Tax Law Case Study

Submitted By 1-joey
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Pages: 3

Chapter 2
Working With
The Tax Law
Individual Income Taxes


Statutory Sources of Tax Law
(slide 1 of 2)

• Internal Revenue Code
– Codification of the Federal tax law provisions in a logical sequence
– Have had three codes:
• 1939, 1954, 1986


Statutory Sources of Tax Law
(slide 2 of 2)

• Example of Code Citation: § 32(f)(5)(B)(ii)(I)
§ = Abbreviation for “Section”

32 = section number
(f) = subsection
(5) = paragraph designation
(B) = subparagraph designation
(ii) = Clause
(I) = Subclause


The ACA breaks the record!!
• The Affordable Care Act, in all its simplicity, added something powerful to the Internal Revenue Code:
• § 4980I(b)(3)(C)(iii)(II)(aa)
• A seventh unit, that has, as far as I can tell, no name

“that premium cost for the provision of such coverage under such option in such taxable period if priced for the age and gender characteristics of the national workforce.”


Administrative Sources of Tax Law

Treasury Department Regulations
Revenue Rulings
Revenue Procedures, and
Various other administrative pronouncements 7

– Issued by U.S. Treasury Department
– Provide general interpretations and guidance in applying the Code

• Issued as:
– Proposed: preview of final regulations
• Do not have force and effect of law

– Temporary: issued when guidance needed quickly
• Same authoritative value as final regulations

– Final:
• Force and effect of law

Revenue Rulings
• Officially issued by National Office of IRS
– Provide specific interpretations and guidance in applying the Code
– Less legal force than Regulations
– Issued in IRB and accumulated in the Cumulative


Revenue Procedures
• Concerned with the internal management practices and procedures of the IRS
– Issued similar to Revenue Rulings
– Issued in IRB and accumulated in the Cumulative


Letter Rulings
• Provide guidance to taxpayer on how a transaction will be taxed before proceeding with it
– Issued for a fee upon a taxpayer's request
– Describe how the IRS will treat a proposed transaction

• Apply only to the taxpayer who asks for the ruling
– Post-1984 letter rulings may be substantial authority for purposes of the accuracy-related penalty

• Example of Letter Ruling citation
– Ltr.Rul. 201125030
• 30th ruling issued in the 25th week of 2011

• Over 2000 a year


Gaming and Leisure Properties


November, 2013 10-Q


Tax Treaties
• The U.S. signs tax treaties with foreign countries to:
– Avoid double taxation
– Render mutual assistance in tax