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Itemized Deductions
The Federal Tax system that is managed by the Internal Revenue Service (IRS) contains many complicated rules and regulations that presents many problems and issue for taxpayers wishing to abide by these laws. Itemized deductions is one method of self-reporting that taxpayers choose to use to file their returns. The purpose of this essay is to examine the use of itemized deductions on federal income tax returns. This investigation seeks to understand the history of this application while also evaluating the complex nature of the qualities that determine the appropriateness of this selection. This essay will also examine the effectiveness of itemized deductions as part of the larger component of income tax returns. The essay will conclude by highlighting certain examples where IRS audits were started because of misuse of the itemized deduction.
History of the Itemized Deduction
According to the Internal Revenue Service's web site its history has roots during the...
This was later ruled unconstitutional but the 16th Amendment to the United States Constitution gave congress the authority to enact an income tax on American civilians. The article continued by revealing "In the 50s, the agency was reorganized to replace a patronage system with career, professional employees. The Bureau of Internal Revenue name was changed to the Internal Revenue Service. Only the IRS commissioner and chief counsel are selected by the president and confirmed by the Senate. The IRS Restructuring and Reform Act of 1998 prompted the most comprehensive reorganization and modernization of IRS in nearly half a century. The IRS reorganized itself to closely resemble the private sector model of organizing around customers with similar needs." The fairness of this amendment has been debated over the decades and some have made the claims that the IRS is not an official branch of government and its ability to collect taxes…
Works Cited
The Internal Revenue Service Tax Code. Viewed 19 Feb, 2013, Retrieved from http://www.irs.gov/publications/p17/ch20.html#d0e67864
Viard, A. (2013). The myth of the limits on itemized deductions. The American, January 9, 2013. Retrieved from http://www.aei.org/article/economics/fiscal-policy/taxes/the-myth- of-the-limits-on-itemized-deductions/
Wood, R. (2013). Shh, Home Office and other IRS Audit Trigger Secrets. Forbes, 25 Jan 2013. Retrieved from http://www.forbes.com/sites/robertwood/2013/01/25/shhh-home-office- and-other-irs-audit-trigger-secrets/
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Tax Advise Table of Contents (optional) Louise is aged 50 and single. Since 1994 she has carried on a retail business as a sole trader. Her trading profits as adjusted for tax purposes and after capital allowances, for the year ended 30th April 2009 were $150,000. The business is carried out from a number of valuable retail outlets, all of which are owned by Louise personally. These units have been acquired over a
Tax Law Taw Law and Accounting In the United States, 43 states currently impose a personal income tax. New Hampshire and Tennessee tax only "intangible" income, which is composed of interest and dividends. The remaining 41 states have "broad-based" income taxes, with most sources of income subject to tax. In 1932, Washington voters approved an initiative establishing a personal income tax. However, the State Supreme Court ruled this initiative unconstitutional. Since then,
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This generous act not only saves the taxpayer some extra cash come April, but it also helps a number of charities across the country. Charities can either use donated vehicles for their own use or they can auction them off in order to use the cash to help those in need. Either way, the charity is getting great use out of the old bucket which was just a nuisance