ACC 442 Lecture Notes - Lecture 5: Internal Revenue Service, Appellate Court
Where does tax legislation generally originate?
the House of Representatives
Where is tax legislation first considered?
House Ways and Means Committee
List the legislative process for Tax Bills
see ch. 2 class notes
Which US department issues regulations?
US Treasury
Which entity issues rulings?
IRS
Proposed Regulations
- carries little weight in the litigation process
- whenever changes or new regulations are proposed
- the period between the proposal and finalization allows parties to comment on the proposal, also
called "notice and comment"
Temporary Regulations
- provide immediate guidance on issues to the public
- expire within 3 years after issuance
Final Regulations
the final guidance of tax
What the 3 classifications of Regulations
- legislative,
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- interpretive
- procedural
Why are rulings important?
they provide the IRS and taxpayers guidance on tax matters
Revenue Rulings
- provide a detailed interpretation of the tax law
- can be overruled by courts and regulations
Revenue Procedures
- focus on the internal controls and procedures of the IRS
- increase taxpayer compliance and efficient management
Letter Rulings
- describes how the IRS will treat a proposed transaction for tax purposes.
- issued by the IRS National office
determination letter
- provide guidance on the application of tax laws
- comes from an IRS Executive
- involves only completed transactions
Technical Advice Memo (TAM)
- involves only completed transactions
- issued in response to IRS auditors, not taxpayers
Effect of Treaties
- affect persons and businesses operating in foreign countries and vice versa
- the most recent tax law or treat will take precedence
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