Even outside U.S. borders, the April 15 date for filing income tax returns is important, as the IRS is willing to trawl the ends of the Earth to get its due share. This has been the case for the last 90 or so years.
American schoolchildren generally learn that U.S. income tax originated in 1913 with the ratification of the 16th Amendment to the U.S. Constitution. In truth, only the current version of U.S. income tax exists because of that legislation. The real origin of U.S. income tax goes back to the American Civil War.
The Revenue Act of 1861 actually imposed the first U.S. income tax -- 3 percent of all annual incomes above $800. Intended to finance Union forces during the war, the law outlasted the conflict by seven years.
Why go to the extraordinary trouble of passing a Constitutional Amendment to establish a federal income tax if Congress already had the power to levy income taxes? In 1895, the U.S. Supreme Court ruled that the Constitution essentially prohibited an "unapportioned" federal tax on income derived from property.
Apportioning taxes (i.e., distributing them based on each state's portion of the U.S. population), as well as splitting the hair of determining which income comes from wages as opposed to property, basically made federal income tax an impossible technical quagmire even though it was legal.
The 16th Amendment untied these knots: "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."
Despite this effort at simplification, however, U.S. tax law has only grown exponentially more complex in the intervening decades -- so much so that U.S. corporations with assets over $50 million must file electronically.
That's probably a good idea. One U.S. company filed the largest federal tax return in U.S. history -- one that would have required tens of thousands of pages to print.
Which company's 2006 U.S. tax return was the largest return ever filed -- one so massive that it would have required tens of thousands of pages to print if the firm had not filed electronically?
The corporation in question is none other than General Electric, which submitted a 237-MB e-filed tax return to the IRS in May 2006. (Like other large corporations, GE received an extension, to move its tax deadline from September 15 to April 15.)
By most estimates, a paper version of the tax return would have been approximately 24,000 pages long. Printing the return on 8.5"x11" paper and laying the pages end-to-end would have traced a line more than four miles in length.
Compare that to the entirety of the infamously massive U.S. Internal Revenue Code -- the formal title for all federal tax law in the United States -- which is roughly 24 MB. To print it would require over 17,000 pages..
Put another way, GE's 2006 tax return was almost 10 times larger than the entirety of the laws that dictate how to file the return. (The IRS regulations that implement the tax code are another, vastly longer story.)
Why is their tax return so large?
GE is a multinational conglomerate, with ties to dozens of industries in dozens of countries. While perhaps best known as a maker of light bulbs and household appliances, GE actually has six major divisions, which have businesses in commercial and consumer finance, healthcare, entertainment, and industrial development.
Each division has major subdivisions, and each subdivision has its own complicated tax profile. For example, Universal Studios -- which takes in hundreds of millions of dollars in motion picture revenue every year -- is just one branch of NBC Universal, GE's entertainment arm.
Taken collectively, GE's various businesses comprise the one of the largest companies on Earth, with the most complicated tax "footprint" in America.
Read more of Harris Sherline’s commentaries on his blog at www.opinionfest.com