In 1913, the Sixteenth Amendment to the U.S. Constitution was ratified. However, not everyone must file a return. The requirements for filing are found in 26 U.S.C. 6011 and on. As the largest contributor by far, its purpose is to generate revenue for the federal budget. The funds collected are essential for the shaping and preservation of a free market economy.
Some terms are essential in understanding income tax law.
These terms are not fixed nor should anyone be confident in understanding their true meaning after a cursory reading because their imputed definitions change with time. The Supreme Court, through case law, show and demonstrate the changing meaning of taxable income. Individuals are not the only ones required to file income tax returns, but corporations do also. While they are subject to may of the same rules as are individual taxpayers, they are additionally covered by an intricate body of rules addressed to the peculiar problems of corporations.