Findings and Conclusions: 

·        As written, the statutes in the USC say to use regulations Section 861 to determine if income is taxable.

·        Historical deletions of key phrases and references have deliberately induced confusion in this portion of the tax code that did not exist prior to 1954.

·        Per the plain language of the regulations, “Items” of income can only be taxed if they come from taxable “sources.”

·        The list of “sources”, using the same word as found in the 16th Amendment, is found in Section 861.

·        The list of “sources” found at Section 861 is limited to foreign source income and foreign taxpayers. 

·        Per the plain language of the regulations, wages, salaries and even capital gains earned by ordinary Americans within the fifty states are not taxable.

Bottom Line:   The IRS does not want you to look at Section 861.