Last Updated:December 1 @ 07:49 am

Sherline: The Largest U.S. Tax Return

By Harris R. Sherline

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

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  1. milliibarraComment by milliibarra
    August 18, 2011 @ 6:47 am

    The IRS created innocent spouse relief because it realizes that there are times that it would be unfair to hold a spouse liable for the tax liability that was created during the joint filing there are more settlements with IRS available through “Free Tax Settlements”

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  2. Son Of ThunderComment by mcrank
    August 18, 2011 @ 8:44 am

    The Internal Revenue Service is long overdue for dissolution.  When you read statistics like the ones pointed out in this article, it is more than apparent that there are too many people with too little to do.  Taking the revenue collection process to a level of complexity that would give engineers migraines proves nothing other than there are useless government personnel whose job it is to write tax code in such ridiculous detail that goes well beyond extreme.

    Drowning businesses and individuals in overly technical guidelines, publications, and formulas simply to calculate tax liability isn’t indicative of intelligence—it’s a glaring sign of inefficiency and ineffectiveness.

    Aside from its mathematical indulgences to the absurd, the IRS engages in strong-handed tactics from harassment to property seizures that raise questions as to its exercise of power.

    But, here again, you can prove the idiocy of the present system all you want, but abolishing the IRS and tax reform—all talk and no action.

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  3. lwessonComment by lwesson
    August 18, 2011 @ 9:26 am

    Obama resonates with Lincoln.  One should be worried or at least curious about that.  In 1861 Lincoln was quickly dispensing with the Constitution and the Supreme Court or any opposition to his little war against the Southern Nation that had formed from States that freely left the Union.  Arrests of journalists were proceeding along nicely and anyone else that posed a threat like elected officials.  OBEY or else. 
    This Lincoln I might add, did not win the majority of votes in the election that seated him into power.  The vote was divided amongst 4 others running for Pres. and yet under Lincoln’s watch over 620,000 lives were snuffed out along with countless wounded with one half of the supposed Union laid asunder.  So, Lincoln without the Constitution, Bill of Rights or the defining Declaration of Independence, set into motion his own curious “laws” and started the ever growing behemoth of the Central Nation State.   The Income tax and all of it’s pleasures like the IRS, is no surprise.  Finally the Supreme Court dismantled this one Lincoln legacy only to have the ever delightful busy Progressives resurrect it.
    It is time to put this beast away, yet again.

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  4. dixon757Comment by dixon757
    August 18, 2011 @ 11:08 am

    Is this the same income tax that was sold as a tax on the “rich”?  Yes, to all you morons still focused on envy.  Is this the same income tax that ratification by the states was never legally completed, yet imposed anyway (many irregularities, the most important being that some states withdrew their ratification when they realized what they were doing)?  Is this the same income tax that, as implemented, strips citizens of basic rights like the 5th, due process, and equal protection (14th)?  Congratulations, morons, for voting for those who believe there are no Constitutional limits on their powers, and welcome to tyranny!

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  5. Liberty4310Comment by Liberty4310
    August 18, 2011 @ 12:00 pm

    So GE had a huge tax return?  How much tax did they actually pay?  I’ve heard it wasn’t much, if any.  The current tax system is simply absurd.  It’s time to revisit the whole concept and do away with the 16th Amendment and the monster IRS that resulted from it.  We need a “fair tax” where all entities that are the final consumers of a product or service pay a set percentage as an added on sales tax.  Spend a lot, pay a lot.  Spend a little, pay only a little.  Everyone, including the underground economy, would pay their fair share.  It’s time has come.

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  6. toddyComment by toddy
    August 18, 2011 @ 1:20 pm

    Unfortunately the author does not understand law. 1 law cannot defeat another so without the 4 th amendment being repealed the 16 th cannot possibly do what he says it does, and upon inspection we find that is indeed the case as the supreme court further ruled that the 16th amendment conveyed no new taxing power to the government.

    The 16th only defines a class of income that can be taxed, nothing else. For many years very little changed with the over all effect of the 16th only causing 5% of the population to file fed returns. As time passed and people forgot the intent of the law and as the meaning is hidden in legal descriptions far removed from what you and I use in common definitions, more and more people where fooled and coerced into believing they fall under the definitions requiring them to pay an income tax. In reality most Americans don’t fall under the IRS definition of income , wages or trade or business. It takes a bloodhound to track down all the subterfuges but Hendrickson in “Cracking the Code ” did some yeoman’s work on the subject. Every American should study his work. The best way to kill a Hydra is to starve it……….

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