In our system of written law, Congress may use a term to mean almost anything, as long as the law itself defines that meaning. When the written law explains the meaning of a term used in the law, standard English usage becomes irrelevant. For example, by the definition in 26 USC 7701(a)(1), the term person includes estates, companies and corporations (in addition to individuals). While no one would call Walmart a person in everyday conversation, Walmart is a person under federal tax law. The legal use of a term is often significantly different from basic English, and therefore reading one section of the law alone can be very misleading. See more about the Rules of Statutory Construction
As a good example, 26 USC 5841 states that [t]he Secretary [of the Treasury] shall maintain a central registry of all firearms in the United States which are not in the possession or under the control of the United States. The law has a far more limited application than this section by itself would seem to imply. In 26 USC 5845(a) it is made clear that the term firearm in these sections does not include the majority of rifles and handguns (while the term firearm in basic English obviously would), but does include "a shotgun having a barrel or barrels of less than 18 inches in length"(most shotguns are at least 18 inches and some like the Winchester Model 9410 are as long as 24 inches), silencers and grenades. The average citizen reading the law will naturally tend to assume that he already knows what the words in the law mean, and may have difficulty accepting that the legal meaning of the words used in the law may bear little or no resemblance to the meaning that those words have in common English. For example, reading the phrase all firearms in Section 5841 in a way that excludes most rifles and handguns is contrary to instinctive reading comprehension. But any lawyer reviewing Sections 5841 and 5845 would confirm that such a reading would be absolutely correct. Reading one section of the law without being aware of the legal definitions of the words being used can give an entirely incorrect impression about the application of the law.
As demonstrated, sometimes the apparent meaning of a simple phrase in the law is very different from the legal meaning. The income tax is imposed on income from whatever source derived. If the law did not explain what constitutes sources of income, then the law would be interpreted using basic English. However, the law does explain what the term means and therefore standard English usage is irrelevant.
Because the Constitution is the LAW (aside from natural law and natural rights which come from our creator), a good place to start in our discussion of tax laws would be right there. Have you read the Constitution lately? Have you read it since your 9th grade Civics class? This might be a good time to reacquaint yourself with the document that controls so much of our lives every day. You will be amazed at the ease with which you can read the document, especially when compared to current legal writings. It becomes obvious at first glance that the Constitution was written to be understood by the common Citizen who was very concerned with the content. Current legislation is usually not read by many people outside Washington, DC, and frequently not even by the legislators who vote on it. Because of the huge volume of legislation drafted each year, it is becoming common for most legislators to have one of their staff people review legislation to look for specific items so the legislators do not have to take the time to read it themselves. These legislators then vote yea or nay based on a staffer's review of certain items in the proposed law.
Laws today are not written to be understood by the common Citizen. They are written by legislators, who are usually lawyers, to be understood only by lawyers. In a very practical way, this is called "job security." I mean, whom better to interpret the law than one who played a role in writing and approving the law? As a result, most legislators go back to being lawyers when their terms are complete. So most legislation is specifically written by lawyers to be understood only by lawyers. Yet the whole concept of "common law" assumes the average Citizen has both read and understood the law. "Ignorance of the law is no excuse" is very true, but if you can prove you didn't understand how the law applied to you, it is common to get a case against you dismissed. That is how important it is for the law to be understandable! And yet the Internal Revenue Code is so complex and difficult to understand, even the IRS is not held accountable to the view or interpretation it gives you on any specific tax law! The U.S. Tax Court is full of cases where the IRS gave a written, researched opinion of the "law" and later changed its mind, resulting in a civil or criminal tax case against the person who was counting on the accuracy of the IRS in interpreting the tax laws!
This is a good place to make a statement on the type of government that was created by the Constitution. When you hear a politician speak of our government, almost always you will hear the politician refer to America as a democracy. Over the past sixty years or so, Americans have been brainwashed by our politicians into believing that we live in a democracy. WE DO NOT! Our Founding Fathers considered a democracy and dismissed it. They chose to create, instead, a republic. The differences between a democracy and a republic have been discussed and debated at great length by people more knowledgeable than I, so I won�t take much space here to add to their work. Allow me, instead, to make a simple comparison. In a democracy, if the people or their elected servants want to create a law or enact a change, all they have to do is demonstrate that a majority of the people wants the law or change. A majority vote is all that is necessary. In a republic, there might be a vast majority of the people in favor of a particular law or change, but that will not matter unless The LAW allows it. The LAW must allow it or The LAW must be modified before a new law or change can be passed. The Founding Fathers knew public opinion could be manipulated, or even misrepresented. This is the major weakness of a true democracy. So America elects its public servants to enact the will of the people, but only if The LAW allows it! Congress cannot, by majority vote, extend or increase its authority. The United States Supreme Court explains this principle:
"It is also not entirely unworthy of observation, that in declaring what shall be the supreme law of the land, the constitution itself is first mentioned; and not the laws of the United States generally, but those only which shall be made in pursuance of the constitution, have that rank. Thus, the particular phraseology of the constitution of the United States confirms and strengthens the principle, supposed to be essential to all written constitutions, that a law repugnant to the constitution is void, and that courts, as well as other departments, are bound by that instrument." Marbury v. Madison, 5 U.S. 137 (1803)
"Congress cannot by any definition it may adopt conclude the matter, since it cannot by legislation alter the Constitution, from which alone it derives its power to legislate, and within whose limitations alone that power can be lawfully exercised." Eisner v. Macomber, 252 U.S. 189 (1920)
The Supreme Court of Tennessee agrees further elaborates:
"Privileges are special rights, belonging to the individual or class, and not to the mass; properly, an exemption from some general burden, obligation or duty; a right peculiar to some individual or body.
Since the right to receive income or earnings is a right belonging to every person, this right cannot be taxed as privilege."
Cole v. MacFarland, 337 S.W. 2d 453 (Tenn. 1960)
