Taxing times: Behind the Form 1040

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(CBS News) Nothing says TAXING TIMES quite like the realization that you have almost no time left to mail in your tax return. You only have until midnight tomorrow . . . remember? Our Cover Story is reported by Anthony Mason:


The Internal Revenue Service received a package recently addressed to its headquarters on Constitution Avenue in the nation's capital. It was not a tax return.

No, Mr. Haynes' history students at JFK Middle School in Florence, Mass., all sent birthday cards to the federal income tax - because Form 1040, the document most taxpayers fill out, turned 100 this year.

The original tax form, introduced in 1913, only came with one page of instructions, "which would make people very happy," said Nina Olson, taxpayer advocate at the IRS.

Back then, only about 3 percent of the population was subject to the income tax. Today it's 54 percent. Gone is the single page of instructions, with its deductions for losses due to "shipwreck."

Now, the tax code is more than 73,000 pages long. Just figuring out what to pay eats up an estimated 6.1 billion hours of our time each year.

Complete CBSNews.com coverage: Tax season

Olson agreed it was easy to understand that everybody "loves to hate" the IRS.

"Even if you like what those tax dollars are doing, even if you feel the benefits of them, you don't want somebody taking your money away from you," she told Mason. "And we constantly have to remind them that IRS has nothing to do with the tax code. You know, Congress passed it."

Congress may get the blame now, but it was the American people who passed the 16th Amendment to the Constitution, making the income tax possible.

At first, it affected only the well-off, with a top rate of just seven percent. But only four years later, when we entered World War I, that rate soared to 77 percent.

"That's sort of the untold story of American history -- the different points at which Americans have supported the tax system, have supported higher taxes for purposes and goals that they believed in," said tax historian Joseph Thorndike. He says we may see ourselves as a nation founded on resistance to taxation, but that's only part of the story.

Consider the Boston Tea Party, the granddaddy of tax rebellions. It was less about paying taxes than objecting to tax loopholes granted to British companies. Then, as now, the system hinges on the notion of fairness.

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