Homeownership is highly encouraged by tax code

Goal to minimize taxed

Tax code is written by Congress and has to be written by it. You
lobby Congress to get tax codes.

Where Tax is relevant?

Civil Rights Law (see Cohen & Sager, Why Civil Rights Lawyers Should
Study Tax, 22 Harv. Blackletter L.J. 1 (2006)).
Litigation (are damages/awards taxable?)
Transactions (tax implications to deals)
Family Law (alimony/child support/same-sex marriage)
Intellectual Property (how to tax patents, etc.?)
Administrative Law
Environmental Law
Health Law
Immigration
Criminal law
Politics / Public Policy (incentivizing behavior)

I.R.C. 7201 Attempt to evade or defeat tax.

Any person who willfully attempts in any manner to evade or defeat any tax
imposed by this title or the payment thereof shall, in addition to other
penalties provided by law, be guilty of a felony and, upon conviction thereof,
shall be fined not more than $100,000 ($500,000 in the case of a
corporation), or imprisoned not more than 5 years, or both, together with the
costs of prosecution.
Tax Lawyers
Do tax lawyers prepare tax returns?
No, not even for the super-rich or prominent
So, what do tax lawyers do?
Arrange transactions to minimize tax
Answer client questions on gray areas
Litigate against the IRS
History of Federal Income Tax
http://www.npr.org/blogs/money/2013/04/16/177489268/episode-356-thesurprisingly-entertaining-history-of-the-income-tax
Tax as Public Policy
Why do we tax income?
To generate revenue for government for various funding such as public goods
like education, roads etc.
How much should peoples income be taxed?
Public v. Private issues

Should income be taxed?

What are the alternatives to an income tax?

Property tax, sales tax etc. but main portion is federal income tax.
Sources of Tax Authority
The Sixteenth Amendment
The Congress shall have power to lay and collect taxes on incomes,
from whatever source derived, without apportionment among the
several States, and without regard to any census or enumeration.
Internal Revenue Code (I.R.C.)
26 U.S.C. 61
Who writes it? Take a guess.
Case law
Treasury Regulations (Treas. Reg.)
Title 26 of the Code of Federal Regulations
Treas. Reg. 1.61-2 is 26 C.F.R. 1.61-2
Treasury issues private layers to tax payers, and is very helpful.
TAX, TREASURY, CASE BINDING?
Various IRS Pronouncements
Revenue Rulings
Revenue Procedures
Private Letter Rulings
Various internal legal opinions and memoranda

With Tax Court, you dont have to pay/pre-pay; no jury and they travel
(last example of a travelling court).
Federal Court there is Jury. No tax law?; rich mans game/court as
you pay first, if cant pay money, Tax court is preference.
Most people end in tax/dist. court to not pay?
Court of Appeals Tax and Dist. Ct. appeal here

3 Primary Federal Taxes on Individuals

1. Income Tax
Focus of this class (other two not on final)
Imposed by 1
Rates range from 0% to 39.6%
Applied to all taxable income
2. Social Security Tax
Imposed by 3101(a)
6.2% of all wages up to $118,500
Employers pay an identical amount (6.2 + 6.2 = 12.4%)
3. Medicare Tax
Imposed by 3101(b)
1.45% of all wages (no cap)
Employers pay an identical amount (1.45 + 1.45 = 2.9%)
Additional 0.9% for high-income individuals (ACA/ObamaCare)
Note on Filing Status
Every taxpayer must use a filing status:
Single
Married Filing Jointly (and Surviving Spouse)
Married filing Separately
Unmarried Head of Household (another example of govt. trying
to incentivize to make people have a family) being married
and/or having household is considered better.
Impacts rate schedule
E.g. 39.6% rate imposed on:
Taxable income over $466,950 for married filing jointly
Taxable income over $441,000 for head of household
Taxable income over $415,050 for single
Impacts some other provisions (e.g. 121 amount)
More on this later

Basic Structure of Income Tax (not in book)

How much you make deductions from code book.
Why is gross income broadly construed (while deductions are narrowly
construed) Narrow so people cant evade taxes; income doesnt have to be
defined as such as you can come into money by many different ways.
- TO PREVENT EVASION OF INCOME TAXED
- Also there will be less revenue remaining.

Questions
What are deductions?
- to promote certain behavior that reduces taxable income
- have to be based on an expense
Why do deductions help taxpayers?
Why do deductions exist?
What is deductible?
Why are deductions narrowly construed?

- Green Taxable Income should be as low as possible.