Cecily Zamora
Tax law is a complex regulatory area that requires both primary sources and authoritative secondary sources for comprehensive research. The primary source of tax law in the United States is the Internal Revenue Code (IRC), which is enacted by Congress and provides the legal framework for taxation. The IRC is amended periodically, with the most recent major amendments being the 1939 Code, the 1954 Code, and the 1986 Code. The IRC is interpreted and administered by the Internal Revenue Service (IRS), which is a division of the Treasury Department. The IRS publishes regulations, revenue rulings, revenue procedures, notices, and other forms of guidance to clarify and implement the IRC. These sources are essential for understanding tax law and determining its application in specific scenarios.
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What You'll Learn
The Internal Revenue Service (IRS)
The IRS has its origins in the Office of the Commissioner of Internal Revenue, a federal office created in 1862 to assess the country's first income tax to fund the American Civil War. The temporary measure funded over a fifth of the Union's war expenses before expiring a decade later. In 1913, the Sixteenth Amendment to the US Constitution was ratified, authorising Congress to impose a tax on income, which led to the creation of the Bureau of Internal Revenue. The agency was renamed the Internal Revenue Service in 1953 and has since undergone numerous reforms and reorganisations.
The IRS makes rules and regulations to implement the statutes, with taxation regulations codified under Title 26 of the Code of Federal Regulations (CFR). Final and temporary tax regulations are issued as Treasury Decisions (TDs) and published in the Cumulative Bulletin (CB). The Federal Register also publishes proposed, temporary, and final regulations. The IRC has had three major amendments: the 1939 Code, the 1954 Code, and the 1986 Code. Congress typically enacts federal tax law in the IRC of 1986, and sections of the IRC can be found in Title 26 of the United States Code (26 USC).
The duties of the IRS include providing tax assistance to taxpayers, pursuing and resolving instances of erroneous or fraudulent tax filings, and overseeing various benefits programs, including the Affordable Care Act. The IRS publishes several types of agency guidance that interpret or apply the IRC, Treasury regulations, and case law. These include revenue rulings, revenue procedures, notices, and announcements. Revenue rulings are official interpretations by the IRS of the IRC, related statutes, tax treaties, and regulations, and how they are applied to specific sets of facts. Revenue procedures, on the other hand, are official statements of procedures that affect the rights or duties of taxpayers or the public under the IRC, related statutes, tax treaties, and regulations. Notices are public pronouncements that may contain guidance on interpreting the IRC or other provisions of the law.
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The Internal Revenue Code (IRC)
The IRC has undergone three major amendments: the 1939 Code, the 1954 Code, and the 1986 Code. The 1986 Code is the most recent version, and it is where the sections of the IRC can be found. An electronic version of the current United States Code, including Title 26, is accessible to the public through Congress.
To navigate the IRC, users can browse "Title 26—Internal Revenue Code" to see the table of contents. They can then "Jump To" a specific section of Title 26 to find the text for that IRC provision. For example, Title 26 Section 24 contains the provision for the child tax credit in the IRC, denoted as 26 USC 24.
It is important to verify the provision's applicability to the tax year being researched, as updates from new laws may not be immediately reflected in the IRC. Additionally, Congress may enact laws that influence federal tax law without being a part of the IRC. The IRC should be interpreted in conjunction with the Treasury Regulations and court decisions that provide context and interpretation.
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Treasury Regulations
Section 7805 of the IRC grants the Treasury Department the authority to interpret and administer the IRC. The IRC has had three major amendments: the 1939 Code, the 1954 Code, and the 1986 Code. The sections of the IRC can be found in Title 26 of the United States Code (26 USC). An electronic version of the current United States Code is made available to the public by Congress.
The Internal Revenue Service publishes several types of agency guidance that interpret or apply the IRC, Treasury regulations, and case law. These include Revenue Rulings (Rev. Rul.), Revenue Procedures (Rev. Proc.), and Notices.
Final and temporary tax regulations are issued as Treasury Decisions (TDs) and published in the Cumulative Bulletin (CB). Temporary regulations are effective immediately upon publication in the Federal Register and must expire within three years of enactment (with the exception of temporary regulations issued prior to 1989). Proposed Treasury Regulations are published in the Federal Register so that taxpayers may submit written comments or speak at hearings before final regulations are published.
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Revenue Rulings
The IRC, enacted by Congress, forms the basis of federal tax law and is located in Title 26 of the United States Code. Revenue Rulings interpret and apply the IRC, along with related statutes, tax treaties, and regulations. They are one of several types of agency guidance published by the IRS, which also include Revenue Procedures and Notices.
Revenue Procedures are official statements of procedures that affect the rights and duties of taxpayers under the IRC, related statutes, tax treaties, and regulations. Notices, on the other hand, are public pronouncements that may contain guidance on interpreting the IRC and other provisions of the law.
In addition to Revenue Rulings, the IRS also issues Private Letter Rulings (PLRs or LTRs) in response to taxpayers' specific facts. These are not considered authoritative and are assigned a file number indicating the year, week, and order of issuance.
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US Tax Courts
The primary source of US tax law is the Internal Revenue Code (IRC). The IRC is enacted by Congress under the power to tax granted by the Constitution. The IRC has been amended three times: in 1939, 1954, and 1986. The IRC is interpreted and administered by the Treasury Department's Internal Revenue Service (IRS), which also makes rules and regulations to implement the statutes. These regulations are published in the Federal Register and codified in Title 26 of the Code of Federal Regulations (CFR).
The United States Tax Court is a federal trial court established by Congress under Article I of the US Constitution. The Tax Court specializes in adjudicating disputes over federal income tax, generally before formal tax assessments are made by the IRS. It is the only forum in which taxpayers can litigate tax matters without first paying the disputed tax in full. The Tax Court issues two types of decisions: Regular decisions and Memorandum (Memo) decisions. Regular decisions involve new or unusual points of law and are decided by all the Tax Court judges, while Memo decisions relate to established legal issues and are decided by the trial judge. Regular decisions are published in the Reports of the United States Tax Court (T.C.), while Memo decisions are not officially published but may appear in some legal databases. All Tax Court decisions are also published in the CCH Tax Court Reporter and RIA's Tax Court Reported and Memorandum Decisions.
The IRS publishes several types of guidance that interpret or apply the IRC, Treasury regulations, and case law, including Revenue Rulings, Revenue Procedures, and Notices. Revenue Rulings are official interpretations of the IRC and related laws, while Revenue Procedures are official statements of procedures that affect taxpayers' rights or duties. Notices may contain guidance on the interpretation of the IRC or other provisions of the law. These documents are published in the Internal Revenue Bulletin (I.R.B.), along with Treasury Decisions, final and temporary tax regulations, and other notices.
The Tax Court is not a part of the executive branch of the government and is independent of it. However, Tax Court judges can be removed by the President for inefficiency, neglect of duty, or malfeasance. The Tax Court provides a forum for affected persons to dispute tax deficiencies determined by the Commissioner of Internal Revenue before paying the disputed amounts. The jurisdiction of the Tax Court includes the authority to hear a range of tax-related matters.
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Frequently asked questions
The primary source of US tax law is the Internal Revenue Code (IRC), which is enacted by Congress under the authority granted by the Constitution. The IRC is published in Title 26 of the United States Code (26 USC).
Other important sources of tax law include Revenue Rulings, Revenue Procedures, Notices, Treasury Regulations, and court decisions such as those made by the US Tax Courts and Supreme Court.
The Internal Revenue Code and related tax laws can be found in Title 26 of the United States Code, which is available electronically to the public. The Internal Revenue Bulletin (IRB) and Cumulative Bulletin (CB) also publish tax laws and regulations. Additionally, the IRS website provides useful information, although it may not be considered a primary source of law.
