Archives: Glossary

Property received from a person who has died, whether by will, by trust or under intestacy law. Federal law does not tax an heir’s receipt of an inheritance as income (26 U.S.C. § 102(a)), although a large estate may owe federal estate tax and a few states impose an inheritance tax on recipients.

A person who inherits property under the state’s intestacy law when someone dies without a valid will. Heirs are usually the closest relatives, such as a spouse, children or parents, in the order the statute sets. Because heirs are fixed only at death, a living person has no heirs in the legal sense, only heirs apparent.

Taking on another person’s obligation or a known risk. For example, a home buyer who assumes a mortgage takes over the seller’s loan, often with the lender’s consent. Tort law also has a defense called assumption of risk, which applies when an injured person knowingly accepted a danger. Likewise, a party may assume a duty under a contract, and a debtor in bankruptcy may assume or reject certain contracts under 11 U.S.C. § 365.

Treated as true by law until shown otherwise. For example, a defendant is presumed innocent until proven guilty, and a properly mailed letter is presumed to have been received. See Presumption.

A rule that lets a court treat a fact as true once another fact is proven, until it is rebutted. In federal civil cases, Federal Rule of Evidence 301 says a presumption shifts the burden of producing evidence to the other party but does not shift the burden of persuasion. A rebuttable presumption can be overcome with evidence, while a conclusive presumption cannot. The presumption of innocence is a basic rule of criminal law.

The bureau of the U.S. Department of the Treasury that administers and enforces federal tax laws. It is headed by the Commissioner of Internal Revenue, whose office and duties are set out in 26 U.S.C. § 7803. The IRS processes returns, collects taxes, issues guidance and audits returns, and taxpayers can challenge many IRS decisions in the U.S. Tax Court.

The U.S. Department of the Treasury, the executive department that manages federal finances. It collects taxes through the Internal Revenue Service, borrows by issuing Treasury securities, makes federal payments, and produces currency and coins through the Bureau of Engraving and Printing and the U.S. Mint. 31 U.S.C. § 301 establishes the Department.

U.S. government debt securities that pay a fixed rate of interest every six months and mature in two, three, five, seven or ten years. The Treasury sells them at auction through TreasuryDirect and banks or brokers. They are different from Federal Reserve notes, which are paper currency.

A government department or fund that manages public money. In the United States, it usually means the U.S. Department of the Treasury. A treasury can also be the fund in which public money is kept.

The institutions and officials through which a political community makes and enforces its laws. In the United States, the Constitution creates a federal government with legislative, executive and judicial branches and leaves other powers to the states or the people (Tenth Amendment). Each state, county and city also has its own government. In law, the word can mean the whole system or, in a case, the prosecuting authority, as in “the government must prove.”