Question and Evidence Overview: 

The first questions are very important.  If we assume the IRS’s contention that the “source” of income is irrelevant, one would conclude the IRS can tax everything, everywhere.  This is simply not true.  Consider additionally, why they would even NEED all these code sections in the law if this were the case.

Pay close attention to the wordings in Question 447.  In its grammatical best, the government is using double negatives to confuse the reader.  Bear in mind that this quote is from 1956.  Today’s versions are significantly more confusing and have the language referencing “fundamental law” (i.e., Constitutional law) deleted.

Question 450 is important because it reminds us that no matter how the underlying regulations are written – the controlling statutes still point to Section 861 to determine taxable income.

Question 451 list the “items” of income most everyone is familiar with.  If all these items are taxable why don’t they just say so?  The fact is that these “items” only become taxable (as “gross income”) if they come from a taxable source.

Question 452 lists the official and totally inclusive list of sources that are taxable.  Again, we find this list in the regulations severely oriented to foreigners and foreign corporations. 

Question 456 is the punch line: Using the regulations as plainly written, domestically earned income of U.S. citizens inside the fifty states is not taxable.