Lesson 1.1.3 Sources of Tax Law: Administrative

Loading...

来自 University of Illinois at Urbana-Champaign 的课程

Taxation of Business Entities I: Corporations

22 个评分

Explore Related Videos

At Coursera, you will find the best lectures in the world. Here are some of our personalized recommendations for you

University of Illinois at Urbana-Champaign

Taxation of Business Entities I: Corporations

22 个评分

课程 3（共 5 门，Specialization U.S. Federal Taxation）

This course provides an introduction to the U.S. federal income taxation of corporations and their shareholders. The course focuses on the relevant provisions of Subchapter C of the Internal Revenue Code, as well as related Treasury Regulations and judicial opinions, governing corporate formation, operations, distributions, and liquidation. Practical in-class study problems facilitate self-discovery of technical tax knowledge along with the development of a variety of professional skills and attitudes.

从本节课中

Module 1: Overview of Business Taxation

In this module, you will review the basics of tax law, which includes the origins of taxation, the three sources of tax law, the hierarchy of tax law, and judicial doctrines. Next, you will cover the fundamental features of the different organizational forms: sole proprietorship, partnership, corporation, and limited liability corporation. There will also be a discussion on strategic form choice. Finally, you will be introduced to entity classification for tax purposes.

Lesson 1.1.1 Origins of Taxation3:59

Lesson 1.1.2 Sources of Tax Law: Statutory3:54

Lesson 1.1.3 Sources of Tax Law: Administrative6:40

Lesson 1.1.4 Sources of Tax Law: Judicial3:27

Lesson 1.1.5 Judicial Doctrines4:10

Lesson 1.1.6 Hierarchy of Tax Law Sources1:40

与讲师见面

Michael P Donohoe, PhD, CPA
Associate Professor of Accountancy and PwC Faculty Fellow
Department of Accountancy, Gies College of Business

[SOUND]

[MUSIC]

Administrative sources of federal tax law originate in the executive branch of

the government.

Specifically, the Treasury Department is the executive body responsible for

administering the federal tax laws of the United States.

And the Internal Revenue Service, or IRS, a division of the Treasury,

is charged with collecting taxes and enforcing the Internal Revenue Code.

To facilitate these objectives, Code Section 7805A

authorizes the Treasury Secretary or delegate to prescribe rules and

regulations necessary to administer the code.

It states, quote, except where such authority is expressly given by this title

to any person other than an officer or employee of the Treasury Department,

the Secretary shall prescribe all needful rules and regulations for

the enforcement of this title, including all rules and regulations as may be

necessary by reason of any alteration of law in relation to internal revenue.

In other words, this code section allows the IRS to issue legally binding rules and

regulations concerning Title 26 of the United States Code of Federal Regulations.

Consequently, most administrative sources of Federal tax law

are issued by either by the US Treasury Department or the IRS.

There are five main types of administrative pronouncements.

Regulations, revenue rulings, revenue procedures, letter rulings, and

other pronouncements.

Let's briefly review each type.

Regulations are issued by the US Treasury to provide official

interpretive guidance on the meaning and application of the Internal Revenue Code.

Regulations take one of three different forms.

Final regulations, also called treasury decisions, have the full force and

effect of law.

However, before a regulation can be considered final, it must first be

previewed in proposed form, which allows time for public commentary and revision.

Note that proposed regulations do not have the effect of law.

The third form, temporary, typically results from a congressional or

judicial change in the tax law or its interpretation.

Temporary regulations have the same authoritative weight as final regulations

as they tend to consider issues requiring immediate guidance.

However, because they have not been subjected to public feedback, temporary

regulations are also simultaneously issued in the proposed form and

expire three years after issuance.

Regulations follow the same organizational numbering system as the code.

However, a prefix is added to indicate the type of issue to which they relate.

For example,

a prefix of 1 indicates that the regulation pertains to income tax issues.

While a prefix of 301 relates to procedural matters.

Returning to the code section example from earlier,

the treasury's official interpretive guidance for

applying code section 1231 is found in its treasury regulation 1.1231.

Note that the numbering system for regulation subparts and

beyond rarely collate with code sections.

You probably know or expect that the Internal Revenue Code is rather large, but

how large is it really?

While there is some debate, Andrew Grossman,

an attorney at the US Congress Joint Committee on Taxation,

places the code at about 2,600 pages long.

He knows that this is about two-and-a-half times the length of Steven King's novel

IT, except you replace scary clown with accounting methods.

One explanation of the sheer length of the code is that it is difficult to concisely

explain algebraic concepts.

One of the worst such attempts was former Section 341(e),

relating to collapsible corporations, where one sentence had

more than 450 words, twice as many as in Abraham Lincoln's Gettysburg Address.

But let's think about that for a minute.

If the code is a massive 2,600 pages and the treasury regulations explain and

interpret the code, how large are the regulations?

Well, from one publisher,

the regulations comprise nearly this many separate volumes.

From a different perspective, the Tax Foundation estimates that as of 2015,

the code and regulations combined exceed 10 million words,

not counting appendices or references.

This amount reflects a 621% increase in

the number of words over the past 60 years or so.

Wow is right.

The second major type of administrative pronouncements are revenue rulings.

Issued by the National Office of the IRS, revenue rulings indicate

how the IRS will apply the tax law to a specific transaction or situation.

Because they are not directly approved by the Secretary of the Treasury, and

deal with more restricted issues,

revenue rulings do not carry the same weight as regulations.

They are, however, legally binding to all taxpayers.

The third type of administrative pronouncements are revenue procedures,

which as the name implies, deal with internal practices and

procedures of the IRS.

Revenue procedures aim to increase taxpayer compliance, and help the IRS

administer tax law more efficiently by answering important questions,

such as where to file a tax return, or how to change a fiscal year end?

The fourth type of administrative pronouncements are letter rulings,

which are specific responses to tax-related inquiries.

They take several forms including private letter rulings,

which typically concern proposed transactions.

Technical advice memoranda, which deal with completed transactions.

And determination letters, which deal with lower level, non-controversial IRS issues.

For brevity, let's focus on private letter rulings,

which are issued by the national office of the IRS.

These rulings are labeled private because they are only provided for

a substantial fee at a taxpayer's request.

They provide specific and narrowly defined anticipatory guidance on

how the IRS will treat a transaction before it occurs.

That is a proposed transaction.

Because such rulings are based on taxpayer-specific facts,

they technically are only binding on the taxpayer making the request.

However, when an anonymized version of the letter ruling is disclosed publicly,

it can sometimes be used by other taxpayers for guidance and

the avoidance of certain accuracy-related penalties.

The IRS issues about 2,500 private letter rulings each year.

Finally, there are numerous other miscellaneous administrative

pronouncements, which are larger issue by the IRS.

This include the Internal Revenue Bulletin, Field Service Advices,

Chief Counsel Memoranda, and Publications.

You will learn more about these and other pronouncements throughout the course.

探索我们的目录

免费加入并获得个性化推荐、更新和优惠。

Coursera 致力于普及全世界最好的教育，它与全球一流大学和机构合作提供在线课程。

© 2019 Coursera Inc. 保留所有权利。

通过 App Store 下载

通过 Google Play 获取