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98-449: Referred to colloquially as the "New Bankruptcy Law", the Act of Congress attempts to, among other things, make it more difficult for some consumers to file bankruptcy under Chapter 7 ; some of these consumers may instead utilize Chapter 13 . It was passed by the 109th United States Congress on April 14, 2005, and signed into law by President George W. Bush on April 20, 2005. Provisions of

196-499: A 2024 study, "an additional $ 1 spent auditing taxpayers above the 90th income percentile yields more than $ 12 in revenue, while audits of below-median income taxpayers yield $ 5." As of 2018, it saw a 15 percent reduction in its workforce , including a decline of more than 25 percent of its enforcement staff. Nevertheless, during the 2023 fiscal year, the agency processed more than 271.4 million tax returns including more than 163.1 million individual income tax returns. For FY 2023,

294-497: A Chapter 7 Bankruptcy—under which most debts are forgiven (or discharged )—and instead required them to file a Chapter 13 Bankruptcy—under which the debts they incurred are discharged only after the debtor has repaid some portion of these debts. Some of the bill's more significant provisions include the following: Prior to the BAPCPA Amendments, debtors of all incomes could file for bankruptcy under Chapter 7. BAPCPA restricted

392-457: A chapter 7 debtor does not complete the course, it constitutes grounds for denial of discharge pursuant to new 11 U.S.C.   § 727(a)(11) . The financial management program is experimental and the effectiveness of the program is to be studied for 18 months. Theoretically, if the educational courses prove to be ineffective, the requirement may disappear. In 2006 more than half of all certified pre-filing counseling sessions were rendered by

490-613: A congressional grant of power. See also : Executive orders issued by the President; Code of Federal Regulations for rules issued by executive branch departments and administrative agencies; and the Federal Rules of Civil Procedure of the federal courts. Acts of Congress are published in the United States Statutes at Large . Volumes 1 through 18, which have all the statutes passed from 1789 to 1875, are available on-line at

588-578: A courtroom via criminal prosecutions to curtail the activities of some of these groups, IRS can do by administrative action." By 1986, limited electronic filing of tax returns was possible. The Internal Revenue Service Restructuring and Reform Act of 1998 ("RRA 98") changed the organization from geographically oriented to an organization based on four operating divisions. It added "10 deadly sins" that require immediate termination of IRS employees found to have committed certain misconduct. Enforcement activities declined. The IRS Oversight Board noted that

686-528: A debtor will no longer be eligible to file under either chapter 7 or chapter 13 unless within 180 days prior to filing the debtor received an "individual or group briefing" from a nonprofit budget and credit counseling agency approved by the United States trustee or bankruptcy administrator. The new legislation also requires that all individual debtors in either chapter 7 or chapter 13 complete an "instructional course concerning personal financial management." If

784-455: A decision that contradicted Hylton v. United States . The federal government scrambled to raise money. In 1906, with the election of President Theodore Roosevelt , and later his successor William Howard Taft , the United States saw a populist movement for tax reform. This movement culminated during then-candidate Woodrow Wilson 's election of 1912 and in February 1913, the ratification of

882-458: A decline in the number of paper returns being processed each year. As a result, the IRS implemented a consolidation plan for its paper tax return processing centers, closing five of its ten processing centers between 2003 and 2011. The agency closed two more centers - one in 2019 and another in 2021 - as e-file use continued to expand. E-filed tax returns accounted for 90% of all returns submitted during

980-407: A discharge if a debtor had received a discharge in a prior Chapter 7 case filed within eight years of the filing of the present case. Prior to BAPCPA, the rule was six years between chapter 7 filings. BAPCPA did not change the rule for the waiting period if the debtor filed a chapter 13 previously. Another major change to the law enacted by BAPCPA deals with eligibility. Section 109(h) provides that

1078-455: A government agency." Requard admitted that he saw the returns but denied that he leaked them. Reporter Jack White of The Providence Journal won the Pulitzer Prize for reporting about Nixon's tax returns. Nixon, with a salary of $ 200,000, paid $ 792.81 in federal income tax in 1970 and $ 878.03 in 1971, with deductions of $ 571,000 for donating "vice-presidential papers". This was one of

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1176-443: A homestead can not be exempted. The only exception is if the value was transferred from another homestead within the same state or if the homestead is the principal residence of a family farmer (§ 522(p)). This "cap" would apply in situations where a debtor has purchased a new homestead in a different state, or where the debtor has increased the value to his/her homestead (presumably through a remodeling or addition). The new law adds

1274-484: A messy tax season on several fronts. The email was sent by IRS Commissioner Koskinen to workers. Koskinen predicted the IRS would shut down operations for two days later that year which would result in unpaid furloughs for employees and service cuts for taxpayers . Koskinen also said delays to IT investments of more than $ 200   million may delay new taxpayer protections against identity theft . Also in January 2015,

1372-409: A new login and ID verification process for several of its online tools, including general account access, Identity Protection (IP) PIN setup, and payment plan applications. As part of the agency's Identity, Credential, and Access Management (ICAM) initiative, the process included the use of third-party facial recognition technologies to confirm taxpayer identities. The facial recognition requirement

1470-472: A number of new requirements for bankruptcy filers that attempt to make the filing process more difficult and costly. These additional requirements include: The 2005 bankruptcy bill was actually first drafted in 1997 and first introduced in 1998. The United States House of Representatives approved a version titled the "Bankruptcy Reform Act of 1999" and the Senate approved a slightly different version in 2000. After

1568-402: A percentage of debts must be paid over a period of 3–5 years) as opposed to Chapter 7 (under which debts are paid only out of existing assets), the additional penalties and responsibilities the bill placed on debtors, and the bill's many provisions favorable to credit card companies. Opponents of the bill regularly pointed out that the credit card industry spent more than $ 100 million lobbying for

1666-402: A presumption of abuse is found under the means test, it may only be rebutted in the case of "special circumstances", [ see 11 U.S.C.   § 707(b)(2)(B) ]. Even in cases where there is no presumption of abuse, it is still possible for a Chapter 7 case to be dismissed or converted. If the debtor's "current monthly income" is below the median income, as discussed above, only the court or

1764-405: A provision that protects creditors from monetary penalties for violating the stay if the debtor did not give "effective" notice pursuant to § 342, [§ 342(g)]. The new notice provisions require the debtor to give notice of the bankruptcy to the creditor at an "address filed by the creditor with the court," or "at an address stated in two communications from the creditor to the debtor within 90 days of

1862-465: A report critical of the lack of protection of privacy in TAS, and the project was abandoned in 1978. In 1995, the IRS began to use the public Internet for electronic filing. Since the introduction of e-filing , self-paced online tax services have flourished, augmenting the work of tax accountants, who were sometimes replaced. By 2002, more than a third of all tax returns were filed electronically. This led to

1960-791: A result, the IRS now functions under four major operating divisions: The Large Business & International (LB&I) division was known as the Large and Mid-Size Business division prior to a name change on October 1, 2010. The IRS is headquartered in Washington, D.C. , and does most of its computer programming in Maryland. It processes paper tax returns sent by mail and e-filed tax returns at three IRS center locations: Austin, Texas; Kansas City, Missouri; and Ogden, Utah. The IRS also operates computer centers in three locations: Detroit, Michigan; Martinsburg, West Virginia; and Memphis, Tennessee. The IRS

2058-641: Is an agency of the Department of the Treasury and led by the Commissioner of Internal Revenue , who is appointed to a five-year term by the President of the United States. The duties of the IRS include providing tax assistance to taxpayers; pursuing and resolving instances of erroneous or fraudulent tax filings; and overseeing various benefits programs, including the Affordable Care Act . The IRS originates from

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2156-415: Is an exception if the property is "reasonably necessary for the support of the debtor and any dependent of the debtor." These provisions were largely intended to prevent filers from forum shopping, i.e. moving assets and domiciles to a state with more favorable exemptions and filing. BAPCPA attempted to eliminate the perceived "forum shopping" by changing the rules on claiming exemptions. Exemptions define

2254-470: Is blamed for $ 4   billion worth of fraudulent 2012 tax refunds by the IRS. Fraudulent claims were made with the use of stolen taxpayer identification and Social Security numbers, with returns sent to addresses both in the US and internationally. Following the release of the findings, the IRS stated that it resolved most of the identity theft cases of 2013 within 120 days, while the average time to resolve cases from

2352-447: Is currently led by Daniel Werfel , who became Commissioner of Internal Revenue on March 13, 2023. He succeeded Douglas O'Donnell , who served as Acting Commissioner of Internal Revenue after Charles P. Rettig 's term as Commissioner ended on November 12, 2022. There have been 50 commissioners of Internal Revenue and 28 acting commissioners since the agency's creation in 1862. From May 22, 2013, to December 23, 2013, senior official at

2450-467: Is higher than the median income of their state, as calculated by the Code, are subject to being found abusive under § 707(b)(2). Debtors whose income falls below the median income figure may be in violation of the means test, however no party is permitted to file a motion in order to find abuse under § 707(b)(2), [ see 11 U.S.C.   § 707(b)(7) ]. This creates a means test "safe harbor" for debtors below

2548-570: The Commissioner of Internal Revenue , a federal office created in 1862 to assess the nation's first income tax to fund the American Civil War . The temporary measure funded over a fifth of the Union's war expenses before being allowed to expire a decade later. In 1913, the Sixteenth Amendment to the U.S. Constitution was ratified, authorizing Congress to impose a tax on income and leading to

2646-605: The Office of Management and Budget Daniel Werfel was acting Commissioner of Internal Revenue. Werfel, who attended law school at the University of North Carolina and attained a master's degree from Duke University , prepared the government for a potential shutdown in 2011 by determining which services that would remain in existence. No IRS commissioner has served more than five years and one month since Guy Helvering, who served 10 years until 1943. The most recent commissioner to serve

2744-496: The Sixteenth Amendment to the United States Constitution : 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. This granted Congress the specific power to impose an income tax without regard to apportionment among the states by population. By February 1913, 36 states had ratified

2842-484: The U.S. Customs and Border Protection (collecting duties and tariffs ) or the Federal Reserve (purchasing U.S. treasuries ). The IRS faces periodic controversy and opposition over its methods, constitutionality, and the principle of taxation generally. In recent years, the agency has struggled with budget cuts, under-staffed workforce, outdated technology and reduced morale, all of which collectively result in

2940-464: The United States trustee (or bankruptcy administrator) can seek dismissal or conversion of the debtor's case. If the debtor's "current monthly income" is above the median income, as discussed above, any party in interest may seek dismissal or conversion of the case. The grounds for dismissal under 11 U.S.C.   § 707(b)(3) are the filing of a petition in "bad faith", or when "the totality of

3038-652: The federal level in the United States , legislation (i.e., " statutes " or " statutory law ") consists exclusively of Acts passed by the Congress of the United States and its predecessor, the Continental Congress , that were either signed into law by the President or passed by Congress after a presidential veto . Legislation is not the only source of regulations with the force of law . However, most executive branch and judicial branch regulations must originate in

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3136-471: The "means test" are defined in 11 U.S.C.   § 707(b)(2)(A) , (ii)-(iv) and include: An itemized list of the applicable IRS living standards can be found at the US Trustee's website. A "presumption of abuse" will arise if: (1) the debtor has at least $ 182.50 in current monthly income available after the allowed deductions (this equals $ 10,950 over five years) regardless of the amount of debt, or (2)

3234-456: The 2011/2012 tax period was 312 days. In September 2014, IRS Commissioner John Koskinen expressed concern over the organization's ability to handle Obamacare and administer premium tax credits that help people pay for health plans from the health law's insurance exchanges. It will also enforce the law's individual mandate , which requires most Americans to hold health insurance. In January 2015, Fox News obtained an email which predicted

3332-455: The 2021 filing season. In 2003, the IRS struck a deal with tax software vendors: The IRS would not develop online filing software and, in return, software vendors would provide free e-filing to most Americans. In 2009, 70% of filers qualified for free electronic filing of federal returns. According to an inspector general's report, released in November 2013, identity theft in the United States

3430-474: The Bankruptcy Code to provide for the dismissal or conversion of a Chapter 7 case upon a finding of "abuse" by an individual debtor (or married couple) with "primarily consumer debt". The pre-BAPCPA language of § 707(b) provided for dismissal of a chapter 7 case upon a finding of "substantial abuse". Under the former § 707(b), only the court or the United States trustee could bring a motion to find abuse under

3528-466: The IRS collected approximately $ 4.7 trillion, which is approximately 96 percent of the operational funding for the federal government; funding widely throughout to different aspects of American society , from education and healthcare to national defense and infrastructure. In July 1862, during the American Civil War , President Abraham Lincoln and Congress passed the Revenue Act of 1862 , creating

3626-527: The IRS was tasked with enforcement of laws relating to prohibition of alcohol sales and manufacture ; this was transferred to the jurisdiction of the Department of Justice in 1930. After repeal in 1933, the IRS resumed collection of taxes on beverage alcohol. The alcohol, tobacco and firearms activities of the bureau were segregated into the Bureau of Alcohol, Tobacco, Firearms and Explosives in 1972. A new tax act

3724-593: The Library of Congress, here . In the list below, statutes are listed by X Stat. Y , where X is the volume of the Statutes at Large and Y is the page number, as well as either the chapter or Public Law number. See examples below. Each Congress has two to four sessions. Under the numbering system used from 1789 until 1957, the Acts in each session are numbered sequentially as Chapters. This numbering included both laws applicable to

3822-532: The Senate and House after the 2004 elections breathed new life into the bill, which was introduced in its current form by the chairman of the Senate Finance Committee , Republican Senator Chuck Grassley of Iowa . According to George Packer in his book The Unwinding , Joe Biden , Chris Dodd , and Hillary Clinton helped pass this bill. (Of the three, however, only Biden voted for the final bill. Dodd voted against, and Clinton did not vote.) The bill

3920-726: The Union raised 21% of its war revenue through income taxes. After the Civil War, Reconstruction , railroads, and transforming the North and South war machines towards peacetime required public funding. However, in 1872, seven years after the war, lawmakers allowed the temporary Civil War income tax to expire. Income taxes evolved, but in 1894 the Supreme Court declared the Income Tax of 1894 unconstitutional in Pollock v. Farmers' Loan & Trust Co. ,

4018-447: The act apply to cases filed on or after October 17, 2005. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) made changes to American bankruptcy laws, affecting both consumer and business bankruptcies. Many of the bill's provisions were explicitly designed by the bill's Congressional sponsors to make it "more difficult for people to file for bankruptcy." The BAPCPA was intended to make it more difficult for debtors to file

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4116-419: The amount of property debtors may protect from liquidation to pay creditors. Typically, every state has exemption laws that define the amount of property that can be protected from creditor collection action within the state. There is also a federal statute that defines exemptions in federal cases. In bankruptcy, Congress allowed states to opt out of the federal exemption scheme. Opt out states still controlled

4214-412: The amount of property that could be protected from creditors, or "exempted" from creditors, in bankruptcy cases. Under BAPCPA, a debtor who has moved from one state to another within two years of filing (730 days) the bankruptcy case must use exemptions from the place of the debtor's domicile for the majority of the 180-day time period preceding the two years (730 days) before the filing [§ 522(b)(3)]. If

4312-402: The average income may be higher or lower than the debtor's actual income at the time of filing for bankruptcy. This has led some commentators to refer to the bankruptcy code's "current monthly income" as "presumed income". If the debtor's debt is not primarily consumer debt, then the means test is inapplicable. The applicable median income figure is adjusted by family size. Generally, the larger

4410-508: The bankruptcy code would be considered as an "abuse" and therefore subject to dismissal. This decision was previously made by a bankruptcy court judge, who would evaluate the particular circumstances that led to a bankruptcy. Critics of the means test, which is triggered if a debtor makes more than their state's median income, argued that it ignored the many causes of individual bankruptcies, including job loss, family illnesses, and predatory lending , and would force debtors seeking to challenge

4508-748: The bankruptcy system. As Congressman F. James Sensenbrenner Jr. (R-Wis), one of the bill's key supporters in the House, argued, "This bill will help restore responsibility and integrity to the bankruptcy system by cracking down on fraudulent, abusive, and opportunistic bankruptcy claims." Opponents of the bill argued that claims of bankruptcy abuse and fraud were wildly overblown, and that the vast majority of bankruptcies were related to medical expenses and job losses. These arguments were bolstered by an in-depth study and survey of 1,771 bankruptcy cases by scholars at Harvard University , of whom 931 submitted to interviews. The study found that "about half" of bankruptcy filers in

4606-425: The bill over the course of eight years. There has also been significant criticism of BAPCPA's changes to Chapter 11 business bankruptcies. Harvey Miller, one of the most-prominent bankruptcy attorneys in the country (particularly in terms of representing corporate debtors) has described BAPCPA as "ill-conceived." One of the primary stated purposes of the bankruptcy bill was to cut down on abusive or fraudulent uses of

4704-421: The bill; according to Warren, after the briefing: President Clinton had been showing that this is another way that he could be helpful to business. It wasn't a very high visibility bill. And when Mrs. Clinton came back with a little better understanding of how it all worked, they reversed course, and they reversed course fast. And indeed, the proof is in the pudding. The last bill that came before President Clinton

4802-465: The change to the Constitution. It was further ratified by six more states by March. Of the 48 states at the time, 42 ratified it. Connecticut, Rhode Island, and Utah rejected the amendment; Pennsylvania, Virginia, and Florida did not take up the issue. Though the constitutional amendment to allow the federal government to collect income taxes was proposed by President Taft in 1909, the 16th Amendment

4900-471: The circumstances (including whether the debtor seeks to reject a personal services contract and the financial need for such rejection as sought by the debtor) of the debtor's financial situation demonstrates abuse." Another change that resulted from the BAPCPA was an extension of the time between multiple bankruptcy filings. 11 U.S.C.   § 727(a)(8) was amended to provide that the debtor would be denied

4998-471: The creation of the Bureau of Internal Revenue . In 1953, the agency was renamed the Internal Revenue Service, and in subsequent decades underwent numerous reforms and reorganizations, most significantly in the 1990s. Since its establishment, the IRS has been largely responsible for collecting the revenue needed to fund the United States federal government, with the rest being funded either through

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5096-417: The debtor has at least $ 109.59 of such income ($ 6,575 over five years) and this sum would be enough to pay general unsecured creditors more than 25% over five years. For example, if a debtor had exactly $ 109.59 of "current monthly income" left after deductions and owed less than $ 26,300 in general unsecured debt, then the presumption of abuse would arise, [ see 11 U.S.C.   § 707(b)(2)(A)(i) ]. If

5194-408: The debtor or a relative of the debtor, jewelry worth more than $ 500, with adjustment for inflation (except wedding rings), and motor vehicles. Prior to BAPCPA, the definition of household goods was broader so that more items could have been included, including more than one television, VCR, radio, etc. Under the new law, the homestead exemption , which allows bankruptcy filers in some states to exempt

5292-562: The decline in enforcement activities has "rais[ed] questions about tax compliance and fairness to the vast majority of citizens who pay all their taxes". In June 2012, the IRS Oversight Board recommended to Treasury a fiscal year 2014 budget of $ 13.074   billion for the Internal Revenue Service. On December 20, 2017, Congress passed the Tax Cuts and Jobs Act of 2017 . It was signed into law by President Trump on December 22, 2017. In

5390-533: The differences in the bills were reconciled, Congress passed the "Bankruptcy Reform Act of 2000". President Clinton, however, employed what is known as a " pocket veto " by waiting for the lame duck congressional session to adjourn without signing the bill, a legislative maneuver tantamount to a veto. Professor Elizabeth Warren , a member of the National Bankruptcy Review Commission at that time, briefed First Lady Clinton on negative effects of

5488-409: The editorial board of The New York Times called the IRS budget cuts penny-wise-and-pound-foolish, where for every dollar of cuts in the budget, six were lost in tax revenue. A 2020 Treasury Department audit found the IRS had improved its identity verification system offerings for taxpayers, but was still behind in fully meeting digital identity requirements. The following year, the IRS announced

5586-478: The exceptions to discharge. The presumption of fraud in the use of credit cards was expanded. The amount that the debtor must charge for "luxury goods" to invoke the presumption is reduced from $ 1,225 to $ 500. The amount of cash advances that would give rise to a presumption of fraud has also been reduced, from $ 1,225 to $ 750. The time period was increased from 60 days to 90 days. Thus, if a debtor purchases any single item for more than $ 500 within 90 days of filing,

5684-412: The family, the greater the applicable median income figure and the more money the debtor must earn before a presumption of abuse arises. A chart of the most recent applicable median incomes by state can be found at the US Trustee's website. This code section then requires a comparison between the debtor's "current monthly income" and the median income for the debtor's state. If the debtor's income exceeds

5782-664: The filing deadline was moved from March 15 to April 15. The Tax Reform Act of 1969 created the Alternative Minimum Tax . In 1969, Richard Nixon directed the IRS to audit his political opponents, as well as opponents of US involvement in the Vietnam War . The IRS's Activist Organizations Committee, later renamed the Special Services Staff, created a target list of more than 1,000 organizations and 4,000 individuals. A White House memo said that "What we cannot do in

5880-458: The filing of the bankruptcy case. The notice must also include the account number used by the creditor in the two relevant communications [§ 342(c)(2)(e) & (f)]. An ineffective notice can be cured if the notice is later "brought to the attention of the creditor." This means that the notice must be received by a person designated by the creditor to receive bankruptcy notices. BAPCPA also provided more protections to creditors because it expanded

5978-428: The form and the IRS checked the form for accuracy. The IRS's workload jumped by ten-fold, triggering a massive restructuring. Professional tax collectors began to replace a system of "patronage" appointments. The IRS doubled its staff but was still processing 1917 returns in 1919. Income tax raised much of the money required to finance the war effort; in 1918 a new Revenue Act established a top tax rate of 77%. In 1919

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6076-475: The general public and laws relating to specific individuals, e.g., to grant pensions to disabled veterans. Internal Revenue Service The Internal Revenue Service ( IRS ) is the revenue service for the United States federal government , which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code , the main body of the federal statutory tax law. It

6174-401: The inappropriate enforcement of tax laws against high earners and large corporations , reduced tax collection, rising deficits , lower spending on important priorities, or further tax increases on compliant taxpayers to compensate for lost revenue . Research shows that IRS audits raise revenue, both through the initial audit and indirectly by deterring future tax cheating. According to

6272-423: The landlord has already obtained a judgment of possession prior to the bankruptcy case being filed, § 362(b)(22). The stay also would not apply in a situation where the eviction is based on "endangerment" of the rented property or "illegal use of controlled substances" on the property, § 362(b)(23). In either situation the landlord must file with the court and serve on the debtor a certificate of non-applicability of

6370-542: The lender is no longer relevant. Thus, even loans from "for-profit" or "non-governmental" entities are not dischargeable. Some types of liens may be avoided through a chapter 7 bankruptcy case. However, BAPCPA limited the ability of debtors to avoid liens through bankruptcy. The definition of "household goods" was changed—for example, by limiting "electronic equipment" to one radio, one television, one VCR, and one personal computer with related equipment. The definition now excludes certain items such as works of art not created by

6468-634: The longest term was Doug Shulman, who was appointed by President George W. Bush and served for five years. The Commissioner of Internal Revenue is assisted by two deputy commissioners. The Deputy Commissioner for Operations Support reports directly to the Commissioner and oversees the IRS's integrated support functions, working to facilitate economy of scale efficiencies and better business practices. The Deputy also administers and provides executive leadership for customer service, processing, tax law enforcement and financial management operations. Additionally,

6566-488: The median income, then the debtor must apply the means test. For debtors subject to the means test, the test is calculated as follows. The debtor's "current monthly income" is reduced by a set of allowed deductions specified by the IRS . These deductions are not necessarily the actual expenses the debtor incurs on a monthly basis. Some commentators have referred to these deductions as "presumed expenses". The deductions applicable in

6664-403: The new residency requirement would render the debtor ineligible for any exemption, then the debtor can choose the federal exemptions. Also, there is a "cap" placed upon the homestead exemption in situations where the debtor, within 1215 days (about 3 years and 4 months) preceding the bankruptcy case added value to a homestead. The provision provides that "any value in excess of $ 125,000" added to

6762-462: The number of debtors that could declare Chapter 7 bankruptcy. The act sets out a method to calculate a debtor's income, and compares this amount to the median income of the debtor's state. If the debtor's income is above the median income amount of the debtor's state, the debtor is subject to a "means test." The most noteworthy change brought by the 2005 BAPCPA amendments occurred within 11 U.S.C.   § 707(b) . Congress amended this section of

6860-581: The number of lawyers willing to help consumers file. These criticisms were partly borne out in the months following the new law, as lawyers have reported that the bankruptcy process has become significantly more arduous, forcing them to charge higher fees and take fewer clients. List of United States federal legislation This is a chronological, but still incomplete, list of United States federal legislation . Congress has enacted approximately 200–600 statutes during each of its 118 biennial terms so more than 30,000 statutes have been enacted since 1789. At

6958-418: The office of Commissioner of Internal Revenue and enacting a temporary income tax to pay war expenses. The Revenue Act of 1862 was passed as an emergency and temporary war-time tax. It copied a relatively new British system of income taxation, instead of trade and property taxation. The first income tax was passed in 1862: By the end of the war, 10% of Union households had paid some form of income tax, and

7056-412: The present case is a third filing within one year, the automatic stay does not go into effect at all, unless the debtor or any other party in interest files a motion to impose the stay that demonstrates that the third filing is in good faith with respect to the creditor, or creditors, being stayed. The provision presumes that the repeat filings are not in good faith and requires the party seeking to impose

7154-442: The presumption that the debt was incurred fraudulently and therefore non-dischargeable in the bankruptcy arises. Prior to BAPCPA, the presumption would not have arisen unless the purchase was for more than $ 1,225 and was made within 60 days of filing (§ 523(a)(2)(C)). BAPCPA amended § 523(a)(8) to broaden the types of educational ("student") loans that cannot be discharged in bankruptcy absent proof of "undue hardship." The nature of

7252-448: The public. His tax advisor, Edward L. Morgan, became the fourth law-enforcement official to be charged with a crime during Watergate . John Requard Jr., accused of leaking the Nixon tax returns, collected delinquent taxes in the slums of Washington. In his words: "We went after people for nickels and dimes, many of them poor and in many cases illiterate people who didn't know how to deal with

7350-635: The reasons for his famous statement: "Well, I'm not a crook. I've earned everything I've got." So controversial was this leak, that most later US presidents released their tax returns (though sometimes only partially). These returns can be found online at the Tax History Project. By the end of the Second World War, the IRS was handling sixty million tax returns each year, using a combination of mechanical desk calculators, accounting machines , and pencil and paper forms. In 1948 punch card equipment

7448-405: The requirement is serving its intended purpose. The automatic stay in bankruptcy is the result of Section 362 of the Bankruptcy Code that requires all collection proceedings to stop. There are exceptions, of course, but generally this is the term for the "relief" from collection proceedings a debtor receives by filing the bankruptcy with the bankruptcy clerk's office. BAPCPA limited the protections

7546-449: The section. The 2005 amendments removed these restrictions. Post-BAPCPA, § 707(b) provides two definitions of "abuse". "Abuse" may be found when there is an unrebutted "presumption of abuse" arising under a BAPCPA-created "means test", [ see 11 U.S.C.   § 707(b)(2) ], or through a finding of bad faith, determined by a totality of the circumstances [ see 11 U.S.C.   § 707(b)(3) ]. Only debtors whose monthly income

7644-399: The state's median income figure. Current monthly income is defined in 11 U.S.C.   § 101(10A) as the monthly average of the income received by the debtor (and the debtor's spouse in a joint case) during a defined six-month time period prior to the filing of the bankruptcy case. Some narrow classes of payments, for example, social security, are excluded from these figures. Notably,

7742-469: The stay (usually the debtor) to rebut the presumption by clear and convincing evidence. There are exceptions. Notably, § 362(i) provides that the presumption that the repeat filing was not in good faith would not arise in a "subsequent" case if a debtor's prior case was dismissed "due to the creation of a debt repayment plan." BAPCPA also limited the applicability of the automatic stay in eviction proceedings. The stay does not stop an eviction proceeding if

7840-438: The stay provides in some re-filed cases. New § 362(c)(3) provides that if the debtor files a chapter 7, 11 or 13 case within one year of the dismissal of an earlier case, the automatic stay in the present case terminates 30 days after the filing, unless the debtor or some other party in interest files a motion and demonstrates that the present case was filed in good faith with respect to the creditor, or creditors, being stayed. If

7938-478: The stay spelling out the facts giving rise to one of the exceptions. There is a process for the debtor to contest the assertions in the landlord's certificate or if state law gives the debtor an additional right to cure the default even after an order for possession is entered, § 362(l) & (m). In addition, BAPCPA extends the exceptions to automatic stay to certain paternity, child custody, domestic violence and domestic and child support proceedings. BAPCPA enacts

8036-465: The test into costly litigation , driving them even further into debt. Besides the stricter means test, opponents of the bill also objected to the many other obstacles the bill creates for individuals seeking bankruptcy protection. These changes included more detailed reporting requirements, higher fees, mandated credit counseling , and the additional liability placed on bankruptcy attorneys, which critics argued would drive up attorneys' fees and decrease

8134-420: The three decades since 1991, the IRS had a substantial decrease in the number of employees per million residents, decreasing from 451 (in 1991) to 237 (in 2021). A decrease of 47.5 percent. From the 1950s through the 1970s, the IRS began using technology such as microfilm to keep and organize records. Access to this information proved controversial, when President Richard Nixon's tax returns were leaked to

8232-513: The three largest agencies: Money Management International , Consumer Credit Counseling Service of Greater Atlanta and GreenPath Debt Solutions . A 2007 GAO report was inconclusive regarding the efficacy of the counseling provisions and concluded that there is no mechanism in place to evaluate it: ... the value of the counseling requirement is not clear. The counseling was intended to help consumers make informed choices about bankruptcy and its alternatives. Yet anecdotal evidence suggests that by

8330-419: The time most clients receive the counseling, their financial situations are dire, leaving them with no viable alternative to bankruptcy. As a result, the requirement may often serve more as an administrative obstacle than as a timely presentation of meaningful options. Because no mechanism currently exists to track the outcomes of the counseling, policymakers and program managers are unable to fully assess how well

8428-478: The value of their homes from creditors, is limited in various ways. If a filer acquired their home less than 1,215 days (40 months) before filing, or if they have been convicted of security law violations or been found guilty of certain crimes, they may only exempt up to $ 125,000 (adjusted periodically), regardless of a state's exemption allowance.(§ 522(p)(1)). Filers must also wait 730 days before they are allowed to use their state's exemptions. (§ 522(b)(3)(A)). There

8526-420: The year 2001 cited out-of-pocket medical bills in excess of $ 10,000 as a major contributor to bankruptcy (the average bankruptcy filer in this study was a 41-year-old woman with a median income of $ 25,000, slightly below the personal income average for that year). Perhaps the most controversial provisions of the bill was the strict means test it established to determine whether a debtor's filing under Chapter 7 of

8624-676: Was a great supporting factor to eventually prevailing and getting Congress to pass the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. It was widely claimed by advocates of BAPCPA that its passage would reduce losses to creditors such as credit card companies, and that those creditors would then pass on the savings to other borrowers in the form of lower interest rates. These claims turned out to be false. After BAPCPA passed, although credit card company losses decreased, prices charged to customers increased, and credit card company profits soared. The 2005 bankruptcy bill

8722-474: Was dropped in 2022, however, following privacy concerns from government officials and the public. Alternative ID verification options have since been introduced with the goal of making IRS online tools accessible to more people. As early as the year 1918, the Bureau of Internal Revenue began using the name "Internal Revenue Service" on at least one tax form. In 1953, the name change to the "Internal Revenue Service"

8820-581: Was formalized in Treasury Decision 6038. The 1980s saw a reorganization of the IRS. A bipartisan commission was created with several mandates, among them to increase customer service and improve collections. Congress later enacted the Internal Revenue Service Restructuring and Reform Act of 1998 , which mandated that the agency replace its geographic regional divisions with units that serve particular categories of taxpayers. As

8918-521: Was not ratified until 1913, just before the start of the First World War . That same year, the first edition of the 1040 form was introduced. A copy of the 1913 form can be viewed online and shows that only those with annual incomes of at least $ 3,000 (equivalent to $ 92,500 in 2023) were instructed to file an income tax return. In the first year after the ratification of the 16th Amendment, no taxes were collected. Instead, taxpayers simply completed

9016-440: Was opposed by a wide variety of groups, including consumer advocates, legal scholars, retired bankruptcy judges, and the editorial pages of many national and regional newspapers. While criticisms of the bill were wide-ranging, the central objections of its opponents focused on the bill's sponsors' contention that bankruptcy fraud was widespread, the strict means test that would force more debtors to file under Chapter 13 (under which

9114-457: Was passed in 1942 as the United States entered the Second World War . This act included a special wartime surcharge. The number of American citizens who paid income tax increased from about four million in 1939 to more than forty-two million by 1945. In 1952, after a series of politically damaging incidents of tax evasion and bribery among its own employees, the Bureau of Internal Revenue

9212-495: Was phased out. Information processing in the IRS systems of the late 1960s was in batch mode; microfilm records were updated weekly and distributed to regional centers for handling tax inquiries. A project to implement an interactive, realtime system, the "Tax Administration System", was launched, that would provide thousands of local interactive terminals at IRS offices. However, the General Accounting Office prepared

9310-408: Was reorganized under a plan put forward by President Truman , with the approval of Congress. The reorganization decentralized many functions to new district offices which replaced the collector's offices. Civil service directors were appointed to replace the politically appointed collectors of the Bureau of Internal Revenue. Not long after, the bureau was renamed the Internal Revenue Service. In 1954

9408-454: Was supported by President George W. Bush . Tom DeLay also championed the legislation. The bill passed by large margins, 302–126 in the House and 74–25 in the Senate, and was signed into law by President Bush. Support for the act mostly came from banks, credit card companies, and other creditors. Since banks, credit companies and other creditors are the ones who must bear the losses for debts discharged through bankruptcy, their lobby power

9506-763: Was that bankruptcy bill that was passed by the House and the Senate in 2000 and he vetoed it. And in her autobiography, Mrs. Clinton took credit for that veto and she rightly should. She turned around a whole administration on the subject of bankruptcy. She got it. In the years since 2000, the bill was introduced in each Congress, but was repeatedly shelved due to threats of a filibuster from its opponents and because of disagreements over various amendments, including one backed by Senate Democrats that would have made it harder for anti-abortion groups to discharge court fines related to legal debts incurred from lawsuits filed by pro-abortion groups. The increase in Republican majorities in

9604-480: Was used. The first trial of a computer system for income tax processing was in 1955, when an IBM 650 installed at Kansas City processed 1.1 million returns. The IRS was authorized to proceed with computerization in 1959 and purchased IBM 1401 and IBM 7070 systems for local and regional data processing centers. The Social Security number was used for taxpayer identification starting in 1965. By 1967, all returns were processed by computer and punched card data entry

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