Identify the general content of each of the following chapters of the Internal Revenue Code. Briefly indicate how you found this information.
a. Chapter 6
b. Chapter 21
c. Chapter 39
The correct answer and explanation is:
a. Chapter 6 – Tax on Estates and Gifts
Chapter 6 of the Internal Revenue Code (IRC) deals with the tax obligations associated with estates and gifts. It covers the federal estate tax and the gift tax, setting the rules for how wealth passed from one individual to another through gifts or bequests is taxed. This chapter outlines the exemptions, deductions, and rates applied to both estate transfers upon death and lifetime gifts. Additionally, Chapter 6 details how estates are valued, the filing requirements, and the entities responsible for payment.
b. Chapter 21 – Federal Insurance Contributions Act (FICA)
Chapter 21 of the IRC governs the Federal Insurance Contributions Act (FICA), which mandates the withholding of Social Security and Medicare taxes from employees’ wages. FICA taxes are split between the employee and employer, with each contributing a set percentage of earnings to fund Social Security benefits and Medicare. Chapter 21 defines the rates of taxation, the wage base limits, and how these contributions are allocated. It also includes provisions about self-employment taxes under the Self-Employment Contributions Act (SECA), which ensures that self-employed individuals pay into these programs as well.
c. Chapter 39 – Miscellaneous Provisions
Chapter 39 of the IRC contains various miscellaneous provisions that do not fall under other specific chapters. These provisions include the rules and regulations regarding tax administration, enforcement, and procedural requirements for compliance. It also addresses other tax-related issues such as assessments, collections, and penalties for noncompliance. This chapter acts as a catch-all for tax rules that are applicable across different areas of tax law and provides clarity on the administration and enforcement of the IRC.
To find this information, I used a combination of legal databases, summaries of the IRC, and references to the official IRS resources. Each chapter of the IRC is categorized and labeled according to the topics it governs, which are then outlined in various tax law summaries and official government publications available online.