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Found of Taxation
Chapter 1: Taxes and Taxing Jurisdictions
| Term | Definition |
|---|---|
| tax | a payment to support the cost of government. A tax is nonpenal but compulsory and is not directly related to any specific benefit provided by the government |
| taxpayer | any person or organization required by law to pay tax to a governmental authority |
| incidence | the ultimate economic burden represented by a tax |
| jurisdiction | the right of a government to levy tax on a specific person or organization |
| tax base | an item, occurrence, transaction, or activity with respect to which a tax is levied. Tax bases are usually expressed in monetary terms |
| tax formula | Tax (T) = Rate (r) * Base (B) |
| flat rate | a single percentage that applies to the entire tax base |
| graduated rate | multiple percentages that apply to specified brackets of the tax base |
| brackets | the portion of a tax base subject to a given percentage rate in a graduated rate structure. |
| revenue | total tax collected by the government and available for public use |
| event-or transaction based tax | a tax imposed on the occurrence of a certain event or transaction |
| activity based | a tax imposed on the results of an ongoing activity in which persons or organizations engage |
| income tax | a tax imposed on the periodic increases in wealth resulting from a person’s economic activities |
| earmarked | a tax that generates revenues for a designated project or program rather than for the government’s general fund |
| ad valorem taxes | a tax based on the value of property |
| realty | land and whatever is erected or growing on the land or permanently affixed to it |
| real property taxes | a tax levied on the ownership of realty and based on the property’s assessed market value |
| tax assessors | an elected or appointed government official responsible for deriving the value of realty located within a taxing jurisdiction |
| abatements | a property tax exemption granted by a government for a limited period of time. |
| personalty | any asset that is not realty |
| sales tax | a general tax levied on the retail sale of goods and services |
| use tax | a tax levied on the ownership, possession, or consumption of goods if the owner did not pay the jurisdiction’s sales tax when the goods were purchased |
| exise tax | a tax levied on the retail sale of specific goods or services. An excise tax may be in addition to or instead of a general sales tax |
| employment taxes | a tax based on wages, salaries, and self-employment income. Federal employment taxes are earmarked to fund Social Security and Medicare |
| unemployment tax | a tax levied by both the federal and the state governments on compensation paid by employers to their employees. Unemployment taxes are earmarked to fund the national unemployment insurance program |
| transfer taxes | a tax levied on the transfer of wealth by gift or at death and based on the market value of the transferred assets |
| value-added tax (VAT) | a tax levied on firms engaged in any phase of the production or manufacture of goods and based on the incremental value added by the firm to the goods |
| tax law | the body of legal authority consisting of statutory laws, administrative pronouncements, and judicial decisions |
| Internal Revenue Code of 1986 | the compilation of statutory tax laws written and enacted by the Congress of the United States |
| House Ways and Means Committee | the committee of the U.S. House of Representatives responsible for originating and drafting tax legislation |
| Senate Finance Committee | the committee of the U.S. Senate responsible for drafting tax legislation |
| Conference Committee | a committee composed of House and Senate members formed for the purpose of reconciling differences in the House and Senate versions of new tax legislation |
| sections | numerically labeled subdivision of the Internal Revenue Code. Each section contains an operational, definitional, or procedural rule relating to one of the federal taxes |
| treasury regulations | the official interpretation of a statutory tax rule written and published by the U.S. Treasury |
| Internal Revenue Service (IRS) | the subdivision of the U.S. Treasury Department responsible for the enforcement of the federal tax laws and the collection of federal taxes |
| revenue ruling | an IRS pronouncement explaining how the IRS applies the tax law to a particular set of facts |
| revenue procedure | an IRS pronouncement advising taxpayers how to comply with IRS procedural or administrative matters |
| Internal Revenue Bulletins (I.R.B.) | the IRS’s weekly publication containing revenue rulings and revenue procedures |
| Cumulative Bulletins (C.B.) | semiannual compilation of weekly Internal Revenue Bulletins |
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ryanriggs18
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