FEDERAL INCOME TAX MAZZA FALL 2007
I. EXPECTATIONS
A. Legal Analysis/Reasoning:
1. Ability to identify applicable Rule of Law (out of statutes/regs)
2. Apply ROL to a set of facts
3. Articulate arguments for/against a particular result (IRS arguments)
4. Identify/ articulate most likely result
B. Public Policy Analysis
1. Standards to determine whether best choice was made
2. Inform what Rule of Law is
3. Knowing policy concept can help predict
II. SOURCES OF FEDERAL TAX LAW
A. US CONSTITUTION
1. Plays almost no role
2. Art. 1 § 8 plus 16th Amendment
a. Interpreted so broadly basically no limitations
b. property rights, so rational basis review
3. State Taxes provide more state constitutional issues
B. INTERNAL REVENUE CODE TITLE 26 OF THE USC (MAIN SOURCE)
1. Enacting and Amendment: General Route
a. President makes recommendations at beginning of year
b. Art. 1 § 7 must begin in House Ways & Means Committee
i. holds hearings
ii. drafts bill and issues House report, which includes:
a) existing law
b) How and why it is being changed
c. House Debates, then sent to Senate
d. Senate Finance Committee- same process as House WMC
i. Senate Reports, then debates
e. Goes to Conference Committee if two versions differ
i. Report
ii. Back to both Houses
f. Vote
g. Send to President for signature
2. Process in last 6-7 years has been conducted primarily behind closed doors
C. ADMINISTRATIVE LAW
1. Role Govt. Agencies play in interpreting law
2. Congress delegates legislative authority to agencies, which can then issue rules
And regulations with some force
3. IRS (div. of US Treasury Dept) responsible for administration of taxes
4. Self-assessment system
5. Pronouncement Hierarchy
a. Treasury Regs (Authoritative Interpretation of law)
i. Prec. Value: GR: TP may rely just as on the IRC itself
ii.
ot from a different Circuit
b) Can thus have similarly situated TP in different circuits with different results
c) Impt. For forum shopping considerations
viii. § 7431: can recover reasonable costs
b. Federal District Court
i. Refund jurisdiction
ii. If want a jury trial, file here
c. Court of Federal Claims
i. No juries
ii. File here if precedent in TP Circuit is bad and you don’t want
a jury
III. WHY WE HAVE FEDERAL TAXES
A. FUNDING GOVT.
1. Social programs
2. Social Secuirty
3. Military, etc.
4. Govt. expenditures
B. OTHER WAYS TO FUND
1. Selling Natural Resources
2. Loans
3. Printing more Money
GOALS OF THE TAX SYSTEM, COMPLIANCE, AND DIFFERENT TYPES OF TAXES
