I is for internal tax code


I is for internal revenue code.

Most taxpayers are familiar with the 16th Amendment to the Constitution which sets the stage for the collection of federal income tax:

Congress shall have power to establish and collect taxes on income from whatever source, without apportionment among the several States, and without regard to any census or enumeration.

But this is only the beginning. Since the passage of the 16th Amendment in 1913, additional federal tax laws have been codified and organized under the United States Code (USC). Today, most of these tax laws have been codified in Title 26 (26 USC) and commonly referred to as the tax code. It should be noted, however, that the tax code, or tax code, includes most – but not all – federal tax laws. You will find more tax laws in other parts of the United States Code, including Title 11 (Bankruptcy); Title 19 (Customs) and Title 28 (Judicial).

Title 26 is a way to distinguish tax laws from other legal subjects under US law. The United States Code is divided into sections and organized by area called titles. There are 51 titles in the Code.

Each title is then broken down into smaller pieces called subtitles, chapters, subchapters, parts, subparts, and sections. Some of the most popular subchapters of the Tax Code are subchapter k (dealing with partnerships) and subchapter s (dealing with corporations). You may also be familiar with sections: these give rise to common tax conditions such as Section 501(c)(3) (relating to charities) and Section 179 (relating to expenses).

The Internal Revenue Code is huge, but it’s not the most important title in the US code. Most of the words, elements and sections are found in Title 42 (Public Health and Welfare). Most words per section? These are found in Title 23 (Highways).

Although not the biggest headline, Heading 26 is still quite large: in 2012, it had 73,608 pages. But that does not include a number of other important guidance documents, including tax treaties and Treasury regulations, which are found elsewhere. Treasury Regulations (26 CFR) – or “Regs” as tax experts call them – are the Treasury Department’s official interpretations of the tax code. In other words, this is how the Treasury (and therefore the IRS) understands and administers the specific provisions of the Internal Revenue Code—a power granted to the Treasury by Congress under Section 7805 of the Internal Revenue Code.

For more information on the series, see:

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