Tax Research Midterm

The statutory sources are

U.S. Constitution, IRC, Tax treaties

The administrative sources are

Treasury Regs, Revenue Rulings, Revenue procedures, PLRs

The judicial sources are

Tax court, district courts, court of federal claims, court of appeals, supreme court

Without the 16th amendment…

federal income tax is unconstitutional

The current, amended IRC is as of which year

1986

The first step of how federal laws originate

bill is introduced in house or senate and assigned a number

The second step of how federal laws originate

number follows the bull through hearings, amendments, committees

The third step of how federal laws originate

if signed by president or not vetoed within 10 days, it becomes a Public Law

Where does tax law begin?

The House

The original form of a statute is

Public Law

Public Law Citations format

P.L. (session of congress that passed law)-(bill adopted that session)

Sessions of congress last

2 years

IRC Section format

Section (subsection) (paragraph) (subparagraph) (clause)

The IRC is binding unless

its provisions are found to violate the constitution

Binding means

obligated to follow provisions

Leaving the date off of an IRC section citation…

implies the most recent citation

Statutes (can?/cannot?) be effective retroactively

cannot

Technical corrections (are?/aren’t?) effective retroactively?

are

A technical correction cannot be effective retroactively if

it creates new law

A committee report arises from

each committee considering legislation generates a committee report that accompanies the bill to recommend its passage

Path of tax bills

Tax bills are generated by the house ways and means committee, voted by the house/senate, go to joint conference committee to reconcile house/senate differences, re. voted, signed, and put into title 26.

the JCT is

the joint committee on taxation

The IRS (makes?/enforces?) tax law

enforces

The JCT

conducts research studies, provides revenue estimates, offers opinions about proposed tax ideas, produces a post-legislation committee report

Tax treaties are

agreements negotiated between countries on the treatment of entities subject to tax in both

which is given preference, tax treaty or IRC

whatever is more current

Committee reports come

before statute

Tax bills are first marked up by

the ways and means committee

Sub-regulatory guidance

Administrative sources in the IRB other than regulations

Administrative sources come from

the treasury department

Treasury regulations are

regulations associated with the IRC that provide general interpretation and guidance in applying the code.

Temporary and final regulations are issued as

treasury decisions

The three forms of regulations are

Proposed, final, temporary

Proposed regs have a ___ notice and comment period

30 day

Final regs are issued after

notice and comment period

Temporary regs are often issued

in response to a congressional or judicial change in the law or its interpretation

Proposed regs are

non binding

Final regs have

the force and effect of law

Temporary regs have

force and effect of law but have to expire

Temporary regs have to expire so

a proposed reg also has to be issued

Temporary regs last for

3 years

Are proposed, final, and temporary regs equal in terms of authority?

No

Regulation citation format

Reg. Section-(reg type)(section)(paragraph)

What is the federal register?

The official daily publication of the U.S. government where federal agencies publish proposed and final rules, notices, and executive orders.

What is the IRB?

The IRS’s weekly official publication that announces revenue rulings, revenue procedures, notices, Treasury decisions, and other tax guidance.

What is a treasury decision?

A final regulation issued by the Treasury Department (usually through the IRS) that is published first in the Federal Register and then reprinted in the IRB to officially finalize or amend tax regulations.

Legislative regulations

Treasury is directed by Congress to fulfill a law-making function by specifying the substantive requirements of a tax provision.

Interpretive Regulations

Issued under the general authority granted to the Treasury to interpret the language of the IRC

Procedural

Subset of interpretive. Issued to inform the public of how to participate in agency decision-making.

T/F Tax regs and non-tax regs have the same process of issuance.

True

T/F A scrivener’s error is not a technical correction

False

What is the technical difference between a legislative and interpretive regulation?

Origin

What is the practical difference between legislative and interpretive regulations?

The necessity of notice and comment

Will a judge always defer to the tax-law interpretation of a regulation?

No

How does the distinction between legislative and interpretive regulations affect the statutory authority of these sources?

Distinction is mild. Both are binding, primary, and have notice/comment period

What is a proposed reliance regulation?

A proposed reliance regulation can be relied on before it is finalized. It is like a trial period for a final regulation

A regulation can be effective when?

Back to the date of the notice, date of proposed, or date of final

The preamble to a regulation…

informs readers of the basis and purpose of the rule/proposal in simple language

What is within sub-regulatory guidance

Rev rulings, letter rulings, reveue procedures, notices

Revenue rulings are

The IRS’s application of tax law to a specific fact situation

Revenue rulings are issued by

the National Office of the IRS

Revenue rulings provide

interpretation and guidance in applying the IRC

Regulations and Revenue Rulings are

both primary sources

Revenue rulings are persuasive but…

non-binding

Revenue ruling citation format

Rev. Rul. (Year)-(# ruling that year) (year)-(# weekly issue of IRB) (page of IRB)

Some revenue rulings have CB on the end

because they were originally published in print in the cumulative bulletin

Should revenue rulings be relied on?

Revenue rulings provide precedents to be used in the disposition of other cases and may be cited and relied upon for that purpose.

Revenue rulings (do/do not) have the same force and effect as treasury.

do not

A revenue procedure is

an official pronouncement/ statement of procedure of the National Office of the IRS

Why did revenue procedures used to have a temporary and permanent citation?

They were published and posted in CB

Private letter ruling

written statement issued to a taxpayer that interprets and applies tax laws to the taxpayer’s specific set of facts

An expense directive is

a good name for an otherwise non-existent source of tax law

IRS publication

Informational booklets written by the IRS that give taxpayers guidance about tax issues

A determination letter is a

Written statement issued to a taxpayer by a district office of the IRS that applies principles and previously published precedents to a specific set of facts

A revenue procedure is

a statement of procedure that affects the rights or duties of taxpayers under the IRC that should be a matter of public knowledge

A technical advice memorandum is

Guidance furnished by the Office of Chief Counsel upon the request of an IRS employee in response to a technical or procedural questions that develop during a proceeding

A revenue ruling is

A revenue ruling is The IRS’s official interpretation of the IRC; presents conclusions about how the IRC is applied to a specific set of facts

Private letter ruling citations

Ltr. Rul. (year)(wk of year)(# that week)

How much does a PLR cost

$43,700

The IRS will not issue a PLR if

the issue is being audited or litigated

Is the IRS required to issue a PLR if requested?

No

Are PLRs binding?

No, as they describe proposed transactions

T/F Nobody else can rely on PLRS.

True

T/F A written determination may not be used or cited as precedent

True

What is an IRS FAQ?

Informal guidance, not a legal authority.

A written determination (may/may not) be cited as precedent.

May not

What did Chevron v. NRDC (1984) establish?

Courts must defer to a reasonable agency interpretation of an ambiguous statute the agency administers

What is Skidmore weight, and what factors determine it?

Persuasive weight, based on the thoroughness, validity of reasoning, consistency, and power to persuade

Why might Congress have more work as a result of Chevron being overturned?

Statute might get to court before agency, Congress has to be more specific with statues

Chevron Part One asks what?

Has Congress directly spoken to the precise question at issue?

Per Chevron, if the statute is clear…

that ends the inquiry, reg not necessary

Chevron Part Two says what?

If the statute is ambiguous, the court asks whether the agency's reading is permissible. It need not be the best reading, only a reasonable one.

Is part 1 of Chevron still applicable in challenges to the validity of a regulation?

Yes

Are other IRS sources of tax law accorded Chevron deference?

No

Administrative sources do what two things?

Help people comply, increase tax revenue

Administrative and judicial sources __________ statues.

interpret

What trial court a tax case is heard in is decided by ____

the taxpayer

Which trial court does not require the payment of deficiency before trial?

U.S. Tax Court

What are people arguing for in U.S. District Courts and U.S. Court of Federal Claims?

Refund on deficiency payment that was already made

Which trial court has a jury trial availible?

U.S. District Courts