Tax Laws: Rules of the Game

Find out where the tax code comes from and who gets the final say on interpretation.

Congress writes the tax laws, which become part of the Internal Revenue Code (IRC), or tax code for short. The tax code is amended every year; presently, it's over 4,500 pages long.

Part of the reason the tax code is so big is that many tax laws are passed for purposes other than raising money. A social goal using a tax law, for example, is Congress's attempt to alleviate the housing problem by giving tax breaks to those who invest in low income housing. Similarly, an economic goal is found in allowing rapid tax writeoffs to buyers of new business equipment to stimulate manufacturing.

And there are purely political reasons for tax laws. Many special interest groups, such as oil companies, horse breeders, broadcasters, insurance companies and even major league baseball clubs, have gotten tax laws passed that are designed to give them special treatment. These special provisions of the tax code outnumber the laws of general application.

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