CHAPTER 1 – TAXES AND TAXING JURISDICTION
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Taxes are pervasive because they: o Are so widespread. o Come in so many varieties, and o Affect virtually every area of modern life.
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Taxes are dynamic because tax law changes so freque ntly. o
Rate of change reflects fact that economic and poli tical assumptions on which tax structures are based are constantly ev olving. 
Tax –
Payment to support the cost of government. o Differs from fine or penalty because tax is not int ended to deter or punish unacceptable behavior. o Taxes, on the other hand are compulsory rather than voluntary on part of the payer. o Differs from user’s fee because payment of tax does not entitle payer to specific good or service in reutnr. o Citizens receive government benefits for tax dollar s but the value of those benefits is not correlated to the tax the per son must pay. o NOT an assessment of benefits, but a means of distr ibuting burden and cost of government. o Taxpayer “entitled to benefit derived from enjoymen t of privileges of living in organized society, established and safe g uarded by devotion of taxes to public purposes.”

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Taxpayer –
Any person or organization required by law to pay a tax to a governmental authority. o Person – Natural persons and corporations. o Corporations are entities organized under law of ju risdiction and enjoy same legal rights, privileges, and protection s as individuals. o Taxing jurisdictions uniformly regard corporations as entities separate and distinct from shareholders and as taxp ayers in their own right. 
Incidence of Tax –
Refers to the ultimate economic burden represented by the tax. o Most often person or organization makes a direct ta x and bears incidence of tax. o In some cases, however, payer can