Tax 8-3 Identify the sources of authority for reliance on tax-related issues.

Question 1

Authority of Tax Law

There are three sources of information (authority) that constitute “the body of tax law.” What are these three sources of information?

8-3

Answer 1

statutory sources, i.e., the Constitution, congressional acts, and tax treaties

administrative sources, i.e., Treasury Department releases

judicial sources, i.e., court decisions, including the tax court and the U.S. Supreme Court

Question 2

Authority of Tax Law

In the major tax services, where is the information compiled?

8-3

Answer 2

Commerce Clearing House—Standard Federal Tax Reporter— Income Taxes

Prentice-Hall Inc.—Federal Taxes—Series D

The Bureau of National Affairs Inc.—Tax Management Portfolios—U.S. Income

The Research Institute of America Inc.—Federal Tax Coordinator—2nd Series

Question 3

Authority of Tax Law

Briefly discuss the use of a citator.

8-3

Answer 3

A citator evaluates all rulings and decisions for precedential value. Thus, it should be used to determine if a case or ruling has been affirmed or reversed.

Question 4

Authority of Tax Law

What are secondary sources of authority, and what purpose do they serve?

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Answer 4

Secondary sources of tax information consist mainly of books, periodicals, articles, newsletters, and editorial judgments published by tax services. They are very useful as a starting point in tax research, but realize that the secondary sources are unofficial interpretations—mere opinions—which have no legal authority.

Question 5

Authority of Tax Law

Module Check

15. Which one of the following is not a secondary source of federal tax law information?
    a. tax periodicals
    b. tax services
    c. technical advice memoranda
    d. law journals

(LO 8-3)

Answer 5

c. technical advice memoranda

Technical advice memoranda are a primary source of tax law

All others listed are secondary

Question 6

Authority of Tax Law

Module Check

27. Which one of the following is not part of the body of U.S. tax law?
    a. legislative provisions
    b. court decisions
    c. administrative pronouncements
    d. secondary sources

(LO 8-3)

Answer 6

d. secondary sources

Legislative provisions (the Internal revenue Code, for example), court decisions, and administrative pronouncements (Revenue Procedures and Revenue Rulings, for example) constitute the body of U.S. tax law. Secondary sources such as textbooks or editorial judgments by tax services are not part of the body of tax law.

Question 7

Authority of Tax Law

Module Check

29. Which one of the following is not a statutory source of law?
    a. the Constitution
    b. revenue rulings
    c. acts of Congress
    d. tax treaties

(LO 8-3)

Answer 7

b. revenue rulings

Revenue rulings are an official interpretive source, not a statutory source, of tax law.