Okay, well, I can see you didn't bother to read and understand any of my post linked above.
From its inception the income tax has been an excise that applies only to gains from the profitable exercise of federal privileges (and therefore needn’t be apportioned), as the Pollock court itself noted (here in Justice Field’s separate concurring opinion):
"...in Springer v. U. S., 102 U.S. 586 , it was held that a tax upon gains, profits, and income was an excise or duty, and not a direct tax, within the meaning of the constitution, and that its imposition was not, therefore, unconstitutional."
~Pollock v. Farmer's Loan & Trust, 157 U.S. 429 (1895)
So, yes, Section 61 lays out all the various types of "income" but without the exercise of FEDERAL PRIVILEGE by definition there is no "income" to tax.
Because the income tax is an indirect tax, which means it can be avoided as long as you are not participating in earning "income" by exercising any privilege, the tax is not on the "income" itself but on the ACTIVITY and the "income" is how the amount of the tax is calculated.
This is Taxation 101, but CPAs pretend not to know this.
So it would appear your research is lacking with respect on what is actually SUBJECT to the tax.
Moving on to "wages" as you've missed the boat on this one as well. As the FICA definitions in 3121 are more convoluted let's look at Section 3401, the analysis is the same regardless, and which is more applicable to the gato post as it applies specifically to withholding.
[My comments are in brackets and specifically defined terms per the code are in quotes.]
3401(a) "wages"
"For purposes of this chapter, the term "wages" means all remuneration (other than fees paid to a public official) for services performed by an "employee" for his "employer" ..."
[so by definition, ONLY the remuneration paid by an "employer" to an "employee" is defined as "wages" and therefore EXCLUDES all other remuneration]
3401(d) "employer"
"For purposes of this chapter, the term "employer" means the person for whom an individual performs or performed any service, of whatever nature, as the employee of such person..."
[this one is pretty clear that an employer is defined as the person for whom an "employee" works]
3401(c) "employee"
"For purposes of this chapter, the term "employee" includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term "employee" also includes an officer of a corporation."
[are you an officer, employee or elected official of the "United States" (note this term also has a specific definition), a "State" (ditto), or any political subdivision thereof, or DC, or any agency of any of these? no? how about an officer of a "corporation" (also a specifically defined term)? so how are you an employee exactly?]
Because the term "employee" is specifically defined in the code it CANNOT also mean the common usage of the word. So if you're hung up on the word 'includes' and think it does also mean the same as the commonly used word, let the Supreme Court disillusion you:
"[T]he verb "includes" imports a general class, some of whose particular instances are those specified in the definition." ~Helvering v Morgan's Inc, 293 U.S. 121, 126 fn. 1 (1934)
"[I]ncluding ... connotes simply an illustrative application of the general principle." ~Federal Land Bank of St. Paul v Bismarck Lumber Co., 314 U.S. 95, 62 S.Ct. 1 U.S. (1941)
So, it's pretty clear that withholding only applies to "employees" as specifically defined in the code and if you do not meet that specific definition, which are specific instances of a general class of Federal Employees, YOU ARE NOT AN "EMPLOYEE" AND YOU DO NOT EARN "WAGES." As is perfectly clear from the definition, only those who are paid as a result of the exercise of federal privilege are included.
So, if you received a W-2 alleging you received "wages" when in fact you did not, you simply have to refute the allegations on Form 4852, and correctly reflect $0 as your "wages" on your Form 1040, which is the correct form to request a refund of the amount erroneously withheld.
This is getting long, so I'll show you how you are misled on "trade or business" in a separate reply.
1/2
Okay, well, I can see you didn't bother to read and understand any of my post linked above.
From its inception the income tax has been an excise that applies only to gains from the profitable exercise of federal privileges (and therefore needn’t be apportioned), as the Pollock court itself noted (here in Justice Field’s separate concurring opinion):
"...in Springer v. U. S., 102 U.S. 586 , it was held that a tax upon gains, profits, and income was an excise or duty, and not a direct tax, within the meaning of the constitution, and that its imposition was not, therefore, unconstitutional."
~Pollock v. Farmer's Loan & Trust, 157 U.S. 429 (1895)
So, yes, Section 61 lays out all the various types of "income" but without the exercise of FEDERAL PRIVILEGE by definition there is no "income" to tax.
Because the income tax is an indirect tax, which means it can be avoided as long as you are not participating in earning "income" by exercising any privilege, the tax is not on the "income" itself but on the ACTIVITY and the "income" is how the amount of the tax is calculated.
This is Taxation 101, but CPAs pretend not to know this.
So it would appear your research is lacking with respect on what is actually SUBJECT to the tax.
Moving on to "wages" as you've missed the boat on this one as well. As the FICA definitions in 3121 are more convoluted let's look at Section 3401, the analysis is the same regardless, and which is more applicable to the gato post as it applies specifically to withholding.
[My comments are in brackets and specifically defined terms per the code are in quotes.]
3401(a) "wages"
"For purposes of this chapter, the term "wages" means all remuneration (other than fees paid to a public official) for services performed by an "employee" for his "employer" ..."
[so by definition, ONLY the remuneration paid by an "employer" to an "employee" is defined as "wages" and therefore EXCLUDES all other remuneration]
3401(d) "employer"
"For purposes of this chapter, the term "employer" means the person for whom an individual performs or performed any service, of whatever nature, as the employee of such person..."
[this one is pretty clear that an employer is defined as the person for whom an "employee" works]
3401(c) "employee"
"For purposes of this chapter, the term "employee" includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term "employee" also includes an officer of a corporation."
[are you an officer, employee or elected official of the "United States" (note this term also has a specific definition), a "State" (ditto), or any political subdivision thereof, or DC, or any agency of any of these? no? how about an officer of a "corporation" (also a specifically defined term)? so how are you an employee exactly?]
Because the term "employee" is specifically defined in the code it CANNOT also mean the common usage of the word. So if you're hung up on the word 'includes' and think it does also mean the same as the commonly used word, let the Supreme Court disillusion you:
"[T]he verb "includes" imports a general class, some of whose particular instances are those specified in the definition." ~Helvering v Morgan's Inc, 293 U.S. 121, 126 fn. 1 (1934)
"[I]ncluding ... connotes simply an illustrative application of the general principle." ~Federal Land Bank of St. Paul v Bismarck Lumber Co., 314 U.S. 95, 62 S.Ct. 1 U.S. (1941)
So, it's pretty clear that withholding only applies to "employees" as specifically defined in the code and if you do not meet that specific definition, which are specific instances of a general class of Federal Employees, YOU ARE NOT AN "EMPLOYEE" AND YOU DO NOT EARN "WAGES." As is perfectly clear from the definition, only those who are paid as a result of the exercise of federal privilege are included.
So, if you received a W-2 alleging you received "wages" when in fact you did not, you simply have to refute the allegations on Form 4852, and correctly reflect $0 as your "wages" on your Form 1040, which is the correct form to request a refund of the amount erroneously withheld.
This is getting long, so I'll show you how you are misled on "trade or business" in a separate reply.