CHAPTER TWO THE INTERNAL REVENUE CODE. EXPECTED LEARNING OUTCOMES l Appreciate and understand: The...
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Transcript of CHAPTER TWO THE INTERNAL REVENUE CODE. EXPECTED LEARNING OUTCOMES l Appreciate and understand: The...
CHAPTER TWO
THE INTERNAL REVENUE CODE
EXPECTED LEARNING OUTCOMES
Appreciate and understand:• The significance of the Internal
Revenue Code • The legislative process• How to find legislative history• How to locate and analyze Code
provisions• How to properly cite the Code
Sources of tax law
Sixteenth Amendment ratified in 1913 created income tax.
Internal Revenue Code was created in 1939 and subsequently revised in 1954 and 1986.
Statutory authority = Internal Revenue Code (Legislative)
Administrative authority (Executive) Judicial authority (Judicial)
THE SIGNIFICANCE OF THE INTERNAL REVENUE CODE
Compilation of tax statutes enacted by Congress
THE LEGISLATIVE PROCESS
P re s id e n t
B o th H o u s e s
C o n fe re n c e C o m m itte e
S e n a te
S e n a te F in a n c e C o m m itte e
H o u s e o f R e p re s e n ta tive s
H o u s e W a ys a nd M e a n s C o m m itte e
FINDING LEGISLATIVE HISTORY
Each act is a “Public Law” and given a designated number – pg. 54
Recent public laws (CCH and RIA) Older legislation
• Cumulative Bulletins• BNA’s Primary Sources
Joint Committee On Taxation
Created by the IRC Works with W&M committee and SFC
committee – Brings tax law knowledge to the process.
Provide explanations of the law: Blue Book
Do not confuse with conference committee in the legislative process
ORGANIZATION OF THE CODE
Title 26 of the United States Code Organized into segments See Illustration on pg. 58 Citation of Code: Sec. #, subsection,
paragraph, subparagraph, clause: Sec 162(g) (1)(A)(i) – see pg. 62-63.
Flush language---
LOCATING RELEVANT PROVISIONS
Table of Contents – reference noted is to Code Section
Index Knowledge of pertinent provision Reference from a secondary
source
Analyzing the Code
Logical skimming Terms of art: special meaning when using the
IRC• Determining the tax context and relative importance
of words.• IRC Sec 7701 – useful definitions
Connecting words: or v. and to assess if criteria are met.
Measuring words: less than, equal to, greater than etc.
Use of male pronoun: used for brevity
Analyzing the Code(Continued)
Limiting language: For purposes of a) this title v. b) this section
Pinballing: reference to other sections rather than repeat of provisions
Sunset provisions: time limitation of section, requiring future reenactment.
Transition provisions: safe harbors during pending legislation.
Historical notes: insight into previous versions of the code section.
Accessing the Code
Print/Paper CD-ROM Modem Web