The Federal Tax Law System?

1 Answer

Answer :

For many people in the United States, the federal tax law system can be extremely confusing. There are so many regulations and forms that people need to be aware of in order to successfully complete their tax returns. Accountants must also be aware of new tax laws and regulations that seem to spring out of nowhere each tax year. An understanding in how the tax laws are organized and how they are formed can be very helpful in knowing how to find them and how they work. All of the tax laws that are in place can be found in one book, and that is the U.S. Tax Code. The tax code is just one portion in the even larger U.S. Code. There are many different sections in the tax code that are called "sections" and are sorted by the topic that they deal with. For example, there is a section on Income Tax and a separate section on Estate Tax. There are literally hundreds of sections that can be found in the tax code, so knowing what is being sought can help to find laws and regulations more easily. In each section, there are several paragraphs and subparagraphs. Often times, these paragraphs outline certain specifications of a tax law, and the subparagraphs give more clarification on the specific paragraph. Sometimes these paragraphs will be numbered and sometimes they will not be, it all depends on which resource is used to look through the tax code. Sometimes, the government sees the need to add certain regulations onto the tax code. These are simply called regulations and are added into the tax code at the end of the specific section to which they apply. Sometimes regulations are only meant to be added for a set number of years, such as a tax break that is meant to help the economy improve. These regulations are called temporary regulations and expire after the amount of time specified is completed. The source of federal tax law is the Internal Revenue Service (IRS), which is contracted by the U.S. Treasury Department and given authority by Congress. The IRS is responsible for the implementation of tax laws and the collection of federal taxes. Congress is the body that passes new tax laws, which are approved by the President. The authority for Congress to create new tax laws is provided by the Sixteenth Amendment to the United States Constitution. Essentially, all tax law is provided by Congress and the U.S. Tax Court rulings.

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