Alan Bacon (sui Juris)
Definitions are KEY!
Wed Feb 18 14:13:58 2004
192.187.239.239

The popular mistaken belief is that the FICA tax which is imposed on the income of "employees" under Section 3101(a), is a "wage" tax.

However, a reading of Section 3101(a) shows clearly that the tax is not, in fact, a wage tax but rather is imposed on "income" which is measured by "wages."

Hence, the FICA tax is simply another income tax.

However, what is of vital important in both these sections is the limited application of the terms "wages" (as defined in Section 3121(a)) and "employment" (as defined in Section 3121(b).

The definitions of these terms create a territorial limitation on the application of the tax.



As a sidebar here, the Handbook for Special Agents issued by the Department of Treasury, Section 451, Definition and Purposes, states: Definition.-An excise tax is a duty or impost levied upon the manufacture, sale, or consumption of commodities within the country and upon certain occupations.




Continuing, Section 3121 states:

Definitions.

(a) Wages. For purposes of this chapter, the term "wages" means an remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other
than cash; except that such term shall not include....



Note that the term "wages" identifies monies paid for the activity identified by the term "employment" which is defined in Section 3121(b), the essential part of which is as follows:



Section 3121(b). Employment. For purposes of this chapter, the term "employment" means any service, of whatever nature, performed (A) by an employee for the person employing him, irrespective of the citizenship or residence of either, (i) within the United States, or (ii) on or in connection with an American vessel or American aircraft under a contract of service which is entered into within the United States or during the performance of which and while the employee is employed on the vessel or aircraft it touches at a port in the United States,....



As shown, the term "employment" means a service performed by one identified by the term "employee" within the "United States...". "United States" is also a term used in this chapter as defined in Section 3121(e)(2):



Section 3121(e)(2). For purposes of this chapter -



(2) United States. The term "United States" when used in a geographical sense includes the Commonwealth of Puerto Rico, the Virgin Islands, Guam and American Samoa.



The definition of the term "United States" lists those areas in which the activity described by the term "employment" takes place. The definition lists only the Commonwealth of Puerto Rico, the Virgin Islands, Guam and American Samoa as the areas in which the tax imposed by this chapter applies.



When words are used as terms in order to establish their clear and unambiguous meanings, precise definitions of those terms are always included in the law. These definitions explain the exact meaning of terms used in the IR Code. As quoted earlier, the Supreme Court in the decision of Gould v. Gould
established that, in taxing statutes, definitions of terms used in the statutes cannot be expanded by implication. Nothing can be added to the definition of a term; it means only that which is stated, regardless of any belief to the contrary.



It may be difficult to believe that the definition of the term "United States" could be limited to mean only the four island possessions of Puerto Rico, the Virgin Islands, Guam and American Samoa. But that is exactly what this definition means because statutes mean only that which is stated, nothing more.

• Come out of Her (Babylon)! — Alan Bacon (sui Juris), Wed Feb 18 14:19