A Comprehensive Guide to the Internal Revenue Code (IRC)

Understand the intricacies of the Internal Revenue Code (IRC) - a critical set of laws enforced by the IRS that govern various types of federal taxes.

What is the Internal Revenue Code (IRC)?

The Internal Revenue Code (IRC) refers to Title 26 of the U.S. Code, the official consolidation and codification of the federal laws of the United States. Commonly known as the IRS code or tax code, these laws are enforced by the Internal Revenue Service (IRS). The United States Code was first published in 1925 by the U.S. House of Representatives. Title 26 covers the comprehensive set of rules regarding income, gift, estate, sales, payroll, and excise taxes.

Understanding the Internal Revenue Code (IRC)

The Internal Revenue Code is subdivided into various topics or subcategories, including:

  • A. Income Taxes
  • B. Estate and Gift Taxes
  • C. Employment Taxes
  • D. Miscellaneous Excise Taxes
  • E. Alcohol, Tobacco, and Certain Other Excise Taxes
  • F. Procedure and Administration
  • G. The Joint Committee on Taxation
  • H. Financing of Presidential Election Campaigns
  • I. Trust Fund Code
  • J. Coal Industry Health Benefits
  • K. Group Health Plan Requirements

History of the Internal Revenue Code

In 1919, a committee within the U.S. House of Representatives initiated a project to re-codify U.S. statutes. This endeavor culminated in the 1925 publication of the United States Code. Title 26, the Internal Revenue Code, was first compiled in 1939. Congress regularly updates the tax code to introduce new measures and reforms. For example, the Tax Cut and Jobs Act of 2017 introduced significant changes affecting both individuals and businesses.

The IRS, established in 1862, governs the provisions set forth in Title 26. Residing in Washington, D.C., the agency is responsible for collecting taxes and has the authority to impose fines and other penalties for noncompliance with the IRC.

Campaigns to Abolish the Code

Despite significant reforms with the passage of the Tax Cuts and Jobs Act (TCJA) of 2017, there have been persistent campaigns to abolish the tax system entirely. Highlights include:

  • H.R. 29 - The Tax Code Termination Act: Filed in 2017, this bill aimed to abolish the Internal Revenue Code of 1986 by the end of 2021. It required Congress to approve a new federal tax system by July 4, 2021.

  • S.18 - The Fair Tax Act of 2017: Proposed a national sales tax in place of personal, corporate income, and other taxes, with an initial sales tax rate of 23% as of 2019. The IRS would be disbanded with no further funding post-2021.

Though the Fair Tax Act proposed significant systemic changes, its passage remains unlikely given the major reforms already enacted via the TCJA.

John Buhl, former manager of media relations for the Tax Foundation, noted that recent changes to the tax code may reduce momentum for drastic overhauls, like those proposed by the Fair Tax Act.

Related Terms: Tax Code, IRS, Tax Cuts and Jobs Act, Fair Tax Act.


  1. United States Congress. “How Our Laws Are Made”.
  2. Library of Congress. “Historical Versions of the United States Code Now Online”.
  3. United States Census Bureau. “Title 26, U.S. Code”.
  4. U. S. Government Publishing Office. “Title 26: Internal Revenue Code”, Page 22.
  5. Ralph H. Dwan and Ernest R. Feidler. “The Federal Statutes: Their History and Use”, Page 1018-1019. Minnesota Law Review, 1938.
  6. Internal revenue Service. “Evolution of Taxes”.
  7. Internal Revenue Service. “Publication 5307: Tax Reform Basics for Individuals and Families”, Page 1.
  8. Internal Revenue Service. “Historical Highlights of the IRS”.
  9. Internal Revenue Service. “The Agency, its Mission and Statutory Authority”.
  10. U.S. Congress. “H.R. 29: Tax Code Termination Act”,
  11. U.S. Congress. “S.18: Fair Tax Act of 2017”.
  12. U.S. Congress. “S.18: Fair Tax Act of 2017”.

Get ready to put your knowledge to the test with this intriguing quiz!

--- primaryColor: 'rgb(121, 82, 179)' secondaryColor: '#DDDDDD' textColor: black shuffle_questions: true --- ## What is the Internal Revenue Code (IRC) primarily used for? - [ ] Setting interest rates for loans - [x] Establishing federal tax laws in the United States - [ ] Regulating stock market practices - [ ] Determining state tax policies ## Which government body administers the Internal Revenue Code? - [ ] Federal Reserve - [ ] Securities and Exchange Commission (SEC) - [ ] Department of Commerce - [x] Internal Revenue Service (IRS) ## When was the original Internal Revenue Code enacted? - [ ] 1945 - [ ] 1936 - [x] 1939 - [ ] 1922 ## What major revision was made to the Internal Revenue Code in 1954? - [ ] Introduction of sales tax - [x] Comprehensive re-codification and expansion of federal tax laws - [ ] Standardization of state taxes - [ ] Implementation of income tax deduction limits ## Which section of the Internal Revenue Code primarily deals with taxation of income? - [ ] Section 52 - [ ] Section 370 - [x] Section 1 - [ ] Section 5000A ## Which part of the IRC deals with cross-border taxable income? - [ ] Section 89 - [ ] Section 225 - [ ] Section 401 - [x] Section 861 ## How often is the Internal Revenue Code typically amended? - [ ] Every year - [x] Periodically, whenever new tax legislation is passed by Congress - [ ] Every decade mandatorily - [ ] Every two years ## What was the significance of the Tax Reform Act of 1986 on the IRC? - [ ] It introduced the income tax for the first time - [x] It simplified and restructured various tax brackets and deductions - [ ] It abolished the federal tax system - [ ] It introduced corporate tax only ## Which financial aspect does the IRC NOT cover? - [x] Monetary policy regulation - [ ] Individual income taxation - [ ] Corporate income taxation - [ ] Value-added taxation (VAT) for certain transactions ## What role does case law play in interpreting the IRC? - [x] It helps provide clarification and application of IRC provisions through judicial decisions - [ ] It replaces sections of the IRC - [ ] It limits the scope of IRC applicability - [ ] It negates federal tax requirements