True or false? After the 16th Amendment was passed the legal meaning of the word 'income' was enlarged to include all earnings, not just those arising from the exercise of federal privilege.

The Supreme Court made a number of decisions about the income tax in the first decade after the 16th Amendment, including this:

"...there should be no room to doubt that the word ['income'] must be given the same meaning in all the Income Tax Acts of Congress that was given to it in the Corporation Excise Tax Act [of 1909], and that what that meaning is has now become definitely settled by decisions of this Court." (Merchant's Loan & Trust Co. v. Smietanka, 255 U.S. 509) (1921)

Some have taken this to mean that 'income' means only 'corporate income' and have gone to prison defending this erroneous view.

What the court stated quite clearly is that the legal meaning of the word 'income' has been unchanged since 1909, before the 16th Amendment was ratified in 1913. The 1921 case given above is still the law.

'Income' most definitely does not mean "all that comes in". It has meaning only in the context of an excise tax on federally-connected and privileged activities, and its meaning was not changed by the 16th Amendment, nor by any law or ruling since.