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Book details
  • Genre:LAW
  • SubGenre:Taxation
  • Language:English
  • Pages:96
  • eBook ISBN:9781483534800

Code Breaker; The § 83 Equation

The Tax Code’s Forgotten Paragraph

by David R. Myrland

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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.
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.
About the author
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.
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