26 U.S.C. § 7851 — Applicability of revenue laws

(a) General rules. Unless another section of this title says otherwise, here is when different parts of this title took effect and when the old 1939 tax code was repealed:

(1) Subtitle A (income taxes). (A) Chapters 1, 2, and 6 of this title apply only to tax years that began after December 31, 1953, and ended after this title became law. For those tax years, most of chapters 1 and 2, and section 3801, of the old 1939 tax code are repealed (chapter 1 keeps sections 143 and 144 in force). (B) Chapter 3 of this title (payments and transfers to foreign persons) applies to payments and transfers after December 31, 1954. For those, sections 143 and 144 and chapter 7 of the 1939 code are repealed. (C) If a rule in subtitle A says it applies starting on a specific date after December 31, 1953, or to tax years ending after such a date, it applies to tax years ending after that date. For a tax year still governed by the 1939 code, that new rule is treated as written into the 1939 code, but only for years ending after that date — and the old 1939 rule it replaces is treated as still part of subtitle A, but only for the time before the new rule took over. (D) For tax years ending after March 31, 1954, that are taxed under chapter 1 of the 1939 code: (i) a specific list of 1939-code provisions is repealed (sections 13(b)(3), 26(b)(2)(C), 26(h)(1)(C), 26(i)(3), 108(k), 207(a)(1)(C), 207(a)(3)(C), and the last sentence of section 362(b)(3)); and (ii) another list of provisions (sections 13(b)(2), 26(b)(2)(B), 26(h)(1)(B), 26(i)(2), 207(a)(1)(B), 207(a)(3)(B), 421(a)(1)(B), and the second sentence of section 362(b)(3)) is changed by deleting the phrase "and before April 1, 1954" wherever it appears.

(2) Subtitle B (estate and gift taxes). (A) Chapter 11 of this title (estate tax) applies to the estates of people who died after this title became law; for those estates, chapter 3 of the 1939 code is repealed. (B) Chapter 12 of this title (gift tax) applies to calendar year 1955 and every year after; for those years, chapter 4 of the 1939 code is repealed.

(3) Subtitle C (employment taxes). Subtitle C applies only to wages paid after December 31, 1954, except that chapter 22 of subtitle C applies only to wages paid after that date for work also done after that date. Chapter 9 of the 1939 code is repealed for wages paid after December 31, 1954 — except that one part of it (subchapter B, plus the connected part of subchapter E) stays in effect for wages paid after that date for work done on or before that date.

(4) Subtitle D (miscellaneous excise taxes). Subtitle D takes effect January 1, 1955. Most of subtitles B and C of the 1939 code are repealed as of that date (a short list of chapters and parts is kept in force instead). A provision with the same effect as section 6416(b)(2)(H), and the part of section 4082(c) about special motor fuels, are treated as part of the 1939 code starting May 1, 1954. One 1939-code section about a 1954 tax cut applies to the period from April 1, 1954 through December 31, 1954.

(5) Subtitle E (alcohol, tobacco, and firearms taxes). Subtitle E takes effect January 1, 1955, except that a few specific provisions (about using a brewery to make and bottle soft drinks, section 5554, and chapter 53) take effect the day after this title becomes law. Some parts of the 1939 code are repealed the day after this title becomes law, and other parts are repealed as of January 1, 1955.

(6) Subtitle F (procedure and administration). (A) General rule. Subtitle F takes effect the day after this title becomes law and applies to any tax imposed by this title. It applies to 1939-code taxes only as described in (B) and (C) below. (B) Assessment, collection, and refunds. Certain enforcement provisions of the 1939 code stay in effect until January 1, 1955, and apply to taxes under this title too, even though this title has its own rules on the same topics. Starting January 1, 1955, this title's rules on assessment, collection, and refunds apply to all taxes, whether imposed by this title or the 1939 code — except that the 1939 code's rule about reporting refunds and credits keeps working for refunds or credits allowed after this title becomes law, and the matching 1939-code enforcement section is then repealed. (C) Taxes imposed under the 1939 Code. After this title becomes law, several parts of subtitle F — the rules on bonds, closing agreements and compromises, crimes (for offenses after this title becomes law, using this title's time limit for prosecution), judicial proceedings, miscellaneous provisions (with special timing rules for mailing and deadlines), discovery of liability and enforcement, definitions, and general application rules — also apply to taxes under the 1939 code, even where the 1939 code said something different. Once this title's crime rules apply, the 1939 code's own penalties for the same conduct no longer apply. (D) Except as described in (B) and (C), the enforcement chapter and subtitle D of the 1939 code keep applying to taxes imposed under the 1939 code.

(7) Other provisions. If this section or another part of this title does not say when a rule in the current Internal Revenue Code takes effect, it takes effect the day after this title becomes law. If the repeal of an old 1939-code provision is not spelled out elsewhere, that provision is repealed the day after this title becomes law.

(b) Effect of repealing the 1939 code.
(1) Existing rights and liabilities. Repealing a 1939-code provision doesn't erase anything already done, any right already earned, or any lawsuit already started before the repeal. Rights and duties under the old code continue and can still be enforced as if the repeal never happened.
(2) Existing offices. Repealing a 1939-code provision doesn't abolish or change any tax district, office, position, board, committee, or the appointment of any officer or employee^* that existed right before this title became law — as long as keeping it doesn't clearly conflict with this title. Those things stay in place until properly changed.
(3) Existing delegations of authority. Any delegation (or further redelegation) of authority made under two specific 1950s Reorganization Plans, and still in effect under the 1939 code right before this title became law, stays in effect for this title too — unless it clearly conflicts with this title. This doesn't limit anyone's power to later change or cancel such a delegation.

(c) Crimes and forfeitures. Any crime committed, or penalty or forfeiture triggered, under a repealed law can still be prosecuted and punished exactly as if this title had never been enacted.

(d) Periods of limitation. Deadlines for filing civil cases, prosecuting crimes, or recovering penalties or forfeitures under repealed laws are not affected by the repeal. Any such case — civil or criminal — for something that happened before the repeal can still be brought within the same time limit as if this title had never been enacted.

(e) Reference to other provisions. When applying the 1939 code or the current Internal Revenue Code to a particular time period, if one of those codes points to a provision of the other code that doesn't apply to that period, that reference is read instead as pointing to the matching provision of whichever code does apply to that period.