Cyndi A. Trembley, The Daily Record Newswire
This edition of Research and Resources will reflect on the 100th year of the modern income tax. The 16th Amendment to the Constitution, ratified in February 1913, made permanent the power of Congress to access and collect taxes.
As Benjamin Franklin noted, “[I]n this world nothing is certain but death and taxes,” but that hasn’t stopped some from trying to cheat both. From Al Capone to the recently released Wesley Snipes, many famous and not so famous individuals have tried and failed to evade the IRS. Not even politicians are spared a date with the tax man as Spiro Agnew discovered when in 1973 he resigned the vice-presidency after pleading no contest to tax evasion.
Taxes have played their part in literature and popular culture as well, from Robin Hood, to the epic battle between Elliott Ness and Al Capone in “The Untouchables,” to the classic Beatles hit “Taxman:” “Now my advice for those who die, Declare the pennies on your eyes, Cause I’m the taxman.” What follows is a select group of websites with information on the 16th Amendment and references to popular culture that offer educational and entertaining perspective on taxes, the tax man, and those who have been ensnared in the intricate web that is the American tax system.
The copy of the 16th Amendment available at the Government Printing Office (www.gpo.gov/fdsys/pkg/GPO-CONAN-1992/pdf/GPO-CONAN-1992-10-17.pdf) includes the history and purpose of the Amendment. This documents notes that “[t]he ratification of this Amendment was the direct consequence of the [Supreme] Court’s decision in 1895 in Pollock v. Farmers’ Loan & Trust Co. (157 US 429), whereby the attempt of Congress the previous year to tax incomes uniformly throughout the United States was held by a divided court to be unconstitutional.” This copy also includes commentary on notable decisions related to the amendment covering such topics as deductions and income from illicit transactions.
The IRS website isn’t just for forms and publications. Tax scams and consumer alerts including its annual “Dirty Dozen” list can be found here (www.irs.gov/uac/Tax-Scams-Consumer-Alerts.) Its Facts and Figures section (www.irs.gov/uac/Facts-&-Figures) includes information and statistics on enforcement, individual filings, income statistics and forecasts. The IRS site also offers a small collection of quotes from historical figures including this one attributed to Albert Einstein: “The hardest thing in the world to understand is the income tax.” More quotes can be found at www.irs.gov/uac/Tax-Quotes.
The Government Accountability Office includes thousands of reports and testimony on all aspects of the governmental operations including taxes and their effect on the economy. For example, a July 1979 statement by Allen R. Voss, director of the General Government Division before the Subcommittee on Oversight, discusses the “IRS’ effort to identify and pursue income tax nonfilers and underreporters.” (http://archive.gao.gov/f0302/109885.pdf). This “inquiry” delves into the “subterranean economy” defined as “the aggregate of unrecorded cash activity and that activity which escapes economic measurement and tax assessment.” Subterranean economy is defined in this report as including the actual exchange of goods or services for cash or for the value of other goods or services — that is, bartering.”
Although almost 80 percent of Americans now e-file their returns, in 1993 the IRS was just beginning to experiment with other alternatives to paper filing. The GAO reported to Congress that the IRS’s Telefile program could be “a viable alternative to paper return filing.” (www.gao.gov/assets/80/78660.pdf). These reports and many others may provide valuable insight for those interested in congressional and governmental accountability; as such this site is an invaluable research tool.
The Tax History Project (www.taxhistory.org) produced by tax analysts includes an interesting and informative video reflecting on the centennial celebration of the income tax, a detailed timeline of taxes from the 1600s to the present, an image gallery, copies of select Presidential tax returns and more. This site also includes copies of the Federalist Papers, which “illuminate key ideas behind America’s constitutional creation, including the federal taxing power” and reproductions of Form 1040 from 1913.
The relationship between the income tax and prohibition is noted in Ken Burns’s documentary Prohibition. In this film, with the ratification of the 16th Amendment, the government, which up to that point heavily depended on the money it received from liquor and tobacco, now had the coffers of every American to dip into, thereby, easing the passage of the 18th Amendment. Information on the documentary can be found at www.pbs.org.
Rounding out this review of the history of the income tax is a brief look at a few of characters in fiction and film who have portrayed lawyers, IRS employees and everyday characters wrestling with tax issues.
“The Firm,” a novel by John Grisham, features a young lawyer caught up in a money laundering and tax evasion scheme. Property taxes are a subplot in “Gone with the Wind” as Scarlett struggles to pay the taxes on Tara, the trigger of tragic consequences in the “House of Sand and Fog,” and in the musical comedy “Blues Brothers” in which the characters seek to raise money to pay the back taxes owed on the orphanage where they were raised.
Finally, on a “lighter” note, in “Stranger than Fiction,” Will Ferrell plays an IRS agent who finds himself the central character in a novel playing out in real time and in his head. To find a list of other movies featuring taxes and tax personnel, try keyword search taxes at the movie website IMDb (www.imdb.com).
In closing, as we live with Franklin’s certainty I’m reminded of the advice a very wise accountant, who rarely saw the light of day from Jan. 1 through April 15 for over 50 years, told me on more than one occasion “the more taxes you pay, the more successful you are.” (Jon R. Trembley 1934-2011).
—————
Cyndi Trembley has been with the Rochester firm of Harris Beach PLLC since 1997, most recently in the position of manager of research services. Prior to Harris Beach, she served as a reference librarian for 18 years at a Syracuse law firm. Her professional activities include service as past president of the Association of Law Libraries of Upstate New York. For almost two decades she has given presentations on Internet issues and resources for library groups, attorneys and law students.
