12 Dec
The argument that a person`s income will not be taxed if he or she rejects or renounces U.S. citizenship because he or she claims to be exclusively a citizen of a state, and variations of that argument, have been officially identified as legally frivolous federal tax return items for purposes of the frivolous $5,000 tax return penalty imposed under Section 6702(a) of the Internal Revenue Code. [17] Overall, most Americans thought the new tax was a great idea. One taxpayer wrote to the Bureau of Internal Revenue: “I have intentionally omitted certain deductions that I might claim in order to have the privilege and pleasure of paying at least a small income tax.” Nevertheless, about 60 years later, the first income tax was levied in the United States to pay for the Civil War. At the end of the conflict, this tax was repealed, but it gave the federal government a taste of the revenue that income tax could generate. A new income tax was introduced in 1894, ostensibly to compensate for the loss of revenue due to reduced U.S. tariffs. The audience was not impressed. This tax was taken to the Supreme Court and declared unconstitutional in Pollock v. Farmers` Loan and Trust Co. Proponents of this demand argue that African Americans can claim a so-called “black tax credit” on their federal tax returns in compensation for slavery and other oppressive treatment of African Americans. A similar frivolous argument has been made that Native Americans are entitled to a credit on their tax returns as a form of redress for past repressive treatment.
The law: There is no provision in the Internal Revenue Code that allows taxpayers to claim a “Black Tax Credit” or an Indian Reparations Credit. It is a well-established legal principle that deductions and offsets are a matter of legislative pardon. See INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). Except as expressly provided in the Internal Revenue Code, no deductions or credits are permitted. The IRS warned taxpayers of the consequences of seeking refunds or other tax benefits based on frivolous tax credits.
Rev. Rul. 2004-33, 2004-1 B.C. 628; Communication 2010-33, 2010-17 I.R.B. 609. and in Reverend Rul. 2006-20, 2006-1 C.B. 746 and Notice 2010-33, 2010-17 I.R.B.
In 609, the IRS warned taxpayers against the frivolous nature of seeking exemption for Native Americans from federal income tax on the basis of an unspecified “Indian contract.” rEV.rUL. 2004-1C.B. Individuals who seek or assist others in obtaining refunds based on the Slavery Compensation Tax Credit will be prosecuted for violating federal tax laws. In addition, the United States has an injunction against a party suspected of violating tax laws. In such cases, Articles 7407 and 7408 provide for injunctive relief against taxpayers or promoters of abusive tax havens. Relevant case law: The income tax amendment, which has a considerable social and economic impact, was incorporated into the Constitution following a curious series of events that culminated in some political manoeuvring gone wrong. To counter the defeat, the administration drafted the 16th Amendment, which states that “Congress has the power to levy and levy taxes on income, from any source, without division among any state and without regard to a census or census.” The amendment was ratified in 1913 and removed legal obstacles to the establishment of an income tax. Not surprisingly, an income tax was levied later this year. The legislation was taken up before the Supreme Court. On January 24, 1916, the court ruled that income taxes were now legal due to constitutional amendments. Some tax protesters have blamed the U.S.
Supreme Court`s decision in Eisner v. Macomber[113] for the theory that wages are not taxable,[114] or for the theory that dividends are not taxable. [115] The case involved a stock dividend on shares, which was essentially equivalent to a share split, as opposed to a cash dividend on shares. With such a “dividend”, the shareholder receives nothing and does not realize any added value. For example, if a shareholder owns 100 shares worth $4 per share, the total value is $400. For example, if the company declares a “two-for-one” stock dividend that is essentially similar to a stock split (and the company does not distribute money or other property), the shareholder now has 200 shares worth $2 each, which is still worth $400 – meaning no appreciation and no income. The cake is always the same size – but it is cut into several pieces, each piece being proportionally smaller. This material, which is supposed to be a quotation, does not appear at all in the text of the case. Moreover, the words “wages” and “salaries” do not appear anywhere in the text, and there is no ruling in this case that federal income tax laws apply only to “businesses.” The Colonial Pipeline case was actually about Louisiana`s corporate income tax, not a federal tax. The validity of the Louisiana franchise tax in this case was upheld by the U.S. Supreme Court. In the case of the Colonial Pipeline, no issue related to the validity or applicability of federal income tax was raised, mentioned or decided by the Supreme Court.
As mentioned earlier, taxation is mandatory, not voluntary. Some people claim that compulsory taxation is a form of slavery and therefore illegal. They cite the 13th Amendment, which prohibits slavery in the United States. In 1894, Congress enacted a 2% tax on income over $4,000 as part of a high tariff law. The tax was repealed almost immediately by a five-to-four Supreme Court decision, although the court did not uphold the constitutionality of the Civil War tax until 1881. Although agricultural organizations condemned the court`s decision as an excellent example of the alliance of state and business against peasants, a general return to prosperity at the turn of the century tempered the demand for reform. However, Democratic Party platforms, led by three-time presidential candidate William Jennings Bryan, systematically included an income tax plan, and the progressive wing of the Republican Party also supported the concept. The financial demands of the Civil War led to the first U.S. income tax in 1861. At first, Congress imposed a flat 3% tax on all income over $800, then changed that principle to include a progressive tax.
Congress repealed the income tax in 1872, but the concept has not disappeared. More directly, there was no “sale or other sale” of the shares. The taxpayer always owns the same asset (i.e. The same interest in the company that he held before the stock dividend. Even if his base amount (usually the amount he originally paid for the stock) is less than $400 (i.e., even if he has an unrealized or potential gain), he has not yet “realized” the gain. The court ruled that this type of stock dividend is not treated as “income” for a shareholder. Over the next 20 years, several attempts were made in Congress to reinstate the “progressive” income tax. Support came mainly from populists in the South and Midwest, who attacked the rich for displaying their millions by building mansions and spending extravagantly while paying virtually no taxes. In Hawkins v. The Internal Revenue Service argued that damages received by the taxpayer in connection with the settlement of a claim for injury to personal health and reputation resulting from defamatory statements constituting defamation or defamation were taxable.
While the Board of Appeal noted that “there may be cases where taxable income is determined by a court even if it does not fall within the precise scope of the description already given”, it concluded that such damage would not be taxable. The Commission noted that the injury was “purely personal and not financial” and that the remedy was simply to heal the individual. [26] Although the payment was “separable” and resulted in a demonstrable increase in net wealth, the Commission nevertheless found that the payment was not income. The plaintiffs first argue that they are exempt from federal tax because they are “natural persons” who “did not request, receive or exercise a privilege from a government agency.” It is not a basis for exemption from federal income tax. [citation omitted] All persons, natural or otherwise, must pay federal tax on their salary, whether or not they have received “privileges” from the government. The applicants also argued that the Constitution prohibited the levying of a direct tax without levying. They are wrong; This is not the case. Const. of the United States [32] The sixteenth [amendment] does not justify taxing persons or things (their property) that were previously exempt. It does not extend fiscal sovereignty to new or exempt citizens.
It is only intended to eliminate all possibilities of any distribution of income tax between the States. It does not allow a tax on a salary. [91] The first attempt to tax income in the United States occurred in 1643, when several colonies introduced a “faculty and skills tax.” Tax collectors literally went door-to-door asking if the person had any income during the year. If so, the tax has been calculated locally.