What Is Revenue Code 516 and Does It Still Exist?

A search for “Revenue Code 516” often stems from a typo or a misunderstanding of how laws are organized. This term does not correspond to an active or commonly referenced section of the United States Internal Revenue Code (IRC). Instead, this search query usually points toward historical federal laws, other common federal tax codes, or various state-level statutes that use the number 516.

The Historical Federal Tax Law

There was, at one point, a provision in federal law designated as Internal Revenue Code Section 516. This section of the tax code pertained to the federal tax imposed on wagers. This law is no longer relevant for any current tax matters. Congress repealed IRC Section 516 in 1976, and its provisions have been defunct for decades. Any ongoing tax obligations related to gambling or wagering are now covered under different sections of the modern Internal Revenue Code.

Potential Federal Tax Code Confusion

A search for “Revenue Code 516” is a simple mistyping of another, more common, federal tax law. Several sections of the Internal Revenue Code are numerically close to 516 and are frequently used by taxpayers and professionals.

One of the most common points of confusion is with IRC Section 529. These are state-sponsored savings plans, often called “529 Plans” or “Qualified Tuition Programs,” designed to help families save for future education costs. Contributions to these accounts grow tax-free, and withdrawals are also tax-free when used for qualified education expenses, which can include K-12 tuition, college costs, and even certain apprenticeship programs.

Another possibility is a search for information on the Unrelated Business Income Tax (UBIT), governed by IRC Sections 511 through 514. These rules apply to tax-exempt organizations, such as charities or educational institutions, that engage in business activities not substantially related to their exempt purpose. For example, if a university-run museum operates a public parking garage, the income from that garage could be subject to UBIT under these sections.

Finally, the query might be a misremembered reference to the broad category of tax-exempt organizations under IRC Section 501(c). This part of the tax code lists dozens of types of nonprofit organizations, with each having a specific number, such as 501(c)(3) for charitable organizations or 501(c)(6) for business leagues.

Possible State Law References

The reference to “Revenue Code 516” might not be related to federal tax law, but to a specific state law. State legislatures number their statutes independently, and the designation “516” appears in various contexts across the country.

For instance, in Missouri, Chapter 516 of the Missouri Revised Statutes deals with statutes of limitation. A statute of limitation is a law that sets the maximum amount of time that parties in a dispute have to initiate legal proceedings. Missouri’s Chapter 516 establishes these deadlines for various civil actions, such as breach of contract or personal injury claims.

In another legal area, California’s state laws contain references to the number 516 in its Revenue and Taxation Code. Some county ordinances use this number in the context of property tax administration. For example, procedures for correcting an incorrect property assessment or rules related to the documentary transfer tax on real estate sales might fall under a local ordinance numbered 516.