It is Law when passed by the Congress and signed by the President.  If the President Vetoes it, then Congress can override if they have the numbers.  This is how laws are made.  Settled Law is a bit different, as it does involve the Courts and their giving of their imprimatur. 

In this case, the law authorizes the IRS to act as an 'agency' of the US Government.  That agency is also empowered by the very same law to interpret the laws of Congress as appropriate.  So what we really have here is Congress delegating their power to an outside agency.  Some may even say 'abdicating'.  Nonetheless, if the law empowers the agency, then that's what it does.  If you want to argue that Congress should not have abdicated or delegated, that's fine.  But they did so through laws.  And you violate those laws, or ignore them, at your own peril.