Ins and Outs of the Tax System

The idea of taxation has been around for a very long time. Kingdoms, towns, and governments have all relied on taxation ever since the beginning of time. But the modern U.S. tax system was not enacted until 1913. However, the code has undergone substantial development and expansion over time. The Internal Revenue Code (IRC) has undergone annual revisions, additions, and deletions since its inception in 1913. Since 1913, the tax code has undergone 28 major revisions. Changes of this magnitude occurred throughout the Kennedy and Carter administrations (1954–1963), the Clinton years, and the Bush tax cuts in the 2000s. There are currently around 4,500 pages of tax regulations.

Congress enacts laws.

Congress drafted and passed tax laws regulating the Internal Revenue Service’s activities. Tax legislation in Congress is passed for a variety of reasons. Some laws are enacted for the greater good of society. For instance, a tax law designed to aid those suffering losses due to natural disasters like hurricanes and other storms is meant to do just that. However, Congress does pass specific laws for partisan gain. For instance, many rules that benefit oil firms and media outlets are thought to have been passed for political motives. Oil firms are big donors to political campaigns, and media coverage is crucial to any campaign’s success and maintaining positive public attitudes over time. Congress also passes laws for monetary motives. The vital role that small businesses play in the American economy is why many regulations have been passed to help them succeed, such as the extra accelerated depreciation on cars bought for commercial use. To regulate a particular economic climate, Congress also passes laws. The Bush tax cuts were enacted into law and used to stimulate the economy after the end of the Iraq War, and the stimulus package bill had the same goal following the economic downturn of 2007–2008.

The Internal Revenue Service is responsible for both interpreting and crafting regulations.

The Internal Revenue Service (IRS) is responsible for interpreting the tax code and creating the regulations that allow their execution after Congress has amended them. The IRS is the principal authority on interpreting tax law and providing guidance and rules to taxpayers, a role granted by Congress. Over 16,000 pages long, the IRS tax regulations are significantly more substantial than the tax code itself. Additional assistance for taxpayers and tax professionals is available from the IRS in the form of revenue and letter rulings, as well as revenue procedures.

Tax Experts and Their Importance

The Tax Experts include tax lawyers, accountants, auditors, and financial advisors. Their primary function in the tax system is to help individuals and businesses with tax planning and preparation. The typical taxpayer may feel overwhelmed by the size and complexity of the tax code. As a result, these experts aid the taxpayer in preparing for, implementing, and complying with tax regulations while capitalizing on legal openings. More than 70 percent of taxpayers employ the help of a tax preparer. A tax attorney is helpful if the IRS decides to sue a taxpayer for unpaid taxes. Financial experts can also assist with settling tax debt through the IRS’s Installment Payment Plan or Offer in Compromise program.

Legal Proceedings

Courts have the final say on how the tax code should be interpreted. Cases involving taxpayers and the Internal Revenue Service over the application of tax law are heard and decided by the courts. They look to the original intent of lawmakers to determine how to apply tax laws. Federal district courts, the Tax Court, the United States Court of Federal Claims, and bankruptcy courts hear taxation cases. A taxpayer with a dispute that costs more than $50,000 can take their case to a Circuit Court of Appeal and, if necessary, the Supreme Court of the United States.

Rob L Daniel and his colleagues at Limon Whitaker & Morgan have, for many years, assisted clients all around the country in resolving tax debt issues with the Internal Revenue Service and specific states. The headquarters of the company can be found in Los Angeles. Accessible at [http://www.limonwhitaker.com] / (888) 321-6188

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