Tax Law and Accounting Paper
This essay is going to summarize the sources of modern income tax statutes, summarize the objectives of modern income tax statutes and compare and contrast generally accepted accounting principles.
There are three sources of modern income tax statutes which are legislative, executive and judicial. In this paper only the legislative and the executive will be discussed.
The Internal Revenue Code, which consists of statutory provisions relating to Federal taxation, only existed as individual revenue acts before 1939. In 1939 congress put in place the federal tax laws. This codification arranged all Federal tax provisions in a logical sequence and placed them in a separate part of the Federal statutes. Two more such rearrangements took place in 1954 and 1986. The Internal Revenue Code of 1986 is the latest which resulted in substantial changes, only a minority of the statutory provisions was affected. Statutory amendments to the tax law are incorporated into the code. Examples include the Taxpayer Relief Act (TRA) of 1997, the Internal Revenue Service Restructuring and Reform Act of 1998 and American Jobs Creation Act of 2004 (Hoffman, pg 2-3).
The typical legistlative process for tax bills by and large initiates in the House Ways and Means Committee in the House of Representatives. However, tax bills originating in the senate are attached as riders to other legislative propositions. After both the House of Representatives and the Senate work out the dissimilarities in the Joint Conference Committee and is passed by the House and Senate, the tax bill then goes for approval or rejection by the President. If the President approves or the President rejection is overridden, then the tax bill is incorporated into the code (Hoffman, pg 2-4). The Committee reports from the House Ways and Means, Senate Finance and the Joint Conference committee frequently explains or gives insight to the intent of congress.
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There are three sources of modern income tax statutes which are legislative, executive and judicial. In this paper only the legislative and the executive will be discussed.
The Internal Revenue Code, which consists of statutory provisions relating to Federal taxation, only existed as individual revenue acts before 1939. In 1939 congress put in place the federal tax laws. This codification arranged all Federal tax provisions in a logical sequence and placed them in a separate part of the Federal statutes. Two more such rearrangements took place in 1954 and 1986. The Internal Revenue Code of 1986 is the latest which resulted in substantial changes, only a minority of the statutory provisions was affected. Statutory amendments to the tax law are incorporated into the code. Examples include the Taxpayer Relief Act (TRA) of 1997, the Internal Revenue Service Restructuring and Reform Act of 1998 and American Jobs Creation Act of 2004 (Hoffman, pg 2-3).
The typical legistlative process for tax bills by and large initiates in the House Ways and Means Committee in the House of Representatives. However, tax bills originating in the senate are attached as riders to other legislative propositions. After both the House of Representatives and the Senate work out the dissimilarities in the Joint Conference Committee and is passed by the House and Senate, the tax bill then goes for approval or rejection by the President. If the President approves or the President rejection is overridden, then the tax bill is incorporated into the code (Hoffman, pg 2-4). The Committee reports from the House Ways and Means, Senate Finance and the Joint Conference committee frequently explains or gives insight to the intent of congress.
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