Cracking The Code By Peter Hendrickson

Let's get this said loud and clear right at the outset: IF YOU HAVE TAXABLE INCOME, YOU ARE SUBJECT TO THE INCOME TAX. Section l(a) of the Internal Revenue Code says:

"There is hereby imposed on the taxable income of-... [a tax of varying percentages]" Pretty straightforward. Of course, it does raise the question of exactly what is "taxable income"...
"... 'income', as used in the statute should be given a meaning so as not to include everything that comes in". United States Supreme Court, So. Pacific v. Lowe, 247 U.S. 330,(1918)

"Inclusio unius est exclusio alterius. The inclusion of one is the exclusion of another. The certain designation of one person is an absolute exclusion of all others.... This doctrine decrees that where law expressly describes [a] particular
situation to which it shall apply, an irrefutable inference must be drawn that what is omitted or excluded was intended to be omitted or excluded."
Black's Law Dictionary, 6th edition.

What you will learn as you read this book is that specific Constitutional limitations on the federal government's power to tax do shape related law, and have generated a coherent Supreme Court doctrine which clearly and soundly answers the question of what is "taxable income". Both the statutes and the doctrine acknowledge the exemption of the vast majority of private-sector receipts from that taxing power's reach.

However, you will also learn about a complex
combination of craft, routine bureaucratic incoherence, and casual- and not-so-casual- corruption by virtue of which many people are led to inadvertently allow, and even participate in,
the legal transformation of their untaxable earnings into "taxable income". Such people are tricked into voluntarily and utterly unnecessarily enabling the diversion of a river of wealth from their own hands, usually never to be seen again.