Internal Revenue Code
The Internal Revenue Code is the body of law that codifies all federal tax laws, including income, estate, gift, excise, alcohol, tobacco, and employment taxes. These laws constitute title 26 of the U.S. Code (26 U.S.C.A. § 1 et seq. ) and are implemented by the INTERNAL REVENUE SERVICE through its Treasury Regulations and Revenue Rulings.
Congress made major statutory changes to title 26 in 1939, 1954, and 1986. Because of the extensive revisions made in the TAX REFORM ACT OF 1986, title 26 is now known as the Internal Revenue Code of 1986 (Pub. L. No. 99-514, § 2, 100 Stat. 2095 [Oct. 22, 1986]).
Subtitle A of the Code contains five chapters on income taxes. The chapters cover normal income taxes and surtaxes, taxes on self-employment income, withholding of taxes on nonresident ALIENS and foreign corporations, taxes on transfers to avoid INCOME TAX, and consolidated returns.
Subtitle B deals with ESTATE AND GIFT TAXES. The rules and regulations concerning the taxation of probate estates and gifts are very complicated. This subtitle contains chapters on taxing generation-skipping transfers and rules on special valuation of property.
Subtitle C contains the law of employment taxes. It consists of chapters on general provisions relating to employment taxes and other sections dealing with federal insurance contributions, railroad retirement taxes, and federal unemployment taxes.
Subtitle D covers miscellaneous excise taxes. Its fifteen chapters cover a variety of issues, including retail excise taxes, manufacturers' excise taxes, taxes on wagering, environmental taxes, public charities, private foundations, PENSION plans, and certain group health plans.
Subtitle E covers alcohol, tobacco, and other excise taxes. Chapter 53 deals with machine guns, destructive devices, and certain other firearms.
Subtitle F contains provisions on procedure and administration. Under this subtitle are twenty chapters that deal with every step of the taxation process, from the setting of filing dates and the collection of penalties for late filing, to criminal offenses and judicial proceedings. The rules for administrative proceedings under the Code are addressed in the appendix to title 26.
Subtitle G addresses the organization of the Congressional Joint Committee on Taxation. Subtitle H contains the rules for the financing of presidential election campaigns. Subtitle I contains the Trust Fund Code.
The Internal Revenue Code has grown steadily since the 1930s. The complexity of its provisions, most of which are written in technical language, has required law and accounting firms to develop specialists in the various areas of taxation.