6 Must-Know Tax Code Hacks for Savvy Filers

You can’t find loopholes if you don’t know the rules. The U.S. tax code is one of the most important documents the federal government produces—and probably the least often read in its entirety, except for smart accountants.

Stretching over 6,000 pages long and available in print and searchable online versions, it lays out the rules taxpayers need to know to comply with the law. Even if you don’t plan to make the tax code your next beach read, for tax-savvy Americans, it’s worth understanding what it covers (and doesn’t cover) and how it works.

Key Takeaways

• The U.S. tax code is a lengthy document, to say the least.
• It is searchable online, making it easier to find answers to your questions.
• The Internal Revenue Service offers many free publications that translate the tax code into everyday English.
• Other free or paid help is available if you need it.

Read the Most Important Parts of the Internal Revenue Code (IRC)

Formally known as the Internal Revenue Code (IRC), the U.S. tax code is just one of 54 sections, or “Titles,” in the larger United States Code, which covers everything from copyright law to flag etiquette to veterans’ benefits. The tax code is Title 26 of the larger code.

Title 26 is divided into 11 lettered sections called Subtitles. For individual taxpayers, Subtitles A and B are the most relevant sections, and the place to start. They are:

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

Watch What Congress Does With Treasury Regulations and Revenue Rulings

While we often speak of the Internal Revenue Service (IRS) as if it makes the rules, it is actually Congress that enacts them. The role of the IRS is to enforce the laws and interpret how they apply in specific circumstances

Those interpretations take the form of Treasury regulations, which appear as part of Title 26, and in separate IRS guidance. This helps taxpayers understand how the tax laws should be applied in practice.

IRS guidance can take several forms:

• Revenue Rulings: Official interpretations of tax laws.
• Revenue Procedures: Guidelines for handling specific tax issues.
• Private Letter Rulings: IRS determinations on individual tax matters.
• Notices and Announcements: Updates and clarifications on tax laws.

These resources are crucial for understanding and navigating the finer points of the tax code, especially for complex tax situations.

Watch for the Latest IRS Publications and Resources

The IRS provides several helpful publications and resources for taxpayers. Individual taxpayers and small employers may find the most comprehensible and useful IRS publications (each devoted to a separate topic, such as “Publication 463: Travel, Gift, and Car Expenses”) and tax tips.

The publications are generally updated each year to assist taxpayers who are filling out their tax returns, while the tax tips are issued throughout the year.

Consult a Tax Professional

For individuals with relatively simple tax situations, it’s often possible to handle tax returns independently. However, if your financial situation is more complex—such as if you have significant investments, multiple income streams, or business ownership—you may need professional help.

Tax professionals who can assist include:

• Certified Public Accountants (CPAs): Provide tax preparation and planning advice.
• Enrolled Agents (EAs): Licensed by the IRS to represent taxpayers before the agency.
• Tax Attorneys: Offer legal advice on tax-related issues and disputes.

While their services come with costs, these professionals provide invaluable expertise, especially when dealing with complicated tax matters.

Get Help From the Volunteer Income Tax Assistance (VITA) Program

Free help for preparing tax returns is available from the IRS-sponsored Volunteer Income Tax Assistance (VITA) program. VITA is available for individuals who earn $67,000 or less, people with disabilities, and those with limited English language proficiency.

Check out Consumer Publications for Tax Education

In addition to the official IRS publications, several independent publishers and websites offer free tax guidance, especially online. Among them are tax preparation companies and software makers, brokerage firms, nonprofits such as AARP, and, of course, Investopedia.

The Bottom Line

The Internal Revenue Code (IRC) is the foundation for all U.S. tax laws. Although long and complex, it’s accessible online, and the IRS provides many free resources to help taxpayers interpret it. Whether you need to consult IRS publications, engage a tax professional, or use online tools, there’s ample help available to navigate the tax code efficiently.

Ultimately, understanding the basics of the IRC—and knowing where to find additional resources—can empower taxpayers to manage their taxes more effectively and avoid costly mistakes.