Taxes: Sources of Tax Authority Research

Question 1

Taxes:
Sources of Tax Authority Research
Types of Tax Authority

Answer 1

Primary
- Legislative
- Administrative
- Judicial
Secondary
- Treatises
- Journals
- Commentaries

Question 2

Taxes:
Sources of Tax Authority Research
Legislative Authority

Answer 2

Legislative Authority (Congress)

• Sources: Constitution, IRC, Treaties, Committee Reports of House Ways & Means, Senate Finance, and Joint Conference Committee
• IRC is tax legislation by congress that must pass:
  1. bills originate in HW&M
  2. bill passed by House
  3. bill moves to Senate Finance (cant start w/o house bill)
  4. senate debates and passes new version
  5. joint committee crafts compromise
  6. bill returns to House and Senate for another vote
  7. President either signs or vetos
  8. congress overrides veto with 2/3 vote

Question 3

Taxes:
Sources of Tax Authority Research
Administrative Authority

Answer 3

Administrative Authority (from Treasury & IRC)
Treasury Regulations
Can be Classified As:
1. legislative: as much weight as IRC
2. Interpretive: written under general mandate to Treasury to develop regulations to interpret laws
3. Procedural: apply to such procedural issues as info to be submitted
OR
1. Proposed: in progress
2. Temporary: limited time
3. Final Regulations: effect of law until revoked
Revenue Rulings
- less weight than regulations
- limited to given set of facts
- deal with more specific issues
Private Letter Rulings
- request by taxpayer to IRS to provide tax consequences on specific set of facts
- transaction cannot be completed with request made
- apply only to requestor, but can be used by others
-IRS doe not have to provide ruling
Revenue Procedures
- internal processes of IRS
Technical Advice Memo
- apply only to effected taxpayer
Notices, Announcements, and General Council Memo

Question 4

Taxes:
Sources of Tax Authority Research
Judicial Authority

Answer 4

Judicial Authority
US Tax Court
- hears only tax cases
- 1 court but 19 traveling judges
- do not have to pay deficiency before trial
- no jury trial
US District Courts
- jury trial possible
- must pay deficiency then sue IRS for refund
- judges are not tax specialists
- may different courts throughout country
US Court of Federal Claims
- one court in DC
- must pay deficiency then sue IRS for refund
- 16 judges, not tax specialists
- no jury trial
US Tax Court - Small Cases
- no appeal
Appellate Courts
US Court of Appeals
- appeals from Tax & District courts
- 11 circuit judges + DC
- must follow precedent
US Court of Appeals for Federal Circuit
Supreme Court
- hears few cases
- highest court

Question 5

Taxes:
Sources of Tax Authority Research
Weight of Authority

Answer 5

Weight of Authority
Legislative
- highest: constitution
- next highest: IRC
- lower: treaty with foreign country
Administrative
- Legislative regulations almost = IRC
- Other regulations
- Revenue Rulings
- Private Letter Rulings
Judicial depends on:
- level of court
- legal residence of taxpayer
- if IRS has acquiesced
- date of decision
- whether latter decisions have concurred