Chapter 2 Federal Tax

What are the three types of Treasury regulations discussed?

Final, temporary, and proposed regulations.

Do final regulations have precedent value?

Yes. Final regulations are authoritative precedent.

Do temporary regulations have precedent value?

Yes. Temporary regulations generally have the force and effect of regulations while in effect.

Do proposed regulations have precedent value?

No. Proposed regulations are not precedent and are subject to a comment period.

Which regulation has the lowest authority?

Proposed regulations.

What is a Letter Ruling?

An IRS ruling issued before a taxpayer completes a transaction, addressing how the tax law will apply to that taxpayer's proposed transaction.

What is a Determination Letter?

An IRS determination generally addressing the tax treatment of an already completed transaction or specific taxpayer situation.

What is a Technical Advice Memorandum (TAM)?

IRS advice concerning the proper tax treatment of a specific issue, usually arising during an examination or proceeding.

What is Field Service Advice (FSA)?

Case-specific advice provided to IRS field personnel/examiners.

What are the three main federal trial-level courts for tax cases?

U.S. Tax Court, U.S. District Court, and U.S. Court of Federal Claims.

Where does an appeal from the U.S. Tax Court generally go?

To the appropriate U.S. Court of Appeals.

Can a Small Tax Case Division decision be appealed?

No. Small Tax Case Division decisions are not appealable.

Where does an appeal from a U.S. District Court generally go?

To the appropriate U.S. Court of Appeals.

Where does an appeal from the U.S. Court of Federal Claims go?

To the U.S. Court of Appeals for the Federal Circuit.

When was the Internal Revenue Code codified in 1939?

1939 Internal Revenue Code.

When was the Internal Revenue Code codified in 1954?

1954 Internal Revenue Code.

When was the current major Internal Revenue Code codified?

1986 Internal Revenue Code.

What is the general journey of a tax law through Congress?

A tax proposal is introduced → considered by committees → debated/amended → passed by both chambers → reconciled if necessary → sent to the President for signature or veto.

What is IRC Subtitle A about?

Income taxes.

What can generally be cited as precedent?

Authoritative sources of tax law, such as statutes, regulations, and applicable court decisions.

Can proposed regulations generally be cited as precedent?

No. They are not authoritative precedent.

What is required to bring a refund case in federal court?

Generally, the taxpayer must pay the tax first and then sue for a refund.

Which federal tax court does not use juries?

U.S. Tax Court.

Which courts can provide a jury trial in appropriate tax cases?

U.S. District Courts, when the requirements for a jury trial are met.

Which court generally requires the taxpayer to pay the deficiency before bringing the case?

U.S. District Court and U.S. Court of Federal Claims generally follow the refund procedure requiring payment first.

Which court is the highest authority in the federal court system?

U.S. Supreme Court.

What is the general hierarchy of court authority?

Supreme Court → Court of Appeals → Trial/District Court.

What is a reviewed Tax Court decision?

A decision reviewed by the full Tax Court, giving it greater precedential weight than an opinion issued by a single judge.

What can affect how much weight a court decision carries?

The court that issued it, whether it was reviewed, and whether it is binding in the taxpayer's jurisdiction.

What does the IRS do when it agrees with a court decision?

It generally accepts/follows the decision and applies it as appropriate.

What can the IRS do when it disagrees with a court decision?

It may appeal the decision when permitted or distinguish the case from other situations.

Where are tax court decisions published?

They can be published in official and commercial tax-reporting services.

What does "Aff'd" mean?

Affirmed — the appellate court agrees with the lower court's decision.

What does "Rem'd" mean?

Remanded — the case is sent back to the lower court for further action.

What does "Rev'd" mean?

Reversed — the appellate court overturns the lower court's decision.

What are primary sources of tax law?

IRC statutes, Treasury regulations, and court decisions, along with other authoritative governmental sources.

What are non-primary sources of tax law?

Sources that interpret or explain tax law rather than creating authoritative law, such as textbooks, articles, and commercial tax research materials.

How should you start a search on a tax research site?

Start with the specific tax issue or relevant keywords, then narrow the search using facts, Code sections, regulations, or other authorities.

What does stare decisis mean?

"Let the decision stand." Courts generally follow established precedent.

Who issues Treasury regulations?

The U.S. Department of the Treasury, generally through the IRS.