Originally Posted By Gus Laskaris:
And whose word are you going to take that Americans don't have to withhold taxes from their employees? The IRS or some inbred militia yahoo out in Minnesota?
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Maybe you didn't see my earlier post. I too took the IRS' word. I quoted a paragraph directly from IRS Publication 515, page 4, which spells out the rules, to employers, for who must have taxes withheld. Here it is again:
EVIDENCE OF RESIDENCE: If an individual gives you a written statement stating that he or she is a citizen or resident of the United States, and you do not know otherwise, you do not have to withhold tax under the rules discussed in this publication.
Is that clear enough? Couldn't be more clear to me. Are you waiting for IRS to send you a letter saying they have "accidently" been illegally taxing incomes of US citizens? It won't happen. They aren't going to give up piles of money being sent to them!
Taxation is a lawful function of government, the tax code carries the full weight of law, and opinions to the contrary have not withstood legal challenge.
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Why do you think that they have not withstood legal challenge? Could it be because the prosecution (gov't) has an endless source of funds to fight, while the accused does not?
Whose word are you taking? Not the IRS, as I have shown an IRS rule contradictory to popular belief. Your belief about tax codes are based on heresay. I would guess that you haven't read for yourself the part of the tax code which determines who has taxable income.
The Federal Regulations make reference to "sources" within the United States. Below are the only sources listed from which income must be derived in order for it to be taxable for the purpose of the Income Tax.
Code of Federal Regulations 1. 861-869 (1)
(i) Overall limitation to the foreign tax credit.
(ii) [Reserved]
(iii) DISC and FSC taxable income. (Note: DISC is Direct International Sales Corp, and FSC is a Foreign Sales Corp)
(iv) Effectively connected taxable income. Nonresident alien individuals and foreign corporations engaged in trade or business within the United States,…
(v) Foreign base company income.
(vi) Other operative sections.
(A) "...foreign source items of tax..."
(B) "...foreign mineral income..."
(C) [Reserved]
(D) "... foreign oil and gas extraction income..”
(E) “…citizens entitled to the benefits of section 931 and the section 936 tax credit…” (Note: section 931 is titled - Income from sources within Guam, American Samoa, or the Northern Mariana Island - section 936 is titled - Puerto Rico and Possession tax credit)
(F) "... residents of Puerto Rico…”
(G) "...income tax liability incurred to the Virgin Islands…”
(H) "... income derived from Guam…”
(I) “… China Trade Act corporations…”
(J) "...income of a controlled foreign corporation…”
(K) "...income from the insurance of U.S. risks…”
(L) "...international boycott factor... attributable taxes and income under
section 999...”
(M) "...Income attributable to the operation of an agreement vessel under section 607of the Merchant Marine Act of 1936... "
Yup, they're all foreign sources.