Definition
A Revenue Procedure is an official documentation issued by the Internal Revenue Service (IRS) that provides procedural instructions on compliance with tax laws. Unlike regulations, which have the force of law, Revenue Procedures are more focused on the execution and administration of tax rules. They offer taxpayers guidance on methods and forms of filing, record keeping, and other aspects of tax administration. These documents are initially published in the Internal Revenue Bulletin (IRB) and subsequently included in the Cumulative Bulletin (CB).
Examples
- Revenue Procedure 2021-20: This procedure provides guidance on waivers for taxpayers affected by the COVID-19 pandemic.
- Revenue Procedure 2019-38: Offers a safe harbor under Section 199A for rental real estate enterprises.
- Revenue Procedure 2015-13: This clarifies the process for accounting method changes.
Frequently Asked Questions (FAQs)
What is the purpose of a Revenue Procedure?
A Revenue Procedure offers guidance on the correct methods and processes for compliance with tax laws, including filing requirements and administrative processes.
How do Revenue Procedures differ from Revenue Rulings?
Revenue Procedures address procedural and administrative issues, while Revenue Rulings interpret the tax laws specifically addressing the IRS’s position on particular issues.
Where can I access Revenue Procedures?
Revenue Procedures are first published in the Internal Revenue Bulletin (IRB) and later compiled in the Cumulative Bulletin (CB), both of which can be accessed through the IRS website.
Do Revenue Procedures carry the force of law?
No, Revenue Procedures do not have the force of law but provide taxpayers with official guidance on tax administration and procedural matters.
Are Revenue Procedures issued annually?
Yes, Revenue Procedures are typically released on an annual basis, along with interim updates as necessary throughout the year.
Revenue Ruling
Revenue Ruling: An official IRS interpretation that provides guidance on how the law is applied to specific factual situations.
Internal Revenue Bulletin (IRB)
Internal Revenue Bulletin (IRB): The weekly publication by the IRS containing rulings, procedures, Treasury decisions, and other tax-related documents.
Cumulative Bulletin (CB)
Cumulative Bulletin (CB): A semi-annual compendium of documents initially published in the Internal Revenue Bulletin, providing comprehensive reference material.
Treasury Regulations
Treasury Regulations: The official interpretations of the Internal Revenue Code (IRC) issued by the United States Department of the Treasury.
Private Letter Ruling (PLR)
Private Letter Ruling (PLR): A written determination issued by the IRS to a taxpayer furnishing guidance on specific tax issues.
Online References to Online Resources
Suggested Books for Further Studies
- “Federal Income Tax: Code and Regulations–Selected Sections” by Martin B. Dickinson
- “Principles of Taxation for Business and Investment Planning” by Sally M. Jones and Shelley C. Rhoades-Catanach
- “Tax Procedure and Tax Fraud” by Camilla E. Watson
- “Understanding Taxation: A Primer” by Christopher White
- “Federal Tax Research” by William A. Raabe, Gerald E. Whittenburg, Debra Sanders, and John A. Everett
Fundamentals of Revenue Procedure: Taxation Basics Quiz
### What primary purpose does a Revenue Procedure serve?
- [x] Providing procedural guidance on tax laws.
- [ ] Interpreting specific tax issues.
- [ ] Offering legal decisions on tax disputes.
- [ ] Issuing penalties for non-compliance.
> **Explanation:** A Revenue Procedure offers procedural guidance to assist taxpayers in complying with administrative aspects of tax laws.
### Where is a Revenue Procedure first published?
- [x] Internal Revenue Bulletin (IRB)
- [ ] Federal Register
- [ ] Statutory Code
- [ ] Congressional Reports
> **Explanation:** Revenue Procedures are initially published in the Internal Revenue Bulletin (IRB) and subsequently included in the Cumulative Bulletin (CB).
### How is a Revenue Procedure different from a Revenue Ruling?
- [x] Revenue Procedures address procedural matters while Revenue Rulings interpret law.
- [ ] Revenue Procedures are more authoritative.
- [ ] Revenue Procedures can overturn court decisions.
- [ ] Revenue Procedures establish tax rates.
> **Explanation:** Revenue Procedures focus on procedural guidance whereas Revenue Rulings provide interpretations of the tax law on specific issues.
### Can Revenue Procedures be accessed directly from the IRS website?
- [x] Yes, they are available in the IRB section.
- [ ] No, they require a subscription.
- [ ] Only through tax professionals.
- [ ] Only through printed volumes.
> **Explanation:** Revenue Procedures are published on the IRS website within the IRB section, making them accessible to the public online.
### Do Revenue Procedures have the same legal authority as Treasury Regulations?
- [ ] Yes, both have the same authority.
- [x] No, Revenue Procedures do not have the force of law.
- [ ] Only during tax disputes.
- [ ] Only when cited in court decisions.
> **Explanation:** While Revenue Procedures provide important procedural guidance, they do not carry the force of law like Treasury Regulations.
### How often are Revenue Procedures typically issued?
- [x] Annually, with interim updates as necessary.
- [ ] Biannually without updates.
- [ ] Monthly.
- [ ] Once per decade.
> **Explanation:** Revenue Procedures are generally issued annually with interim updates as needed.
### What document compilation includes a year's worth of Revenue Procedures?
- [x] Cumulative Bulletin (CB)
- [ ] Annual Report to Congress
- [ ] Quarterly Journal of Tax Administration
- [ ] Federal Code Synopsis
> **Explanation:** The Cumulative Bulletin (CB) is a semi-annual compilation that includes Revenue Procedures and other documents initially published in the IRB.
### Which term refers to an official IRS interpretation of specific tax laws?
- [ ] Revenue Procedure
- [x] Revenue Ruling
- [ ] Treasury Note
- [ ] Tax Code Summary
> **Explanation:** A Revenue Ruling is an official interpretation by the IRS of specific tax laws, whereas Revenue Procedures focus on procedural details.
### Are Revenue Procedures static once issued?
- [ ] Yes, they cannot be altered.
- [x] No, they are subject to updates and amendments.
- [ ] Only when Congress mandates.
- [ ] Only through taxpayer petitions.
> **Explanation:** Revenue Procedures can be updated or amended to reflect changes in tax law or administrative requirements.
### Who benefits from the guidance provided in Revenue Procedures?
- [ ] Only tax lawyers.
- [ ] Internal IRS agents exclusively.
- [x] All taxpayers and tax professionals.
- [ ] State tax authorities only.
> **Explanation:** Revenue Procedures provide procedural guidance beneficial to all taxpayers and tax professionals, facilitating compliance with tax laws.
Thank you for exploring our comprehensive guide on Revenue Procedures and testing your understanding with our quiz. Continue to expand your knowledge in taxation for better compliance and effective planning!
