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Primary Law

            Now that you have a better understanding of what tax attorneys do, the next step is to look at the law tax attorneys need to research. 
           
            Congress - Legislation
           
            First and foremost, it’s important to understand that tax law is statutorily defined.   The Internal Revenue Code (“IRC”), found in Title 26 of the U.S. Code, is at the heart of all tax research and is often consulted first. All other sources, both primary and analytical, will deal with the interpretation of the IRC, either directly or indirectly.   Sources include not only the Annotated Code, or the U.S.C.S., but also code-based federal tax services, like LexisNexis Tax Advisor – Federal Code and CCH’s Standard Federal Tax Reporter. which are organized around IRC sections.
             
            A tax attorney may also need to understand the legislative intent behind an IRC section, in which case the attorney would consult, among other sources, the LexisNexis Tax Advisor –Federal Code, the Committee Reports from the House Ways & Means Committee, the Senate Finance Committee and the House-Senate Conference Committee, as well as CIS Legislative Histories and JCT Blue Books (which are the Joint Committee on Taxation’s general explanations of U.S. tax legislation).  For bills not yet passed,  researchers may want to follow its progress via LexisNexis bill tracking files. Bill tracking offers not only a chronology of what happened to the legislation in Congress, but also links to the full text of the bill, related news stories, and any material relating to the bill in the Congressional Record.
           
            Treasury Department - IRS
           
            Treasury Regulations are another source of interpretation. They are issued by the Treasury Department to help explain and illustrate the IRC. There are three types of regulations: final, temporary, and proposed. The first two, final and temporary, carry the force of law, while proposed regulations do not. All of the regulations are published in the Federal Register and Internal Revenue Bulletin. Each year, the enforceable regulations are codified in Title 26 of the Code of Federal Regulations, or CFR. 
           
            The IRS also issues rulings and releases to help interpret tax law. The officially published version is located in the Internal Revenue Bulletin and the Cumulative Bulletin files. (The Cumulative Bulletin is simply a compilation of six month’s worth of Internal Revenue Bulletins.) Among the IRS sources, revenue rulings and private letter rulings are probably the most important for a tax attorney (other than regulations). Both respond to a particular fact pattern. The major difference between the rulings is that a private letter ruling is only enforceable against the taxpayer who requested it, whereas a revenue ruling is enforceable against all taxpayers. If you are wondering why tax attorneys look to PLR’s when they are not enforceable, it’s because they are a good indicator as to how the IRS may react to a certain transaction that their client is considering.
           
            A tax attorney should also be aware of IRS advance releases. Via advance releases, the IRS will publish new revenue rulings, revenue procedures, notices and announcements in advance of publication in the Internal Revenue Bulletin.
           
            Courts
           
            Finally, let’s look at caselaw. Understand that cases are not nearly as significant to a tax attorney as they are to a litigator. The reason for this is that the IRS issues its own rulings and, through the Treasury Dept (of which it is a part), Treasury Regulations  The IRS is not wholly bound by any court by the U.S. Supreme Court, so, if the court decides adversely to the IRS, the IRS can decide not to acquiesce as to other taxpayers and fallback on its own rulings and regulations (with the noted limitations described below under the Action on Decision definition).  Since it’s the IRS that might audit their clients, a practitioner will defer to the IRS’ interpretations and seek its guidance first, thus making cases (except in limited circumstances) secondary.
            
            When a researcher does search cases, he usually looks to the U.S. Tax Court decisions first because most tax cases are heard there. (The other choices are the U.S. District Court and the U.S. Court of Federal Claims.) The Tax Court issues both decisions and Tax Court Memoranda (“TCM”). TCM’s apply well-established law to a set of facts and are considered more “pedestrian” in nature. That said, they can be very helpful, and tax attorneys use them all the time, although they are not “officially” published. As an aside, unlike District Courts and the U.S. Court of Federal Claims, judges who preside over the Tax Court are tax experts, but parties give up the right to a jury trial to be heard in this court.