April 15th – “The Day of Reckoning”! Every year, millions of Americans get ready
to pay taxes to Uncle Sam, or get ready to collect a tax refund from Uncle Sam;
when did this become the great day that it is for taxpayers, and when are we
actually required to file an income tax return?
Let’s take a look at the beginnings of the income tax date of April 15
and why it was chosen?
The first known income tax that Americans were legally
required to pay was enacted during the early 1860s and the Presidency of
Abraham Lincoln. The Civil War was
proving very costly to finance, and the President and Congress created the
Commissioner of Internal Revenue and enacted a law requiring citizens to pay
federal income tax. This could be
considered the start of our modern-day income tax. This income tax was based on principles of
graduated or progressive taxation and of withholding income at the source. The commissioner was given authority to
assess, levy and collect federal income taxes.
The authority to enforce tax laws by seizure of property and income and
by prosecution.
Originally, the deadline for completing and filing your
individual income tax was not April 15th.
In the beginning, it was first set for March 1st. Then, during 1918, Congress pushed the date
out to March 15th. Then, in the great
overhaul of 1954, the date was once again moved forward to April 15th, and this
is where it remains today. Why April 15th?
The main thought from most scholars says the reasoning is that the date
gives the IRS more time to handle the workload and more time to hang on to
your money before offering a tax refund.
This date has only been set this way for a little over 50 years. That’s not very long, in historical terms,
and it could possibly be changed again.
If you are an individual taxpayer, you are required to file
either a return or an extension of time to file (Form 4868) by April 15th. Corporate and other legal entities are
required to file their federal income tax return by March 15th, and if not,
they also must file an extension of time to file. What this extension does not do, is to extend
the amount of time you have to pay any taxes due the government. So, if you are unable to ready your personal
or business financial information in a timely manner, and have no reasonable
estimate as to the amount of tax you may owe, you can expect to pay some form
of penalty.
In the years following WWII, the burden of tax
responsibility was shared fairly equally by the corporate world and the
individual taxpayer. Today, however, the
shift has been toward more responsibility on the part of the individual, and
less on the business backs. To
demonstrate how special interests have begun to overtake American politics,
during 1867, public opinion was so strong, and the outcry of the general public
so loud, that the President and Congress abolished the income tax law in 1872,
and from 1872 until 1913 almost all of the revenue for government operation
came from the sale of liquor, beer, wine, and tobacco. Although the income tax did make a small come
back in 1894, it was found unconstitutional in 1895 by the U.S. Supreme Court
because it was not apportioned among the states in conformity with the
Constitution.
An interesting time during the formation and eventual
taxation of America occurred during 1918.
Until that point in time, the vast majority of tax revenue for
government funding came from alcoholic beverage sales and high tariffs. In 1919, Congress passed an amendment to the
Constitution that made it illegal to manufacture or sell alcohol; what would
replace the revenue? American federal
income tax was the proposed solution, and we’ve been paying since. Although during the great years known as
Prohibition, many “revenue agents” spent their days tracking down “moonshiners” not tax evaders, the American citizen, the individual taxpayer took on
the heavy burden of supporting government revenue, and it has become heavier
with each passing year. On a side note,
although “moon shining” was illegal, the “moonshiners” still had to pay taxes
on the moon shine so they were incarcerated for tax evasion and not “moon
shining”. Taxes seem to always come
into play when looking for a way to prosecute someone.
Then, during 1942, the Revenue Act of 1942 was passed and
the “New Deal” era was begun. Since that
point in time, government control, power, and expenditures has continued to
increase at a phenomenal rate, and today the American taxpayer supports a trillion-dollar
giant known as the United States government.
This ravenous beast consumes more than 10% of our earned income each
year, and if the Social Security Administration has their way, will continue to
consume even more of our weekly earnings.
We can foresee no other relief in sight.
Currently, all the tax regulations for this country are the
responsibility of the Internal Revenue Service and there are four major
divisions of this government office: The Wage and Investment, Small/Business
Self-Employed, the Large and Midsize Business and the Tax Exempt and Government
Entities. Each division has
responsibilities as they pertain to their individual speciality.
There continues to be talk on the hill to change the way
taxes are calculated and collected. The
most common themes are the flat tax and the national sales tax. Until Congress actually has the courage to
step up to the plate and change it, taxes will remain as cumbersome as always.
Disclaimer:
This article is presented solely as an example and is not meant to replace qualified
financial advice. If you or someone you know require up to date financial or
legal help please seek qualified assistance. No content on this site should
ever be used as a substitute for direct legal advice from your lawyer or a
qualified attorney.
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