Tax Day is here

Monday, April 15 is referred to as Income Tax Day, the deadline day when Americans practice their civic duty of filing their income tax with the federal government.

Leading up to this day, U.S. citizens have been gathering and completing their financial records to have them ready to send to the Income Revenue Service. Of course, many have filed ahead of time and others are requesting an extension to pay their taxes.

It may surprise you to know that April 15 was not always the deadline date for filing, this day has only been in effect since 1955.

The United States didn’t institute federal income tax until the Civil War era, which was done to ease the financial burden of the war and was only a temporary measure.

The federal government enacted levying an income tax in 1893 at the start of Grover Cleveland’s second term as president. However, a year later, the Supreme Court ruled it unconstitutional.

For the next years, supporters of an income tax began the process of amending the Constitution and in 1913 Congress ratified the 16th Amendment, which gave the federal government the power to tax individuals directly.

Following the adoption of the 16th Amendment, not all taxpayers were required to file a tax return.

Those required to file applied to a single person with a yearly income over $3,000 and a married couple with a yearly income over $4,000 (about $90,000 and $120,000 in today’s dollar amounts). The taxpaying population only amounted to approximately 4% of income earners at that time.

The amendment also included setting March 1 — one year and a few dozen days later — as the deadline for filing returns.

The Revenue Act of 1918 brought about a change to the deadline filing date moving it to March 15 and remained that date for the next 43 years.

In 1954, the Internal Revenue Code of 1954, which contained a lot of tax-code revisions, and included changing the deadline to file tax returns to April 15. It has remained that date for nearly 70 years.

The purpose for changing the date to April 15 was to help Americans, who needed more time to manage the difficulties of the tax laws.

Also, the IRS benefitted from moving the date and giving its employees more time to handle the workload and provide a better service to the taxpayers. In addition, due to the tax revisions applying more to the middle working class of people, it would give the IRS more time to issue a refund to those getting qualifying for one.

The day is now generally referred to as Tax Day with most years April 15 falling on a week day, however if it falls on a weekend, the deadline will be on the following business day.

For those, who are able to file on April 15 to avoid being penalized, you can request an extension of time to file your return, but it does not grant you any extension of time to pay your taxes.

Regarding a penalty of not paying taxes on the deadline, a taxpayer may have a penalty imposed on the amount you owe.

The failure-to-file penalty is usually 5% of the tax owed for each month your return is overdue, up to 25% of the bill.

Also, a person may avoid or reduce penalties if they can prove a “reasonable cause” for not paying on time.

The IRS offers payment plans that can reduce your late-payment penalties.

In order for a person to be convicted of a tax crime, the IRS does not have to prove the exact amount you owe.

But, charges most often may come after the IRS has conducted an audit of your income and financial situation.

Sometimes charges may be filed after the agency detects evasion or fraud.