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Acct 553 Week 1 Homework

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Submitted By rodrigme
Words 872
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ACCT553
Week 1 Homework
_________________________________________________________
Please provide your answer to each question in the space provided below.
When finished, submit to the DropBox.

Chapter 1 (5 pts)
1. Briefly discuss the purpose of the Sixteenth Amendment.
The sixteenth amendment, which was passed by Congress in 1909, grants the power to collect federal income taxes (Smith et al. 2015). Congress is given the authority to collect tax on any source of income, whether directly or indirectly. All individuals, and businesses, are required to pay federal taxes. Prior to the sixteenth amendment, Congress was only able to levy tariffs on imported goods. Congress tried to tax individuals on their property for additional revenue, but this tax was considered unconstitutional in the Pollock Case (Hart 2002). The reason for this being unconstitutional, was because it was deemed as an unapportioned tax, which was not allowed by the Constitution at the time. There was a large disparity between the rich and poor class, and income tax was intended to “level the plainfield”. The original purpose of the sixteenth amendment was to provide a tax relief to wage earners (Hart 2002). Now that all wages are taxed, whether apportioned or not, taxing the rich was supposed to assist the lower classes while generating revenue for the government.
Hart, Phil. "Phil Hart -- Constitutional Income: The Purpose of the 16th Amendment. Part1."Phil Hart -- Constitutional Income: The Purpose of the 16th Amendment. Part1. NewsWithViews.Com, 28 July 2002. Web. 01 Nov. 2014. .
Smith, Ephraim P., Philip J. Harmelink, James R. Hasselback, and Ted D. Englebrecht. CCH Federal Taxation: Comprehensive Topics, 2015. Chicago, IL: Wolters Kluwer, 2014. VitalSource Shelf.
Chapter 2 (5 pts)
2. Explain the two "safe harbors" available to an Individual taxpayer to avoid a penalty for

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