Federal Income Tax Law: Primary Sources

Primary Sources start with the Internal Revenue Code, which is Title 26 of the United States Code (U.S.C.) and is the most authoritative source of federal income tax law. Next, there are the Treasury Regulations handed down by the Internal Revenue Service under the supervision of the Department of Treasury. Third, there are tax cases. Fourth, there are agency decisions, including those that are published in the Internal Revenue Bulletin and those that are available because of the Freedom of Information Act (FOIA). While secondary sources save time and are often necessary, it is important for those involved in tax research or tax practice to be familiar with and know how to research the primary sources.

The Internal Revenue Code (IRC) is a compilation of tax statutes arranged by subject and is located under title 26 of the United States Code (U.S.C.). The Code is the foundation of all tax law and is the most authoritative source. The code is not very popular given that it is very difficult to interpret and use, which is typical of statutes.

There are three versions of the United States Code:

• United States Code (U.S.C.), Title 26
  • This is the official version, available on GovInfo, HeinOnline, and the U.S. House of Representatives Office of the Law Revision Counsel. See below for free online resources.
• United States Code Annotated (U.S.C.A.), Title 26
  • This is the version available on Westlaw, that will have annotations to case law, secondary sources such as treatises, practice guides, and legal encyclopedias, and references to the Code of Federal Regulations.
• United States Code Service (U.S.C.S.), Title 26
  • This is the version available on Lexis Advance, that will have annotations to case law, secondary sources, legal enclopedias, and references to the Code of Federal Regulations.

There are other sources that will have the code:

• Internal Revenue Code (Thomson Reuters, published annually) (KF6276.526.A19I57)

The following online sources provide free access to the United States Code:

• U.S. House of Representatives, Office of the Law Revision Counsel
• Government Publishing Office, Govinfo database
• Cornell Law School's Legal Information Institute

Treasury Regulations are desinged to interpret the Internal Revenue Code (IRC). They are issued by the Department of Treasury with the intent of providing guidance to the code. Final Treasury Regulations are codified in the Code of Federal Regulations (CFR) and announced in the Federal Register as Treasury Decisions. Treasury Decisions are also announced in the Interal Revenue Bulletin/Cumulative Bulletin.

1. There are three types of regulations.

Proposed: Treasury Regulations typically go through a minimum 30 day notice and comment period. During this period professional  organizations including the Amerian Institute of Certified Public Accountants (AICPA) and the American Bar Association (ABA) can review the proposed regulations and make comments and suggestions for changes. Proposed regulations are not considered to be binding until they are finalized.

Final: Final regulations are authoritative as long as they are "reasonable and consistent interpretations" of the code. Once final regulations are issued, they are announced in the Federal Register and codified in the Code of Federal Regulations (CFR). The CFR is also available from the Government Publishing Office's new Govinfo database.

The following chart will  provide information on where to locate the regulations along with sample citations:

Looking at case law is very important in tax research, given that there are issues that the code and regulations may not have adequately addressed. Tax cases can originate from three different courts, including the U.S. Tax Court, the U.S. District Court, and the Court of Federal Claims. Most cases are filed in the U.S. Tax court because any disputed amount between the IRS and the individual taxpayer does not have to be paid until the matter is resolved. Should the taxpayer decide to file with the other two courts any disputed amount owed would have to be satisfied prior to filing with the court. Tax cases are filed with the U.S. District Court because it provides the right to a jury trial, whereas the U.S. Tax Court does not provide this. The U.S. Court of Federal Claims where tax cases are least likely to be filed given that it does not provide the right to a jury trial and disputed amounts must be settled prior to filing with the court. Regardless of court of origin, it is important to remember that tax cases can be appealed to the U.S. Circuit Court of Appeals and eventually the U.S. Supreme Court.

1. Types of Tax Court Cases

Regular Tax Court Decisions

These decisions deal with substantive tax matters, usually where is a dispute bewteen the IRS and the taxpayer regarding the code. This is often an area that has not been address by the courts.

Tax Court Memorandum Decisions

These are cases where there is no disagreement about the law, but there is a dispute between the Internal Revenue Service and the taxpayer with respet to factual issues.

Tax Court Summary Opinions

These are small cases (involving less than $50,000) under IRC § 7463(b). These are available from 2001, when these cases first began, at http://www.ustaxcourt.gov/.

*Westlaw has the orginal images for cases from the print reporters published by West. The full text of federal tax cases is available on Lexis Advance, Westlaw, Bloomberg Law, Thomson Reuters Checkpoint, and Wolters Kluwer Cheetah.

**The United States Tax Case are published by CCH (Wolters Kluwer). The lastest cases can be found on the Wolters Kluwer Cheetah database.

***The O'Quinn Law Library has the archived American Federal Tax Reports (AFTR) until 1995. Thomson Reuters Checkpoint database contains current cases from this reporter.

In addition to the statutes, regulations, and case law there are a number of administrative materials available from the IRS that a tax practitioner will need to utilize. The Revenue Rulings and Procedures will often refer to issues not adequately addressed by the code, regulations, or case law. While some of these materials including the IRS announcements and notices are purposely made available to the public, other materials are only accessible because of the Freedom of Information Act. Researching online databases is the best method of finding many of these materials.