Tax Law Sources Flashcards
What are the two broad categories of tax authorities?
primary authorities
secondary authorities
Tax law generated by the legislative branch are …
statutory authority issued by Congress
Tax law generated by the legislative branch are …
statutory authority issued by Congress
Tax law generated by the judicial branch are …
rulings by the U.S courts
6 common judicial authorities are …
U.S. Supreme Court
U.S. Circuit Court of Appeals
U.S. Tax Court - regular decision
U.S. Tax Court - memorandum decision
U.S. Court of Federal Claims
U.S. District Court
6 common judicial authorities are …
U.S. Supreme Court
U.S. Circuit Court of Appeals
U.S. Tax Court - regular decision
U.S. Tax Court - memorandum decision
U.S. Court of Federal Claims
U.S. District Court
Tax law generated by the executive/administrative branch are …
Treasury and IRS pronouncements
7 common administrative authorities are …
Final Regulation
Temporary Regulation
Proposed Regulation
Revenue Ruling
Revenue Procedure
Private Letter Ruling
Technical Advice Memorandum
5 common tax research service authorities …
BNA Tax Management Portfolios
CCH Standard Federal Tax Reporter
CCH Tax Research Consultant
RIA Federal Tax Coordinator
RIA United States Tax Reporter
5 common tax research service authorities …
BNA Tax Management Portfolios
CCH Standard Federal Tax Reporter
CCH Tax Research Consultant
RIA Federal Tax Coordinator
RIA United States Tax Reporter
3 common newsletter authorities …
Daily Tax Reporter
Federal Tax Weekly Alert
Tax Notes
2 common law review authorities …
Tax Law Review (New York University School of Law)
Virginia Tax Review (University of Virginia School of Law)
The three legislative or statutory tax authorities are …
Which one is the highest authority?
Which is the main authority?
U.S. Constitution (⭐highest)
Internal Revenue Code (⭐main)
tax treaties
Which authority has the same authoritative weight as tax treaties and Supreme Court rulings
The Internal Revenue Code
As required by the U.S. Constitution (Article 1, Section 7), “All bills for raising revenue shall originate in the _____ __ ________________.”
House of Representatives
The ______ may propose tax legislation, but the first to formally consider a bill will be the _____, typically within its ____ ___ _____ _________.
Senate
House
Ways and Means Committee
After the Ways and Means Committee debates proposed tax legislation and drafts a bill, the bill goes to the House of Representatives floor for debate and ultimately a ____. If the bill is ________, it becomes an ___ and is sent to the ______, which typically refers the act to the ______ _______ _________.
vote approved act Senate Senate Finance Committee
The _____ ____ ___ _____ Committee, ______ _______ Committee, and _____ __________ Committee each produce a committee report that explains the _______ tax law, ________ ______ in the law, and _______ for the ______.
These committee reports are considered _________ sources of the tax law and may be very useful in ____________ tax law and _____________ changes congressional ______.
House Ways and Means Senate Finance Joint Conference current proposed change reasons change statutory interpreting understanding intent
How is the Internal Revenue Code divided? (6 parts)
subtitles chapters subchapters parts subparts sections
When referencing a tax law, the researcher generally refers to the law simply by its ____ _______.
code section
Primary authorities are ________ sources of the tax law generated by the ___________ branch, ________ branch, and _______________________ branch.
official
legislative
judicial
executive/administrative
Secondary authorities are __________ tax authorities that _________ ___ _______ the primary authorities, such as ___ ________ _________, ___ ________ ____ ____________________ ___ ___ _______ , ___________ , and _________.
unofficial interpret and explain tax research services tax articles from professional journals and law reviews newsletters textbooks
Which branch system has the ultimate authority to interpret the Internal Revenue Code and settle disputes between the IRS and taxpayers?
judicial
The lowest level of judicial authority consists of three different types of trial-level courts …
U.S. District Courts
U.S. Court of Federal Claims
U.S. Tax Court
U.S. Tax Court hears only ___ cases and its judges are ___ _______, its decisions typically have more weight than those rendered by a district court or the U.S. Court of Federal Claims
tax
“tax experts”
The U.S. Court of Federal Claims hears only ________ claims against the US government, its decisions have more weight than district court decisions.
monetary
What is stare decisis doctrine?
that a court will rule consistently with (a) its previous rulings (unless, due to evolving interpretations of the tax law over time, the court decides to overturn an earlier decision) and (b) the rulings of higher courts with appellate jurisdiction (the courts its cases are appealed to)
The doctrine of stare decisis presents a special problem for the U.S. Tax Court because …
it appeals to different circuit courts based on the taxpayer’s residence.
To implement the doctrine of stare decisis, the tax court applies the ______ ____, which states that the tax court will …
Golsen rule
abide by rulings of the circuit court that has appellate jurisdiction for a case
The Treasury Department is charged with … , among other duties such as …
administering and interpreting the tax laws of the United States
printing money and advising the president on economic issues
What are regulations?
the Treasury Department’s official interpretation of the Internal Revenue Code and have the highest authoritative weight issued by the IRS
often contains examples of the application of the Code that may be particularly helpful to the tax researcher
Regulations are issued in three different forms …
final
temporary
proposed
What are final regulations?
regulations that have been issued in final form, and thus, unless or until revoked, they represent the Treasury’s interpretation of the Code
What are temporary regulations?
regulations issued with a limited life (three years for regulations issued after November 20, 1988).
during their life, they carry the same authoritative weight as final regulations
What are proposed regulations?
regulations issued in proposed form
do not carry the same authoritative weight as temporary or final regulations
all regulations are issued in ________ form first to allow…
proposed
public comment on them
Regulations serve three basic purposes …
interpretative
procedural
legislative
What are interpretative regulations?
the most common regulations
represents the Treasury’s interpretation of the Code and are issued under the Treasury’s general authority to interpret the Code
What are procedural regulations?
they explain Treasury Department procedures as they relate to administering the Code
What are legislative regulations?
rarest type of regulation
issued when Congress specifically directs the Treasury Department to create regulations to address an issue in an area of law thereby writing the tax law
actually represent tax law instead of interpretation of the law
have more authoritative weight than interpretative and procedural regulations
What are revenue rulings?
second in administrative authoritative weight after regulations
they address the specific applications of the Code and regulations to specific factual situation
provide more detailed interpretation of the Code
What are private letter rulings?
IRS pronouncements issued in response to a taxpayer request for a ruling on specific issues for the taxpayer
common for proposed transactions with potentially large tax implications
very high authority for the requesting taxpayer, but little weight for others
What are determination letters?
rulings requested by the taxpayer, issued by local IRs directors, generally not controversial
What are technical advice memorandums?
ruling issued by the IRS national office, requested by an IRS agent, and generated for a completed transaction
Whenever the IRS loses a case it may issue an ____________ or _______________
acquiescence
nonacquiescence
An acquiescence indicates that the IRS has decided to ______ the court’s adverse ruling in the future, it does not mean that the IRS ______ with it. Instead, it simply means that the IRS will …
follow
agrees
no longer litigate this issue
A nonacquiescence alerts taxpayers that the IRS will …
continue to litigate the issue
What is actions on decisions?
an IRS pronouncement that explains the background reasoning behind an IRS acquiescence or nonacquiescence.
True or False:
Revenue rulings and revenue procedures are examples of secondary tax authorities.
False
