Tax Law the Author of This Report

Tax Law

The author of this report is asked to answer a set of four questions relating to tax law and its sources/adjudication. The first question asks what the primary sources of tax law are. The second question asks what the secondary sources of tax law are. The third questions asks what "substantial authority" is as it relates to tax law. The final question asks what the role of the courts and the Internal Revenue Service as it relates to interpreting and applying the sources of tax law.

Questions Answered

Primary sources of tax law include five major things. The first thing that is a primary source of tax law is the actual Internal Revenue Code. The IRC is located in section 26 of the United States Code. The second source is the decisions of the United States Tax Court, district courts, the Court of Federal Claims, the federal circuit courts in the United States and the United States Supreme Court. The third primary source of tax law are the regulations created and issued by the United States Treasury. Said regulations are located in Title 26 of the Code of Federal Regulations (Tarlton, 2013).

The fourth source of primary tax law is the guidance issue by the Internal Revenue Service via its Internal Revenue Service bulletins, Internal Revenue Service rulings, Internal Revenue Service procedures, notices, announcements and so forth. The fifth classification of primary sources of tax law is the other Internal Revenue Service materials that include private letter rulings and technical advice memorandum (Tarlton, 2013).

Secondary sources of tax law are related to the primary sources but are not the same thing. Basically, secondary tax materials that are created to locate, parse out, analyze and interpret/summarize primary tax sources of tax law are secondary tax sources. In short, secondary sources are built off of the primary sources and that is why they can be used if primary sources are lacking or at least not enough to clear the matter some other way (Georgetown, 2013).

Substantial authority are materials that have direct bearing and control over future actions and rulings relating to tax law. Per the University of Texas Tarlton School of Law website, examples of substantial authority include the Internal Revenue Code, proposed/temporary/final regulations, tax treaties and applicable regulations, court cases, congressional intent as reflected in committee reports, general explanations of tax leglislation by the Joint Committee on Taxation as rendered in the so-called "Blue Book," private letter rulings issued after October 31st, 1976, actions on decisions, IRS general counsel memoranda, IRS press releases, and notices/announcements as well as other administrative pronouncements by the IRS in the Internal Revenue Service bulletin (Tarlton, 2013).

The courts and the IRS are instrumental in applying sources of tax law and this is necessary because the law is not always clear and/or different laws ostensibly applicable to the same situation suggest different and disparate conclusions to a tax matter. Alternately, there can be a question as to whether or how the law applies to a situation. Through review in the courts and/or a decision made by the IRS on a matter, it can be made clear what is relevant to the current situation and what (if anything) should be done differently going forward.

The reason things like this come up stem in large part from the fact that some laws allow for direct discretion and/or an ad hoc decision by an agency like the IRS or the statute in particular is simply vague to begin with. Works like "reasonable" and the like can lead to opinions and subjectivity and it often takes a court deciding how to handle a given situation and/or the IRS coming forward and stating what their intent was and/or how companies and agencies should interpret and enforce the law going forward.