As if the Tax Code weren’t enough, tax attorneys also need to be well-versed in the various sources of “IRS guidance.” IRS guidance can be broken down into about seven main categories. It is common for government agencies to provide formal interpretations of code (i.e., guidance), but it is not normal for there to be so many different types of guidance. However, in the case of the IRS, it is definitely needed, given the length and complexity of our modern Tax Code.
These are the seven most common categories of guidance as described by the IRS:
- Regulation
- Revenue Ruling
- Revenue Procedure
- Private Letter Ruling
- Technical Advice Memorandum
- Notice
- Announcement
These are listed in relative order of importance, or authoritative rank. In other words, one can rely fairly heavily on a regulation or revenue ruling to support his/her position, but an IRS announcement carries less authoritative weight. A description of each form of IRS guidance can be found on the IRS website.
A possible 8th form of guidance is information found on the IRS website in various formats, such as the FAQ.