By Dr. Eduardo M. Rivera
Washington, D.C., December 24, 1872.
According to an act of Congress of that date, 27 Stat 401, assessments of all federal taxes, which were heretofore made by persons in the Offices of Assessor and Assistant Assessor, would, by July 1, 1873, be performed by the Collectors of Internal Revenue or their deputies and the offices of assessor and assistant assessor would be abolished and the duties of those officers would henceforth be transferred to the Collectors of Internal Revenue.
On August 28, 1894, the Collectors of Internal Revenue and Deputy Collectors of Internal Revenue had been assessing, levying, collecting and paying into the Treasury of the United States of America all internal revenue they received less their compensation for more than 20 years.
The Act of August 28, 1894, 28 Stat 553-560, an act to reduce taxation, to provide revenue for the government, and for other purposes, in Section 29 imposed a duty on:
“all persons of lawful age having an income of more than three thousand five hundred dollars for the taxable year, computed on the basis herein prescribed, to make and render a list or return, on or before the day provided by law, in such form and manner as may be directed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, to the collector or a deputy collector of the district in which they reside, of the amount of their income, gains, and profits…”
The imposition of a duty to make a list or return of taxable property made the 1894 Income Tax a direct tax on property, which was the opinion of the Supreme Court of the United States in the Income Tax cases, Pollock v. Farmer’s Loan and Trust Co., 157 U.S. 429 (1895) and Pollock v. Farmer’s Loan and Trust Co., 158 U.S. 601 (1895)
Almost 20 years later, after the ratification of the 16th Amendment, Congress enacted another federal income tax law, which the Supreme Court first declared to be constitutional in Brushaber v. Union Pacific, 240 U.S. 1 (1916). As in the 1894 Income Tax, the Collectors of Internal Revenue and Deputy Collectors of Internal Revenue played the significant role in the assessment, levying, collection and payment of internal revenue. The Collectors of Internal Revenue and Deputy Collectors of Internal Revenue continued to pay a significant and critical role in federal income taxation until the 1952 abolition of the all the Offices of the Collectors of Internal Revenue and Deputy Collectors of Internal Revenue
For over 150 years the Collector of Internal Revenue was the Tax Man in the United States. During the 150 years the Collectors of Internal Revenue collected taxes within the United States they had the power of Congress to assess, levy and collect federal taxes and most important they had the power of distraint—the authority to seize the property of the tax debtor for non-payment. Neither the Secretary of the Treasury nor the Commissioner of Internal Revenue could at anytime assess, levy and collect any federal tax, so not possessing authority to tax they could not delegate that power to another.
The Collectors of Internal Revenue survived many forms of novel taxation during their tenure, including the 1894 federal income tax, but the Collector of Internal Revenue couldn’t survive government’s 1952 plan to expand federal income taxation by turning the country into a democracy where anyone could volunteer to pay taxes.
The power of the Congress to tax incomes, reaffirmed in the 16th Amendment, can be traced back to the temporary tax noted in Article 4 of the Northwest Ordinance of July 13, 1787. Income tax assessments and collections began with the appointment by the President of assessors, assistant assessors and collectors and deputy collectors under the Act of July 1, 1862 12 Stat 432. Assessors were to be abolished by July 1, 1873 and the Collectors of Internal Revenue and Deputy Collectors of Internal Revenue were to be gone by December 1, 1952, making 1952 the first year of voluntary federal taxation.
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Dr. Eduardo M. Rivera