Authoritative Hierarchy

Question 1

What is a technical advice memorandum?

Answer 1

A technical advice memorandum is similar to a private letter ruling, but the request for TAMS comes from a high level IRS field office rather than a taxpayer.

Question 2

What is a private letter ruling?

Answer 2

A private letter ruling is IRS guidance provided to a taxpayer for that taxpayer’s specific tax situation. It is binding on the IRS but only with respect to the specific taxpayer who requested the PLR.

Question 3

What is the order of the tax rules hierarchy?

Answer 3

1. Internal Revenue Code - binding on IRS
2. Treasury Regulations - binding on IRS
3. Internal Revenue Bulletin - binding on IRS
4. Written Determinations - PLR, TAM - binding on IRS to specfic TP
5. Other IRS publications and information

Question 4

When a taxpayer needs guidance with a specific tax issue related to a proposed transaction, the taxpayer can ask the IRS for?

Answer 4

A private letter ruling

Question 5

What is a revenue ruling?

Answer 5

A revenue ruling is an official interpretation of how the IRS applies tax statues and regulations. Revenue rulings are much broader in scope that PLRs. For example, a revenue ruling may hold that taxpayers can deduct certain automobile expenses if they follow prescribed record keeping rules.

Question 6

What is an extension?

Answer 6

An extension is a request from a taxpayer for additional time to file a tax return.