Courts and Authorities

Question 1

16th Amendment

Answer 1

“The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

Question 2

Regulations

Answer 2

• Not the same weight as the Code.
• Interpretations of the IRC promulgated by the Dept. of the Treasury and IRS. “ the IRS’s interpretation of what Congress said in the Code.
• 2 Kinds: Interpretative or Legislative
• 3 Types: Final, Proposed, or Temporary
• Can be challenged in light of the code…Good Luck! The older the date on the reg.’s, the harder it is to challenge.

Question 3

Revenue Rulings

Answer 3

• Hypothetical Rulings on Regulations from problems submitted by taxpayers. The IRS view on a specific set of facts.
• Prospective and Retroactive because they reflect and interpret.
• General Application: Don’t rely on unless fact and circumstances are substantially the same.
• Weight of Authority: Depends. Some are given considerable weight, others little weight.

Question 4

Private letter Rulings

Answer 4

Private Ruling for Specific Individual Taxpayer in specific situation

Question 5

Revenue Procedures: “Safe Harbors”

Answer 5

The IRS will announce circumstances in which the IRS won’t challenge the position of the Taxpayer.

In other words, in this situation Mr. Taxpayer, we’ll accept your answer.

Question 6

Acquiescence or Non-Acquiescence

Answer 6

IRS agreement or disagreement with a holding in a case.

Non-acquiescence means that they are going to continue to fight on THIS case, but they will on future cases with similar facts

Question 7

Interpretative Treasury Reg

Answer 7

§7805 authorizes the Secretary of Treas. to make rules and regulations for enforcement. The Sec. of Treas. delegates this to the IRS.

Question 8

Legislative Treasury Reg

Answer 8

Congress is Telling the IRS to do it. Express Authorizations in the Code to make regulations to govern the application of the provisions.

Chevron Test: (1) Has Congress spoken on the issue? (2) Does the plain language clearly address the precise question?

If no, is the regulation interpretation reasonable? If yes, then the interpretation is valid. This is a low threshold for agencies (like the IRS) to meet.