Are you engaged in a trade or business?
If so, do you KNOW what the legal definition of a "trade or business" is in the law?
You can find it in the tax code at 26 USC 7701(a)(26):
The term “trade or business” includes the performance of the functions of a public office.
There is NO OTHER definition of this term anywhere in the tax code.
FYI.
That's the form designed to be used for that purpose, isn't it?
If the error is not noticed on the immediate year's filings, of course there's a different form, the 1040X.
What might be incorrect about the W-2 as filed by the workplace?
What would be the correct statement of the case?
What do the W-2 instructions specify about how to define words used when filling it out?
What word used in the W-2 has multiple definitions in the tax code requiring it to be used multiple times in case the meaning should change from one definition to another?
For instance, people who make more than $147,000 in income this year are treated differently than people who don't.
What is the actual applicability of the key word to you?
Why?
I’m getting the impression that your methods still requires you to sign a confession every year, thought not one that they would like. Is my presumption correct?
I was looking towards a path that doesn’t require me to deal with them at all (except maybe this final year). Just write a notice of “termination of authority to withhold”, have my w2 corrected (or at least try) and then not even file despite “possibly” getting a huge refund from withholding.
I may spend the time learning their codes, just for the sake of understanding, but I certainly wouldn’t use it as a defense. Going after the man acting as an agent seems, I don’t want to say easier but it will cause less headache in the long run as opposed to navigating within their legal society.
Yes, but at this point I don’t really care about previous withheld money. I just want to stop all withholding moving forward.
Good to know
Boxes 1,3,5 and 7.
She’s should be 0, I think? Don’t really know how it should be filed. Still researching.
Have to read through their pamphlet to answer that one.
Wages/income? I’m guessing here.
It’s not always necessary. I can get out of it the same way 147k+ does, for the same reasons, despite not making 147k+. Maybe I overthink It, but I think that’s what you were hinting at.
There's no method, there's just the law. You're not required to sign anything you don't want. But if someone testifies falsely against you under penalty of perjury, it's appropriate to testify truly under penalty of perjury. Since the scheme convinces many bosses to testify under penalty about hundreds of millions of people, each of those people has the responsibility to check and correct their boss's testimony because it's an evidentiary nexus.
That leads to the choice to testify (risky) or not to testify (differently risky). The law provides that if you don't testify and the IRS accumulates evidence against you, it can proceed to enforce after it checks off its procedural boxes, which typically takes 4-6 years leading people to believe not testifying is just fine. The law provides that if you do testify accurately, the IRS is required to accept your testimony, which sometimes it has accepted (with many examples available) but sometimes it tries to talk you out of, by various tricks.
There have been different periods where I haven't testified annually for different reasons, some mistaken, some informed. One of my reasons was that I was (as you hint) fearful of making a confession to something tricksy or nefarious. Now I firmly recommend testifying truly according to your knowledge of the law as always the best approach. Any mistake you make can be corrected procedurally if your views grow later. Simply review every fact you're asked to testify to against the code definitions and determine the correct answers. You are free to retain scruples, as I did, but once you learn the law you'll have no fear of being trapped into a negative confession. (Not only that, but having learned the law I can read the cases of people who have been trapped into confessions they didn't intend, and tell you what mistakes they made.)
"Simple." Structure your affairs so that nobody ever sends the IRS a mistaken information return under penalties of perjury that states that you had taxable income. This is not easy for slaves but there are several bracing paths available for sovereigns.
The government's "agent" doesn't realize what an agential service he's doing, he thinks he's burdened by the law just like you are. He is fearful of going outside ADP's lines. The most fruitful conversation with an HR professional I had on this subject ended suddenly when the person retired with no prior announcement. I don't know whether it was "family reasons" or whether I had actually convinced him his job was largely a lie. So unless your boss is so based as to want to know the whole truth and consider broad changes, I don't see it useful to "go after" them. You (1) convert your job to contract, which some positions are able to do; (2) quit and change up; or (3) settle for something that might work as a minimal loss option, namely file W-4 exempt, accept the 7.65% hit from all paychecks, and never try to collect that back. If this last is an acceptable loss, you don't need to correct the record in the short term, but again by not filing you're on the long track of needing to correct the record someday as you continue to work under that assumption.
But if you tell your boss you terminate his authority to withhold, he (who hates legalese worse than you) laughs, asks payroll, hears that they can mark you as exempt and will only withhold 7.65%, and settles for that. In other words, it has no effect because it is a request with no power to overcome his perceived legal duties. For him to understand his legal duties correctly requires patient education rather than legal notices, and his willingness to find a path that doesn't risk the place of his business as a going concern in the world.
We'd all love that, and that requires finding a workplace and a job where the ADP is permitting that withholding is not necessary. That usually comes to the three options above, or other ones that a creative sovereign might work out with fellow based citizens. If you've gotten into a "slave job" ("employee" means "slave" in French), you go to that passage in Paul about getting free if you can, but not sweating it if you can't.
Good, so let's see, as it's much easier to look these things up than previously and it's part of the hours of tax prep every American is projected to do annually anyway (https://www.irs.gov/pub/irs-pdf/iw2w3.pdf).
Box 1—Wages, tips, other compensation. Show the total taxable wages ....
Box 3—Social security wages. Show the total wages paid ... subject to employee social security tax ....
Box 5—Medicare wages and tips. The wages and tips subject to Medicare tax are the same as those subject to social security tax (boxes 3 and 7) except that there is no wage base limit for Medicare tax.
Box 7—Social security tips. Show the tips that the employee reported to you even if you did not have enough employee funds to collect the social security tax for the tips.
Yes, "wages" is the key word, because as you see it has to be reported 3 times because each amount might be theoretically different. And therefore there are basically 3 definitions of "wages" in the tax code, one for each box. (New to me is how tips are handled, but I'll note that here for my own memory's sake: 26 USC 6530 says, "Every employee who, in the course of his employment by an employer, receives in any calendar month tips which are wages (as defined in section 3121(a) or section 3401(a)) or which are compensation (as defined in section 3231(e)) shall report all such tips." Why would you only report "tips which are wages ... or which are compensation" and not any other tips? Do tips exist which are neither? But the definition of "compensation" comes up separately and is less important.)
Correct, it's not always necessary for "wages" to apply to you, because "wages" are taxable income in the nature of excise, which makes them evitable without infringement of common-law right to labor for money.
Close enough. The reason that excess earnings over $147K are not taxed for SS purposes (box 3) is that SS law thinks that you shouldn't earn any additional benefits just because you're at a top-tier income. So in that sense only, the excess is tax-free for SS purposes. Well, the same broad reason is that any other money made in America that is not taxable income is also tax-free for SS purposes. If you pay your babysitter $100 in the course of a year and are the only one to pay, every accountant knows that is not taxable income because it's below the threshold (if I am wording this point accurately). So the question is whether an ordinary laborer's regular earnings are not taxable income. But the W-2 is evidence that they are. But if the W-2 is mistaken and they're not taxable and further evidence corrects the record, the IRS has a duty to refund any mistaken withholding, including SS/Medicare.
So now we can look at leisurely pace at the law (I do this all the time, especially for traffic law).
Per 26 USC 3402(a), box 1 is about 3401(a) "wages" defined in terms of 3401(c) "employees".
Per 26 USC 3101(a)-(b), boxes 3 and 5 are about 3121(a) "wages" defined in terms of 3121(b) "employment" defined in terms of 7701(a)(9) "United States" defined in terms of the 7701(a)(10) "State". (The distinction between boxes 3 and 5 is made in 3121(a)(1).)
(The ordinary reader who wants to drill down can find these provisions in reasonable time and follow through to find the definitions and the general definitions section. It's possible one might risk making a scoping error, but scope too can be validated by further study.)
I belabor these two because they are both for the sake of understanding and a valid defense through knowledge of the law. If you are happy with the 7.65% hit every year, some people compromise at that and call it an acceptable bribe to pay for relative quiet. But if you want to know your actual liability and how to defend against allegations of different liability, which are an eventual risk with any traditional job, it'll be important to track why those definitions above are important.
(Hint: One of them was written in 1864 for Lincoln's income tax and its core has never changed since. Most people don't know Lincoln started an income tax in 1862, but the basic scheme goes back that far!)
So I would ask you, if you want to keep diving: Why, Mr. Crotch, do you believe boxes 1, 3, 5, 7 of the W-2 should be corrected to zero?
What I meant was that what you’re describing is more in line with Peter Hendrickson or Brian Swanson who stays within the legal framework as opposed to Karl Lentz or Bill Turner who operates under common law. I don’t mind learning both approaches.
When I mention going after the man, I meant the irs, not my hr manager. So in this scenario, 4-6 years later when the irs comes knocking on my door, couldn’t I just hold the agent liable. (Employer might be liable for a false w-2, but if I have a copy of the email I sent informing them that my earnings is not subject to income taxes then that’s on them)
While true (as a government employee, he is) if they said I owe $xxxxx in taxes, I simply ask for a bill of particulars, or to have them sign their claim that I owe $xxxxx. Without a signature it boils down to fraud. Who would I hold liable if $xxxxx was off by 1 penny.
They’re not and I agree with it being useless to go after my employer. But I can claim it, it’s just why would I want to unless I’m burning bridges. That’s my plan z, if I end up losing my job over this, I can claim every $ withheld in the last x years. Hopefully it doesn’t get to that.
You didn’t mention it but it was in the book:
I’m fine with option 3, however I believe I can possibly get out of the 7.65% hit through the use of termination of authority to withhold Because an agreement between a non-"employee" and a non-"employer" regarding withholding is neither regulated nor required, one can end it at any time by simply withdrawing any implied or explicit permission. as you say, they may just laugh but at least I tried.
I don’t think one should be filed at all but because I had previous withholding, it would be necessary.
A w-2 is used to confess “income” to an “employee”. I can’t be an “employee” because my company is not “engaged in the performance of the functions of a public office”. That makes my earnings “non taxable income”.
3401 failed to define me as an “employee” so none of their definitions of “wages” apply to me.
For 3121, (d)(2) is a bit confusing. What does that even mean? Can I determine whether there is a employer-employee relationship? Can my employer?
I’ve skimmed through 6051, 3401 and 3121, but I’m going to need a lot more time to fully process and understand it. Most don’t apply but some seems like they do (for example 3401 (a)(4), everything is outside of business or trade, so it’s a bit confusing. I would think it doesn’t apply at all since my employer is not a trade or business, but what if they claim to be?)
Also, it sounds like compensation revolves solely around being harmed or in a position to potentially be harmed. Was that why you said it’s less important?
Yes, this thread is about the code rather than the common law, so that's what I'm focusing on. If there were a simple repeatable common-law remedy for the "wage slave" as opposed to the sovereign who can easily withdraw, given the problems they face, I'd focus on that too.
They deflect everything you give their agents as personal attachments. If you are willing to email your workplace, you should be willing to testify to the IRS to the facts you know before it goes a lot farther.
Good, but what happens when the IRS contacts your workplace or bank with a lien or levy? Suddenly you're older Joe Lewis with tons of power but no liquidity. He wasn't the only one to wake up with his cash zeroed like a terrorist, and my allusion is hiding a whole world of destruction of lives. The purpose of early testimony is that it protects you before it goes that far.
Your workplace knows nothing about how much you claim out of your withholding after they've completed their middleman work in January each year. There are no bridges burned with the workplace by making a proper claim with the IRS.
Good, and now we're coming to the meat. Remember that "wages" are different for the two purposes, Fed WH and SS/Med. Nature of "employee" is also different for the two.
That would only work if you were being asked about the definition you quote, "trade or business", which only comes up for the self-employed. You could still be an "employee" under either or both of the two other definitions. We're constantly dealing with scoping, words that change meaning based on context, to an extreme degree.
There's your first hump. None of the chapter 24 definitions by this standard (we'll get to the chapter 21 definitions). For Fed WH purposes (box 1), you have legally determined that you are not a 3401(c) "employee". A person who has made that determination can truthfully testify on form 4852 attached to 1040 that they have made attempts to contact the workplace about the error (copying your letter), that the error remains uncorrected and should be corrected to the amount specified, and that they have determined themselves not to be a 3401(c) "employee". (By the 1940s, when withholding at the source was piggybacked onto Social Security to produce more taxpayers, the lawmakers realized that the ambiguity of the word "includes" was not being contested by anyone and they could set up "volunteers" in plain sight, especially with the war and Donald Duck and all. Earlier they had to be cagier.)
Indeed, because in the early 1930s only business owners were paying personal income tax, so when SS withholding was invented and sold as a savings plan rather than a tax it had to rely on the cagier definitional track. So let's assume for the moment that a 3121(d) "employee" (SS/Med) is not the same as a 3401(c) "employee" (Fed WH), and that a 3121(d) SS/Med employee is (and includes) just the ordinary meaning of the word, a common-law employee. Did SS law fail to create an excise nexus, thus running the risk of unconstitutionality due to impinging the constitutional right to exchange labor for money? No, we just look further for the nexus. I've discovered that there's always a nexus. Go back to 3121(a), which talks about the withholding to be paid:
For purposes of this chapter, the term “wages” means all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash; except ....
Nothing about an "employee" in that sentence! Just "employment". Employment is the nexus for SS/Med, but employee is the nexus for Fed WH. Now reread my earlier note about 3401 vs. 3121. (I may have mentioned 7701 too hastily as global definitions for the whole IRC, because there's a backup definition in 3121 also useful that doesn't conflict, and either route works.) Getting over the second and final hump won't take "a lot more time" with that much help, and I think you're willing to see it, and it covers 3, 5, 7 all together. And that is all the pieces you need even if my account should go silent.
("Compensation" has multiple meanings, and I thought there was a quick demonstrable route to show which one is intended for W-2 but I'm not finding that immediately. The reason it's less important is that it's generally a catchall term for things that are not cash-for-labor, such as investment benefits. Unless you have an adjustment to these boxes that causes their totals to differ from your final pay stub gross total before withholding, there's no compensation to worry about, just earnings.)
You meant, made Not more than that in 8 years <--- That resembles me.
Maybe but that's not what I'm talking about here. When we learn what the code says about rich people it has consequences for "poor" people.
Because we must be careful what we say about this online, what I said was a form of puzzle to tax researchers, which is not hard to solve online. The question is what is $147,000 a cutoff for in this year's law. When they discover that, they can join it with the answers to the other questions to learn how to classify their own earnings. If you want more explanation I can provide it.