Question

CodeBreaker #1

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26 U.S. Code § 6001 - Notice or regulations requiring records, statements, and special returns

Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe. Whenever in the judgment of the Secretary it is necessary, he may require any person, by notice served upon such person or by regulations, to make such returns, render such statements, or keep such records, as the Secretary deems sufficient to show whether or not such person is liable for tax under this title. The only records which an employer shall be required to keep under this section in connection with charged tips shall be charge receipts, records necessary to comply with section 6053(c), and copies of statements furnished by employees under section 6053(a).

Your task for these Codebreakers is to break down the meaning of a section of the Internal Revenue Code and explain it in plain English. DO NOT summarize -- your response will probably be longer, maybe much longer, than the code section itself.

To help you along this first week, here are some questions your answer might address:

• What does "person" mean?
• What does "liable" mean?
• What does "this title" refer to?
• What's the significance of "or for the collection thereof" -- who does that include?
• What does "the Secretary" mean -- who is the secretary?
• What's the implication of the word "prescribe"?
• What authority does this section NOT bestow?
• What's the significance of the last sentence and how does it differ from the rest of the Section?
• What would it be like if this Section did not exist?

Answer 1

Ans:

Before answering the question i want to give some clarification on some most important terms:

1. "Person" - The term "person" in the law refers to any human being and any trust, estate or entity that is capable of suing and being sued and entering into contract, and  include partnerships, limited liability companies, corporations, non-profit associations (whether or not incorporated), business trusts, joint ventures, local governments, states, the federal government and foreign governments, government department.

2. "liable" - The term Liable means a person responsible for any task or answerable in law is called liable.

3. This Title - This term hereby means under section or subsection this rule of policy written.

4."or for the collection thereof" refer to employer who is responsible to deducted tax on wages paying to his employee. This is like collection of tax from employees in indirect way.

5. "the Secretary" means the secretary of treasury and the secretary of treasury is the secretary of the treasury is the head of the United States Department of the Treasury which is concerned with all financial and monetary matters relating to the federal government.

6."prescribe" means any notification through rule and regulation from secretary or any changes thereof in the regulation which can be done from time to time basis as they deems fit.

Now according to this question what here is written is

"26 U.S. Code § 6001 - Notice or regulations requiring records, statements, and special returns mean"

Under this section every person who is liable to pay tax and collection of tax by deduction tax on wages which payable to his employees, is responsible to maintain such records and books on timely basis. that person is liable to furnish these records to Secretary by due dates or against the notice of secretary.

Secretary has discretion  upon such records to decide that person is liable for payment of taxes or not.

Under Internal Revenue Code 6053:-

Under Internal Revenue code 6053(a)

Every employee who, in the course of his employment by an employer, receives in any calendar month tips which are wages shall report all such tips in one or more written statements furnished to his employer on or before the 10th day following such month. Such statements shall be furnished by the employee under such regulations, at such other times before such 10th day, and in such form and manner, as may be prescribed by the Secretary.

Under Internal Revenue code 6053(b)

If the tax with respect to tips reported by an employee pursuant to subsection (a) exceeds the tax which can be collected by the employer, shall furnish to the employee a written statement showing the amount of such excess. The statement required to be furnished pursuant to this subsection shall be furnished and contain such other information, and shall be in such form as the Secretary may by regulations prescribe. When required by such regulations, a duplicate of any such statement shall be filed with the Secretary.

Reporting Requirements Relating To Certain Large Food Or Beverage Establishments 6053(c):

Under Internal Revenue code 6053(c)(1) Records and Documents report to Secretary in case of a large food or beverage establishment, each employer shall report to the Secretary, in the format and manner which is Secretary may notify by the regulation. The following information are:

1. The gross receipts of such establishment from the provision of food and beverages.

2. The aggregate amount of charge receipts.

3. The aggregate amount of charged tips shown on such charge receipts.

4. The sum of the aggregate amount reported by employees to the employer under subsection (a) with the amount the employer is required to report under section 6051 with respect to service charges of less than 10 percent

5. With respect to each employee, the amount allocated to such employee.