How to navigate the U.S. Tax Code with precision
Knowing the differences and benefits between primary and secondary sources of the tax code. Tips on how to apply it, tools to master the code and more.
Varying interpretaions, frequent updates and appropriate applicability. To say that the U.S. Tax Code is complex would be an understatement. To say it is complex is an understatement.
Given the difficulties, it comes as little surprise that keeping up with tax law and government regulations ranked number three among the top accounting challenges in 2024, according to Thomson Reuters research.
Unfortunately, the ever-evolving landscape of intricate tax provisions and new regulations shows no signs of slowing. Now, throw into the mix the pressures of the busy tax season and rise in client demands and expectations. In today’s environment, the need for precise and timely tax information is critical.
Inaccurate information can not only damage a firm’s reputation and result in a loss of clientele, it can also lead to costly penalties and fines.
Keep reading for actionable tips on how to learn the U.S. tax code system, stay up to date on changes, and effectively communicate those tax law changes to clients.
Jump to |
Newsletter
Tax and accounting news featuring content from Checkpoint
Sign up for /
A quick refresher on the tax code sources
There is a variety of sources that are used to establish tax rules and procedures. The Internal Revenue Code is the definitive source for all U.S. federal tax laws. The U.S. Department of the Treasury and the federal court system provide the official interpretation.
The IRC — initially compiled in 1939 and revamped in 1954 and 1986 — is the body of law that codifies all federal tax laws such as income, employment, estate, and excise taxes. The laws are Title 261001010 of U.S. Code which is published by the U.S. House of Representatives’ Office of the Law Revision Counsel.The IRC is complex. The IRS
explains that the IRC sections must be read within the context of the whole Code, the Treasury (tax regulations), and the court cases that interpret it.The U.S. Department of the Treasury gives the official interpretation of the IRC, and provides directions on how taxpayers can comply with the IRC requirements. Treasury regulations are also known as federal tax regulations. As stated in a
document recently issued by the Congressional Research Service (CRS), “Treasury regulations are the most important type of tax guidance issued by the Treasury and the IRS. Treasury regulations provide guidance for newly enacted laws and tax issues arising from preexisting legislation. Taxpayers may rely on final and temporary Treasury regulations, but may not rely on proposed Treasury regulations unless they contain an express statement permitting reliance.”
Interpreting and applying the tax codeInterpreting and appropriately applying the U.S. tax code to a client’s specific situation is one of the biggest challenges for tax professionals. Tax attorneys and professionals who have studied law and are familiar with statutory language will find it easier. However, for many tax professionals, deciphering and navigating thousands of pages filled with cross-references and detailed rules and exceptions can be a challenge. It can be a “puzzle” to understand the Code, according to Shaun Hunley
 |
of Thomson Reuters. Hunley explained that we don’t speak that language, and it can be frustrating for a new associate to translate what is written in the Code. This leads you to have to jump from one Code section to another. Often, they will use a different Code section to define the term. You may not be able to use the definition you think you know when you read a Code Section. In this case, you will have to look up the Code to see how Congress defined the term. It can be a puzzle going to all these different sections.”
Primary and secondary sources
When interpreting and applying the U.S. tax code, it is important to keep in mind the importance and purpose of both primary and secondary sources.
Primary Sources include:The Tax Code and other federal laws–
Court rulings that can shed more light on Code sections and their intent
Hunley noted that “When a Code Section is passed, you are able to read the legislative intent.” You can read about the legislative history of the Code section. You can also read the legislative history behind the Code section. Those are also really good to figure out what was the intent of the Code section.”
Secondary sources, which can further summarize, analyze, interpret, or comment on the information, include:
“I tell people that the Code section is the starting point,” said Hunley. “That’s what you should do at the very least, but you also need to look into other sources.”
Staying on top of tax law changes
- As previously stated, intricate tax provisions and new regulations continue to evolve and, without the right tools and resources, keeping pace with the changes
- can be daunting.
Take for instance, the many tax-related changes enacted under The Tax Cuts and Jobs Act in 2017; the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020; the Coronavirus Response and Consolidated Appropriations Act in 2021; and the Inflation Reduction Act of 2022.
“Apart from any really significant tax reform, which was in 2017, the tax code is usually modified in reaction to some sort of event–whether it is a major pandemic, or inflation, or the economy is not doing well. Hunley explained that Congress will then decide whether to modify the Code. Trump is talking tax reform and he wants no tax on tips. He also wants no tax on Social Security
and no tax for overtime pay. Subscribe to a reputable tax news service such as Thomson Reuters
Checkpoint newsstand
to receive the latest tax and accounting news.
Subscribe to industry publications like Accounting Today to receive articles that discuss topics in a conversational, easier-to-understand manner. Consider taking the following measures:
Subscribe to a reputable tax news service such as Thomson Reuters
Checkpoint newsstand
to receive the latest tax and accounting news.Subscribe to industry publications like Accounting Today to receive news articles that discuss topics in a conversational, easier-to-understand manner.Leverage your firm’s internal expertise and resources to track tax developments.[if passed]”My suggestion, especially to new associates, and I know this can be hard during busy season, but just take ten to fifteen minutes out of your day and look at those tax subscriptions and the news you are getting,” said Hunley.
“Always look at those, even if it’s just for a few minutes, because that way you will get all those updates. You will receive updates whenever there is major legislation or
- tax Reform. The House will release one version of the Code and the Senate will release the other. Hunley also offered a tip for firms that use Checkpoint Classic or Checkpoint edge
- . He suggested using the history button. If a practitioner is in a Code section of Checkpoint and clicks on the “History button”, Checkpoint will list all the changes that have been made to that section, along with the date.
Mastering the U.S. tax code is becoming easier, thanks in large part to advancements in technology.Tax professionals can more efficiently navigate the U.S. tax code using
- advanced search options
on the U.S. House of Representatives’ Office of the Law Revision Counsel web site.
There’s also AI-powered innovation like Thomson Reuters CoCounsel Tax, which can take staff productivity and research capabilities to new heights. CoCounsel Tax is
a next generation agentic AI assistant that can deliver the following benefits:
Streamlines the tax workflow, as CoCounsel Tax is designed to automate complex tasks, analyze documents, and standardize processes across a firm.
Accelerates research by integrating multiple knowledge sources–including trusted Checkpoint content–eliminating time-consuming manual searches.Validates answer formation with citations and links to specific Checkpoint editorial content and source materials, showing a clear and defensible audit trail.Enables junior staff to work more independently and effectively. This means senior staff has more time to concentrate on critical, higher-value projects.
CoCounsel Tax combines agentic AI with trusted expertise to transform complex tax research into clear, actionable insights“You can have a conversation with it, but what is really good about that tool is it takes its information from Checkpoint itself. Hunley explained that the tool uses up-to date data and content that is updated to reflect current law changes.
Communicating tax law changes to clientsIn today’s competitive business environment, it is important to strengthen client loyalty and provide the proactive tax guidance clients have come to expect. This involves using solutions, including AI-powered tools, to research and communicate tax code changes more effectively.Sending a mass email or video to clients can be an easy way to quickly reach a broad audience with tax-related news and developments.On the other hand, data mining capabilities can be a highly effective way to pinpoint existing clients who could be impacted by a specific tax development. This can help strengthen client relationships
- and unlock more higher-value, higher-margin advisory services.Regardless of the communication channel and method used to inform clients, Hunley stressed the importance of translating the statutory language for clients so it is easy for them to understand. In other words, do not cite Code sections to clients.
- “What clients care about is how it affects them. Some clients will not be affected by the Code section at all. However, when we pass major legislation like we will do this year, it is likely that many clients will be affected. Hunley said that you need to communicate this message to clients in everyday language. It is about being proactive and anticipating what might happen, how that could affect clients, then translating it all.”
- Take action today to master the U.S. Tax Code with greater precision. Turn to a trusted provider like Thomson Reuters to stay up-to-date on the latest
- tax news
and transform the way you work with the
power of AI.
CoCounsel Tax
CoCounsel: One agentic AI assistant for tax, audit, and accounting professionals
Learn more about /
