Tax Research – Legislative History is a Valuable Resource
When language in the Internal Revenue Code is ambiguous, or when a Code provision does not specifically address a taxpayer’s issue, courts often look to the intent of Congress when the provision was enacted. Knowing the rationale of the legislators in passing the law may provide insight into its intended application. The legislative history of the provision serves as the best guide to Congressional intent because it was prepared contemporaneously with the legislation and speaks on behalf of Congress itself. This article describes how the legislative course of action of enacting a tax law generates legislative history.
House of Representatives/Ways and method Committee
The U.S. House of Representatives is the starting point for all federal tax legislation. All bills dealing with federal income, estate, gift, or excise taxes are under the jurisdiction of the House Ways and method Committee. The Committee holds hearings on the hypothesizedv legislation to offer government officials and the general public an opportunity to present their views on the hypothesizedv changes or additions. A record of the Congressional hearings is sometimes published by the Government Printing Office. The Committee then revises, or marks up, the bill, making any changes that it believes are necessary or appropriate. The Committee also prepares a report discussing the changes and explaining its reasons for approving the legislation. The report is identified as the House Report and is stated a report number. If the bill is approved by the complete House, it proceeds to the U.S. Senate.
The Senate Finance Committee is the Senate style to the House Ways and method Committee. The Finance Committee also holds hearings for official and public input and marks up the House bill with its recommended changes. The Committee prepares a report explaining the amendments made to the House bill. The complete Senate then has the opportunity to consider the legislation.
The version of the hypothesizedv law approved by the House of Representatives may differ considerably from the version passed by the Senate. A Conference Committee composed of members of the House and Senate is appointed to resolve the conflicts between the two bills. The Conference Committee prepares an accompanying report explaining why it adopted or rejected the provisions from the two bills. The Conference Report is identified by a number. The revised bill is sent back to the House and Senate for final approval and then to the President for signing or veto.
Joint Committee on Taxation
The Joint Committee on Taxation (JCT) is a Congressional committee composed of five members from each the House and Senate. The Committee, assisted by a nonpartisan staff, has several roles, most of which are concentrated on analyzing and reporting on hypothesizedv or enacted tax legislation. The JCT staff participates in every facet of the enactment of a tax law, including writing the laws, explaining the laws, and estimating the economic impact of the hypothesizedv changes. Members of the Majority and Minority parties may request assistance from the JCT. Before or after a bill becomes law, the JCT prepares a technical explanation, knows as a bluebook, which explains the law before the new legislation and the reasons for changing the prior law.
The Internal Revenue Code is a federal statute located in Title 26 of the United States Code. To amend the Code, Congress must go by the normal course of action for the passage of federal legislation.
The legislative history traces a bill from its introduction in the House of Representatives until it is signed into law by the President. It may include a House bill, a Senate bill, the final compromise bill, four committee reports, and records of Congressional hearings. The legislative history is a high source of Congressional intent with regard to any tax law.