Revenue Ruling
Encyclopedia
Revenue Rulings are public administrative rulings by the Internal Revenue Service
(IRS) of the United States federal government that apply the law to particular factual situations. A revenue ruling can be relied upon as precedent by all taxpayers.
. A private letter ruling binds only the IRS and the requesting taxpayer. Thus, a private ruling may not be cited or relied upon for precedent.
The IRS does have the option of redacting the text of a private ruling and issuing it as a revenue ruling, which become binding on all taxpayers and the IRS.
Revenue rulings are published both in the Internal Revenue Bulletin and in the Federal Register
.The numbering system for revenue rulings corresponds to the year in which they are issued. Thus, for example, Revenue Ruling 79-24 was the twenty-fourth revenue ruling issued in 1979.
Public administrative rulings are part of second tier authorities and generally do not prevail over legislative regulations, the Internal Revenue Code, Court Cases and Treaties. However, they hold higher weight than tier 3 authorities such as legislative history and private letter rulings. Revenue Rulings can be used to avoid certain IRS penalties
.
For example, a revenue ruling holds that taxpayers may deduct certain automobile expenses, and a revenue procedure provides that taxpayers entitled to deduct these automobile expenses may compute them by applying certain mileage rates in lieu of determining actual operating expenses.
Revenue rulings and revenue procedures are alike in that both are issued only by the National Office and both are for the information and guidance of taxpayers.
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
(IRS) of the United States federal government that apply the law to particular factual situations. A revenue ruling can be relied upon as precedent by all taxpayers.
Function and authority
A taxpayer may, for a fee, seek advice from the IRS as to the proper tax treatment of a transaction. This is called a private letter rulingPrivate letter ruling
Private letter rulings , in the United States, are written decisions by the Internal Revenue Service in response to taxpayer requests for guidance. A private letter ruling binds only the IRS and the requesting taxpayer. Thus, a private ruling may not be cited or relied upon as precedent...
. A private letter ruling binds only the IRS and the requesting taxpayer. Thus, a private ruling may not be cited or relied upon for precedent.
The IRS does have the option of redacting the text of a private ruling and issuing it as a revenue ruling, which become binding on all taxpayers and the IRS.
Revenue rulings are published both in the Internal Revenue Bulletin and in the Federal Register
Federal Register
The Federal Register , abbreviated FR, or sometimes Fed. Reg.) is the official journal of the federal government of the United States that contains most routine publications and public notices of government agencies...
.The numbering system for revenue rulings corresponds to the year in which they are issued. Thus, for example, Revenue Ruling 79-24 was the twenty-fourth revenue ruling issued in 1979.
Public administrative rulings are part of second tier authorities and generally do not prevail over legislative regulations, the Internal Revenue Code, Court Cases and Treaties. However, they hold higher weight than tier 3 authorities such as legislative history and private letter rulings. Revenue Rulings can be used to avoid certain IRS penalties
IRS penalties
Taxpayers in the United States may face various penalties for failures related to Federal, state, and local tax matters. The Internal Revenue Service is primarily responsible for initiating these penalties at the Federal level. The IRS can impose only those penalties specified in Federal tax law...
.
Comparison with revenue procedures
Revenue rulings are different from revenue procedures. A revenue procedure is an official statement of a procedure that affects the rights or duties of taxpayers under the law, while a revenue ruling is the conclusion of the IRS on how the law is applied to a specific set of facts. Generally, a revenue ruling states the IRS position, whereas a revenue procedure provides return filing or other instructions concerning the IRS position.For example, a revenue ruling holds that taxpayers may deduct certain automobile expenses, and a revenue procedure provides that taxpayers entitled to deduct these automobile expenses may compute them by applying certain mileage rates in lieu of determining actual operating expenses.
Revenue rulings and revenue procedures are alike in that both are issued only by the National Office and both are for the information and guidance of taxpayers.
External links
- Legalbitstream.com Online list of Revenue Rulings