Taxation Office

Taxation Office in the United States


Tax Administration

Administrative Complexity

New legislation places new demands on the administrative resources of the IRS and Treasury Department. The most immediate impact is felt in the task of redesigning tax forms and instructions to incorporate the changes. Interpretation of the law through regulations and rulings is necessary and may require revision of the recently issued forms. It may be difficult or impossible to issue timely guidance before effective dates. IRS personnel must become acquainted with new law promptly to provide guidance to taxpayers seeking to comply. Often they must be fully conversant with several conflicting provisions governing the same area (e.g., interest deductibility rules before 1987 and tracing rules after 1986) in order to perform the audit function.

The effort to achieve the highest possible level of certainty has historically caused the Treasury Department and the Internal Revenue Service to write detailed regulations that attempt to address all issues. This pattern has often caused delays in providing general guidance to taxpayers. The drafting of exhaustive regulations creates added complexity and a tremendous compliance burden for the small taxpayer. An example was the original proposed passive loss regulation defining the term “activity” which, for all but the most sophisticated taxpayers, was incomprehensible and nonworkable. It is positive the Treasury´s and the IRS’ reissuance of simpler regulations in this area and the efforts to seek opportunities to simplify other regulations in a similar manner, such as they have done with section 7701. Naturally, certain tax areas demand specific, detailed regulations.

Taxpayers and the IRS alike have difficulty interpreting complex provisions. In addition, the IRS faces an even greater burden than taxpayers when factual issues are involved because taxpayers are in control of the reporting and presentation of facts relevant to a particular issue. For example, enforcing the research and experimentation credit is an extremely difficult task for the IRS because of problems in tracing and categorizing various expenditures and in judging whether the taxpayer meets requirements such as “technological innovation.” Likewise, enforcing the luxury excise tax rules is difficult because of problems in identifying taxable transactions.

Complexity in making factual determinations is dramatically reduced from an administrative perspective to the extent that a provision relies on the interaction of two parties with contrary or adverse interests. For example, contracts for the sale of assets or an entire business are the result of pressure to establish the true purchase price; each party has tax and non-tax incentives to correctly state the agreed-upon price in the contract and purchase price allocation. These conflicting interests do not afford perfect controls, but they aid in verification.

Other Popular Tax Concepts

Taxation Office: Open and Free Legal Research of US Law

Federal Primary Materials

The U.S. federal government system consists of executive, legislative, and judicial branches, each of which creates information that can be the subject of legal research about Taxation Office. This part provides references, in relation to Taxation Office, to the legislative process, the federal judiciary, and the primary sources of federal law (cases, statutes, and regulations).

Federal primary materials about Taxation Office by content types:

Laws and Regulations

US Constitution
Federal Statutory Codes and Legislation

Federal Case Law and Court Materials

U.S. Courts of Appeals
United States courts of appeals, inclouding bankruptcy courts and bankcruptcy appellate panels:

Federal Administrative Materials and Resources

Presidential Materials

Materials that emanate from the President’s lawmaking function include executive orders for officers in departments and agencies and proclamations for announcing ceremonial or commemorative policies. Presidential materials available include:

Executive Materials

Federal Legislative History Materials

Legislative history traces the legislative process of a particular bill (about Taxation Office and other subjects) for the main purpose of determining the legislators’ intent behind the enactment of a law to explain or clarify ambiguities in the language or the perceived meaning of that law (about Taxation Office or other topics), or locating the current status of a bill and monitoring its progress.

State Administrative Materials and Resources

State regulations are rules and procedures promulgated by state agencies (which may apply to Taxation Office and other topics); they are a binding source of law. In addition to promulgating regulations, state administrative boards and agencies often have judicial or quasi-judicial authority and may issue administrative decisions affecting Taxation Office. Finding these decisions can be challenging. In many cases, researchers about Taxation Office should check state agency web sites for their regulations, decisions, forms, and other information of interest.

State rules and regulations are found in codes of regulations and administrative codes (official compilation of all rules and regulations, organized by subject matter). Search here:

State opinions of the Attorney General (official written advisory opinions on issues of state law related to Taxation Office when formerly requested by a designated government officer):

Tools and Forms

Law in Other Regions

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