Tax Return Position

Tax Return Position

Researching tax laws involves a variety of sources including primary and secondary sources and several methods used to resolve a tax issue. Tax professionals should become familiar with the Internal Revenue Code (IRC), which are organized sections, paragraphs, and parts. The interpretations of the IRC including both administrative and judicial are important and necessary. The Treasury Regulation provides administrative interpretations and Court opinions provide judicial interpretations (Pope & Anderson, 2010, p. 1-7). By exploring primary and secondary tax sources, court rulings, and substantial authority will give a better understanding how important tax research has become for tax practitioners and advisors to communicate tax consequences to clients.

Primary Tax Sources

The foundation of all tax laws begins with the Internal Revenue Code (IRC), enacted by Congress in Title 26 of the United States Code Title 26, first systematically formed in 1939 and re-formed in 1954. In 1986, the name changed to Internal Revenue Code of 1986. The IRC contains provisions addressing income, estate, gift, employment, alcohol, tobacco, and other taxes. The language of the IRC addresses in generic terms the tax treatment in board categories of transaction or events. The generality is done so in this manner because Congress can neither foresee or provided for every detailed transaction or event. Because of the generality of interpretations of the IRC; the Internal Revenue Service (IRS) and Treasury Department must take the specifics of these laws and translate them into detailed regulations, rules, and procedures for guidance to taxpayers, businesses, and charitable groups (Pope & Anderson, 2010, p. 1-8).

Regulations, rules, and procedures issued by the IRS and Treasury Department provide guidance to new legislation or addresses issues with existing Internal Revenue Code (IRC). Regulations interpret and give directions on complying with the law and published in the Federal Register. Revenue ruling are official interpretation by the IRS of the IRC, addressing tax treaties and regulations to a specific set of facts and published in the Internal Revenue Bulletin. A revenue ruling usually states the IRS position, for example, a revenue ruling may state that taxpayers can deduct certain automobile expenses. Revenue procedures are official statements that affect the rights or duties of the taxpayer under the IRC and should be a matter of public knowledge. Revenue procedures published in the Internal Revenue Bulletin. The Revenue procedures provide return filing or other instruction pertaining to an IRS position, for example, a revenue procedure may specify how certain automobile expenses computed by applying a certain mileage rate when calculating actual operating expenses (IRS, 2011).

Secondary Tax Sources

Besides primary tax sources there are many secondary tax sources that can help with guidance on tax related issues such as practice guides, handbooks, tax journals, and