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Encyclopedia > Internal Revenue Code

The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, gift taxes, estate taxes and statutory 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. Tax law is the codified system of laws that describes government levies on economic transactions, commonly called taxes. ... An income tax is a tax levied on the financial income of persons, corporations or other legal entities. ... The United States imposes an income tax on the taxable income of individuals, corporations, trusts, decedents estates and certain bankruptcy estates. ... In the United States, payroll tax is tax that pays for two social insurance systems: Medicare and Social Security. ... Inheritance tax, also known in some countries outside the United States as a death duty and referred to as an estate tax within the U.S, is a form of tax levied upon the bequest that a person may make in their will to a living person or organisation. ... The examples and perspective in this article or section may not represent a worldwide view. ... An excise is an indirect tax or duty levied on items within a country. ... The United States Code (U.S.C.) is a compilation and codification of the general and permanent federal law of the United States. ...

Contents

Genesis of tax codes in the United States

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. The Revised Statutes of the United States was an early effort at codifying the Acts of Congress, undertaken by private publishers. ... June 22 is the 173rd day of the year (174th in leap years) in the Gregorian Calendar, with 192 days remaining. ... 1874 (MDCCCLXXIV) was a common year starting on Thursday (see link for calendar). ... December 1 is the 335th (in leap years the 336th) day of the year in the Gregorian calendar. ... 1873 (MDCCCLXXIII) was a common year starting on Wednesday (see link for calendar). ...


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).


Internal Revenue Code of 1939

The tax statutes were re-codified by an Act of Congress on February 10, 1939 as the "Internal Revenue Code" (later known as the "Internal Revenue Code of 1939"). The 1939 Code was published as volume 53, Part I, of the United States Statutes at Large and as title 26 of the United States Code. Subsequent permanent tax laws enacted by the United States Congress updated and amended the 1939 Code. The United States Statutes at Large, commonly referred to as the Statutes at Large, is the official source for the laws and resolutions passed by Congress. ... Seal of the U.S. Congress. ...


Internal Revenue Code of 1954/1986

On August 16, 1954, in connection with a general overhaul of the Internal Revenue Service, the IRC was greatly reorganized by Congress and expanded. The code was published in volume 68A of the United States Statutes at Large. To prevent confusion with the 1939 Code, the new version was thereafter referred to as the Internal Revenue Code of 1954 and the prior version as the Internal Revenue Code of 1939. The lettering and numbering of subtitles, sections, etc., was completely changed. For example, section 22 of the 1939 Code (defining gross income) was roughly analogous to section 61 of the 1954 Code. The 1954 Code replaced the 1939 Code as title 26 of the United States Code. Seal of the Internal Revenue Service The Internal Revenue Service (IRS) is the United States government agency that collects taxes and enforces the internal revenue laws. ... The United States Statutes at Large, commonly referred to as the Statutes at Large, is the official source for the laws and resolutions passed by Congress. ... The United States Internal Revenue Code of 1954 temporarily extended the 5 percentage point increase in corporate tax rates through March 31, 1955, increased depreciation deductions by providing additional depreciation schedules, and created a 4 percent dividend tax credit for individuals. ...


Section 2 of the Tax Reform Act of 1986 provides (in part): President Ronald Reagan signs the Tax Reform Act of 1986 on the South Lawn. ...

(a) Redesignation of 1954 Code. - The Internal Revenue Title enacted August 16, 1954, as heretofore, hereby, or hereafter amended, may be cited as the "Internal Revenue Code of 1986".
(b) References in Laws, Etc. - Except when inappropriate, any reference in any law, Executive order, or other document -
(1) to the Internal Revenue Code of 1954 shall include a reference to the Internal Revenue Code of 1986, and
(2) to the Internal Revenue Code of 1986 shall include a reference to the provisions of law formerly known as the Internal Revenue Code of 1954.

In effect, the '54 Code was renamed the Internal Revenue Code of 1986 by section 2 of the Tax Reform Act of 1986. The 1986 Act contained substantial amendments, but no formal re-codification. That is, the 1986 Code retained the most of the same lettering and numbering of subtitles, chapters, subchapters, parts, subparts, sections, etc. The 1986 Code, as amended from time to time (and still published as title 26 of the United States Code), 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).


Individual income tax

Perhaps the most widely known function of the IRC is that it is the law which requires all Americans to pay a Federal income tax. Indeed, the first operative words of the document are the title to § 1, "Tax imposed", and Section 1 of the Internal Revenue Code describes the exact dollar amounts and percentages of income that the law requires must be paid as income tax. Section 1 of the Internal Revenue Code ( or simply IRC §1), titled Tax Imposed is the law which requires all American individuals to pay a federal income tax, and sets forth the amount of the tax to be paid. ...


Organization

Since the IRC is a part of the USC, the organization of the IRC is identical. See United States Code#Organization. The United States Code (U.S.C.) is a compilation and codification of the general and permanent federal law of the United States. ...


As an example, section 162(e)(2)(B)(ii) (26 U.S.C. § 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)

Subtitles

  • A. Income Taxes (sections 1 through 1563)
    As a further example, here are the chapters of this subtitle:
    • CHAPTER 1—NORMAL TAXES AND SURTAXES (sections 1 through 1400L)
    • CHAPTER 2—TAX ON SELF-EMPLOYMENT INCOME (sections 1401 through 1403)
    • CHAPTER 3—WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS (sections 1441 through 1464)
    • CHAPTER 4—Repealed
    • CHAPTER 5—Repealed
    • CHAPTER 6—CONSOLIDATED RETURNS (sections 1501 through 1563)
  • B. Estate and Gift Taxes (sections 2001 through 2704)
  • C. Employment Taxes (sections 3101 through 3510)
  • D. Miscellaneous Excise Taxes (sections 4001 through 5000)
  • E. Alcohol, Tobacco and Certain Other Excise Taxes (sections 5001 through 5891)
  • F. Procedure and Administration (sections 6001 through 7874)
  • G. The Joint Committee on Taxation (sections 8001 through 8023)
  • H. Financing of Presidential Campaigns (sections 9001 through 9042)
  • I. Trust Fund Code (sections 9500 through 9602)
  • J. Coal Industry Health Benefits (sections 9701 through 9722)
  • K. Group Health Plan Portability, Access, and Renewability Requirements (sections 9801 through 9833)

List of commonly-referenced sections

All of these examples are from Chapter 1 (Normal Taxes and Surtaxes) of Subtitle A (Income Taxes)


(key: §="section", §§="sections")


Title 26 - Internal Revenue Code

  • Subtitle A - Income Taxes (§§ 1-1563)
    • Chapter 1 - Normal Taxes and Surtaxes (§§ 1-1400L)
      • Subchapter A - Determination of Tax Liability (§§ 1-59)
        • Part I - Tax on Individuals (§§ 1-59)
      • Subchapter B - Computation of Taxable Income (§§ 61-291)
        • Part VI - Itemized Deductions for Individuals and Corporations (§§ 161-198)
          • Section 179 - Election to expense certain depreciable business assets (26 U.S.C. § 179)
      • Subchapter C - Corporate Distributions and Adjustments (§§ 301-385)
        • Part III - Corporate Organizations and Reorganizations (§§ 351-368)
          • Subpart A - Effects on Recipients (§ 351)
            • Section 351 - Transfer to Corporation controlled by transferor (26 U.S.C. § 351)
          • Subpart B - Effects on Shareholders and Security Holders (§§ 354-358)
            • Section 355 - Corporate divisions (26 U.S.C. § 355)
          • Subpart D - Special Rule: Definitions (§§ 367-368)
            • Section 368 - Taxfree reorganizations (i.e. takeovers, mergers) (26 U.S.C. § 368)
      • Subchapter D - Deferred Compensation, Etc. (§§ 401-425)
        • Part I - Pension, Profit-sharing, Stock Bonus Plas, etc. (§§ 401-420)
          • Subpart A - General Rule (§§ 401-409)
            • Section 401 - Qualified pension, profit-sharing, and stock bonus plans
              • paragraph (a) ("401(a)") - employer-sponsored retirement plan for employees of state and local governments and certain tax-exempt entities (26 U.S.C. § 401(a))
              • paragraph (k) ("401(k)")- employer-sponsored retirement plan (26 U.S.C. § 401(k))
            • Section 402A - "Roth 401(k)" (26 U.S.C. § 402A)
            • Section 403 - Taxation of employee annuities
              • paragraph (b) ("403(b)") - employer-sponsored retirement plan at non-profit organizations (26 U.S.C. § 403(b))
            • Section 408 - Individual Retirement Accounts (26 U.S.C. § 408)
            • Section 408A - Roth IRAs (26 U.S.C. § 408A)
            • Section 409A - The Enron provisions on deferred compensation
      • Subchapter E - Accounting Periods and Methods of Accounting (§§ 441-483)
        • Part II - Methods of Accounting (§§ 446-475)
          • Subpart A - Methods of Accounting in General (§§ 446-448)
          • Subpart B - Taxable Year for Which Items of Gross Income Included (§§ 451-460)
      • Subchapter F - Exempt Organizations (§§ 501-530)
        • Part I - General Rule (§§ 501-505)
          • Section 501 - Exemption from tax on corporations, certain trusts, etc. (26 U.S.C. § 501)
            • paragraph (c) ("501(c)") - List of exempt organizations (26 U.S.C. § 501(c))
              • subparagraph (1) ("501(c)(1)") - corporations organized under Acts of Congress such as Federal Credit Unions (26 U.S.C. § 501(c)(1))
              • subparagraph (2) ("501(c)(2)") - title-holding corporations for exempt organizations (26 U.S.C. § 501(c)(2))
              • subparagraph (3) ("501(c)(3)") - charitable, non-profit, religious, and educational organizations (26 U.S.C. § 501(c)(3))
              • subparagraph (4) ("501(c)(4)") - political education organizations (26 U.S.C. § 501(c)(4))
              • subparagraph (6) ("501(c)(6)") - business leagues and chambers of commerce (26 U.S.C. § 501(c)(6))
              • subparagraph (7) ("501(c)(7)") - recreational clubs (26 U.S.C. § 501(c)(7))
        • Part VI - Political Organizations (§ 527)
          • Section 527 - political advocacy groups (26 U.S.C. § 527)
        • Part VIII - Higher Education Savings Entities (§§ 529-530)
      • Subchapter O - Gain or Loss on Disposition of Property
        • Part III - Common Nontaxable Exchanges
          • Section 1031 - Exchange of property held for productive use or investment (26 U.S.C. § 1031)

Section 1 of the Internal Revenue Code ( or simply IRC §1), titled Tax Imposed is the law which requires all American individuals to pay a federal income tax, and sets forth the amount of the tax to be paid. ... ... To meet Wikipedias quality standards, this article or section may require cleanup. ... A retirement plan is an arrangement to provide people with an income, or pension, during retirement, when they are no longer earning a steady income from employment. ... The 401(k) plan is a type of employer-sponsored retirement plan named after a section of the United States Internal Revenue Code. ... A retirement plan is an arrangement to provide people with an income, or pension, during retirement, when they are no longer earning a steady income from employment. ... Please wikify (format) this article or section as suggested in the Guide to layout and the Manual of Style. ... A 403(b) plan is a tax advantaged retirement savings plan available for non-profit employers in the United States. ... A retirement plan is an arrangement to provide people with an income, or pension, during retirement, when they are no longer earning a steady income from employment. ... An Individual Retirement Account (or IRA) is a retirement plan account that provides some tax advantages for retirement savings in the United States. ... A Roth IRA is an individual retirement account (IRA) in the United States. ... Enron Corporation was an American energy company based in Houston, Texas. ... The 457 plan is a type of tax advantaged defined contribution retirement plan that is available for governmental and certain non governmental employers in the United States. ... A retirement plan is an arrangement to provide people with an income, or pension, during retirement, when they are no longer earning a steady income from employment. ... 501(c) is a subsection of the United States Internal Revenue Code (), which lists 28 types of tax exempt non-profit organizations. ... 501(c) is a subsection of the United States Internal Revenue Code (), which lists 28 types of tax exempt non-profit organizations. ... A credit union is a not-for-profit co-operative financial institution that is owned and controlled by its members, through the election of a volunteer Board of Directors elected from the membership itself. ... 501(c) is a subsection of the United States Internal Revenue Code (), which lists 28 types of tax exempt non-profit organizations. ... 501(c)(3) is a provision of the US tax code that provides exempt status, for Federal income tax purposes, for some non-profit organizations in the United States (see 26 U.S.C. Â§ 501(c)(3)). The term refers to: Section 501. ... 501(c)(4) refers to a provision of the United States Internal Revenue Code providing an exemption from the imposition of Federal income tax for the following kinds of entities: Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations... A 501(c)(6) is a type of non-profit organization that is common in the United States. ... A 501(c) is a specific type of tax exempt non profit organization designated under Section 501(c) of the United States Internal Revenue Code (see ). There are 27 types of tax exempt organizations under the code. ... A 527 group, named after a section of the United States tax code, is a tax-exempt organization that is created primarily to influence the nomination, election, appointment or defeat of candidates for public office. ... A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for a childs future higher education expenses. ... A Coverdell Education Savings Account (also known as an Education Savings Account, a Coverdell ESA, a Coverdell Account, or just an ESA and formerly known as an Education IRA), is a tax-advantaged investment account in the United States designed to encourage savings to cover future college education expenses. ... Section 1031 of the Internal Revenue Code () allows that that the sale or exchange of certain types of property will not result in the recognition of gain or loss. ...

External links

  • Database containing the text of Title 26

  Results from FactBites:
 
Internal Revenue Code - Wikipedia, the free encyclopedia (1391 words)
The Internal Revenue Code is published as title 26 of the United States Code (USC), and is also known as the internal revenue title.
The 1939 Code was published as volume 53, Part I, of the United States Statutes at Large and as title 26 of the United States Code.
To prevent confusion with the 1939 Code, the new version was thereafter referred to as the Internal Revenue Code of 1954 and the prior version as the Internal Revenue Code of 1939.
Internal Revenue Code of 1954 - Wikipedia, the free encyclopedia (404 words)
The Internal Revenue Code of 1954 was enacted by the United States Congress as Chapter 736, Public Law 83-591, and became law on August 16, 1954, succeeding the Internal Revenue Code of 1939.
The 1954 Code temporarily extended the 5 percentage point increase in corporate tax rates through March 31, 1955, increased depreciation deductions by providing additional depreciation schedules, and created a 4 percent dividend tax credit for individuals.
References to the Internal Revenue Code in the United States Code and other statutes of Congress subsequent to 1954 generally mean Title 26 of the Code as amended.
  More results at FactBites »

 
 

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