Hendrickson's witnesses in his criminal trial

[Noah]

I have been teaching litigation techniques - "trial practice" - at the law school level and beyond for many years. One of the concepts I try hardest to get across is that the more one "sounds like a lawyer", the less persuasive one is.

Sometimes I succeed, sometimes I don't.

So what grade would you the give the authors of these two different references to employee ?

I would give them both A++++ but, I am probably wrong, right?

IRC 3401
(c) Employee
For purposes of this chapter, the term “employee” includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term “employee” also includes an officer of a corporation



IRC 3121
(d) Employee
For purposes of this chapter, the term “employee” means—
(1) any officer of a corporation; or
(2) any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee; or

[Pottapaug1938]

No, Noah, you're dead on regarding the grades. You see, the two examples that you give list subsets of what the term "employee" means. As has been explained above, the term "includes" is one of expansion and emphasis, except when the word "only" is appended to it; and even them, the operative word of limitation is "only" not "includes".

[Red Cedar PM]

I just realized something, I can't believe I didn't think of it before. I am not sure if this has been mentioned yet, but don't you think if there was any possibility that a person working for a private company wasn't an "employee" that companies would make this argument all the time to get out of the hassle of performing withholding and get out of paying FICA taxes? I think Microsoft got in trouble a few years ago for trying to call a bunch of its employees independent contractors so they didn't have to pay benefits. Just another reason why Pete's whole argument doesn't pass the smell test.

[SteveSy]

No, Noah, you're dead on regarding the grades. You see, the two examples that you give list subsets of what the term "employee" means. As has been explained above, the term "inculdes" is one of expansion and emphasis, except when the word "only" is appended to it; and even them, the operative word of limitation is "only" not "includes".

So including an "employee of the United States" is expanding the common definition of "employee"?

I keep seeing how anyone that thinks "includes" is all inclusive is a retard and any average person would know that. But...then you have the word "employee" right in the term defined. Wouldn't the average person already know an "employee of the United States" is an employee?

[Pottapaug1938]

[quote="SteveSythat you give list subsets of what the term "employee" means. As has been explained abov"]

No, Noah, you're dead on regarding the grades. You see, the two examples e, the term "inculdes" is one of expansion and emphasis, except when the word "only" is appended to it; and even them, the operative word of limitation is "only" not "includes".

So including an "employee of the United States" is expanding the common definition of "employee"?

I keep seeing how anyone that thinks "includes" is all inclusive is a retard and any average person would know that. But...then you have the word "employee" right in the term defined. Wouldn't the average person already know an "employee of the United States" is an employee? [/quote]

Not necessarily. Some people might think that an "employee" is always a private-sector person. At any rate, at worst, this inclusion is a redundancy, and does not change the fact, well established in law, that "includes" is a term of expansion and emphasis, not of limitation. For examples of this, you need only review the posts above.

[SteveSy]

Not necessarily. Some people might think that an "employee" is always a private-sector person. At any rate, at worst, this inclusion is a redundancy, and does not change the fact, well established in law, that "includes" is a term of expansion and emphasis, not of limitation. For examples of this, you need only review the posts above.

You're right the average person might think an employee of the government really isn't an employee. Should have thought that through a little more, you have any more LSD it might help me see it your way a little quicker next time.

Includes is obviously not to be all inclusive when they defined "employee", but its certainly not obvious an employee includes a government employee. I think I got it now, thanks!

[Gregg]

In a fortunate linguistic turn, courts have held that it doesn't. But if anyone with half a brain and a sense of reason in writing the code had done so, this whole long, sad and incredibly costly experience would never have taken place and hundreds, even thousands of people would not have been lured into scams like Hendrickson's.

The ones who wrote and write the tax laws are far more intelligent than you give them credit for. If one thinks incompentence is the reason it is written the way it is , then, one is a fool. It is difficult to hide the truth, so that one is misled to a desired conclusion, without mistating the facts.

Ladies and gentlemen, I have just two words:

Charlie Rangall

[Paul]

Stating in 3401 that "employee" includes employees of the US and of the states also makes it clear that the US and the states required to withhold. Historically, whether the sovereign is subject to its own law or to the law of another sovereign (even when the other sovereign's law is the "supreme law of the land") has been murky, at best.

[LPC]

Ladies and gentlemen, I have just two words:

Charlie Rangall

I'm not a big fan of spelling flames, or of the gentleman from New Jersey, but I still have to point out that it's much more dramatic (and impressive) if you spell the name of the Congresscritter/target correctly.

[.]

When did they move Harlem to New Jersey?

[Nikki]

Stating in 3401 that "employee" includes employees of the US and of the states also makes it clear that the US and the states required to withhold. Historically, whether the sovereign is subject to its own law or to the law of another sovereign (even when the other sovereign's law is the "supreme law of the land") has been murky, at best.

For a good example, try submitting a FOIA request to any part of the Federal Legislative branch.

[Noah]

Stating in 3401 that "employee" includes employees of the US and of the states also makes it clear that the US and the states required to withhold. Historically, whether the sovereign is subject to its own law or to the law of another sovereign (even when the other sovereign's law is the "supreme law of the land") has been murky, at best.

Kick this to curb also, good luck !

IRC3121(e)
(1) State
The term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.

Now why were these "states" left out of IRC 3401 ? Must be they are not subject to withholding... since they were not "added to".

With the exception of DC, Pete should live in the US territories, eh?

[Pantherphil]

SteveSy should look into the legislative history to see why the Congress thought it necessary to specifically state that federal and state government officers, elected officials, and employees and officers of corporations were included in the definition of "employee" in Section 3401. He would find that back in the 1930s there was a legal controversy over whether or not the directors and executive officers of a corporation were "employees" or not. There were decisions of state courts holding that the directors of a corporation and the statutorily required officers-- president, treasurer, etc.-- were not "employees" for various state law purposes. He will also find that there was legal controversy over whether or not elected governmental officials were "employees." In a related area, there was controversy over whether or not withholding of taxes could be made from federal judges who were appointed by the President (subject to advise and consent of the Senate) and who could not constitutionally have a reducton in compensation during their tenure. There were also issues of whether officers of the United States (such as military officers) who were appointed by the President were "employees," and, if so, whether the Department of the Army or the Department of the Navy or other governmental agency who supervised and paid them could be required to withhold from their pay and allowances. Stevesy will also find that there was a legal controversy over whether the federal government could require withholding from state officials and employees. In order to resolve these controversies, Congress enacted amendments and revisions what is now Section 3401 to put an end to the controversy and make clear that all of these folks are to be considered employees subject to withholding. Stevesy makes the common mistake of trying to intepret the words of a statute in a vacuum without reading them in the context of why the legislature felt it necessary to enact the statute in the first place.

[The Operative]

Stating in 3401 that "employee" includes employees of the US and of the states also makes it clear that the US and the states required to withhold. Historically, whether the sovereign is subject to its own law or to the law of another sovereign (even when the other sovereign's law is the "supreme law of the land") has been murky, at best.

Kick this to curb also, good luck !

IRC3121(e)
(1) State
The term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.

Now why were these "states" left out of IRC 3401 ? Must be they are not subject to withholding... since they were not "added to".

With the exception of DC, Pete should live in the US territories, eh?

For income tax withholding at the source, residents of the District of Columbia are subject to withholding because without another definition of "state" within Chapter 24, the 7701 definition of state applies.

As for the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa, income earned by residents of those territories is covered by sections 931, 932, and 933. Those sections exclude certain income from gross income and from taxation under Title 26. Generally, most people in those territories are not subject to withholding for income taxes. However, since the citizens of those territories are eligible for some social security and medicare, withholding for FICA taxes is required, hence the difference between 3121 and 3401.

Pete is currently under indictment for a crime committed as a resident of one of the fifty states. The crime has already occurred. Moving to one of the territories would accomplish nothing as far as his trial is concerned. Moving to one of the territories would not relieve him of future obligations either. As a U.S. citizen, the income tax applies to his worldwide income. There is a foreign earned income exclusion, but he would then have to pay income taxes to the government of the territory. For example, Puerto Rico has its own income tax.

The only ways to avoid paying U.S. income taxes at all are: 1) earn less than the standard deduction and exemptions (a person would still be liable for social security and medicare); 2) go to the U.S. consulate in a foreign country and renounce your U.S. citizenship. Of course, if you choose the second option, do not expect to be allowed back in to the U.S.

Next question.

[LPC]

When did they move Harlem to New Jersey?

Okay, I got that part wrong. (Until I checked, I would have been willing to swear he was from Newark, NJ.)

Which is one of the reasons trying to correct someone else is so dangerous.

[Noah]

Kick this to curb also, good luck !

IRC3121(e)
(1) State
The term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.

Now why were these "states" left out of IRC 3401 ? Must be they are not subject to withholding... since they were not "added to".

With the exception of DC, Pete should live in the US territories, eh?

For income tax withholding at the source, residents of the District of Columbia are subject to withholding because without another definition of "state" within Chapter 24, the 7701 definition of state applies.

As for the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa, income earned by residents of those territories is covered by sections 931, 932, and 933. Those sections exclude certain income from gross income and from taxation under Title 26. Generally, most people in those territories are not subject to withholding for income taxes. However, since the citizens of those territories are eligible for some social security and medicare, withholding for FICA taxes is required, hence the difference between 3121 and 3401.

Pete is currently under indictment for a crime committed as a resident of one of the fifty states. The crime has already occurred. Moving to one of the territories would accomplish nothing as far as his trial is concerned. Moving to one of the territories would not relieve him of future obligations either. As a U.S. citizen, the income tax applies to his worldwide income. There is a foreign earned income exclusion, but he would then have to pay income taxes to the government of the territory. For example, Puerto Rico has its own income tax.

The only ways to avoid paying U.S. income taxes at all are: 1) earn less than the standard deduction and exemptions (a person would still be liable for social security and medicare); 2) go to the U.S. consulate in a foreign country and renounce your U.S. citizenship. Of course, if you choose the second option, do not expect to be allowed back in to the U.S.

Next question.

My question only concerned withholding, which you state,

"Generally, most people in those territories are not subject to withholding for income taxes."

Thanks for the rebuttal. Good job.