INTRODUCTION A.Tax Formula -Gross Income (§ 61) - Exclusions (§ 101-150gifts/inheritance/annuities) - Above the line deductions (§162business deductions,§ 62specified deductions) = AGI oAGI - person exemptions, §151-152minus A) §63 standard deduction or B) itemized deduction (§ 63,2% floor imposed by§ 67misc. itemized) oThen - personal/dependency exemptions (§ 151, § 152) = Taxable Income Taxable income - Tax Credits (§ 25A) = Tax Liability oTax liability x Applicable Tax Rate = Tax Due or Your Refund B. Limitations to tax -Federal Tax must have uniformityacross all 50 states, same tax is subject to everyone oUniformity: Whenever some mode of taxation is used somewhere in the US, the same mode of taxation must be used everywhere throughout the US Ex:federal income tax -State income tax varies across each state -Direct tax:tax demanded from the very person who is intended to pay it (income tax, property tax) omust have apportionment(Ar. 1 § 9): direct tax unavoidable, must be apportioned among the states on the basis of population (head tax) -Indirect tax:tax paid primarily by a person who can shift the burden of the tax to someone else or who at least is under no legal compulsion to pay the tax, it is avoidable oEx:sales tax, buyer pays the sales tax but it is applied to the merchants -Pollock:taxes on income from property is a direct tax. SC says tax on income is on property and it is a direct tax on property, when there's direct tax there has to be apportionment; apportionment is usually based on income -16thamendment: can tax income from whatever source derivedwithoutapportionment, but still must be uniformed C. Courts -Tax Court: oTP does not have to pay deficiency, a taxpayer can petition the Tax Court for a redetermination of the deficiency. Suits are between taxpayer and commissioner. oTried without a jury. oCt based in DC but travels around the country oIf lose can appeal to Circuit Ct. of where TP resides -District Court: oTP must pay all the deficiency and then if win case can get money back oThere is a jury.If law is unfavorable to TP they can come here. oIf lose can appeal to circuit courts, but can only appeal in circuit of where TP resides -Court of Federal Claims: oMust pay deficiency.Then can get $ back if win. oNo jury trial 1
oIf lose here, can go to US Court of Appeals Federal Circuit Ct. -Court of Appeals for the Federal Circuit:decisions by district courts and of Tax Courts are appealable here. oIf lose here can go to SC -Supreme Court:appealable here by petition for cert.
Expert's Answer
Chat with our Experts
Want to contact us directly? No Problem. We are always here for you
Your future, our responsibilty submit your task on time.
Order NowGet Online
Assignment Help Services