Source: http://freedomlawschool.org/who-is-liable.html
Timestamp: 2017-06-26 05:06:46
Document Index: 561736951

Matched Legal Cases: ['§ 7601', '§ 3101', '§ 3201', '§ 4071', '§ 5001', '§ 5005', '§ 1441', '§ 1442', '§ 6012']

Who is liable?	Federal taxes are collected from those who are "liable" for the various taxes imposed in the Internal Revenue Code. For example, 26 U.S.C. § 7601 commands that the Secretary of the Treasury "canvass" the various internal revenue districts to located those "liable" to pay any internal revenue tax:
Section 7601. Canvass of districts for taxable persons and objects. (a) General rule. The Secretary shall, to the extent he deems it practicable, cause officers or employees of the Treasury Department to proceed, from time to time, through each internal revenue district and inquire after and concerning all persons therein who may be liable to pay any internal revenue tax, and all persons owning or having the care and management of any objects with respect to which any tax is imposed.
Section 6303. Notice and demand for tax. (a) General rule.
And the Secretary is authorized to collect taxes from those identified as "liable" for taxes: Section 6331. Levy and distraint.
The Internal Revenue Code imposes in subtitle C several different types of employments taxes, and only one party is "liable" therefor: the employer. The FICA tax is imposed in § 3101, and only the employer is "liable": Section 3102. Deduction of tax from wages.
The Railroad Retirement Tax is imposed via § 3201, and it is the employer who is liable therefor: Section 3202. Deduction of tax from compensation.
Section 3403. Liability for tax. The employer shall be liable for the payment of the tax required to be deducted and withheld under this chapter, and shall not be liable to any person for the amount of any such payment.
And those who provide pensions, etc, are considered employers who are "liable" for the deferred wage/income payments they make: Section 3405. Special rules for pensions, annuities, and certain other deferred income. * * * (d) Liability for withholding.
And in certain circumstances, certain third parties are "liable" for employment taxes: Section 3505. Liability of third parties paying or providing for wages. (a) Direct payment by third parties
Clearly, being made "liable" for a tax via an express provision of the Internal Revenue Code is very important. Subtitles D and E of the Internal Revenue Code impose various excise taxes, and excellent examples appear in these titles of sections of the Code that impose taxes and make specific parties "liable" therefor. For instance, the tax on tires is imposed via § 4071:
Those "liable" for this tax are identified in the same section as follows: (b) Special rule for manufacturers who sell at retail.
The section imposing the gambling tax also identifies who is "liable" for such tax: Section 4401. Imposition of tax.
Directly connected to this tax on wagers is a tax on those receiving the wagers as an occupation tax: Section 4411. Imposition of tax. (a) In general. There shall be imposed a special tax of $500 per year to be paid by each person who is liable for the tax imposed under section 4401 or who is engaged in receiving wagers for or on behalf of any person so liable.
(b) Authorized persons. Subsection (a) shall be applied by substituting "$50" for "$500" in the case of - (1) any person whose liability for tax under section 4401 is determined only under paragraph (1) of section 4401(a), and
The section imposing a tax on crude oil also specifies who is "liable" for that tax: Section 4611. Imposition of tax. (a) General Rule. There is hereby imposed a tax at the rate specified in subsection (c) on - (1) crude oil received at a United States refinery, and
(d) Persons liable for tax. (1) Crude oil received at refinery
A tax is imposed on distilled spirits in § 5001: Section 5001. Imposition, rate, and attachment of tax. (a) Rate of tax. (1) General. There is hereby imposed on all distilled spirits produced in or imported into the United States a tax at the rate of $13.50 on each proof gallon and a proportionate tax at the like rate on all fractional parts of a proof gallon.
Those who are "liable" for this tax are identified in § 5005: Section 5005. Persons liable for tax. (a) General. The distiller or importer of distilled spirits shall be liable for the taxes imposed thereon by section 5001(a)(1).
The tax on wines makes certain parties "liable": Section 5043. Collection of taxes on wines.
(a) Persons liable for payment. The taxes on wine provided for in this subpart shall be paid - (1) Bonded wine cellars. In the case of wines removed from any bonded wine cellar, by the proprietor of such bonded wine cellar; except that - (A) in the case of any transfer of wine in bond as authorized under the provisions of section 5362(b), the liability for payment of the tax shall become the liability of the transferee from the time of removal of the wine from the transferor's premises, and the transferor shall thereupon be relieved of such liability; and
(2) Foreign wine. In the case of foreign wines which are not transferred to a bonded wine cellar free of tax under section 5364, by the importer thereof.
(3) Other wines. Immediately, in the case of any wine produced, imported, received, removed, or possessed otherwise than as authorized by law, by any person producing, importing, receiving, removing, or possessing such wine; and all such persons shall be jointly and severally liable for such tax with each other as well as with any proprietor, transferee, or importer who may be liable for the tax under this subsection.
(b) Payment of tax. The taxes on wines shall be paid in accordance with section 5061. Specific parties are made liable for the beer tax: Section 5418. Beer imported in bulk.
The tobacco tax also makes a specific party liable for it: Section 5703. Liability for tax and method of payment. (a) Liability for tax. (1) Original liability. The manufacturer or importer of tobacco products and cigarette papers and tubes shall be liable for the taxes imposed thereon by section 5701.
Pursuant to the commands of the federal Privacy Act, the IRS is required to give a notice (contained in the Privacy Act Notice or Notice 609) of the various laws that require persons to supply information to it. The IRS Privacy Act Notice states: "Our legal right to ask for information is Internal Revenue Code sections 6001, 6011 and 6012(a), and their regulations. They say you must file a return or statement with us for any tax you are LIABLE for." To determine whether one must file a federal income tax return, one thus only needs to study these 3 sections of the Code. The first section states as follows: Section 6001. Notice or regulations requiring records, statements, and special returns. Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe. Whenever in the judgment of the Secretary it is necessary, he may require any person, by notice served upon such person or by regulations, to make such returns, render such statements, or keep such records, as the Secretary deems sufficient to show whether or not such person is liable for tax under this title. The second section provides as follows: Section 6011. General requirement of return, statement, or list.
Section 1461. Liability for withheld tax. Every person required to deduct and withhold any tax under this chapter is hereby made liable for such tax and is hereby indemnified against the claims and demands of any person for the amount of any payments made in accordance with the provisions of this chapter.
This party is the withholding agent for nonresident aliens and foreign corporations; see § 1441 and § 1442. Withholding agents may be individuals, corporations, estates, trusts, political organizations, homeowners associations, etc. These are the parties who are required to make federal income tax returns pursuant to § 6012: Section 6012. Persons required to make returns of income. (a) General rule. Returns with respect to income taxes under subtitle A shall be made by the following:
(1)(A) Every individual having for the taxable year gross income which equals or exceeds the exemption amount, except that a return shall not be required of an individual - (i) who is not married (determined by applying section 7703), is not a surviving spouse (as defined in section 2(a)), is not a head of a household (as defined in section 2(b)), and for the taxable year has gross income of less than the sum of the exemption amount plus the basic standard deduction applicable to such an individual,
* * * (2) Every corporation subject to taxation under subtitle A;
(b) Returns made by fiduciaries and receivers. * * *
See also Fine v. United States, 206 F.Supp. 520 (Colo. 1962). Peymon Mottahedeh
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