v. Howbert, 231 U.S. 399, 415 , 34 S. Sup. Ct. 136: 'Income may be defined as the gain derived from capital, from labor, or from both combined.'

28.

The Sixteenth Amendment must be construed in connection with the taxing clauses of the original Constitution and the effect attributed to them before the amendment was adopted. In Pollock v. Farmers' Loan & Trust Co., under the Act of August 27, 1894, it was held that taxes upon rents and profits of real estate and upon returns from investments of personal property were in effect direct taxes upon the property from which such income arose, imposed by reason of ownership; and that Congress could not impose such taxes without apportioning them among the states according to population, as required by article 1, 2, cl. 3, and section 9, cl. 4, of the original Constitution.

Afterwards, and evidently in recognition of the limitation upon the taxing power of Congress thus determined, the Sixteenth Amendment was adopted, in words lucidly expressing the object to be accomplished:

      'The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among [252 U.S. 189, 206]   the several states, and without regard to any census or enumeration.'

As repeatedly held, this did not extend the taxing power to new subjects, but merely removed the necessity which otherwise might exist for an apportionment among the states of taxes laid on income.

A proper regard for its genesis, as well as its very clear language, requires also that this amendment shall not be extended by loose construction, so as to repeal or modify, except as applied to income, those provisions of the Constitution that require an apportionment according to population for direct taxes upon property, real and personal. This limitation still has an appropriate and important function, and is not to be overridden by Congress or disregarded by the courts.

In order, therefore, that the clauses cited from article 1 of the Constitution may have proper force and effect, save only as modified by the amendment, and that the latter also may have proper effect, it becomes essential to distinguish between what is and what is not 'income,' as the term is there used, and to apply the distinction, as cases arise, according to truth and substance, without regard to form. Congress cannot by any definition it may adopt conclude the matter, since it cannot by legislation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone that power can be lawfully exercised.

For the present purpose we require only a clear definition of the term 'income,' [252 U.S. 189, 207]   as used in common speech, in order to determine its meaning in the amendment, and, having formed also a correct judgment as to the nature of a stock dividend, we shall find it easy to decide the matter at issue.

After examining dictionaries in common use, … we find little to add to the succinct definition adopted in two cases arising under the Corporation Tax Act of 1909 (Stratton's Independence v. Howbert; Doyle v. Mitchell Bros. Co) 

'Income may be defined as the gain derived from capital, from labor, or from both combined,' provided it be understood to include profit gained through a sale or conversion of capital assets, to which it was applied in the Doyle Case

The government, although basing its argument upon the definition as quoted, placed chief emphasis upon the word 'gain,' which was extended to include a variety of meanings; while the significance of the next three words was either overlooked or misconceived. 'Derived-from- capital'; 'the gain-derived-from-capital,' etc. Here we have the essential matter: not a gain accruing to capital; not a growth or increment of value in the investment; but a gain, a profit, something of exchangeable value, proceeding from the property, severed from the capital, however invested or employed, and coming in, being 'derived'-that is, received or drawn by the recipient (the taxpayer) for his separate use, benefit and disposal- that is income derived from property. Nothing else answers the description.

29.

The fundamental relation of 'capital' to 'income' has been much discussed by economists, the former being likened to the tree or the land, the latter to the fruit or the crop; the former depicted as a reservoir supplied from springs, the latter as the outlet stream, to be measured by its flow during a period of time.

It is obvious that these decisions in principle rule the case at bar if the word 'income' has the same meaning in the Income Tax Act of 1913 that it had in the Corporation Excise Tax Act of 1909, and that it has the same scope of meaning was in effect decided in Southern Pacific Co. v. Lowe, where it was assumed for the purposes of decision that there was no difference in its meaning as used in the act of 1909 and in the Income Tax Act of 1913.

There can be no doubt that the word must be given the same meaning and content in the Income Tax Acts of 1916 and 1917 that it had in the act of 1913.

When to this we add that in Eisner v. Macomber, supra, a case arising under the same Income Tax Act of 1916 which is here involved, the definition of 'income' which was applied was adopted from Stratton's Independence v. Howbert, supra, arising under the Corporation Excise Tax Act of 1909, with the addition that it should include 'profit gained through sale or conversion of capital assets,' there would seem to be no room to doubt that the word must be given the same meaning in all of the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act, and that what that meaning is has now become definitely settled by decisions of this Court.

In determining the definition of the word 'income' thus arrived at, this Court has consistently refused to enter into the refinements of lexicographers or economists, and has approved, in the definitions quoted, what it believed to be the commonly understood meaning of the term which must have been in the minds of the people when they adopted the Sixteenth Amendment to the Constitution. Doyle v. Mitchell Brothers Co.; Eisner v. Macomber.

Notwithstanding the full argument heard in this case and in the series of cases now under consideration, we continue entirely satisfied with that definition, and, since the fund here taxed was the amount realized from the sale of the stock in 1917, less the capital investment [255 U.S. 509, 520]   as determined by the trustee as of March 1, 1913, it is palpable that it was a 'gain or profit' 'produced by' or 'derived from' that investment, and that it 'proceeded' and was 'severed' or rendered severable from it by the sale for cash, and thereby became that 'realized gain' which has been repeatedly declared to be taxable income within the meaning of the constitutional amendment and the acts of Congress. Doyle v. Mitchell Brothers Co. and Eisner v. Macomber, supra.

By an act of legislative partiality it enriches seventeen persons and deprives nearly a thousand others of the same class, and as upright and competent as the seventeen, of the means by which they earn their daily bread.

The right to labor, the right to one's self physically and intellectually, and to the product of one's own faculties, is past doubt property, and property of a sacred kind.

Among these inalienable rights, as proclaimed in that great document, is the right of men to pursue their happiness, by which is meant the right to pursue any lawful business or vocation, in any manner not inconsistent with the equal rights of others, which may increase their prosperity or develop their faculties, so as to give to them their highest enjoyment.

The common business and callings of life, the ordinary trades and pursuits, which are innocuous in themselves, and have been followed in all

30.

communities from time immemorial, must therefore be free in this country to all alike upon the same conditions. The right to pursue them, without let or hindrance, except that which is applied to all persons of the same age, sex, and condition, is a distinguishing privilege of citizens of the United States, and an essential element of that freedom which they claim as their birthright.

It has been well said that 'the property which every man has in his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands, and to hinder his employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of this most sacred property. It is a manifest encroachment upon the just liberty both of the workman and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the others from employing whom they think proper.' Smith, Wealth Nat. bk. 1, c. 10.

And the court has reached a conclusion which, in its judgment, is consistent with both the words and spirit of the Constitution, and is sustained as well by sound reason.'

The principle is fundamental and vital. Included in the right of personal liberty and the right of private property-partaking of the nature of each- is the right to make contracts for the acquisition of property. Chief among such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property.

If this right be struck down or arbitrarily interfered with, there is a substantial impairment of liberty in the long-established constitutional sense. The right is as essential to the laborer as to the capitalist, to the poor as to the rich; for the vast majority of persons have no other honest way to begin to acquire property, save by working for money.

31.

Farmer’s Loan & Trust Co.
Stone Tracy Co.
Stratton’s Independence, LTD.
Union Pacific Railroad Company   
Baltic Mining Company
Mitchell Bros. CO.
Macomber --  Owner of stocks of a corporation.
Merchant’s Loan & Trust Co.

Whatever difficulty there may be about a precise and scientific definition of 'income,' it imports, as used here, something entirely distinct from principal or capital either as a subject of taxation or as a measure of the tax; conveying rather the idea of gain or increase arising from corporate activities.

    Sec. 61. Gross income defined
 
-STATUTE-
    (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:

    Sec. 61. Gross income defined
 
-STATUTE-
(a) General definition
Except as otherwise provided in this subtitle, gross income means
all gain or increase arising from corporate activities derived from capital, labor, or both, or from whatever source derived, including (but not limited
to) the following items:

32.

33.

34.