Taxing Definitions

Definitions — Your tax reading diet

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Image source: GAO-16-720
Image source: GAO-16-720


The food pyramid, an old-school nutrition guide issued by the US government, disappeared in 2011. But if your reading diet includes IRS documents, you’re in luck: The US Government Accountability Office has a similar image to illustrate a hierarchy of healthy tax guidance.

So how healthy are your tax reading habits? Here’s a quiz.

1. Of the five levels on the above GAO pyramid, which two documents does the IRS define as “guidance”?

2. At which level in the pyramid can taxpayers begin to rely on IRS documents as “authoritative”?

3. Though the pyramid lists four types of guidance published in the Internal Revenue Bulletin, the Bulletin can contain an additional type of guidance. Do you know what that guidance is?

4.The Internal Revenue Bulletin is issued weekly. How many guidance documents do you think the Bulletin contained per year from 2013 to 2015?


5. IRS policies and procedures for producing regulations and other guidance cite five legal authorities for the IRS to follow when drafting and issuing regulations. Four of them are: the Administrative Procedure Act (APA), the Paperwork Reduction Act (PRA), the Regulatory Flexibility Act (RFA), and the Congressional Review Act (CRA). Do you know the fifth?

Source of answers: September 2016 GAO Report 16-720, Regulatory Guidance Processes (PDF download)


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IRS’s definition of guidance: regulations plus the four other guidance types published in the IRB.

Although IRS issues thousands of publications in a variety of different forms to help taxpayers and their advisors understand the law, IRS has stated that only guidance published in the Internal Revenue Bulletin contains the IRS’s authoritative interpretation of the law.

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Right answer!

From 2013 to 2015, the IRB (52 weekly issues) contained nearly 300 guidance documents per year, that total about 2,000 pages.

From 2002 to 2008, the number of IRB items published annually was higher (about 500 items), but starting in 2009 that number began to decline.

RS officials said that, from 2002 to 2003, the then-Chief Counsel diverted resources away from litigation and toward the issuance of guidance, in particular revenue rulings, which contributed to the increasing counts of guidance documents during these years.

Regarding the recent decline in the number of guidance documents issued, IRS officials said that hiring freezes have reduced the total number of chief counsel attorneys by 14% from 2011 to 2015.21 They also said that issuance of complicated regulations to implement the Patient Protection and Affordable Care Act (PPACA) and the Foreign Account Tax Compliance Act (FATCA) has contributed to fewer overall guidance documents being issued in recent years.

A section of the internal revenue code.
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