Is there a difference between the definition of "United States" in US tax law and the one in Nationality law?

It seems there is a different definition of United States in Title 26 than in other parts of the US Code. Other laws mention the "continental US" or the "50 States", while these are not mentioned in Title 26 USC. Therefore, when the IRS/tax law talks about an "alien", "resident alien", or "nonresident alien", they must mean something different than what those terms would mean when speaking of immigration/naturalization law, correct? Any thoughts?

Update:

Rick-

Of course one can be a resident alien living in the US and be subject to the tax code. That entity is specified in Title 26.

The question is, what is the definition of "United States", which is very specific, and applies only to the tax code, because it is defined within the text of that code?

Update 2:

Raicha- I don't doubt that the IRS is using the same definition of resident, alien and nonresident alien as found in immigration/nationality/naturalization law.

HOWEVER, the Tax Code (26 USC) the source of ALL the IRS' authority, defines those things differently.

The IRS is assuming a jurisdiction they don't have.

Never once in 26 USC does it say to refer to immigration law to determine what a "citizen" or "alien" (two opposing terms) "resident" or "nonresident" (two more) is.

Why do you suppose the definitions are different? Isn't that to the disadvantage and confusion of the public?

Read the definition of United States here.

http://www4.law.cornell.edu/uscode/search/display....

Read it carefully, then read the definition of "State" below it.

Then go here and read what the Congressional Research Service says it means.

http://www.supremelaw.org/press/rels/kennell3.gif

You'll be very surprised!

Update 3:

NGC- The truth is, anyone in the 50 states can become liable for income tax- if their pay is effectively connected to the Federal government. The definition of "wages" points to this, as does the definition of "employment" itself.

The case you cited shows to what extent the judiciary is taking liberties in interpreting the law. For them to say that the rule of inclusion means that the 50 states were implied although not listed, is not following the rules of statutory construction, such as "inclusio unius est exclusio alterius", the inclusion of the one is the exclusion of the other. "Includes" is said, in 26USC, to "not exclude other things within the meaning of the TERM DEFINED." When a term is defined, that definition becomes the whole meaning of the term. All the other words in that meaning are Federal territories or possessions. The 50 Union States are not in that class and are not meant. People who live in the 50 states are, according to IRS, nonresident aliens.

Update 4:

NGC-

You are fighting like a champ for the IRS, but misguided. On "includes" and "including", you have to realize that, although other things COULD be included in the list of FEDERAL TERRITORIES and POSSESSIONS, only those belonging to that class are meant. The States are not. An example from another statute: "Meaning of Terms: The terms “includes and including” do not exclude things not enumerated which are in the same general class." Title 27, at 27 CFR 72.11.

The 50 States are not included in that general class, as they are not Federal territories or possessions. Federal law sometimes calls territories and possessions states.

Your other cites, mentioning "employed" "wage" earners, are a joke. "Employed" and "wage" necessarily denote a federal connection: look them up in section 7701.

A US citizen can live anywhere in the 50 states- that's called being a resident. Domicile, not residence, is the permanent home, and for a US citizen, that home is Washington DC.

It is very tricky.

Update 5:

Some more can be read here:

http://www.losthorizons.com/appendix.htm#Includes

Cheers!

Update 6:

NGC-

Yes, I have read some of Hendrickson's writing. Yes, the courts are giving him a hard time , believing him to be a figurehead of a movement. Do you believe that the court gives a free ride to anyone who knows the law, even though it threatens to blow the lid off the IRS scam? Believe what you like.

“The legislature must be presumed to use words in their known and ordinary signification.”

Old Colony R. Co. v. Commissioner of Internal Revenue, 248 U.S. 552, 560 (1932), quoting Levy’s Lessee v. McCartee, 31 U.S. 47, 49 (1832).

“[T]he words of statutes--including revenue acts--should be interpreted where possible in their ordinary, everyday senses.”

Crane v. Commissioner of Internal Revenue, 331 U.S. 1, 6 (1947); Malat v. Riddell, 383 U.S. 569, 571 (1966).

“In interpreting the meaning of the words in a revenue Act, we look to the ‘ordinary, everyday senses’ of the words.”

Commissioner v. Soliman, 506 U.S. 168, 174 (1993).

You are absolutely right about the WORDS in 26USC.

Update 7:

But then there are "terms" in 26USC that are specifically defined. They are no longer "common-use words", or there would be no sense in defining them. Some of these TERMS are:

"wages" "employee" "employer" "United States" "state". They are defined TERMS that only carry the meaning given them in the definition for purposes of this title. They must be construed very narrowly, according to the words in the definition. It seems most people like to assume or add words in their heads that are not really there in the definition. I choose not to add to the legislation, but read it as written. I encourage others to do the same.

Back to Hendrickson- if what he says is so wrong, why does the IRS continue to issue refunds of all tax withheld, and do so for years? Why have they refunded over $3.25 million to people who have read his book? Why is he not in jail, like Irwin Schiff? Why did a judge order him to change his legal testimony (very illegal!)?

Update 8:

Raicha: "EDIT - the section of 26 USC that you cite specifically states that the definition applies when United States is "used in a geographical sense". It is not talking about aliens, resident aliens or nonresident aliens. And your second link is to someone's opinion, not actual statute."

People are born in geographical places. How can you say that geography has no effect on jurisdiction?

The fact that you are a "tax professional" reveals a heavy bias. Tax professional are trained by the IRS. The IRS' job is to get as much money from the people as possible. The IRS is privately owned as well.

Just as you are defending the IRS because it is your livelihood, I wish to keep the fruits of my labor, as it is my livelihood.

I do not owe money to the IRS if I am not engaged in an excise-table activity.

The income tax is an excise tax, based on specific federally-connected activity.

It will be hard for you to unlearn what you've been told is true, but I believe you can do it Raicha!

Update 9:

Raicha-

As far as the belief of the Congressional Research Service being "just someone's opinion"- if so, they are opinions relied upon by our Congresspeople all of the time in making decisions. "The United States", according to the CRS, includes only DC, Guam, Puerto Rico, territories, etc., and not the 50 states. The reason that Title 26 mentions a "geographical sense" is the The United States is also the name of a corporation, which is an intangible entity and not geographical.

Update 10:

NGC- Oh, so you're one of those Quatlosers. Like the way I say that so dismissively?

That page had MANY inaccuracies. To say our forefathers hated tax protestors is inane, and history shows the opposite to be true: they WERE tax protestors. George Washington was in the Whiskey business, and hated those who wanted to sell without being taxed.

The Squatgoos page proves how the Internal Revenue Code NEVER defines income, except to say that "income is income". Very helpful. The 16th amendment gave no new powers of taxation, because it approved an excise tax that never needed apportionment to begin with. The Supreme Court agrees that it is an excise tax, just see Brushaber.

The reason 26 USC DOES NOT DEFINE " INCOME" is that it was already decided that income is profit or gain, severable from the basis, which is our labor in this case. We are paid what our labor is worth; there is no profit. Our work is worth every penny paid. If it was worth nothing, we would not be paid.

Update 11:

NGC-

Getting to know you, getting to know all about you.

Getting to like you, getting to hope you like me.

Getting to know you, putting it my way,

But nicely,

You are precisely,

My cup of tea.

OK, just a musical break to relax you. You'll notice that the court always refers to "wages", and they ARE defined as federally connected. If someone says that they aren't liable simply because income is not defined, that is a very weak stance.

If I work for a day, and make a day's pay, I have gained a day's pay BUT have also lost a day's time and energy. That is not a gain, but a conversion of my property into another form.

You say I should convince a court that I don't need to keep paying their paychecks? Do you feel that they are unbiased? This may be a fundamental disagreement for us, NGC.

I don't agree to having my labor stolen from me through coercion. I also know how the IRS does it, and it can't be done without us volunteering our money and giving jurisdiction.

Update 12:

NGC- Funny, I seem to able to keep adding to my side. I am not wrong in my belief that money is not coerced from someone in a free society. Argue against that.

3 Answers

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  • 1 decade ago
    Favorite Answer

    Let me guess, you believe that the tax code only applies to U.S. territories, federal enclaves, the District of Columbia, etc. and not to the 50 states. If that is the case, you are wrong. The courts have rejected this argument every time it has ever been raised.

    In United States v. Teresa Hopper, 2005 TNT 215-10, No. 05-MC-172 (U.S.D.C. E.D.N.Y. 10/29/2005), the court states, "Citing 26 U.S.C. § 3121(e)(1) & (2), the respondent argues that the IRS was without territorial jurisdiction to issue the summons in this case because the Internal Revenue Code only applies to individuals living in one of the territories specifically mentioned in that rule. Unfortunately, the respondent has misinterpreted the statute. This rule, appearing in the ‘definitions’ section, says that the ‘term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, or American Samoa’ (emphasis added). This is a rule of inclusion, not exclusion. Nowhere in this rule does it exclude the fifty United States from the definition of ‘State’ under the Internal Revenue Code. To interpret the rule this way would be absurd."

    EDIT: Again, you are wrong.

    "Though the definition of ‘person’ in 6332 does not mention States or any sovereign or political entity or their officers among those it ‘includes’ [footnote omitted], it is EQUALLY CLEAR THAT IT DOES NOT EXCLUDE THEM. This is made certain by the provisions of 7701(b) of the 1954 Internal Revenue Code that ‘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.’ 26 U.S.C. (Supp. V) 7701(b)."

    Sims v. United States, 359 U.S. 108, 112 (1959).

    "Similarly, Latham’s instruction which indicated that under 26 U.S.C. § 3401(c) the category of ‘employee’ does not include privately employed wage earners is a preposterous reading of the statute. It is obvious that within the context of both statutes the word ‘includes’ is a term of enlargement not of limitation, and the reference to certain entities or categories is not intended to exclude all others."

    United States v. Latham, 754 F.2d 747, 750 (7th Cir. 1985).

    http://bulk.resource.org/courts.gov/c/F2...

    "Petitioner’s assertion that he is not a person required to pay tax as he is not an officer, employee or elected official of the United States, a State, or any political subdivision thereof, or of a corporation, is wholly meritless."

    United States v. Rice, 659 F.2d 524, 528 (5th Cir. 1981).

    http://bulk.resource.org/courts.gov/c/F2...

    "Alan Cooper was convicted of tax fraud, sentenced to 46 months in prison, and pursuant to the tax-fraud statute, 26 U.S.C. § 7206, ordered as part of the sentence to pay the costs of prosecution, $19,123.77. He appeals, making typical, and wholly frivolous, tax-protester arguments, such as that only residents of Washington, D.C., and other federal enclaves are subject to the federal tax laws because they alone are citizens of the United States and that wages are not income because they are compensation for working rather than a pure economic rent. These arguments, frivolous when first made, have been rejected in countless cases. They are no longer merely frivolous; they are frivolous squared."

    United States v. Cooper, 170 F.3d 691, 691 (7th Cir. 1999)

    http://bulk.resource.org/courts.gov/c/F3...

    Edit: Ahh, it is all clear now, a follower of Pete "Blowhard" Hendrickson. Explain this brainiac, why did Pete lose his own case? Why are CTC followers now having levies put against their assets? There is only one answer, Pete Hendrickson is wrong. You are mistaken in you beliefs. Go ahead and follow them if you want, but I warn you now, you will pay more later than if you hadn't followed that BS. The courts have made it clear. A citizen of the U.S. is not limited to just Washington, D.C. or the territories. A person is a citizen of the U.S. if they were born in any of the fifty states. Being a citizen, they are subject to the tax laws of the U.S. Regardless of where they may live.

    Tax protesters often claim that tax laws are written in “legalese” that does not mean the same as normal, every-day English, but the opposite is true, as many Supreme Court decisions will affirm:

    “The legislature must be presumed to use words in their known and ordinary signification.”

    Old Colony R. Co. v. Commissioner of Internal Revenue, 248 U.S. 552, 560 (1932), quoting Levy’s Lessee v. McCartee, 31 U.S. 47, 49 (1832).

    “[T]he words of statutes--including revenue acts--should be interpreted where possible in their ordinary, everyday senses.”

    Crane v. Commissioner of Internal Revenue, 331 U.S. 1, 6 (1947); Malat v. Riddell, 383 U.S. 569, 571 (1966).

    “In interpreting the meaning of the words in a revenue Act, we look to the ‘ordinary, everyday senses’ of the words.”

    Commissioner v. Soliman, 506 U.S. 168, 174 (1993).

    “Common understanding and experience are the touchstones for the interpretation of the revenue laws.”

    Helvering v. Horst, 311 U.S. 112, 118 (1940).

    Only by ignoring the plain and ordinary meanings of words can tax protesters reach nonsensical conclusions such as that “income” in the ordinary sense is not “income” within the meaning of the 16th Amendment to the Constitution (and that the 16th Amendment does not mean what it says), that the states of the United States are not “states” within the meaning of the Internal Revenue Code, that “employees” in the ordinary sense are not “employees” within the meaning of the Internal Revenue Code, that human beings are not “persons,” and so forth.

    Here are a few more cases regarding your silly citizenship argument:

    "Plaintiff claims that he is a nonresident alien or ‘foreign individual of America’ in relation to the United States, and that his residence and citizenship rest solely with the States of Washington, ‘a free, independent, sovereign, territory’ with ‘coequal authority with the other compact states of America.’ ... Despite plaintiff’ creative argument, the court takes judicial notice of the fact that the state of Washington is one of the fifty states that comprise the United States of America, entering the Union in 1889 as the forty-second state. [Citations omitted.] The Fourteenth Amendment states that ‘[a]ll persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.’ U.S. Const., Amend. XIV, section 1. Plaintiff, therefore, along with being a citizen of the state of Washington, is a United States citizen because he was born in Washington State to parents who were United States citizens. ... As a United States citizen, plaintiff is required to pay federal income tax."

    Betz v. United States, 40 Fed.Cl. 286, 294-296 (1998)

    "The Epperlys next argue that since they are ‘American Inhabitants’ who possess sovereign powers and immunities, they are properly classified under the tax code as ‘nonresident aliens’ and are not subject to taxation by the federal government. Such an argument is frivolous.

    Epperly v. United States, 1992 U.S. App. LEXIS 32286 (9th Cir. 1992)

    EDIT:

    Hendrickson does not know the law. The courts have explained to him that he is wrong. Certain words or terms are defined in the code, but that does not negate their original meaning. It only clarifies their meaning. The IRS does follow the law in most instances. You can believe Hendrickson all you want. You are wrong. Hendrickson is wrong. It is that simple.

    It is typical of tax protester behavior that when forced to confront the fact that their ideas about the U.S. Constitution and the Internal Revenue Code are refuted by hundreds of court decisions, and that not a single judge has ever agreed with their crackpot arguments, tax protesters retreat into paranoid delusions, claiming that there is an elaborate and complicated conspiracy among all of the officials of the IRS, all of the members of Congress, every federal judge, and most of the legal profession. In other words, incredibly stupid behavior.

    Why don't you try and collect the reward found at the following website if you believe so intently that the ordinary citizen is not liable for an income tax.

    http://www.hereisthelaw.com

    EDIT:

    If you so intently believe you are right, convince a court. You can't, can you? That is because you are wrong. The law doesn't need to define income. It does define GROSS INCOME and TAXABLE INCOME. BTW, your wages you receive as compensation for your labor IS A GAIN TO YOU. A gain is calculated as the difference between what you pay for something and what you sell it for. Since you pay nothing for your labor, your wage is a gain.

    “Plaintiff argues he is entitled to relief because the Code does not define income. The United States, however, is correct that “income” is afforded its every day usage as any gain derived from capital, labor, or both combined. See United States v. Richards, 723 F.2d 646, 648 (6th Cir. 1983). In addition, the Code explicitly defines “gross income”, from which taxable income is computed, as including compensation for services, i.e., wages.”

    Tornichio v. United States, 81 AFTR2d ¶98-582, KTC 1998-71 (N.D.Ohio 1998)

    EDIT: Re: You'll notice that the court always refers to "wages", and they ARE defined as federally connected.

    Wrong again. There are several court cases that show you are wrong. I was going to post them, but I have reached the limit that Yahoo allows for an answer.

    This is my last edit on this issue. Go ahead and believe your delusions if you want. However, you need to know that you are wrong and Pete Hendrickson is wrong.

  • 1 decade ago

    The IRS uses the same definitions for "alien", "resident alien" and "nonresident alien" as found in the immigration/naturalization law.

    EDIT - the section of 26 USC that you cite specifically states that the definition applies when United States is "used in a geographical sense". It is not talking about aliens, resident aliens or nonresident aliens.

    And your second link is to someone's opinion, not actual statute.

    For purposes of the tax law, aliens, resident aliens and nonresident aliens are defined as they are for immigration purposes.

    2ND EDIT - You are completely wrong in your conclusion that the residents of the states are nonresident aliens for purposes of the federal tax law. Your selective use of statutory construction is reflective of the many tax protestor arguments that have come and gone, without effect.

    If you wish to battle the IRS, hey, have at it. But I hope you don't convince others to join you.

    Source(s): 21 years as a tax professional.
  • 1 decade ago

    There are some differences, yes. People born in, for example, Guam, are US nationals, and entitled to US citizenship, but Guam has a different tax code from that which applies in the US proper.

    I'm not personally aware of any reference to 'the continental US' in 26USC, but any law that referred to it would therefore not apply in Hawaii or Puerto Rico.

    Likewise, one can be a resident alien, living in the US, but still subject to the tax code.

    Richard

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