income tax law: an overview
In 1913, the Sixteenth
Amendment to the U.S. Constitution was ratified. It empowered
Congress to tax "incomes, from whatever source derived, without
apportionment among the several States, and without regard to any census
or enumeration." The Internal Revenue Code is today embodied
as Title 26 of the United
States Code (26 U.S.C.) and is a lineal descendant of the income tax
act passed in 1913, following ratification of the Sixteenth Amendment.
Some terms are essential in understanding income tax law. "Gross income" can be generaly defined as "all income from whatever source derived;" a more complete definition is found in 26 U.S.C. 61. Other important definitions like "taxable income" and "adjusted gross income" can also be found in Chapter I of Title 26. These terms are not fixed nor should anyone be confident in understanding their true meaning after a cursory reading because their imputed definitions change with time. The Supreme Court, through case law, demonstrates the changing meaning of taxable income.
Individuals are not the only ones required to file income tax returns. Corporations do as well. While they are subject to may of the same rles as are individual taxpayers, they are also covered by an intricate body of rules addressed to the peculiar problems of corporations.
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