...accountants or anyone for that matter. This paper seeks to explore the history of the Federal Income Tax System, the Internal Revenue Code, the Internal Revenue Service, and guidelines and improvement of the tax system. History of Taxation in the United States The history of taxation in the United States commenced when the British, French and Spanish Empires ruled the individual colonies established in the US. This was back in the 1790’s after World War I. After their independence from Europe, the taxation system continued by collection of poll taxes, tariffs, and excise taxes. There were various acts passed by parliament which imposed taxation of various items such as lead, paper, paint, glass, stamps, sugar, and tea as a means of tax collection. From these come the Sugar Act, the Stamp Act, and the Townshend Revenue Act. The Boston Tea Party was the insurgency against the British colonists by the American colonists to not pay the tea tax levied upon them. Federal Government Income Tax History The taxation system in the United States is governed by different levels of government. There are different methods of taxation as well. The tariffs imposed were the largest source of federal revenue from 1790 to the eve of World War I. This was the largest source of income until the collection of income taxes. Congress adopted federal statutes imposing legal obligation to pay federal income taxes in 1861 and 1862 to pay for the Civil War. The law levied...
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...insurance or business assets are not enough to cover company debts, the owner’s personal assets are accessible. Income Taxes – Legally, the sole proprietor and business and are viewed as one and taxed as such. This is pass-through taxation and it can be beneficial because generally personal tax rates are lower than corporation rates. Longevity/Continuity – There is no continuity with sole proprietorship. If the owner dies, the business ceases to exist. Control – One of the best reasons to have a sole proprietorship is autonomy. The owner has complete control of the business. Profit Retention – Pass-through taxation provides better profit retention for sole proprietors. Unlike a c-corporation, sole proprietorship is taxed at the business owners personal income tax rate which is generally lower than a corporation tax rate. Convenience/Burden – Setting up a sole proprietorship is the easiest of all business forms. General Partnership: Liability – All partners in a general partnership are equally liable for the debts or lawsuits claimed against the business. There is unlimited liability and one partner is responsible for the actions of all other partners. Income Taxes – As with a sole proprietorship, the partners are subject to pass-through taxation. The partnership does not pay taxes itself. Longevity/Continuity – The partnership is dissolved if either partner passes. Control – All partners have the right to make decisions for the business. However, they may not sell their...
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...Corporation versus Partnership Strayer University ACC317 Advanced Federal Taxation December 7, 2013 Starting a business is not an easy task. First, one must decide what type of entity the business will be in an effort to maximize profits and reduce tax obligations as much as possible. The two entities I will discuss are corporations and partnerships. A corporation is defined as a legal entity that is separate and distinct from its owners. Corporations have most of the responsibilities and rights as individuals, however corporations have the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes. (Investopedia, 1) Deciding to elect to become a corporation has advantages and disadvantages. A few advantages and disadvantages are listed below: ADVANTAGES: * Capacity to act as a legal entity * Due to many individuals investing funds, a corporation has a bigger source of capital which allows for larger business undertakings * Unlimited life which allows time to establish a strong credit position * Stockholders have limited liability for corporate debts. The extent of their investment in the corporation is all the stockholders are held liable for, personal assets are protected * Shares in a corporation can be transferred without prior consent from the corporation’s shareholders * Centralized management under a Board of Directors DISADVANTAGES: * Legal requirements...
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...In May federal district attorney William Rawle issued warrants for more than sixty distillers in Pennsylvania who had not paid the whiskey tax. Under the law that was in effect at the time, the distillers were ordered to travel to Philadelphia were they were to appear in front of a judge in the federal courts. Farmers who received these warrants quickly realized it was expensive, time consuming, and beyond their means. Congress then modified this law on June 5th 1794, meaning that the tax trials could be held in local state courts. But by that time General David Lenox had already been sent to gather the distillers who had warrants against them and bring them to Philadelphia. But shortly after it was announced by William Bradford that the warrants were to compel compliance of the law, and that the government didn’t intend to hold the trials in Philadelphia. The timing of these invents later on...
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...currently uses a progressive tax system, which is dependent on two important factors: income, which is a key component of the progressive taxation, depending on income of an individual. The tax rate increases for higher income earners and decreases for lower income earners. The other major factor in the progressive taxation system is expenditures. Expenditures are various sales takes that impose or collect revenue. The concept of expenditures is the more you spend, the more taxes you will pay thus increasing revenue within the progressive taxation system. The United States did not start with a progressive tax system but before the 16th Amendment was ratified in 1913, the United States had a flat tax. The United States tax code evolved through time, as far back as the 13 original colonies. The colonies back then were heavily taxed by Great Britain, so much so, that they rebelled against Great Britain in an act of the Boston Tea Party to effectively protest a tax which they had no input in and no representation by the government of Great Britain, this led to the Revolutionary War and the fight for independence. Through the early years that America collected taxes, America was virtually tax free due to the heavy handed taxation of Great Britain. “The new American government was understandably cautious when it came to taxation – direct taxation was prevented by the Constitution for all practical purpose.” (Beattie, 2013) Most of the taxes back then collected by the government were...
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...presidential power to pardon • Federalism as a value in the Warren and post-Warren Supreme Court • Federalism as a constitutional concept in the Rehnquist Court • How far did the Rehnquist Revolution in federalism go? • The constitutional status of the War Powers Act (1973) • The concept of Executive Privilege • Are there limits to the Court’s recent “takings clause” jurisprudence? • The impact of I.N.S. v. Chadha (1983) • An analysis of the contemporary understanding and constitutional significance of (a) the reversal of New Deal legislation by the Supreme Court, or (b) the Court Pack Scheme of F.D.R. • Congressional attempts to restrict the jurisdiction of the federal courts...
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...10/08/12 Social Security Paper A brief introduction to the topic of United States Social Security program tells us that it came from the “Old-Age, Survivors, & Disability Insurance” federal program and is meant to provide welfare. There were actually a few similar precursors to what we know as social security, one example being a pension program following the American Civil War. After the Civil War there were hundreds of thousands of widows, orphans, and disabled vets. Even before this, an article informed me that the first national pension program began in early 1776; prior to the signing of our declaration. Not long after the Civil War had ended, America began to rapidly change. This had a lot to do with the Industrial Revolution and the urbanization of the population. This led us to stray from an extensive agrarian family unit that could support their elders to a more condensed American family living in cities. Combining demographic and social changes (including the increase of life expectancy by roughly 10 years), America had fewer and fewer people living on the land, and more of its population in the cities. Unfortunately, this led to a “fragile” provision of economic security. Social Security itself was created on August 14, 1935, when President Roosevelt signed the Social Security Act. Not only did this new legislature help with the general welfare of the public, but it also provided a way for retirees over 65 years of age to receive a continued form of income...
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...Carlos Tovar Federal Taxation March 6, 2011 Article Brief: “Innocent Spouse Relief: Alternatives After the Lantz Case” Article Brief: “Innocent Spouse Relief: Alternatives After the Lantz Case” The dilemmas described in the Lantz case reflect the high level of ambiguity that a filing spouse experiences when challenging IRC 6015 provisions for an Innocent Spouse Claim. Specifically, the stipulated filing timeframe in sub-section (F) of IRC 6015 – Equitable Relief. In general, there’s major discrepancies between the tax courts’ and IRS’ interpretation as to when the Equitable Relief application should be filed by the innocent spouse according to what’s referenced in sub-section F of the code. Such case brings about uncertainty when tax planners advice their clients on how to better strategize when in this situation, and better yet, avoiding it all together. Although the basic background and scope of code IRC 6015 and its sub-sections are fundamentally important, there are other components that bring about the controversy surrounding the provision. The most relevant is perhaps the fact that although sections 6015(B) and (C) requires requesting relief by filing form 8857 within two years of the initiation of an IRS collection activity with respect to the innocent spouse, section (F) contains no mention of a time limit for filing. Nevertheless, the IRS applies the same two-year limit to the equitable relief under section 6015 (F). Taking these points of controversy...
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...paper defines the tax issue and gives a brief history of the tobacco excise tax. The second section discusses the stakeholders and an analysis of the issue. And lastly, I describe my policy perspective. The Tobacco Tax Issue Is taxation on tobacco an effective means of decreasing the smoking rate or is it just an elaborate ploy to increase taxes by playing on voter emotions? The message is clear and has been etched in our minds over the years; tobacco kills. Tobacco and secondary tobacco products kill an estimated 440,000 Americans per year. Over the past several decades, state and local governments have passed tobacco excise taxes and other laws regulating the use of tobacco. But who is actually behind the legislature? First Tobacco Tax Tax on tobacco was first implemented by Alexander Hamilton, secretary of the treasury, in 1794 (Altman, 2009). The tax was soon repealed, but excise taxes have been a staple in federal revenues since the American Civil War. In 1921, Iowa successfully passed the first state tax on tobacco, with many states to follow. Not only does the federal government and state governments tax tobacco, but now city municipalities are also imposing a local tax on tobacco (Altman, 2009). But what is the current tobacco tax about? There are several sides to the argument, as is the case in most taxes. Advocates of the tobacco tax argue that the tax is not only an increase to federal, state and local government revenues...
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...| | | | Small Business Idea Paper Nakisha Burton ACC/561 Accounting June 9, 2013 | | One of the most important business choices one can make is the decision to become an entrepreneur and invest the necessary time, money, and energy into starting a business. I always dream of owning and running my very own childcare center. The childcare business offers entrepreneurs the opportunity to pursue a passion for child care and child development while enjoying the independence and responsibility of being his or hers own boss. However, starting a childcare business is not as easy as one may think. There is a great deal of information one must be fully aware of. The decision of which type of forms, such as Sole Proprietorship, Partnership, C Corporation, S Corporation, and Limited Liability Company (LLC), can challenging. The legal, tax, accounting implications, the advantages, and disadvantages, the financial statements associated with a childcare center, and plan to present to market, are the reasons to consider for a well designed center that can be develop into a successful plan. Sole proprietorship advantages and disadvantages Unless I choose a specific form of business, my new business will become by default a sole proprietorship or partnership (Daily, 2011). The advantage of a sole proprietorship is ease in establishment and ongoing maintenance as the owner manages operations without the need to consult others. In addition, the solitary owner...
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...for a country to face economic growth and to become prosperous. The income tax plan that is currently in place is not helping the United States economy in the least especially compared to our expenditures. But exactly which tax method would be of greatest value for the United States’ to begin the slow hike uphill to conquer the massive hole of debt. Is the income tax or consumption based tax best for Americans? This research paper may not answer the United States economic problems, but will define the various taxes and how they may benefit American’s current economic instability. Literature Review Mr. James R. White is the Director of Strategic Issues within the United States Government Accountability Office. The following article was in his testimony before the Committee on Ways and Means, House of Representatives, “Value-Added Taxes: Potential Lessons for the United States from Other Countries’ Experiences.” (White, 2011) Mr. White defined value-added tax (VAT) as a tax in which it is applied to the difference between the business’s sales of goods and services and its purchases of goods and services. In other words, the businesses pay taxes on what they add to their goods and services to their customers. Value-added taxes are collected...
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...Seite 1 DOING BUSINESS IN SWITZERLAND CONTENTS 1 1.1 1.2 1.3 1.4 2 2.1 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4. 4.1 4.2 4.3 5 5.1 5.2 5.3 6 6.1 6.2 6.3 7 7.1 7.2 7.3 A Brief Survey Geography Population and Languages Political System The Economy Swiss Company Law Governing Law and Forms of Business Enterprises Corporation Books of Account Annual Business Report Taxation of Resident Corporations Liability to Swiss Tax Determination of Taxable Income Tax Privileged Corporations Treaty Benefits for Swiss Resident Corporations Computation of Corporate Taxes Assessment of Corporate Taxes Withholding Taxes of Dividend Distributions of Swiss Corporations Filing of Tax Returns, Assessments of Tax, Tax Litigation Corporate Reorganizations Taxation of Non-Resident Corporations Liability to Swiss Tax Determination of Taxable Income and Capital of Swiss Permanent Establishments Remittance of Profits Withholding Tax Income Subject to Withholding Tax Exemptions from Withholding Tax Withholding and Reimbursement of Tax Indirect Taxes Value Added Tax Stamp Duties Real Estate Taxes Personal Taxation Income Taxes on Residents Income Taxes on Non-residents Other Individual Taxes Seite 2 7.4 8 8.1 8.2 8.3 9 9.1 9.2 10 10.1 10.2 10.3 10.4 10.5 10.6 Tax Returns, Assessment and Payment of Tax Labour Conditions an Social Security Working Conditions Social Security Social Security Treaties Government Incentives Export Risk Guarantee Program Investment Incentives Government Controls...
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... James Madison summarized the powers assigned to the individual states: “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite.” “The Tenth Amendment was intended to confirm the understanding of the people at the time the Constitution was adopted, that powers not granted to the United States were reserved to the States or to the people. It added nothing to the instrument as originally ratified.” It’s quite clear that the Tenth Amendment was written to emphasize the limited nature of the powers delegated to the federal government. In delegating just specific powers to the federal government, the states and the people, with some small exceptions, were free to continue exercising their sovereign powers. When states and local communities take the lead on policy, the people are that much closer to the policymakers, and policymakers are that much more accountable to the people. Few Americans have spoken with their president; many have spoken with their mayor. It was clear in the minds of our founding fathers while they were framing the constitution that federal government was supposed to indulge itself in external matters, such as war, peace, negotiations and foreign commerce, also included was the power of taxation. The state government was able to exercise their power over all other...
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...Americans? * Our political ideologies * Our political values – liberty, capitalism, equality, consent of the governed, individualism Ideology * Political ideology is an integrated system of ideas or beliefs about political values in general and the role of the government in particular * Ideology provides a framework for thinking about politics and policy preferences Ideologies * Modern liberalism is associated with ideas of liberty and political equality: * Tend to favor chance in social, political and economic realms to better protect individuals and produce equality What is the constitution? * Fundamental principles of a government and the basic structures and procedures Two US Constitutions * Articles of confederation ( 1781-1789) * Constitution of the united states (1789-present) Events leading up to the US constitution * By the 18th century, two-tier system of governance had evolved – local colonial assemblies vs Parliament in Britain * Britain’s involvement in the seven years’ war cost money that they tried to recoup from the colonies * Sugar act (1764) * Stamp act (1765) * Colonists responded with...
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... 2015 Abstract The term paper researches the history of bonus depreciation allowance provision, the usefulness to the decision making of corporate taxpayers, and how the temporary changes in recent years affect cash flow of businesses. Under Section 168(k) of IRC, bonus depreciation is a special depreciation allowance to deduct income tax of corporate taxpayers. Though this ranges from 30% to 100% as determined by annual election of congress, bonus depreciation actually results in substantial present value tax savings for businesses when they purchase new qualified property. The introduction section is an overview of bonus depreciation, how it is relevant to businesses, and why taxpayers care about it. The legislation history is a brief description of temporary changes and the timeline of bonus depreciation. The fictional example section presents the possible effects of bonus depreciation transitioning from 50% in 2014 to 0% in 2015, and the conclusion section summarizes this research. Keywords: Depreciation Deduction, Bonus Depreciation, Cash Savings INTRODUCTION Outline the topic. Bonus depreciation is special depreciation allowance that allows businesses an additional first-year depreciation deduction when the qualifying asset is first purchased. It helps business recover the costs of qualified new property made in a particular year faster than the ordinary depreciation schedule allow. Bonus depreciation is eligible to new qualified property, but it is not eligible...
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