Let’s do a quick review of the levels of authoritative research sources for the IRS. We are always being told that IRS pubs are not binding or authoritative in scope by the IRS so when we do research we need to dig deeper. The pubs are handy for helping the layman understand the process and they have some pretty good examples and formula computations. But you always need the underlying internal Revenue Code (IRC) for the pub. The IRC is the Holy Bible for the IRS. It gives them their cans and cant’s. It gives them their authority and also limits that authority. It is from whence all things income tax flows. If the IRC is the Bible then the Internal Revenue Manual (IRM) is the how-to manual.
• Step 1: Establish the facts and circumstances (Joe Friday Style: Just the facts, Ma’am!)
• Step 2: Determine all tax issues (even if the IRS hasn’t brought them up yet)
• Step 3: Identify the specific authorities involved: (who are YOU dealing with?)
Statutory Authority – The Internal Revenue Code (IRC)
Administrative AuthorityTreasury Regulations Revenue Rulings Revenue Procedures Private Letter Rulings Technical Advice Memorandum General Counsel Memorandum Circular 230 Internal Revenue Manual (IRM) Audit Technique Guides (ATG) IRS Field Service Advice IRS Determination Letters IRS Notices
Judicial AuthorityUS Tax Court US District Court US Court of Federal Claims US Circuit Court of Appeals US Court of Appeals for the Federal Circuit US Supreme Court
• Step 4: Standards of the Applicable Level of Opinions (Where do YOU stand?)“Will” Standard (95% chance of success) “Should” Standard (70% chance of success) “More Likely Then Not” Standard (50% chance of success) “Substantial Authority” Standard (40% chance of success) “Realistic Possibility of Success” Standard (33.33% chance of success) “Reasonable Basis” Standard (not deliberately improper) “Non-Frivolous” Standard (10% chance of success) “Frivolous” Standard (Never! Never!)
Tomorrow – Other great non-IRS sites and techniques for research!
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