Legal Briefs

Deadline Week for Federal Income Taxes

Published Monday, April 4, 2011

It’s that most “unfavorite time of year” – the April 15th deadline for filing income taxes. Only this year, there is a twist – and it’s an especially good thing for procrastinators. The deadline this year for filing your 1040’s has been extended by three days.

 

Jim Coyle, an tax attorney and tax specialist with the Gainesville, Ga. law firm Stewart Melvin & Frost, discusses the origin of our federal income tax code.

 

Question: Why was the federal income tax deadline extended this year?

Jim: Due to a combination of interesting circumstances, we all get a three-day extension this year to file our federal income tax returns.

 

In the United States, the tax deadline can never fall on a weekend – a Saturday or Sunday. Whenever April 15th falls on a weekend, then taxes are not due until the following Monday.

 

This year, April 15 falls on a Friday but we are still getting an extension because April 15th this year happens to be a Emancipation Day which is a federal holiday. According to federal law, Tax Day cannot take place on a federal holiday.

 

Emancipation Day celebrates the anniversary of the Compensated Emancipation Act, which officially freed 3,100 slaves residing in the District of Columbia. The Act, signed by President Abraham Lincoln in April 1862, represented the federal government’s first official act to free slaves in the United States. Emancipation Day was made an official holiday in 2005.

 

Question: What are some other historical facts about Tax Day?

 

Jim:

  • The official origin of the U.S. federal income tax on individuals is passage of the 16th Amendment, which gave Congress power to levy and collect taxes on income. Amendment 16 was passed by Congress on July 2, 1909 and was ratified in 1913.
  • That same year, in 1913, Federal Form 1040 was also introduced. It was required to be filled out by all U.S. citizens and residents with a net income of $3,000 or over.
  • Form 1040 looked a lot different back in 1913 – it was just three pages long (including instructions). Today, there are close to 500 different filing forms on the IRS website. And the instructions alone for Form 1040 now take up over 100 pages.
  • Although passage of the 16th Amendment in 1913 is regarded as the origin of our federal income tax system, the roots for federal taxation actually go back much farther. The first United States income tax was imposed in July 1861 to help pay for the Civil War – back then the rate was 3 percent on annual income over $800. That tax was eventually repealed and replaced by a tiered income tax in 1862.
  • The first income tax ever was imposed in 1404 in England.
  • Throughout U.S. history, the cost of war has often driven the push for taxes. The first U.S. income tax, of course, was imposed to help fund the Civil War. And the 16th Amendment creating our federal tax system was adopted just prior to World War I.
  • Federal income tax withholding as we know it today was made permanent in 1943 as part of the Current Tax Payment Act. The move was positioned as a means of making tax payments and filings more convenient for taxpayers. A U.S. Treasury official explained at the time that withholding taxes from payrolls would be a “pay-as-you-go” system that would help the millions of taxpayers with smaller incomes who had little experience in planning their finances around payment of one large tax bill every year.
  • Everyone has their opinion of federal taxes, and very few would say they love paying taxes every year – no matter what your political persuasion or ideology is. That’s probably why the old saying goes that “there are only two things certain in life – Death and Taxes.” Neither of which is something that you really look forward to.
  • And hardly anyone can say that filing taxes is easy. Albert Einstein, generally considered as one of the smartest men who ever lived, once said: “The hardest thing in the world to understand is the income tax.”