3/2/2004 Dear [IRS Counsellor], This is about another good question that I think you had in mind to pose during our 2/25 meeting, though didn't actually put in to words: "WHY doesn't the Code define the legal term 'income'?" On 2/11 you discovered that CS 61, contrary to IRS folklore, does not define it or even pretend to define it. (It does pretend to define "gross income", but only in terms of "income"; since it defines that term nowhere else, it does no more than to pretend.) That absence was observed by the court in U.S. v. Ballard (1976), 535 F2d 400:-"...the general term "income" is not defined in the Internal Revenue Code..." But why? - Inquiring minds would like to know, so you must have wondered about that in the two weeks following. All of Subtitle A purports to have to do with taxing income, and a trillion dollars a year is collected by the IRS on that pretext, so there cannot be any word in more urgent need of a crisp legal definition. The answer is actually very simple: the task is impossible. Title 26 as you know is written by Congress; it is the law. And as you also know from its Section 5, Congress does NOT have the power to amend the US Constitution. Now, the term "income" is used in one part of the Constitution (Amendment 16) and so it is impossible - illegal, in fact - for Congress to attempt to change what Amendment 16 might mean, by redefining one of its words. That answer is so simple and compelling that it is acknowledged even in an Opinion of the Supreme Court - the case of Eisner v Macomber (1920) 252 U.S. 1889 in which it rightly held: "...the Congress may not, 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." So much for the "Why?". Now you will want to know "Where, then, is the term defined?" and on 2/28 you asked and answered that by referring to a dictionary of current, common use and proposed a definition "accession to wealth". The question "where?" is good, but the answer you found that day is not; for there's no way that a 2004 current-use dictionary can reliably define the meaning of a legal term used in a Constitutional Amendment of 1913. We have to look much deeper than that. My own view (for what it's worth) is that since Amendment 16 fails to define the term, for that reason alone Amendment 16 is void for vagueness and so whatever "income" is, Congress does not have the power to tax it without apportionment and the whole of Subtitle A is therefore equally void and the annual trillion dollars you folk collect should be handed back at once to its rightful owners. Even so, let me "go the extra mile" and try to help you find what the term probably meant, in Law, at the time it was allegedly ratified. Absent any better source, we can try the Supreme Court. Fortunately, that Court did define "income" both before and after that alleged ratification; therefore we do have a fairly reliable indicator of how the term was being used in the Law at that time. The matter is summarized best, perhaps, in the case of Merchants' Loan & Trust Co v Smietanka (1921), 255 US 509. The court referred to several post-ratification cases and to the 1909 (pre-ratification) Corporation Excise Tax Act, and said:- 'There can be no doubt that the word ["income"] must be given the same meaning and content in 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 from 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 the 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.' Thus, "income" in the Income Tax Acts is identical to "income" in the Corporation Excise Tax Act, ie corporate profit - of which of course all individuals have none. That is perfectly consistent with CS 61: "Gross income" is "all income from whatever source derived..." and the sources exemplified are those from which a Corporation might derive a profit. "Wages", from which it could obviously not, wages always being an expense, were removed from that list in the 1954 Edition of the Code - and none too soon. That's about it; may I end my reply to your unspoken question by referring to Irwin Schiff's scholarly book "The Great Income Tax Hoax." Say the word, and the address where you'd like to receive it, and it will be my pleasure to send you a copy. It's a towering indictment of the whole i-tax scam, and includes a fascinating chapter on the Congressional debate on what Amendment 16 was to say. No reader can leave that account unmoved by the very obvious fact that the debating Members were hopelessly confused about what the word "income" actually meant. Obviously they voted for it; just as obviously, the "Aye" voters had very varying notions about what they were voting for. This is the highly unstable foundation underlying all your employer's work. Yours sincerely, A.J. Davies