Internal Revenue Code
The IRC is a compilation of most of the
tax statutes enacted by Congress. In tax
research, the researcher’s job is to
determine how the Code applies to a
particular situation. The Code is not
meant to read smoothly like a novel, or
even like a technical newspaper or
journal.
Organization of the Code
• Knowledge of the organization of the Code
helps a researcher to quickly and
concisely research a particular topic.
• The IRC is organized into many segments,
starting with broad subject matter (for ex.,
income taxes, estate taxes, or excise
taxes) and narrowing to specific Code
sections within the broader segment.
Organization of the Code
The segments from broadest to narrowest, are: (Use Illustration from
Excerpt from Table of Contents)
1.
Title
2.
Subtitle
3.
Chapter
4.
Subchapter
5.
Part
6.
Subpart
7.
Section
8.
Subsection
9.
Paragraph
10. Subparagraph
11. Clause
12. Subclause
How To Cite The Code
• Formal : 26 USC Sec. 163
• Less formal: IRC Sec. 163 or
Sec. 163
Code
Treasury Regulations
• Treasury Reg’s are the Treasury Dept’s primary
mechanism to potentially interpret the Code.
• Treasury Reg’s attempt to clarify the provisions
of a particular Code section.
• There are 3 types of regulations: Final,
Proposed, and Temporary
– Final Regulations have the full force and effect of law
as long as they are “reasonable and consistent
interpretations” of the Code. Therefore, final reg’s
may bind both the IRS and the taxpayer.
Citing the Regulation:
• Most Common: Treas. Reg. §1.1625(b)(3)(ii) cites an example of the fact that
education expenses that qualify an
individual for a new trade or business are
nondeductible. Ex. Fees for an engineer to
go to law school at night are nondeductible.
Qualifies for new trade.
• If the Regulation is Proposed or
Temporary, prior to the word Treas. add
“Prop.” or “Temp.”