IRS REMINDS TAX PREPARERS TO BE VIGILANT ON EITC CLAIMS
Washington, D.C. -- The Internal Revenue Service is reminding tax preparers to include complete Earned Income Tax Credit checklists with any tax returns they file claiming the tax credit.
The IRS said in an e-mail to tax preparers early in February that it had noticed a large number of returns with the Form 8867, Paid Preparer's Earned Income Credit Checklist, that had incomplete information. The IRS added that it will not reject a return if the information is missing on Form 8867, but these returns will be suspended, causing a potential delay in refunds if the information is missing.
The IRS also wants tax software companies and electronic filers to ensure that the checklists are complete and remind tax preparers that they could face stiff penalties without the information.
FEDERAL INCOME TAX AT 100
Washington, D.C. -- The first Sunday in February marked the 100th birthday of the U.S. federal income tax with the passage of the 16th Amendment to the Constitution on Feb. 3, 1913. The idea of an amendment to allow an income tax actually dated much earlier, with attempts starting as far back as 1861. Several such failed or were repealed, until 1909, when Congress tried again. This time it stuck, and in 1913, the 16th Amendment was ratified, stating, "The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration."
In 1913 the first Form 1040 was documented. Congress placed a 1 percent tax on net personal income over $3,000, with an additional tax on those who had net income in excess of $20,000 of between 1 and 6 percent, depending upon income. The first year no taxes were collected; the IRS only checked the forms for accuracy. The deadline for filing taxes wasn't always April 15. When the 16th Amendment was first enacted, the deadline was March 1. In 1918 that date was pushed back to March 15, then to April 15 in 1955.