Internal Revenue Code section 861

Internal Revenue Code 861, 26 U.S.C. § 861, titled "Income from sources within the United States" is a provision of the Internal Revenue Code which delineates what kinds of income shall be treated as income from sources within the United States, as opposed to income treated as income from sources outside the United States, for purposes of various taxes imposed by Subchapter N (sections 861 through 999) of Chapter 1 of Subtitle A of the Code.

Among the taxes to which section 861 relates are:

the section 871(a) (26 U.S.C. § 871(a)) tax on certain items of income of nonresident alien individuals not in connection with a United States business, generally equal to 30% of certain amounts received by such nonresident alien individuals;

the section 871(b) {26 U.S.C. § 871(b)) tax on certain items of income of nonresident alien individuals effectively connected with the conduct of a United States business;

the section 881 (26 U.S.C. § 881) and section 882 (26 U.S.C. § 882) taxes on the income of certain foreign corporations; and

the section 887 (26 U.S.C. § 887) tax on the "gross transportation income" of certain nonresident aliens and foreign corporations.

Section 861 and tax protesters

Although Section 861 relates to the taxes imposed on nonresident alien individuals and certain foreign corporations, the language of Section 861 is occasionally cited by tax protesters, who claim that the statute excludes some portion of the income of U.S. citizens and resident aliens from taxation under the provisions of the Code. The courts have uniformly rejected this argument. (cite needed)

Section 861 and tax protesters

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