Opinion ID: 152892
Heading Depth: 2
Heading Rank: 1

Heading: Taxable Income

Text: On appeal, Nelson challenges the district court’s ruling as to his 2003, 2004, and 2007 tax refund claims but not his 2002 and 2006 claims.2 Specifically, Nelson argues that private sector income is not taxable by the federal government because the definition of “wages” in the Internal Revenue Code, 26 U.S.C. § 3401(a), does not apply to income from private sector jobs that are unconnected to the federal government. 2 As to Nelson’s 2002 and 2006 tax refund claims, the district court concluded it lacked jurisdiction. Because Nelson does not challenge the district court’s ruling, he has waived his 2002 and 2006 claims. See Horsley v. Feldt, 304 F.3d 1125, 1131 n.1 (11th Cir. 2002) (concluding issues not briefed on appeal by a pro se litigant are deemed abandoned). Nelson also raised a variety of arguments before the district court that he does not raise on appeal, including challenges to the constitutionality of the tax laws and of the particular taxes imposed on his pay. Because Nelson does not raise these arguments on appeal, he has waived them as well. See id. 3 Section 1 of the Internal Revenue Code imposes a tax on the “taxable income” of every individual. See 26 U.S.C. § 1(a)-(d); see also 26 U.S.C. § 3101 (imposing FICA taxes on “every individual”). “Taxable income” is defined as “gross income minus the deductions allowed by this chapter.” 26 U.S.C. § 63(a). “[G]ross income means all income from whatever source derived, including . . . [c]ompensation for services . . . .” 26 U.S.C. § 61(a)(1). In his amended complaint, Nelson concedes that Northwestern paid him in exchange for his work as a pilot from 2002 to 2007 and reported that pay as “wages.” We have repeatedly rejected arguments, such as Nelson’s, asserting that private sector employment income is not subject to federal taxation. E.g., United States v. Morse, 532 F.3d 1130, 1132-33 (11th Cir. 2008) (concluding that argument that individual’s income is not subject to federal taxation because his income “was derived from employment in the private sector” is “utterly without merit” and “frivolous”) (quotation marks omitted); Motes v. United States, 785 F.2d 928, 928 (11th Cir. 1986) (rejecting argument that “only public servants are subject to tax liability”). Indeed, courts have imposed sanctions, even on pro se litigants, for raising such arguments. See, e.g., Morse, 532 F.3d at 1133 (upholding sanctions against pro se defendant who raised defense that private sector income is not subject to federal taxation). Thus, Nelson’s non-taxable- 4 income argument is foreclosed by our precedent, and the district court did not err in granting summary judgment in favor of the United States on Nelson’s 2003, 2004, and 2007 refund claims.3 Nelson’s reliance on 26 U.S.C. § 6051 does not help him because § 6051 does not impose a tax on Nelson, but instead provides only reporting requirements for his employer. In addition, courts consistently have rejected arguments like Nelson’s that 26 U.S.C. § 3401(c) excludes private sector employees from federal taxation. See, e.g., Sullivan v. United States, 788 F.2d 813, 815 (1st Cir. 1986) (rejecting plaintiff's argument that he received no “wages” because he was not an “employee” under § 3401(c), reasoning that § 3401(c) “does not purport to limit withholding to the persons listed therein,” and noting that § 3401(c) concerns income tax withholding); United States v. Latham, 754 F.2d 747, 750 (7th Cir. 1985) (upholding district court’s refusal to give jury instruction that “under 26 U.S.C. § 3401(c) the category of ‘employee’ does not include privately employed wage earners,” noting this instruction was “inane . . . [and] a preposterous reading of the statute,” and stating, “[i]t is obvious that within the context of [§ 3401(c)] 3 We review de novo the district court’s grant of summary judgment. Martin v. Brevard Cnty. Pub. Sch., 543 F.3d 1261, 1265 (11th Cir. 2008). In doing so, “[w]e draw all factual inferences in a light most favorable to the non-moving party,” here, Nelson. Shiver v. Chertoff, 549 F.3d 1342, 1343 (11th Cir. 2008). Summary judgment should be granted if “there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). 5 the word ‘includes’ is a term of enlargement not of limitation, and the reference to certain entities or categories is not intended to exclude all others”).