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Federal Taxation: ADMINISTRATIVE RULINGS AND INTERPRETATIONS

ADMINISTRATIVE RULINGS AND INTERPRETATIONS

IRS Regulations

Tax regulations appear first as Treasury Decisions (Treas. Dec.) and are issued by the Treasury Department to interpret and guide the Internal Revenue Service on how to carry out the Internal Revenue Code.

Proposed, temporary, and final regulations are promulgated:.

Temporary and final regulations are published as "Treasury Decisions" (T.D.) A T.D. number merely indicates the order in which the regulation is issued and has no other significance. Proposed regulations are not assigned T.D. numbers, and are called "Notice of Proposed Rulemaking." Regulations are found in the following sources:

 

Proposed, Temporary, and Final Regulations all appear first in the Federal Register (F.R.). The Federal Register is published by the Government Printing Office every business day of every year. This is a link to today’s table of contents of the Federal Register. 1 F.R. 1 is dated March 14, 1936; volumes are numbered consecutively from 1936, and pages consecutively from the first through the last business days of the year.

Final Regulations are also found in Title 26 of the Code of Federal Regulations, Title 26 (KF70.A3 C63).

Revenue Rulings

Revenue Rulings are applications of law by the IRS to facts presented by the taxpayer to the IRS for a ruling. These Rulings can be used as precedent by other taxpayers on similar facts and are intended to bind all taxpayers having the same tax issue as that covered in the Revenue Ruling..

Rulings are assigned chronological numbers. For example, Rev. Rul. 97-16 was the 16th Ruling issued in 1997, Rev. Rul. 2020-002, the second in 2020.

Revenue Rulings are published in the IR Bulletin and Cumulative Bulletin, the Daily Tax Report, Tax Analysts, Daily Tax Highlights and Documents.

Each of the expensive online legal-database services has a separate database of Revenue Rulings.

Revenue Procedures

Revenue Procedures are rulings and statements of IRS practices and procedures intended to have general applicability. These tell us how to proceed on matters before the IRS, such as applying for other advisory opinions.

Like Revenue Rulings, they are assigned chronological numbers and can be found in the the Internal Revenue Bulletin, and in specific databases in the big online services..

Letter Rulings (LTRs) are applications of law issued by the IRS at taxpayer or IRS-agent request, usually for a proposed transaction, which are not published in the IR Bulletin. These are privately published, originally obtained through a Freedom of Information Act request. Letter rulings are useful for ascertaining how the IRS might rule in particular fact and indicate how the IRS is likely to decide on a similar issue in the future. These are useful for the list of authorities on which a taxpayer might rely in order to avoid penalties. Otherwise, letter rulings are not to be viewed as precedential. Letter Rulings are found in the Letter Rulings Reporter (CCH) KF6289.A353, as well as in the other secondary sources cited below.

Examples of Letter Rulings include:

PLR or Private Letter Rulings, sought by taxpayer. The PLR binds IRS and taxpayer on the issue analyzed.

TAM or Technical Advice Memoranda, sought by an agent.

FSA, or Field Service Advice, sought by IRS agent

CCA, or Chief Counsel Advice, internal legal opinion

GCM, or General Counsel Memoranda, internal legal opinion

AOD, or Actions on Decision are legal memoranda prepared by the Tax Litigation Division attorneys which describe why the IRS has decided not to follow a court ruling adverse to the position or reasoning of the IRS. As an administrative agency, the IRS considers itself the expert in the area it regulates, and the IRS expects deference to be paid it by the courts. The IRS will never issue a non-acquiescence against an opinion of the U.S. Supreme Court, but it will with other courts.

The foregoing administrative documents can be found in Bloomberglaw, Lexis, Westlaw, and Vitallaw. Not all are available free of charge online.