For a new person interested in knowing about the taxation laws of United States , first complexitie will arise to understand the terms Internal Revenue Code and Title 26 of US Code . Are they different laws ? Which one should I follow : Internal Revenue Code ( IRC ) or the US Code 26 ?
The good news is that both are same . The Internal Revenue Code (IRC) is the federal statutory tax law in the United States. The, Internal Revenue Code is the only volume that has been published in the form of a separate code of the 50 enacted titles of United States Statutes at Large.
History of IRC
The Internal Revenue Code of 1954 was enacted in the form of a separate code by act of August 16, 1954, ch. 736, 68A Stat. 1. However , the name of IRC 1954 Code was changed to the “Internal Revenue Code of 1986” by the The Tax Reform Act of 1986 . The text of the Internal Revenue Code as published in title 26 of the U.S. Code is virtually identical to the Internal Revenue Code as published in the various volumes of the United States Statutes at Large.
The various provision of tax laws under the the Internal Revenue Code is provided under various section which runs from sections 1 through 9834. The table below is summary of the topics of the IRC.
Sections of Internal Revenue Code
| Sections | Function |
|---|---|
| 1–15 | Tax rates |
| 21–54 | Credits (refundable and nonrefundable) |
| 55–59A | Alternative Minimum Tax & environmental tax |
| 61–90 | Definition of gross income (before deductions), including items specifically taxable |
| 101–140 | Specific exclusions from gross income |
| 141–149 | Private activity bonds |
| 151–153 | Personal exemptions; dependent defined |
| 161–199 | Deductions, including interest, taxes, losses, and business related items |
| 211–224 | Itemized deductions for individuals |
| 241–250 | Deductions unique to corporations |
| 261–291 | Nondeductible items, including special rules limiting or deferring deductions |
| 301–386 | Corporate transactions, including formation, distributions, reorganizations, liquidations (Subchapter C) |
| 401–436 | Pension and benefit plans: treatment of plans, employers, & beneficiaries |
| 441–483 | Accounting methods & tax years |
| 501–530 | Exempt organizations (charitable and other) |
| 531–565 | Accumulated earnings tax and personal holding companies |
| 581–597 | Banks: special rules for certain items |
| 611–638 | Natural resources provisions: depletion, etc. |
| 641–692 | Trusts & estates: definitions, income tax on same & beneficiaries |
| 701–777 | Partnerships: definitions, treatment of entities and members, special rules (Subchapter K) |
| 801–858 | Insurance companies: special rules, definitions |
| 851–860 | Regulated investment companies (mutual funds) and Real Estate Investment Trusts |
| 861–865 | Source of income (for international tax) |
| 871–898 | Tax on foreign persons/corporations; inbound international rules |
| 901–908 | Foreign tax credit |
| 911–943 | Exclusions of foreign income (mostly repealed) |
| 951–965 | Taxation of U.S. shareholders of controlled foreign corporations (Subpart F) |
| 971–999 | Other international tax provisions |
| 1001–1092 | Gains: definitions, characterization, and recognition; special rules |
| 1201–1298 | Capital gains: separate taxation and special rules |
| 1301–1359 | Interperiod adjustments; certain special rules |
| 1361–1388 | S Corporations and cooperative associations: flow-through rules |
| 1391–1400T | Empowerment, enterprise, and other special zones |
| 1401–1403 | Self-employment tax (like social security, below) |
| 1441–1465 | Withholding of tax on nonresidents |
| 1501–1564 | Consolidated returns and affiliated groups (corporations) |
| 2001–2210 | Estate tax on transfers at death |
| 2501–2704 | Gift tax and tax on generation skipping transfers |
| 3101–3241 | Social security and railroad retirement taxes |
| 3301–3322 | Unemployment taxes |
| 3401–3510 | Income tax withholding; payment of employment taxes |
| 4001–5000 | Excise taxes on specific goods, transactions, and industries |
| 5001–5891 | Alcohol, tobacco and firearms taxes and special excise tax rules |
| 6001–6167 | Tax returns: requirements, procedural rules, payments, settlements, extensions |
| 6201–6533 | Assessment, collection, and abatement; limitations on collection & refund |
| 6601–6751 | Interest and non-criminal penalties on underpayments or failures |
| 6801–7124 | Other procedural rules |
| 7201–7344 | Crimes, other offences, forfeitures, tax evasion |
| 7401–7493 | Judicial proceedings |
| 7501–8023 | Miscellaneous rules |
| 9001–9834 | Special taxes & funds (presidential election, highway, black lung, etc.) |