About the W-2 Attached to Your Tax Return and How You Volunteer to Make Income Not Subject to Tax Into “Gross Income”
Ever notice now the 1040 and 1040NR both say “wages, salaries, tips etc. Attach Form(s) W-2” but line one of the W-2 says “wages, tips, other compensation” ? Weird that they don’t exactly match
Why doesn’t W-2 mention salaries?
The fundamental difference is that a W-2 is reporting only remuneration that (according to the filer) qualifies as “wages” for withholding and reporting purposes, but that is not in every case “gross income” because the employee may CHOOSE to file as nonresident alien and EXCLUDE such remuneration from his “effectively connected income”.
If he files a 1040, he must report whatever the correct amount of remuneration is that he received. Typically that will be the amount of “wages, tips other compensation” reported on line 1 of W-2.
The mention of “compensation” on the W-2 is a CLUE that the recipient should go look up “compensation for labor or services” in the IRC. If he does, he will find that under 861, compensation for services within the United States shall be treated as income from sources within the United States. And that under 862, compensation for services performed WITHOUT the United States shall be treated as income from sources without the United States.
Remember that W-2 is a required RECEIPT for employees, functioning as NOTICE
We think this is why we see “compensation” on W-2 but not on 1040 or 1040NR. 1040 or 1040NR are forms the taxpayer himself CHOOSES to use. Presumably by his choice of tax return form he has made his determination as to his status, and if he chooses nonresident alien status, he is presumably able from there to determine whether the amounts on W-2 are “compensation for services within the United States” or “without the United States”
So the “etc.” on the 1040 and 1040NR is sufficient, especially since the 1040NR clearly labels this section as being for “income effectively connected with U.S. trade or business”. So the taxpayer has all the warning they are required to give him (probably more warning than they are required to give him) that reporting these amounts on his 1040NR amounts to VOLUNTEERING to TREAT the item as “gross income” under IRC Sec. 872
Perhaps the “etc.” is meant to include “any item you are dumb enough to report on here, even though no law requires you to do so”
The “etc.” along with the “income effectively connected with U.S. trade or business” on 1040-NR is yet another clue as to the quasi-contractual nature of income tax liability for most people. Of course the choice of 1040 form is alone sufficient to make ALL income effectively connected and to make all compensation for labor/services “performed within the United States” because the regulations make it clear that 1040 is for “general use” while the 1040NR is the form for nonresident aliens.
Thus NOT filing a 1040NR = agreeing by default that the SSN belongs to a “United States person” i.e. a citizen or resident of the United States. This too is of course a quasi-contractual way of creating liability for income tax
That’s a deep cut clue right there, and you are one of only a very few people I know who would see what I am talking about there. These demons love to mock their targets/marks, it is part of the “duper’s delight” to leave clues like this right under the noses of their marks.
That “etc.” is so odd and imprecise when you think about the fact that this is a DECLARATION signed under penalty of perjury. The imprecision of words is a recurring feature of the income tax provisions of the IRC and the income tax forms and publications as well. The reason is clear: IRS fraud and deception is deliberately intended:
“Dolosus versatur generalibus. A deceiver deals in generals. 2 Co. 34.”
“Fraus latet in generalibus. Fraud lies hid in general expressions.“
Generale nihil certum implicat. A general expression implies nothing certain. 2 Co. 34.
Ubi quid generaliter conceditur, in est haec exceptio, si non aliquid sit contra jus fasque. Where a thing is concealed generally, this exception arises, that there shall be nothing contrary to law and right. 10 Co. 78.
[Bouvier’s Maxims of Law, 1856]
REAL legal undertakings are NEVER “general” or “general expressions”, but ALWAYS SPECIFIC to the definitions and their limitations. After all, they DO say in their mission statement that their mission is to help taxpayers UNDERSTAND (stand under) their tax obligations. And we should not be surprised to find that a system based on self-assessment relies on DUPING people into assessing more tax than is required by law.
More on the subject of filing tax returns addressed in this article can be found in the following resources on this website:
- How to File Returns, Form #09.074 (Member Subscriptions)
https://sedm.org/product/filing-returns-form-09-074/ - How American Nationals Volunteer to Pay Income Tax, Form #08.024
https://sedm.org/Forms/08-PolicyDocs/HowYouVolForIncomeTax.pdf - Why Its a Crime for a Private American National to File a 1040 Income Tax Return, Form #08.021
https://sedm.org/Forms/08-PolicyDocs/WhyCrimefileReturn.pdf