The Treasury Department has statutory authority under 26 U.S. Code § 7805 to interpret and administer the Internal Revenue Code. The Internal Revenue Service, a division of the Treasury Department, is charged with the day-to-day operations associated with the provisions of the Internal Revenue Code. Temporary and final regulations, issued as Treasury Decisions (T.D.s), can be found in title 26 of the Code of Federal Regulations (C.F.R.) and proposed regulations can be located in the Federal Register. All three types of regulations are also available in Westlaw and Lexis Advance in the Franklin County Law Library Computer Labs.
The Franklin County Law Library has the current CFR in print. However, Remember that the IRC is amended frequently, often a dozen times in one year. When a code section changes, the existing regulations that relate to it may become inconsistent with the section's language. When you are working with a regulation, always make sure that it is consistent with the current IRC section before relying on it.
There are three types of tax regulations—legislative, interpretive and procedural. Details on each type of regulation are discussed below.
The Internal Revenue Code authorizes the IRS to provide operational rules for specific IRC provisions. Generally, legislative regulations carry the same weight of authority as the law itself. The regulation will typically refer to its statutory authority. These regulations must follow the APA's notice and comment requirements.
Interpretive regulations help to explain the IRS’s position on various IRC sections. Interpretive regulations are issued under the IRS’s general authority to interpret the language of the IRC, but they are not specifically authorized by the law. They are subject to challenge if they do not reflect Congressional intent. Nevertheless, interpretive regulations often carry substantial weight of authority. Interpretative regulations are exempt from the Administrative Procedure Act's notice and comment requirements.
Procedural regulations address procedural rather than interpretative matters, such as how to go about filing returns and making elections. Generally, procedural regulations relating to particular IRC Sections are considered to be binding. However, the procedural regulations set forth in 26 CFR Part 601, known as the Statement of Procedural Rules, are considered to be directive and not mandatory. The Statement of Procedural Rules provides guidelines for conducting the internal affairs of the IRS. They are issued by the IRS Commissioner without the signature of the Treasury Secretary. Nevertheless, the procedural rules are published in the Federal Register and have the status of regulations. Therefore, such rules have higher weight of authority than other IRS pronouncements that are not published in the Federal Register.