Not Written for You: The Income Tax Hidden in Plain Sight
Part 13 of 13
Ask the Question
Throughout this series, we have read the statutes, the definitions, the Treasury Decisions, and the Supreme Court holdings. Every one points to the same narrow class of persons.
Now it is your turn. Not to take anyone's word for it. Not mine. Not the government's. Yours.
There are two questions. They are simple. They require only a citation in response — a section number, a statute, a regulation. Not an opinion. Not a reference to an IRS web page. Not a tradition. A law.
Question One
Cite the statute or code section that requires the withholding of income tax from the domestic earnings of an American citizen working in the private sector within a state of the Union.
Not § 3402. We read that. It commands withholding from "wages" paid by an "employer" to an "employee." All three terms are defined at § 3401, and the class they establish is government workers paid by government entities. Not private-sector Americans.
Not an IRS publication. The IRS itself states that no one may rely on its publications when the law says something different.
The statute. The one that applies to you.
Question Two
Cite the statute that makes an American citizen, earning domestic income in the private sector within a state of the Union, subject to the federal income tax.
Not subject to withholding. Subject to the tax itself. The statute that imposes the income tax on that person.
Since 1913, every Treasury Decision addressing the filing of Form 1040 has applied it to nonresident aliens with U.S. source income, foreign corporations with U.S. source income, or U.S. citizens residing abroad with foreign-earned income. The two withholding chapters that name their subject class — Chapters 3 and 4 — both address foreign persons exclusively. The third, Chapter 24, does not name its class in the title, but its definitions and the Treasury Decisions that implement it point to the same persons.
The question is not rhetorical. It is an invitation. Ask it and wait for the answer.
Who to Ask
Call the IRS. Ask the helpline to cite the statute that imposes the income tax on your domestic earnings. Listen carefully to whether you receive a citation or a deflection. If they reference a publication, remind them that the IRS's own policy is that publications do not override the law.
Ask your CPA or tax preparer. They have been filing your returns for years. Ask them to show you the statute that makes you liable. Not the statute that describes how to compute the tax. The one that imposes it on you. They have almost certainly never been asked this question.
Ask a tax attorney. Ask them to identify the class established by the enumerated items in § 3401(c). Ask them whether a regulation can exceed the scope of the statute it implements. These are not trick questions. They are first-year law school principles applied to a definition the attorney has probably never read.
Ask your payroll provider. Ask them to confirm that § 3402 is the statute authorizing the withholding they perform on your behalf. Then ask them to read the definitions that control it. The person withholding from your paycheck every two weeks has, in all likelihood, never seen either provision.
Write your congressional representative. Ask for the specific statutory authority that imposes the federal income tax on the domestic earnings of private-sector American citizens. A member of Congress should be able to cite the law that takes a portion of your earnings. If the answer comes back as a form letter about the tax code in general, you have your answer.
The Silence Is the Answer
If the law clearly imposed the income tax on every working American, citing it would take five seconds. The statute would be famous. Every tax professional would know it by heart. Every payroll clerk would have it on a poster behind the desk.
Instead, you will get silence. Or irritation. Or a reference to something that, when you read it, turns out to say something very different from what you were told.
This series has given you the tools to read the law for yourself. The definitions are not hidden. The Treasury Decisions are public. The Supreme Court holdings are available to anyone. The question is whether the people who tell you what the law requires have ever bothered to read it.
Ask the question. The answer will tell you everything.
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