Date of Download: Dec 26, 2001

CFR (Code of Federal Regulations)

26 CFR S 1.1-1

Copr. © West 2001 No Claim to Orig. U.S. Govt. Works

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 26 C.F.R. § 1.1-1 Treas. Reg. § 1.1-1

CODE OF FEDERAL REGULATIONS

TITLE 26--INTERNAL REVENUE

CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER A--INCOME TAX

PART 1--INCOME TAXES

NORMAL TAXES AND SURTAXES

DETERMINATION OF TAX LIABILITY

TAX ON INDIVIDUALS

Current through December 4, 2001; 66 FR 63093

§ 1.1-1 Income tax on individuals.

 (a) General rule.  (1) Section 1 of the Code imposes an income tax on the income of every individual who is a citizen or resident of the United States and, to the extent provided by section 871(b) or 877(b), on the income of a nonresident alien individual.  For optional tax in the case of taxpayers with adjusted gross income of less than $10,000 (less than $5,000 for taxable years beginning before January 1, 1970) see section 3.  The tax imposed is upon taxable income (determined by subtracting the allowable deductions from gross income).  The tax is determined in accordance with the table contained in section 1.  See subparagraph (2) of this paragraph for reference guides to the appropriate table for taxable years beginning on or after January 1, 1964, and before January 1, 1965, taxable years beginning after December 31, 1964, and before January 1, 1971, and taxable years beginning after December 31, 1970. In certain cases credits are allowed against the amount of the tax.  See part IV (section 31 and following), subchapter A, chapter 1 of the Code.  In general, the tax is payable upon the basis of returns rendered by persons liable therefor (subchapter A (sections 6001 and following), chapter 61 of the Code) or at the source of the income by withholding.  For the computation of tax in the case of a joint return of a husband and wife, or a return of a surviving spouse, for taxable years beginning before January 1, 1971, see section 2.  The computation of tax in such a case for taxable years beginning after December 31, 1970, is determined in accordance with the table contained in section 1(a) as amended by the Tax Reform Act of 1969.  For other rates of tax on individuals, see section 5(a).  For the imposition of an additional tax for the calendar years 1968, 1969, and 1970, see section 51(a).

 (2)(i) For taxable years beginning on or after January 1, 1964, the tax imposed upon a single individual, a head of a household, a married individual filing a separate return, and estates and trusts is the tax imposed by section 1 determined in accordance with the appropriate table contained in the following subsection of section 1:

 

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                                                      Taxable years beginning

                                                        after Dec. 31, 1970

                                    Taxable years       (references in this

                  Taxable years    beginning after     column are to the Code

                  beginning in     1964 but before     as amended by the Tax

                      1964              1971            Reform Act of 1969)

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Single

  individual .... Sec. 1(a)(1)      Sec. 1(a)(2)             Sec. 1(c).

Head of a

  household ..... Sec. 1(b)(1)      Sec. 1(b)(2)             Sec. 1(b).

Married

  individual

  filing a

  separate

  return ........ Sec. 1(a)(1)      Sec. 1(a)(2)             Sec. 1(d).

Estates and

  trusts ........ Sec. 1(a)(1)      Sec. 1(a)(2)             Sec. 1(d).

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 (ii) For taxable years beginning after December 31, 1970, the tax imposed by section 1(d), as amended by the Tax Reform Act of 1969, shall apply to the income effectively connected with the conduct of a trade or business in the United States by a married alien individual who is a nonresident of the United States for all or part of the taxable year or by a foreign estate or trust. For such years the tax imposed by section 1(c), as amended by such Act, shall apply to the income effectively connected with the conduct of a trade or business in the United States by an unmarried alien individual (other than a surviving spouse) who is a nonresident of the United States for all or part of the taxable year.  See paragraph (b)(2) of § 1.871-8.

 (3) The income tax imposed by section 1 upon any amount of taxable income is computed by adding to the income tax for the bracket in which that amount falls in the appropriate table in section 1 the income tax upon the excess of that amount over the bottom of the bracket at the rate indicated in such table.

 (4) The provisions of section 1 of the Code, as amended by the Tax Reform Act of 1969, and of this paragraph may be illustrated by the following examples:

 Example (1).  A, an unmarried individual, had taxable income for the calendar year 1964 of $15,750.  Accordingly, the tax upon such taxable income would be $4,507.50, computed as follows from the table in section 1(a)(1):

 

Tax on $14,000 (from table) ................................. $3,790.00

Tax on $1,750 (at 41 percent as determined from the table) ..... 717.50

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  Total tax on $15,750 ....................................... 4,507.50

 

 Example (2).  Assume the same facts as in example (1), except the figures are for the calendar year 1965.  The tax upon such taxable income would be $4,232.50, computed as follows from the table in section 1(a)(2):

 

Tax on $14,000 (from table) ................................. $3,550.00

Tax on $1,750 (at 39 percent as determined from the table) ..... 682.50

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  Total tax on $15,750 ....................................... 4,232.50

 

 Example (3).  Assume the same facts as in example (1), except the figures are for the calendar year 1971.  The tax upon such taxable income would be $3,752.50, computed as follows from the table in section 1(c), as amended:

 

Tax on $14,000 (from table) ................................. $3,210.00

Tax on $1,750 (at 31 percent as determined from the table) ..... 542.50

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  Total tax on $15,750 ....................................... 3,752.50

 

 (b) Citizens or residents of the United States liable to tax.  In general, all citizens of the United States, wherever resident, and all resident alien individuals are liable to the income taxes imposed by the Code whether the income is received from sources within or without the United States.  Pursuant to section 876, a nonresident alien individual who is a bona fide resident of Puerto Rico during the entire taxable year is, except as provided in section 933 with respect to Puerto Rican source income, subject to taxation in the same manner as a resident alien individual.  As to tax on nonresident alien individuals, see sections 871 and 877.

 (c) Who is a citizen.  Every person born or naturalized in the United States and subject to its jurisdiction is a citizen.  For other rules governing the acquisition of citizenship, see chapters 1 and 2 of title III of the Immigration and Nationality Act (8 U.S.C. 1401-1459).  For rules governing loss of citizenship, see sections 349 to 357, inclusive, of such Act (8 U.S.C. 1481-1489), Schneider v. Rusk, (1964) 377 U.S. 163, and Rev. Rul. 70-506, C.B. 1970-2, 1.  For rules pertaining to persons who are nationals but not citizens at birth, e.g., a person born in American Samoa, see section 308 of such Act (8 U.S.C. 1408).  For special rules applicable to certain expatriates who have lost citizenship with a principal purpose of avoiding certain taxes, see section 877.  A foreigner who has filed his declaration of intention of becoming a citizen but who has not yet been admitted to citizenship by a final order of a naturalization court is an alien.

[T.D. 6500, 25 FR 11402, Nov. 26, 1960, as amended by T.D. 7117, 36 FR 9396, May 25, 1971;  T.D. 7332, 39 FR 44216, Dec. 23, 1974]

26 C. F. R. § 1.1-1

26 CFR § 1.1-1

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