Public Guidance from the Office of Chief Counsel

IRS Guidance
 IRS issues various type of guidance to assist taxpayers comply with the tax
law.

 To understand public guidance issued by the IRS it is helpful to understand the

structure of the IRS.

 The head of the IRS is the Commissioner

 Appointed by the President with consent and advice of the Senate.
 Serves a 5 year term.
IRS Divisions

Commissioner

Small Large Tax-Exempt

Wage and
Business/Self- Business and Government Criminal
Investment
Employed International Entities Investigation
Division
Division Division

Individuals Self-Employed Corporations, Federal, State,

who earn Individuals, S-Corporations, Tax Evasion, Tax
Local
salaries and Corporations, S- Partnerships Fraud, Money
Governments,
wages. Corporations, assets $10 Laundering,
Tax Exempt
Partnerships assets of million or Illegal Activities
bond issuances
less than $10 greater
 IRS Office of the Chief Counsel
 The Office of the Chief Counsel is the legal arm of the
IRS Commissioner

 The office is overseen by the Chief Counsel who is:

1. Legal advisor to the IRS Commissioner; Office of the
2. Appointed by the President with advice and consent of the Senate. Chief Counsel

 Office of the Chief Counsel is divided into Offices: Office of

Associate Chief
 Office of Associate Chief Counsel: Each office of Associate Chief Counsel
Counsel has jurisdiction over specific code sections and provides
guidance over the code sections over which it has jurisdiction.
Field Offices
 Field Offices: The field offices are responsible for representing the
Commissioner in litigation before Tax Court.
IRS Office of the Chief Counsel
 The Office of Chief Counsel issues various types of tax guidance which
indicate how the IRS interprets and intends to apply the Code including:
Revenue Rulings

Revenue Procedures

Notices and Announcements

Publications

Actions on Decisions
Revenue Rulings
 Provide guidance on how the IRS will treat a particular transaction applying
the Code, regulations, and other legal authority.

 Revenue ruling is based on specific hypothetical transaction(s).

 Format of Revenue Rulings is as follows:

1. Identifies facts;
2. Identifies the tax issue(s);
3. Law and analysis of the issues applying the Code, Regulations, and legal
authority;
4. Holding;
5. Drafting Information (authors).
Revenue Rulings
 The Office of the Chief Counsel issues Revenue Rulings based on those areas where
the government perceives there is a need for guidance.

 Rule: Revenue Rulings do not have the force of regulations.

 However, a Revenue Ruling may be relied by a taxpayer if his circumstances are

substantially the same as those discussed in the Revenue Ruling.

 A taxpayer may cite Revenue Rulings to persuade the court, but courts are not bound to
follow revenue rulings.
Revenue Rulings
 Doctrine of concession: Tax court will generally not allow the IRS to take a
position in a case against a taxpayer if it contradicts a Revenue Ruling issued
by the Office of the Chief Counsel and the Revenue Ruling subject to the
controversy has not been revoked or superseded.

 IRS Official Policy regarding Revenue Rulings: It is the official policy of the
IRS that attorneys must follow Revenue Rulings and other public guidance
when litigating cases in Tax Court (See Notice CC-2002-043).
Revenue Rulings
 When a Revenue Ruling affects one or more prior Revenue Rulings, the effect will be
noted with the heading ‘‘EFFECT ON OTHER DOCUMENTS.’’

 The only terms that the IRS uses to describe the effect of one publication on
another publication are:

1. Amplified: A prior Revenue Ruling is being expanded.

2. Clarified: Used when language in a prior Revenue Ruling is being made clear
because of confusion.
3. Distinguished: Used when a new Revenue Ruling cites a prior ruling but points
out an essential difference often in the facts.
Revenue Rulings
4. Obsoleted: Used when a prior Revenue Ruling has been rendered obsolete
due to changes in laws or regulations.

5. Revoked: Used when a Revenue Ruling should no longer be relied.

6. Superseded: Used to restate the decision reached in a previous publication or

to combine into a single publication issues previously discussed over a period of
time in different publications.

7. Supplemented: Often used in situations in which a list (such as list of countries)

is used in a ruling that is expanded by adding further items to the list.
Revenue Rulings
8. Suspended: Used in situations where a previous published ruling will not be
applied temporarily pending the outcome of cases in litigation, issuance of new
regulations, or some other future actions.
 Revenue Procedures
 Revenue procedures give public guidance on procedural rules and issues.

1. Revenue Procedures do not have the force of Regulations.

2. A taxpayer may rely on a Revenue Procedure if his circumstances are substantially

the same as those stated in the Revenue Procedure.

3. Like Revenue Rulings, guidance provided in Revenue Procedures may be amplified,

clarified, distinguished, modified, obsoleted, revoked, superseded, supplemented, or
suspended by subsequent rulings.
Revenue Procedures
 Legal and procedural issues are often related, requiring the IRS to
simultaneously issue a Revenue Ruling and Revenue Procedure. These are
cross-referenced.
Notices and Announcements
 Notices and Announcements are used to provide immediate guidance
concerning the tax laws.

1. Announcing new tax laws that affect a large number of taxpayers;

2. Alerting about common mistakes on tax returns;

3. Identifying tax-shelters;

4. Announcing revisions to tax forms and instructions.

Publications
 IRS has prepared a large number of pamphlets or publications covering a
broad range of tax issues in easy to understand (lay) terms.

 Examples of publications include:

Publication 1 Your Rights as a Taxpayer
Publication 17 Your Federal Income Tax
Publication 587 Business Use of Your Home
Publication 1542 Per Diem Rates
Publications are issued for guidance purposes only and do not have the
force and effect of law.
https://www.irs.gov/publications
Actions on Decisions
 Legal memorandum in which the IRS reacts to important decisions issued by
the Tax Court, District Court, Court of Federal Claims, Circuit Court of
Appeals, Court of Appeals for the Federal Circuit.

1. Acquiescense

2. Acquiescense in Result

3. Nonacquiescence
Internal Revenue Bulletin (IRB)
 Weekly publication of the IRS that contains:

1. Treasury Decisions (Temporary and Final Regulations)

2. Notice of Proposed Rulemaking (Proposed Regulations)

3. Revenue Rulings

4. Revenue Procedures

5. Notices and Announcements

6. Actions on Decisions
Internal Revenue Bulletin (IRB)
 The IRB is divided into four parts:
Internal Revenue Bulletin
 Link to Internal Revenue Bulletin
The Cumulative Bulletin (CB)
 The Cumulative Bulletin is published twice a year and contains reprints of
the weekly Internal Revenue Bulletins.

 Volume One of the Cumulative Bulletin: Contains reprints of weeks 1-26 of the
Internal Revenue Bulletin.

 Volume Two of the Cumulative Bulletin: Contains reprints of weeks 27-52 of

the Internal Revenue Bulletin.

 Volume Three of the Cumulative Bulletin: Contains tax public laws.

The Cumulative Bulletin

Cumulative Bulletin
Volume I (Weeks 1-26)

Internal Revenue Bulletin

Cumulative Bulletin
(IRB)
Volume II (Weeks 27-52)
(Weekly)

Cumulative Bulletin
Volume III (New tax laws
enacted by Congress)
Guidance Priority List
 List published by the IRS that indicates areas, topics, or issues for which the
IRS intends to issue regulations, rulings, or other public guidance.

Link to Guidance Priority Plan

Numbering of Revenue Rulings

Rev. Rul. 89 -24, 1989-1 C.B. 50

89 Revenue Ruling issued in 1989

24 Revenue Ruling is the 24th issued in 1989
1989-1 Revenue Ruling found in 1st volume of the
Cumulative Bulletin of 1989
50 Revenue Ruling can be found on page 50
Numbering of Revenue Procedures

Rev. Proc. 89 -24, 1989-2 C.B. 845

89 Revenue Procedure issued in 1989

24 Revenue Procedure is the 24th issued in 1989
1989-1 Revenue Procedure found in 2nd volume of the
Cumulative Bulletin of 1989
845 Revenue Procedure can be found on page 845
Notices & Announcements

Notice 89 -24, 1989-2 C.B. 660

89 Notice/Announ. issued in 1989

24 Notice/Announ. is the 24th issued in 1989
1989-2 Notice/Announ. Is found in 2nd volume of the
Cumulative Bulletin of 1989
660 Notice/Announ. can be found on page 660