DEBATE: About the meaning of “United States” in I.R.C. 864(b)
QUESTION:
I believe your conclusions in this article are errant.
PROOF OF FACTS: “United States” INCLUDES (not means) the government, FTSIG
https://ftsig.org/proof-of-facts-united-states-includes-the-government/#2._EXAMPLE
United States is geographical—not governmental. The ultimate source of taxing authority is the government—that is correct. But they are hiding the government meaning by shielding it with the geographical sense.
Proof of this can be seen in I.R.C. 864(c)(4).
How can there be “income” without the “United States” if income which is taxed IS ALWAYS ATTACHED TO GOVERNMENT?
They are talking about federal nexus income obtained EITHER within “United StatesG” or without (everywhere else in the universe).
But you can be certain, the “United States” in I.R.C. 864,is geographical. The government source is ASSUMED whether within or without “United StatesG.”
I think United States is seldomly used in a governmental sense in the IRC. It definitely is. I stand corrected on that. You were right and I was wrong. But I think you can only conclude it’s the governmental sense when it’s ABUNDANTLY clear. Otherwise, they hide the government nexus in EITHER one of two distinct geographical contexts:
- Within “United StatesG; and
- Without “United StatesG“
But in EITHER instance, the nexus is governmental.
OUR RESPONSE:
Questions:
- Are personal services tangible property?
- If they are not, what does geography have to do with it?
ANSWER:
- No
- The geography is one of two categories of places the government service was performed,
2.1. Gov service within United StatesG
2.2. Gov service without United StatesG
OUR QUESTION:
So under mereology, TWO sets or characteristics are at play instead of one within the SAME word “United States”?
PROVE IT!
THEIR ANSWER:
Yes. The superset is the United StatesSMJ source
The subset is one of two locations where said government source occurs:
Within or without.
The proof is logically arrived upon at I.R.C. 864(c)(4). Go see….
I.R.C. 864 is irrelevant for a U.S. person, yes?
Since it applies to foreign persons, how could there be income accrued to a foreign person from without the United StatesG?
It can only occur if there is an underlying Gov source. Even if it is in Iraq for example.
They achieve this through the EC concept. Think wall socket, charger, and cell phone.
The government source is there. You are 100% correct.
But they hide it behind two geographical contexts. This camouflages the power behind the scheme.
OUR RESPONSE:
- Not ALL of I.R.C. 864 is limited to NRAs. I.R.C. 864(c) yes, but everything else no. I.R.C. 864(d) and I.R.C. 864(e) and I.R.C. 864(g) are examples. It even references the ENTIRE subchapter, not just that section, and does not reference foreign persons.
- Geography is NEVER relevant for intangibles.
THEIR RESPONSE:
Agreed. The geography is irrelevant, but the source isn’t—which is government. But the source runs through both:
Within United StatesG &
Without United StatesG
The geography is the distraction. But that is the sense in which it is being used.
OUR QUESTION:
PROVE that there are TWO sets applying to “in the United States” and not just the intangible sense in the case of “personal services” that are not geographical in I.R.C. 864(b).
You can’t.
THEIR QUESTION:
Two sets of what?
OUR ANSWER:
Geographical and corporate
People will BY DEFAULT presume its geographical because that’s what they want the ignorant reader to do, but that doesn’t mean it IS.
QUESTION:
Explain this:
Income from sources without government
—IRC sec. 864(c)(4)
If it is a payment outside of government, then how is it income?
OUR ANSWER:
The subject is I.R.C. 864(b), not I.R.C. 864(c). And I.R.C. 864(b) covers the entire chapter 3, not just that section.
THEIR RESPONSE:
Part I (§§ 861-865) pertains to foreign income
How is government income foreign when it is always domestic?
It’s because they are shielding domestic^1 by categorizing it as being either within or without United StatesG
domestic1 from domesticG
domestic1 from non-domesticG
OUR RESPONSE:
- Once again, I.R.C. 864(b) is the subject of section 2 of my article, not I.R.C. 864(c).
- Once it is ECI, it’s public and they can reach it geographically ANYWHERE, so geography is irrelevant beyond the ECI election.
THEIR RESPONSE:
It all falls under the same category: FOREIGN INCOME
THEIR RESPONSE:
Read the Title of Part I
Source rules and other general rules relating to foreign income
OUR RESPONSE:
- Its foreign because the earner is foreign, not the geography.
- And it can’t be income without being PUBLIC property and therefore WITHIN the corporation, since the corporation is just a collection of property.
THEIR RESPONSE:
If you are doing something within the United StatesG, there is an understood gov nexus. Otherwise it would be occurring in StatesG.
Agree to both points. But I think you’re still missing the hidden picture of what’s going on.
Do you believe the gov can create a nexus to someone ANYWHERE?
Wrt 1. Above, it’s domestic1 income being paid to a foreign person in a foreign geography.
There’s still a taxable nexus.
OUR RESPONSE:
They can create a nexus to ANYONE ANSYWHERE who is stupid enough to convert the status of their property from PRIVATE to PUBLIC. But that conversion is not a product of real WILL or CONSENT, so its fraud or mistake.
The key is WHO wrote the definition for the terms that accomplished the conversion: YOU or GOVERNMENT?
It can NEVER be GOVERNMENT if you write all the definitions.
THEIR RESPONSE:
Well, that’s a different argument. I thought we were discussing sec. 864 of the IRC.
You changed sandboxes on me.
I guess we gotta agree to disagree again.
OUR RESPONSE:
What is it that we disagree about: That United States means the government in I.R.C. 864(b)?
Show me a case where TANGIBLE property is connected to “trade or business within the United States” and we can agree.
Everything in I.R.C. 864(b) is PERSONAL SERVICES that are intangible.
THEIR RESPONSE:
The debate was on the meaning of “United States” in your article above—nothing else.
You say it’s STRICTLY government
I say it’s also STRICTLY government that passes through to the recipient in one of two geographical jurisdictions:
Within United StatesG; or
Without United StatesG
My side of the discussion goes no further than that.
OURE RESPONSE:
The debate was ONLY section 2 of the article, not EVERY context. The link you provided went ONLY to that section.
And THAT section deals ONLY with I.R.C. 864(b).
That’s why the title uses INCLUDES. Because its not always government. But for SPECIFIC contexts it CAN.
THEIR RESPONSE:
Even in sec. 2, it’s my position that United States (gov) is unstated, but 100% there. However, it is there through one of two categories of geography:
Within or without United StatesG. Thus, it is geography.
Furthermore I.R.C. 864(b)(1)(A) clearly makes geographical references…. I.e., resident of the United Stares, 90 days of presence for a time frame, etc.
OUR RESPONSE:
I.R.C. 864(b)(1)(B) does but not I.R.C. 864(b)(1)(A).
THEIR RESPONSE:
Well. I don’t believe the context and meaning magically change for one paragraph.
But we can agree to disagree.
OUR RESPONSE:
An office (which is intangible) can geographically be exercised anywhere. Thus, without a geography mentioned in I.R.C. 864(b)(1)(A) it can only mean nongeographical and thus corporate.
A “place of business” or “presence” in I.R.C. 864(b)(1)(B) is certainly geographical and has a domicile or situs. But the items mentioned in I.R.C. 864(b)(1)(A) are nongeographical.
The Ejusdem generis rule doesn’t apply, because we’re not talking about a definition.
And the NRA in I.R.C. 864(b)(1)(B) is an alien or someone in possession of public property if “United States” is geographical, or else they would have no jurisdiction.
“trade or business” is USPI, but its ALWAYS nongeographical. Even the “personal services” connected to it in (b) are, by default, “nongeographical”.
THEIR QUESTION:
So you think “trade or business within the United States” in I.R.C. 864(b) means within government in that particular term?
I can see that….
Notice the quotes go around the whole thing….not separately around “trade or business” and “United States.”
And this because intangible personal services COULD NOT be otherwise taxed.
Do you see that as a kind of reserved property interest in that instance?
OUR ANSWER:
Absolutely. They couldn’t even define it if it wasn’t USPI to begin with. In this case, it’s the BEGINNING of what USPI IS!
And its consistent with that in I.R.C. 871(b) “United States business” and a SUBSET of that business.
THEIR RESPONSE:
Yes. That’s very sound logic.