Tax Research, Practice, and Procedure
SUMMARY OF CHAPTER
Tax practice involves the preparation of tax returns and representation of clients before the audit or appellate
divisions of the Internal Revenue Service. To become a competent professional, skilled in these three functional
areas of tax practice, it is necessary to be proficient in the art of tax research.
The tax specialist needs to understand the organizational structure of the IRS and its administrative proce-
dures to provide fully informed tax consulting services to taxpayers involved in disputes with the IRS. Thus, this
chapter includes a discussion of the internal organization of the IRS, the functions of the various administrative
groups, the rules relating to practice before the IRS, and the procedures for examination of returns, including
correspondence examinations, office examinations, and field examinations.
Tax Reference Materials
¶2001 Classification of Materials
Tax reference materials are usually classified as primary “authoritativeÄ sources or secondary “referenceÄ
sources. Primary source materials include the Internal Revenue Code (Statutory Authority), Treasury Regulations
and Internal Revenue Service Rulings (Administrative Authority), and the various decisions of the trial courts and
the appellate courts (Judicial Authority).
Secondary reference materials consist primarily of the various loose-leaf tax reference services. Additional
secondary materials include periodicals, textbooks and treatises, published papers from tax institutes and sympo-
sia, newsletters, and, more recently, the various computer-assisted research services.
Primary Source Materials
¶2021 Statutory Authority
The authority of the U.S. government to raise revenue through a federal income tax is derived from the
Sixteenth Amendment to the Constitution, enacted in 1913. In subsequent years, with the growing complexity of
the tax law, the multitude of revenue acts were codified into Title 26 of the United States Code, known as the
Internal Revenue Code of 1939. The Code was later revised and rewritten as the Internal Revenue Code of 1954.
However, as a result of the sweeping changes made by the Tax Reform Act of 1986, the Code has been renamed the
Internal Revenue Code of 1986. The major portion of the Code dealing with federal income tax is located in Chapter
1 of Subtitle A. This extremely important chapter, entitled “Normal Taxes and Surtaxes,Ä is further divided into
subchapters (A-W), and each subchapter is then generally divided into parts and subparts which are then divided
into numbered sections. These sections are typically referred to as “Code Sections.Ä
Authoritative Weight of Congress.
Congressional amendments to tax laws can override prior court decisions,
including Supreme Court decisions. However, the Supreme Court and the lower courts cannot override tax laws
passed by Congress. Only a tax treaty with a foreign country may override a tax law, and only if it takes effect after