The taxpayer's taxable income from sources within or without the United States will be determined under the rules of Secs. 1.861-1 through 1.864. If, despite the clear wording of these regulations, citizens who live and work exclusively within the United States should not be using these sections to determine their taxable income, please provide legal citations demonstrating that. For purposes of this section, the term exempt income means any income that is, in whole or in part, exempt , excluded, or eliminated for federal income tax purposes . 1.61-1 Gross income.
Gross income means all income from whatever source derived, unless excluded by law .
The following citations are from the 1945 income tax regulations. Meaning of net income. The tax imposed by chapter 1 is upon income. The federal income tax laws, without a doubt, have a huge impact on the earning, spending, saving, and many other life choices of those who must pay. Grant the validity of this law, and all that Congress would need to do, hereafter, in seeking to take over to its control any one of the great number of subjects of public interest, jurisdiction of which the states have never parted with, and which are reserved to them by the Tenth Amendment , would be to enact a detailed measure of complete regulation of the subject and enforce it by a socalled tax upon departures from it.