Internal Revenue Code Flashcards, test questions and answers
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What is Internal Revenue Code?
The Internal Revenue Code (IRC) is the body of law that governs the federal taxation of individuals and businesses in the United States. It is a complex set of laws, regulations, and court decisions that are constantly being amended and updated to reflect changes in the tax landscape. The IRC covers a wide range of topics from income taxes to estate taxes to excise taxes, as well as providing rules for filing tax returns.The Internal Revenue Code was first enacted in 1913 as part of President Woodrow Wilson’s New Freedom program. Since then, it has been amended many times over the years to keep up with changing economic conditions and legislation. The most recent major amendment to the code came with the passage of the Tax Cuts and Jobs Act in 2017, which made significant changes to both personal and corporate income tax rates. The Internal Revenue Code can be divided into four main sections: Subtitle A (Income Taxes), Subtitle B (Estate Taxes), Subtitle C (Excise Taxes), and Subtitle F (Miscellaneous). Each section contains detailed provisions governing different types of taxation, from deductions for business expenses to principles for determining taxable income. Taxpayers must adhere to all applicable provisions when submitting their tax returns each year or face penalties for non-compliance. Individuals must also ensure that their returns accurately reflect their financial situation by including all relevant information regarding income sources, deductions, credits, etc., that could affect their total taxable liability. Professional advice is often recommended when filing complicated returns or dealing with complex transactions such as investments or trusts. Overall, understanding how each provision works within the context of your own situation can help you maximize your benefits while minimizing your overall tax liability under the Internal Revenue Codeand ensure that you stay compliant with federal regulations at all times.