“source within the United States”
26 U.S. Code § 861 – Income from sources within the United States
EDITORIAL: Note that the hyperlinks to terms on Cornell such as “United States” are NOT part of the U.S. code and are not OFFICIAL links to actual definitions. They are merely guesses. Thus, “United States” DOESN”T necessarily mean the GEOGRAPHICAL “United States” they link to at 26 U.S.C. §7701(a)(9).
References to the term “FDAP” derive from 26 U.S.C. §871(a)(1)(A) and 26 U.S.C. §1473(1)(A)(i).
Note they use the suspicious phrase “if it is income treated as derived from sources within the United States” but they don’t say WHO does the treating. It’s the ABSOLUTE OWNER of the payment and not the government! If this were not the case, the government would be STEALING to decide how to treat the payment.
The term “income” as used here is NOT “income” as defined in the Sixteenth Amendment because that is PROFIT, not GROSS RECEIPTS (property). The tax is on the GROSS receipt of STATUTORY “income” as defined in 26 U.S.C. §643(b), and that “income” is earned by a trust or partnership and not a human being.
26 U.S. Code § 643 – Definitions applicable to subparts A, B, C, and D
(b)Income
For purposes of this subpart and subparts B, C, and D, the term “income”, when not preceded by the words “taxable”, “distributable net”, “undistributed net”, or “gross”, means the amount of income of the estate or trust for the taxable year determined under the terms of the governing instrument and applicable local law. Items of gross income constituting extraordinary dividends or taxable stock dividends which the fiduciary, acting in good faith, determines to be allocable to corpus under the terms of the governing instrument and applicable local law shall not be considered income.
Below is the definition of “U.S. Source” or “sources within the United States”:
26 C.F.R. § 1.1473-1 – Section 1473 definitions.
§ 1.1473-1 Section 1473 definitions.
(a) Definition of withholdable payment—
(1) In general.
Except as otherwise provided in this paragraph (a) and § 1.1471-2(b) (regarding grandfathered obligations), the term withholdable payment means—
(i) Any payment of U.S. source FDAP income (as defined in paragraph (a)(2) of this section); and
(ii) For any sales or other dispositions occurring after December 31, 2018, any gross proceeds from the sale or other disposition (as defined in paragraph (a)(3)(i) of this section) of any property of a type that can produce interest or dividends that are U.S. source FDAP income.
(2) U.S. source FDAP income defined—
(i) In general—
(A) FDAP income defined.
For purposes of chapter 4, the term FDAP income means fixed or determinable annual or periodic income that is described in § 1.1441-2(b)(1) or § 1.1441-2(c) (excluding income described in paragraph (a)(2)(vi) of this section or § 1.1441-2(b)(2) (such as gains derived from the sale of certain property)) and including the types of income enumerated in paragraphs (a)(2)(iii) through (v) of this section.
(B) U.S. source.
The term U.S. source means derived from sources within the United States. A payment is derived from sources within the United States if it is income treated as derived from sources within the United States under sections 861 through 865 and other relevant provisions of the Code. In the case of a payment of FDAP income for which the source cannot be determined at the time of payment, see § 1.1471-2(a)(5).
(C) Exceptions to withholding on U.S. source FDAP income not applicable under chapter 4.
Except as otherwise provided in paragraph (a)(4) of this section, no exception to withholding on U.S. source FDAP income for purposes other than chapter 4 applies for purposes of determining whether a payment of such income is a withholdable payment under chapter 4. Thus, for example, an exclusion from an amount subject to withholding under § 1.1441-2(a) or an exclusion from taxation under section 881 does not apply for purposes of determining whether such income constitutes a withholdable payment.
Note the phrase
26 C.F.R. § 1.1473-1 – Section 1473 definitions.
(a) Definition of withholdable payment—
(2) U.S. source FDAP income defined—
(i) In general—
(B) U.S. source.
“A payment is derived from sources within the United States if it is income treated as derived from sources within the United States under sections 861 through 865 and other relevant provisions of the Code”
Key facts:
- Its U.S. source based on HOW it is TREATED.
- They don’t say WHO has the authority to decide the treatment. The only party who can under real law is the ABSOLUTE owner and not the IRS.
- GEOGRAPHY is not involved at all. Therefore, the corporate context is the only legitimate context.
- Taxes on INTANGIBLES such as those listed above are ALWAYS at the domicile of the OWNER, which is you. Union Refrigerator Transit Co. v. Kentucky, 199 U.S. 194 (1905).
- Even if a TANGIBLE item such as LAND or real property is the subject of the tax, if the income is paid in INTANGIBLE fiat currency, then it has to be treated as INTANGIBLE income.
- If you file as a nonresident alien with no domicile in the “United States” or a domicile within a constitutional state, then there can be NO TAX on the intangible under the Internal Revenue Code. Any attempt to then associate such earnings with “source within the United States” is STEALING at that point. See:
META AI: Proof that 26 U.S.C. 871(a) earnings are PROFIT only and that labor is NOT taxable under this statute, FTSIG
https://ftsig.org/meta-ai-proof-that-26-u-s-c-871a-earnings-are-profit-only-and-that-labor-is-not-taxable-under-this-statute/
We cover the “treated as” scam in:
The Truth About “Effectively Connecting”, Form #05.056, Section 7
https://sedm.org/Forms/05-MemLaw/EffectivelyConnected.pdf