Code Breaker; The § 83 Equation: The Tax Code’s Forgotten Paragraph

By David R. Myrland

It’s hard to believe, but it’s true. Tax Code § 83 “explains how” to tax compensation for services, it “governs the taxation” of any and all compensation, but no accountant, IRS Agent, or attorney has the first clue about its existence; it’s a forgotten paragraph. The courts say it’s integral and of primary importance, but only one man has bothered to analyze its language, and found it to be so profound that he wrote this manual about its proper application. Only the “excess over the amount paid is gross income” - The ramifications of this are so damning and sweeping the gov’t runs from questions about it.

• Language: English
• Publisher: BookBaby
• Release date: Jan 1, 2004
• ISBN: 9781483534800

Book preview

Code Breaker; The § 83 Equation

In 1994 David R. Myrland distinguished himself as America’s premier authority on the scope and intent of the Internal Revenue Code. After analyzing the IRS’ standard operating procedure and comparing it to the language of relevant tax statutes over a period spanning six years, many discrepancies emerged as outright attempts to subvert provisions that serve to either constrain IRS authority or to honor rights to personal privacy and to property in the hands of the individual.

This manual focuses on Tax Code § 83 which remains unknown to the accounting industry, the legal profession, and IRS personnel. HOWEVER, the courts say that § 83 is universally applicable and fundamentally governing:

US Tax Court: "The amount taxable as ordinary income was the lesser of the fair market value of the stock ... over the individual’s cost of the stock. ...the language of the section [Tax Code § 83] covers the transfer of any property transferred in connection with the performance of services... The legislative history makes clear that Congress was aware that the Statute’s coverage extended beyond restricted stock plans for employees." (See Cohn v. Comm’r of IRS, 73 USTC 443, 446 (1979)).

Fifth Circuit: Section 83(a) explains how property received in exchange for services is taxed. (See Montelepre Systemed, Inc. v. Comm’r of IRS, 956 F.2d 496, 498 (CA5 1992)).

Second Circuit: At the heart of this case is I.R.C. § 83 [Tax Code § 83], which governs the taxation of property transferred in connection with the performance of services. (See Gudmundsson v. US, 634 F.3d 212 (CA2 2011)).

This manual is the first and last word on the meaning and operation of the statute that determines whether Americans owe an income tax on their hard earned pay. When you observe how this interpretation comes together you’ll quickly come to understand why the IRS refuses to indulge any and all inquiries as to how Tax Code § 83 operated in any determination of income tax liability.

Mr. Myrland is a very intelligent individual . . . very smart indeed.

U.S. Department of Justice, November 2011

Code Breaker; The § 83 Equation

by David R. Myrland

©Copyright 2014

ISBN #13:9781620309650

eBook ISBN: 9781483534800

Published by American Liberties, LLC

http://TakeFromCaesar.US

*All Rights Reserved - No unauthorized copying, recreation, or transmittal of this book, in full or in part, including quotes of any content, for any reason or by any person, is permitted without express written permission of the publisher.

Conclusions, quotes, excerpts, or teachings contained in this manual on 26 USC § 83 and other statutes shall not be made, exploited, duplicated, or otherwise reproduced in any form without the written and express permission of the publisher above named. All such content is hereby claimed as proprietary and are reserved as a matter of right by the publisher.

From the author:

You can be right as rain about the operation of the law, but if your conclusion has any impact on the revenue streams or standard operating procedure of government on any level you will be ignored; America has no courts. Realistically, the judges are the courts, so to say America has no courts is to say that judges are simply too corrupt to allow the law to operate, especially the Tax Code’s protective provisions.

When my compensation is taxed as gross income I’m being deprived of the provisions of Tax Code §§ 83, 212, 1001, 1011, and 1012. You will be asked to determine for yourself whether the law is being violated by the IRS when it seeks to tax what you receive as compensation for your services as an employee, self employed individual, or a sole proprietor. When the government itself can offer no contrary interpretation of a statute that explains how compensation is to be taxed, would you not be the best tax attorney in the land if you offered a contrary interpretation than what is detailed herein?

When you come to agree with me, reflect on how all of that money’s been spent by state and federal governments, and imagine how truly small government would have had to stay had it not chosen to steal literally 25% of the work product of honest and trusting Americans over these many decades.

The 1994 edition of this manual is first, then in an epilogue there’s a 2014 update and further discussion.

Thank you.

DISCLAIMER: Always have your financial and tax matters handled by a certified or licensed professional account, attorney, or financial planner. Nothing you’ll see herein is intended as legal advice of any nature. Anything that sounds like that to you should be deemed to be what somebody else might do on a planet far, far away where the law matters. It doesn’t matter here, I prove it on daily basis - You’ve been warned.

*Begin 1994 version of Code Breaker; The § 83 Equation. Updates are in the epilogue.

TANGIBLE AND INTANGIBLE PROPERTY

The following definition of the term property is taken from Black’s Law Dictionary, Sixth Edition.

Property. That which is peculiar or proper to any person; that which belongs exclusively to one. In the strict legal sense, an aggregate of rights which are guaranteed and protected by the government. (Cite omitted) The term is said to extend to every species of valuable right or interest. More specifically, ownership; the unrestricted and exclusive right to a thing; the right to dispose of a thing in every legal way, to possess it, to use it, and to exclude everyone else from interfering with it. That dominion or indefinite right of use or disposition which one may lawfully exercise over particular things or subjects. The exclusive right of possessing, enjoying, and disposing of a thing. The highest right a man can have to anything; being used to refer to that right which one has to lands or tenements, goods or chattels, which no way depends on another man’s courtesy.

The word is also commonly used to denote everything which is the subject of ownership, corporeal or incorporeal, tangible or intangible, visible or invisible, real or personal; everything that has an exchangeable value or which goes to make up wealth or estate. It extends to every species of valuable right or interest, and includes real and personal property, easements, franchises, and incorporeal hereditaments, and includes every invasion of one’s property rights by an actionable wrong. (Cite omitted)

Property, within constitutional protection, denotes group of rights inhering in citizen’s relation to physical thing, as right to possess, use and dispose of it. (Cite omitted)

Goodwill is property; as is an insurance policy and rights incident thereto, including rights to the proceeds. (Cite omitted)

Intangible property. Property which cannot be touched because it has no physical existence such as claims, interests, and rights.

Personal property. In a broad general sense, everything that is the subject of ownership, not coming under denomination of real estate. A right or interest in things personal, or right or interest less than a freehold in realty, or any right or interest which one has in things movable. Personal property includes money, goods, chattels, things in action, and evidences of debt. (Calif.Evid.Code)

Black’s Fifth Edition - Criminal code. Property means anything of value, including real estate, tangible and intangible personal property, contract rights, choses in action and other interests in or claims to wealth... (Cite omitted)

It should now be clear that property is not so much the object of ownership as it is the rights to that object. Indeed, property could easily be construed to include a person’s rights themselves. Can you find a way to exclude labor from this definition of property? Isn’t it true that you can decide where your labor will or will not be expended? Yes. Isn’t it true that nobody can make you labor where you do not wish to? Isn’t it true that labor has an exchangeable worth? What does the Supreme Court have to say about labor?

In principle, there can be no difference between the case of selling labor and the case of selling goods. Adkins v. Childrens Hospital, 261 U.S. 525, 558 (1922).

Does Congress share this opinion of labor, that it is property? And if Congress DOES agree, have they provided for it in the Code? Yes.

§ 7701(e)(1) In general.- A contract which purports to be a service contract shall be treated as a lease of property . . .

Why would a service contract be a lease of property if services (labor) were not property? Suffices to say that the powers that be recognize labor to be property, as well as that which is given in exchange for it.

Butcher’s Union Co. v. Crescent City Co., 111 U.S. 746, at 756-757 (1883), As in our intercourse with our fellow men certain principles of morality are assumed to exist, without which society would be impossible, so certain inherent rights lie at the foundation of all action, and upon a recognition of them alone can free institutions be maintained. These inherent rights have never been more happily expressed than in the Declaration of Independence, that new evangel of liberty to the people; We hold these truths to be self evident, that is so plain that their truth is recognized upon their mere statement, that all men are endowed, not by edicts of Emperors, or decrees of Parliament, or acts of Congress, but, by their Creator with certain inalienable rights, that is, rights which cannot be bartered away, or given away, or taken away except in punishment of crime, and that among these are life, liberty, and the pursuit of happiness, and to secure these, not grant them but secure them, governments are instituted among men, deriving their just powers from the consent of the governed."

Butcher’s, supra, at 757: Among these inalienable rights, as proclaimed in that document, is the right of men to pursue their happiness, by which is meant the right to pursue any lawful business or vocation, in any manner not inconsistent with the equal rights of others, which may increase their prosperity or develop their faculties, so as to give their highest enjoyment.

The common business and callings of life, the ordinary trades and pursuits, which are innocuous in themselves, and have been followed in all communities from time immemorial, must, therefore, be free in this country to all alike upon the same conditions. The right to pursue them, without let or hindrance, except that which is applied to all persons of the same age, sex, condition, is a distinguished privilege of citizens of the United States, and an essential element of that freedom which they claim as their birthright.

It has been well said that, The property which every man has is his own labor, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of the poor man lies in the strength and dexterity of his own hands, and to hinder his employing this strength and dexterity in what manner he thinks proper, without injury to his neighbor, is a plain violation of the most sacred property."

Coppage v. Kansas, 236 US 1, at 14 (1915): Included in the right of personal liberty and the right of private property, partaking of the nature of each is the right to make contracts for the acquisition of property. Chief among such contracts is that of personal employment, by which labor and other services are exchanged for money or other forms of property.

The Antelope, 23 US 66, 120: ...every man has a natural right to the fruits of his own labor, as generally admitted; and that no other person can rightfully deprive him of those fruits, and appropriate them against his will...

Evans v. Gore, 253 US 245 (1920): "The Sixteenth Amendment does not justify the taxation of persons or things previously immune. It was intended only to remove all occasion for any apportionment of income taxes among the states.

Constitutional Amendment 16 authorizing Congress to collect taxes on incomes, from whatever source derived, without apportionment, among the states,

Reviews for Code Breaker; The § 83 Equation

[Nato · Rating: 4 out of 5 stars]

I think he's focused too much on §83(a) and over looked §83(b) which in my opinion is more significant and irrefutable because its an election. I you can choose to make the election you can also choose not to make the election and ill choose not to include in my gross income. As opposed to in §83(a), the IRS will likely say you didn't pay anything and therefore everything over $0 is included.

[anthony marine · Rating: 3 out of 5 stars]

Excellent explanation of the law and how it is to be applied, regarding your compensation for services performed i.e. "paycheck". Anyone collecting one should read this book, and require their tax attorney to read it also.