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Against the Grain

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It HAS, however, been defined by the Federal Courts!

LOOK!

"Congress has taxed INCOME, not compensation."

- [Conner v. U.S., 303 F Supp. 1187 (1969)] -

This is just one of MANY rulings where the Federal courts have consistantly, repeatedly, ruled that payment
for labor (wages, salaries and compensation for personal services) is NOT taxable!
 

"Income within the meaning of the 16th Amendment and the Revenue Act means, gain ... and, in such connection, gain means profit... proceeding from property severed from capital, however invested or employed and coming in, received or drawn by the taxpayer for his separate use, benefit and disposal."

- [Staples v. U.S., 21 F Supp 737 U.S. Dist. Ct. ED PA, 1937] -
 

"There is a clear distinction between `profit' and `wages', or a compensation for labor. Compensation for labor (wages) cannot
be regarded as profit within the meaning of the law. The word `profit', as ordinarily used, means the gain made upon any business or investment -- a different thing altogether from the mere compensation for labor."

- [Oliver v. Halstead, 86 S.E. Rep 2nd 85e9 (1955)] -
 

"The claim that salaries, wages, and conpensation for personal services are to be taxed as an entirety and therefore must be
returned by the individual who has performed the services which produce the gain is without support, either in the language of the Act or in the decisions of the courts construing it. Not only this, but it is directly opposed to provisions of the Act and to regulations of the U.S. Treasury Department, which either prescribed or permits that compensations for personal services not be taxed as a entirety and not be returned by the individual performing the services. It is to be noted that, by the language of the Act, it is not salaries, wages, or compensation for personal services that are to be included in gains, profits, and income derived from salaries, wages, or compensation for personal services."

- [Lucas v. Earl, 281 U.S. 111 (1930)] -
 

"... whatever may constitute income, therefore, must have the essental feature of gain to the recipient. This was true when the 16th Amendment became effective, it was true at the time of Eisner v. Macomber Supra, it was true under Section 22(a) of the Internal Revenue Code of 1938, and it is likewise true under Section 61(a) of the I.R.S. Code of 1954. If there is not gain, there is not income ... Congress has taxed income not compensation."

- [Conner v. U.S., 303 F Supp. 1187 (1969)] -
 

A much earlier ruling stated very simply: "... one does not derive income by rendering services and charging for them."

- [Edwards v. Keith, 231 F 111 (1916)] -
 

State court rulings coincide with the Federal courts.
"... reasonable compensation for labor or services rendered is not profit."

- [Lauderdale Cemetary Assoc. v. Mathews, 345 PA 239; 47 A. 2d 277, 280 (1946)] -

"There is a clear distinction between profit and wages, or compensation for labor. Compensation for labor cannot be regarded as profit within the meaning of the law."

- [Oliver v. Halstead, 196 VA 992; 86 S.E. 2d 858 (1955)] -