The tax code, officially titled the Internal Revenue Code, has been written by Congress and has an average of 3.7 million words…at this present time, at least! It’s a compilation of tax laws that have been written and passed by Congress since the ratification of the Constitution way back in 178.... ID: 663851
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Who Writes Tax Laws And Why Do They Change So Often?Slide2
The tax code, officially titled the Internal Revenue Code, has been written by Congress and has an average of 3.7 million wordsâ¦at this present time, at least! Itâs a compilation of tax laws that have been written and passed by Congress since the ratification of the Constitution way back in 1788.
Who gives Congress the power to levy taxes?
Congresses power to levy taxes for the collection of revenue, is given by the Constitution, and is to enable them to collect funds for the common defence and general welfare of the United States. In 1939 the first compilation of The Internal Revenue Code was created, with major revisions being made in 1954 and 1986.Slide3
Why is the tax law so long?
The length of the tax code and the reason why it is so complex, is because it includes absolutely every tax law that has been designed to help promote certain causes or benefits, such as social welfare â including tax breaks for low cost housing construction - or to try and stimulate the growth of the economy by making deductions more readily available for businesses.
Why are so many changes made to tax laws, and so often?
As mentioned above, changes to tax laws can be made for various reasons such as to try and benefit social welfare or economic growth, but some changes are madeSlide4
as political rewards for certain groups who pledge their allegiance to congressmen during their election campaigns. There are also various demands made on the American budget each year, with the nature of finance always fluctuating. This can mean that one year may be a good one in financial terms, and less revenue from taxes is required, compared to another year in which more is demanded from people in the form of taxes. Concerns about national security may also see tax laws changing and may increase the need for a financial safety buffer.
The last significant change to U.S. tax laws was as a direct result of the Economic Growth and Tax Relief Reconciliation Act of 2001, and introduced reduced taxes for individuals and businesses, while lowering estate taxes.Slide5
From time to time, temporary changes to tax laws are made such as in the wake of a national tragedy or act of God, and special credits or deductions can be made for taxpayers. In the aftermath of Hurricane Katrina, for example, the Katrina Emergency Tax Relief Act of 2005 was created to allow charitable donations to be 100% deductible if they were to provide direct relief to the hurricanesâ survivors.
To know more and to stay up to date with current changes to existing tax laws â whether as an individual or a business owner â please seek professional help to ensure that you remain in compliance with the IRS.Slide6
At Heyer & Associates, we proactively assist our individual and small business clients in meeting their goals. Our key area of focus is ensuring that our clients remain compliant with federal and state tax laws by providing them with high quality accounting and
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