Simply, the Internal Revenue Code is the compilation of defining law governing taxes levied on the citizens and businesses in the United States. But, there is nothing simple about it; in truth, the “Code” does not even include all governing statutes. Provisions that deal with bankruptcy and the judiciary, are contained in other documents. Additional regulations, including amendments to the tax code itself, are not codified.
The nation currently operates under provisions of the Internal Revenue Code of 1986, which is in large part the same as the previous 1954 Code. It makes for fascinating reading, as do earlier tax codes, but it is not easily decipherable by the average American. Hence, the confusion.
The Internal Revenue Code is organized into sections, numbering nearly 10,000. They are grouped under chapters and parts which define and attempt to explain all governing statutes relating to tax-related subjects. Section A, for instance, deals with Income Taxes, with listings from 1 through 1564. The final section is devoted to Group Health Plan Requirements.”
Because the Tax Code is so unwieldy, a large number of accountants and tax attorneys have pushed for consolidation of its many provisions and for overall simplification. Even the Internal Revenue Service confirms that its agents mistakenly interpret provisions of the Tax Code about 10 percent of the time. The resulting errors in filing returns create compliance problems for millions of American citizens. And, that’s just part of the problem.
While most citizens think of income taxes in relation to the “Tax Code,” in reality the Internal Revenue Code encompasses all legislation relating to taxes levied on products, or paid to the federal government. Alcohol, tobacco and firearm taxes, estate and gift taxes, miscellaneous excise taxes, presidential election campaign financing, and coal industry health benefits, among others, are all embodied within the Code’s more than 10 million words. Political organizations, government employee pensions, and student tuition assistance programs also have their own sections.
IRS rules are actually a minor part of the Code, although personal income tax reform is the subject of the most heated debate when discussion turns to the subject of tax reform and simplification of the Code.
Filing yearly required tax returns has become increasingly complex, for both business and individuals. Personal tax return Form 1040 instructions comprise more than 160 pages, and more than 69 percent of individual filers pay to have a tax professional prepare their returns.
Despite common complaints and the obvious shortcomings of the Internal Revenue Code, however, it would be a major undertaking to overhaul it completely. In addition to IRS employees, and the budget directed to their salaries and to IRS operation, billions of dollars and more than 15,000 registered lobbyists address citizen concerns every year. Politically, tax reform fuels major debate prior to every election.
The Internal Revenue Code is another story; perhaps the benefit as it now exists is that it does exist; it represents the compilation of all pertinent legislation affecting the imposition of all taxes, and the collection and use of all American government funding. It is available for study by any citizen who wants to look it up, and is also known as Title 26 of the Code of Federal Regulations.
Sources: http://www.irs.gov/Tax-Professionals/Tax-Code,-Regulations-and-Official-Guidance#irc, http://www.freedomworks.org/scrapthecode/topten.php, https://law.lexisnexis.com/infopro/zimmermans/disp.aspx?z=1565
Add comment