Reliance on Treasury Department and IRS Tax Guidance (CRS Report for Congress)
| Release Date |
Revised Sept. 24, 2024 |
| Report Number |
IF11604 |
| Report Type |
In Focus |
| Authors |
Milan N. Ball |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The Department of the Treasury (Treasury) and Internal
Revenue Service (IRS) use several forms of guidance to
help taxpayers understand the Internal Revenue Code (IRC)
and to inform taxpayers of Treasury and the IRS’s position
on particular tax issues. For the most part, this tax guidance
can be split into three categories: (1) Treasury regulations,
(2) sub-regulatory guidance published in the Internal
Revenue Bulletin (IRB), and (3) unpublished sub-regulatory
guidance (i.e., sub-regulatory guidance not published in the
Federal Register or the IRB). Former heads of the IRS’s
Office of Chief Counsel have remarked that the type of
guidance issued reflects a balance between taxpayers’ need
for certainty and the need of Treasury and the IRS for
latitude in administering tax laws.
In a tax dispute, taxpayers generally may rely on Treasury
regulations and sub-regulatory guidance published in the
IRB (e.g., revenue rulings, revenue procedures, notices, and
announcements) to support their tax position, as long as the
guidance is not contrary to or inconsistent with the law and
subsequent guidance does not render it moot. Taxpayers are
generally unable to rely on unpublished sub-regulatory
guidance (e.g., forms, instructions, and publications) in tax
disputes. Given that Treasury and the IRS often issue
unpublished sub-regulatory guidance in response to timesensitive issues, taxpayers may exercise caution when the
need for clarity and certainty is at its greatest, and might
wait for Congress to potentially enact clarifying legislation
or for courts to address the legal issue in litigation.
This In Focus analyzes the ability of taxpayers to rely on
valid Treasury regulations and the more common types of
published sub-regulatory tax guidance.
