<P> The claim that salaries, wages, and compensation for personal services are to be taxed as an entirety and therefore must be returned (i.e., reported on an income tax return) by the individual who has performed the services which produce the gain is without support, either in the language of the Act or in the decisions of the courts construing it . Not only this, but it is directly opposed to provisions of the Act and to regulations of the U.S. Treasury Department, which either prescribed or permits that compensations for personal services not be taxed as an entirety and not be returned by the individual performing the services . It is to be noted that, by the language of the Act, it is not salaries, wages, or compensation for personal services that are to be included in gains, profits, and income derived from salaries, wages, or compensation for personal services . </P> <P> This language is not from the Court's opinion in Lucas v. Earl . Instead, it is an almost direct quotation from page 17 of the taxpayer's brief filed in the case . Guy C. Earl was the taxpayer, and the brief was written by Earl's attorneys: Warren Olney Jr., J.M. Mannon, Jr., and Henry D. Costigan . In some printed versions of the case, this statement and other quotations and paraphrases from pages 8, 10, 14, 15, 17, and 18 of the taxpayer's brief are re-printed as a headnote or syllabus above the opinion of the Court . In the case reprints that include this headnote (and many of them do not even show it), these excerpts are not clearly identified as being from the taxpayer's brief . A person not trained in analysis of legal materials would not necessarily know that this verbiage, like any headnote or syllabus, is not part of the Court's opinion, perhaps leading to the confusion about the source of the quotation . As explained below, the Supreme Court rejected the arguments in the quotation, and the taxpayer lost the case . </P> <P> Lucas v. Earl is a leading case in the area of U.S. income taxation, and stands for the Anticipatory Assignment of Income Doctrine . In the case, Mr. Earl was arguing that because he and his wife, in the year 1901, had made a legally valid assignment agreement (for state law purposes) to have his then - current and after - acquired income (which was earned solely by him) be treated as the income of both him and his wife as joint tenants with right of survivorship, the assignment agreement should also determine the federal income tax effect of the income he earned (i.e., only half the income should be taxed to him). </P> <P> The U.S. Supreme Court rejected that argument, essentially ruling that under federal income tax law all the future income earned by Mr. Earl was taxable to him at the time he earned the income, even though he had already assigned part of the income to his wife, and regardless of the validity of the assignment agreement under state law . The Court in Lucas v. Earl did not rule that wages are not taxable . </P>

Which of the following is a tax that the government cannot levy in the united states