Disscussion #5
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Lone Star College System, Woodlands *
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1393
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Law
Date
Feb 20, 2024
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Uploaded by stidwell2015
5. Tax protesters who file “frivolous” tax returns or bring “frivolous” proceedings before the U.S. Tax Court
are subject to certain fines or other penalties. What are the grounds for imposing each penalty? What is the maximum amount of each penalty?
Taxpayers filing returns with frivolous positions can face many different penalties such as failure to pay, failure to file, failure to pay estimated taxes (§ 6651(f)), accuracy related penalties (§ 6662), fraud penalties (§ 6662), erroneous claim for refund penalties (§ 6676). The penalties for filling a frivolous return are capped at $5,000. Under §§ 6673 and 6702, a frivolous matter is one in which the intent is to delay the revenue collection process and the proceedings are found to be groundless, or the taxpayer unreasonably failed to pursue available administrative remedies. The penalty for bringing a frivolous matter before the court can not exceed $25,000. 17. Discuss the evolution of today’s IRC.
The Internal Revenue Code has significantly evolved since it was initially formed. When
the 16
th
amendment was ratified in 1913, congress began to pass a series of self-contained revenue acts,
which would become the entire income tax law of the US. The next two decades consisted of congress passing new laws every year or two. The rewriting of the entire tax statue became unmanageable, which is when congress decided to replace the revenue act with the first fully organized federal tax law IRC of 1939. The IRC of 1939 left little room to accommodate changes to the law, so it was then replaced with a new more flexible codification in 1954. Because of extensive revisions to the code that were made as part of the Tax Reform Act of 1986, the statute
was renamed the IRC of 1986. This form of the US tax law is the same one we still use to this present day. 4. What did the U.S. Supreme Court hold in Flint v. Stone Tracy Co. in 1911?
The court held that this tax was constitutional because it was a special form of “excise tax” on the privilege of operating in the corporate form, using income as its base, rather than a direct income tax.
30. Locate the committee reports associated with each of the following code sections using a tax service such as Checkpoint. Give the public law (P.L.) number of the most recent committee report and a brief explanation of how the new provision changes the code section for each of the following code sections.
§ 11 – P.L. 115-97, The Tax Cuts and Jobs Act of 2017. This changed the tax rates for many individuals to help lessen their tax liability. § 117 – P.L. 115-97, The Tax Cuts and Jobs Act of 2017. The provision repeals the exclusions from gross income and wages for qualified tuition reductions.
§ 163 – P.L. 115-97, The Tax Cuts and Jobs Act of 2017. Limitations on deductions for interest was put into place for certain indebtedness.
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