Internal Revenue Code

From Wikicpa

The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, and excise taxes. The Internal Revenue Code is published as title 26 of the United States Code (USC), and is also known as the internal revenue title.

Prior to 1874, U.S. statutes were not codified. That is, they were not set forth in one comprehensive subject matter title, but were instead contained in the various acts passed by Congress. Codifications of statutes (including tax statutes) undertaken in 1873 resulted in the Revised Statutes of the United States, approved June 22, 1874, effective for the laws in force as of December 1, 1873 (title 35 of which was the internal revenue title). Another codification was undertaken in 1878.

In 1919, a committee of the U.S. House of Representatives began a project to recodify U.S. statutes which eventually resulted in a new code in 1926 (including tax statutes).

In 1939 the tax law was separately codified; subsequent permanent tax laws updated and amended the Code. In 1954, in connection with a general overhaul of the Internal Revenue Service, the IRC was greatly reorganized and expanded; to prevent confusion with the older law, the new version was thereafter referred to as the Internal Revenue Code of 1954 (see Internal Revenue Code of 1954 and the prior version as the Internal Revenue Code of 1939.

In 1986, the '54 Code was renamed the Internal Revenue Code of 1986 by the Tax Reform Act of 1986. The 1986 Act contained substantial amendments, but no formal re-codification. Thus, the 1986 Code, as amended from time to time, retains the basic structure of the 1954 Code.

The Internal Revenue Code includes most but not all Federal tax statutes. Some tax statutes are found in other provisions of the United States Code including title 11 (related to bankruptcy) and title 28 (related to the judiciary). Further, some tax statutes are not codified at all (for example, the provisions of tax statutes that list the effective dates of Internal Revenue Code amendments).

Organization

Since the IRC is a part of the USC, the organization of the IRC is identical.

As an example, section 162(e)(2)(B)(ii) would be as follows:

Title 26: Internal Revenue Code

• Subtitle A: Income Taxes
  • Chapter 1: Normal Taxes and Surtaxes
    • Subchapter B: Computation of Taxable Income
      • Part VI: Itemized Deductions for Individuals and Corporations
        • Section 162: Trade or business expenses
          • Subsection (e): Denial of deduction for certain lobbying and political expenditures
            • Paragraph (2) Exception for local legislation
              • Sub-paragraph (B)
                • Clause (ii)

References

Wikipedia.org