History of Tax Day: Still April 15?
HISTORY OF TAX DAY
HISTORY OF TAX DAYThis year, in an unprecedented action not seen since 2021’s unprecedented action, or the unprecedented action of the year before, the Internal Revenue Service has extended the deadline for Federal Income Tax filing for individual tax filers.
This year, instead of being due today, April 15, the new deadline for individual tax filers is April 18, but not because of the Coronavirus pandemic this time!
For those keeping track… and all accountants do: The April 15th deadline for individual tax returns was extended to July 15 in 2020 and May 15 in 2021.
Tax Day: It’s Just That Simple
Typically, April 15th is Tax Day unless it falls on a weekend or holiday; then, it is postponed to the first weekday after the weekend or holiday. This year, April 15th falls on Saturday, postponing Tax Day to Monday, April 17th.
But on Monday, April 17th, The Internal Revenue Service offices in the District of Columbia (Washington, D.C.) will be closed to observe their local Emancipation Day, when slavery was abolished in the District. Abraham Lincoln originally signed the Compensated Emancipation Act into law on April 16, 1862, freeing 3100 slaves living in Washington, D.C., and provided $300 compensation to them. This holiday became official in Washington, D.C., in 2005.
This was nine months before the federal Emancipation Proclamation. which changed the legal status of over 3.5 million slaves in ten Confederate states from slave to free. Please read my article on the history of this, recognized since 2021 on Juneteenth.
The Washington D.C. public Emancipation Day holiday technically falls on Sunday, April 16, but is observed by the government on the closest weekday when it falls on a weekend.
Congress initially set the filing deadline in March, but it revised the Internal Revenue Code in 1954, moving the deadline to April 15, where it remains.
Tax Day and Patriots’ Day
Historically, if you lived in either Massachusetts or Maine, you would get an additional day to report your taxes. Patriots’ Day is observed in these two New England States on the third Monday of April. This year that falls on Monday, April 17. Because of that holiday, residents of those states had until April 18 to file; however, because the Federal government recognizes the Emancipation Day holiday. (P.S. April 17 this year is also the running of the Boston Marathon.)
But wait, how much would you pay? Don’t answer because this year, the IRS and California Franchise Tax Board extended the federal and state tax deadline to October 16, 2023, for California taxpayers in counties impacted by 2022-23 winter storms. But not for residents or businesses located in these counties: Lassen, Modoc, and Shasta.
Are we all clear on this now?
Beware the 15th!
It turns out that the 15th of nearly every month is a tax due date — beware the Ides!
- Partnerships are due March 15.
- Corporations and individual taxes are (usually) due April 15.
- Certain foreign taxpayers have their returns due June 15… with the extension for all of those six months later.
And:
- Quarterly estimated taxes are due in April, June, September, and December for corporations; April, June, September, and January for individuals; states play by their own rules and have the same due dates at the beginning of a month.
- Trusts and Nonprofits have their own dates.
The Joy of Tax Day
Tax Day is the anniversary of the celebration for the joy we feel when we receive a tax refund — until we realize it was our own money in the first place. The government has been “borrowing” it from us for the better part of a year and paying us no interest for the privilege. The holiday is celebrated by mentioning tax credits, exemptions, deductions, write-offs, and dependents… some of which may be the same.
Ancient Tax Day
Tiberius Tribute Denarius
Back during the time of Jesus, this season was referred to as
“render unto Caesar the things that are Caesar’s.”
…suggesting that the image (eikon) on the face of the coin indicated to whom the tax was due, in contrast to man, who is made in the image of God.
History of Tax Day
In America, the Federal Income Tax was first instituted as part of the Revenue Act of 1861 to help fund the Civil War. But it was later repealed, re-adopted, and ultimately found unconstitutional in 1895 because it violated the rule that direct taxes be apportioned among the states. However, it differed from today’s Income Tax in that back then, it was based on assessments, not voluntary tax returns.
In 1913, the 16th Amendment to the U.S. Constitution gave Congress the authority to tax all income without regard to the apportionment requirement, with a filing deadline of March 1. This was changed to March 15 in 1918 and April 14 in 1955.
Before Taxes
Ironically, in Colonial America, the original 13 Colonies raised funds by lottery, not taxes. Lotteries were almost a civic duty. As the city of Philadelphia came to surpass Boston as the largest city in the colonies:
“[The lottery] was looked upon as a kind of voluntary tax for paving streets, erecting wharves, buildings, etc., with a contingent profitable return for such subscribers as held the lucky numbers.” — Ainsworth Rand Spofford, 6th Librarian of Congress, 1893
Lotteries were used to build a battery on the Deleware River to defend the city, bridges, and roads. In 17th century America, public and private lotteries built the young country, taking their cue from Europe.
Some of the earliest American colleges were funded in part by lotteries: Harvard (founded in 1636), William and Mary (1693), Yale (1701), and Princeton (College of New Jersey 1746).
The 1776 Constitutional Congress held a lottery to benefit the soldiers of the American Revolution.
By the 19th century, lotteries became less popular as corruption plagued them. The corrupt Lousiana State Lottery company gave lotteries a black eye. Massachusetts and New York banned lotteries in the 1830s, with most other states following their lead. Government-based lotteries did not become popular again until the later 20th century.
Modern Tax Day
For Tax Accountants, this is called the “busy season,” as they put in nights and weekends to finish tax returns. If they’re corporate tax accountants, they do it again in October.
Tax Day Terminology
Here are some helpful terms as you prepare your tax forms:
- Extension: get out of jail free pass for not filing by the deadline, but only for a limited time. You can file this year on October 15 but must pay by May 17 to avoid penalties.
- Coffee: what tax accountants convert into tax returns
- Starbucks: a place you cannot deduct as a workspace
- Dependent: not your dog
- Accrual: the kind of world it is out there
At this time, two things are inevitable: Death and Taxes. The latter, though, is the gift that keeps on giving.
Bill Petro, your friendly neighborhood historian
billpetro.com
