58-Internal_Revenue_Manual_Importance_of_Court_Decisions

58-Internal_Revenue_Manual_Importance_of_Court_Decisions -...

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Internal Revenue Manual Importance of Court Decisions 4.10.7.2.9.8 (05-14-1999) Importance of Court Decisions 1. Decisions made at various levels of the court system are considered to be interpretations of tax laws and may be used by either examiners or taxpayers to support a position. 2. Certain court cases lend more weight to a position than others. A case decided by the U.S. Supreme Court becomes the law of the land and takes precedence over decisions of lower courts. The Internal Revenue Service must follow Supreme Court decisions. For examiners, Supreme Court decisions have the same weight as the Code. 3. Decisions made by lower courts, such as Tax Court, District Courts, or Claims Court, are binding on the Service only for the particular taxpayer and the years litigated. Adverse decisions of lower courts do not require the Service to alter its position for other taxpayers. Part 4. Examining Process Chapter 10. Examination of Returns Section 7. Issue Resolution 4.10.7 Issue Resolution 4.10.7.1 Overview 4.10.7.2 Researching Tax Law 4.10.7.1 (05-14-1999) Overview 1. Examiners are responsible for determining the correct tax liability as prescribed by the Internal Revenue Code. It is imperative that examiners can identify the applicable law, correctly interpret its meaning in light of congressional intent, and, in a fair and impartial manner, correctly apply the law based on the facts and circumstances of the case. 2. This chapter addresses five areas: A. Researching tax law, 7.2, B. Evaluating evidence, 7.3, C. Arriving at conclusions, 7.4, D. Proposing adjustments to taxpayers and/or representatives, 7.5, E. Shift in Burden of Proof, 7.6.
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4.10.7.2 (05-14-1999) Researching Tax Law 1. Conclusions reached by examiners must reflect correct application of the law, regulations, court cases, revenue rulings, etc. Examiners must correctly determine the meaning of statutory provisions and not adopt strained interpretation. 2. The Federal tax system is constantly changing. Examiners must keep well informed of the ever-growing body of tax authorities and advances in the management and storage of information. 3. In the words of Supreme Court Justice Jackson, "No other branch of the law touches human activities at so many points. It can never be made simple." Income tax law is too complex for examiners to immediately perceive its ramifications and provisions in all examinations. 4. This section focuses on researching Federal tax law, evaluating the significance of various authorities, and supporting conclusions reached with appropriate citations. The profiles of various tax authorities in this chapter are intended to help examiners become familiar with the most common, but by no means all, sources or available research techniques. 4.10.7.2.1 (05-14-1999)
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This note was uploaded on 03/31/2012 for the course TAX 4001 taught by Professor Robertmcgee during the Spring '09 term at FIU.

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58-Internal_Revenue_Manual_Importance_of_Court_Decisions -...

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