Tax Return Position Paper - Essay Example

Question One Issued by the government’s administrative, judicial and legislative branches through the Internal Revenue Service (IRS), the Treasury Department and Congress, primary tax law sources bear more statutory authority than the secondary sources. The most significant primary sources include the Internal Revenue Code, public laws and income tax treaties (Lederman & Mazza, 2009). Then there are treasury regulations; revenue procedures; revenue rulings; announcements and notices published by the IRS; legislative history; and legal judgment on tax affairs.

Treasury regulations usually remain in the form of proposed, temporary or non-codified tax statutes, until they are certified as final or reliance regulations. The IRS also supplements such sources by making actions and decisions, audit technique guides and the internal revenue manual accessible by the public (Ellen, 2012). Developed by the IRS, these initiatives support the fundamental Internal Revenue Code through taxpayer assistance services such as the Frequently Asked Questions feature, forms on federal tax instructions and IRS publications.

References made to decisions arrived at by tax courts are also considerably detailed sources that bear interpretations specific to taxpayers. Question Two Though not of equal statutory weight as the primary sources, secondary sources of tax law bear their own significance in the way they offer a comprehensive starting point to research. They are usually in the form of publications, books and articles written by tax professionals, scholars and legal analysts (Lederman & Mazza, 2009). These sources mainly occur as newsletter, textbooks, articles appearing in legal periodicals, treatises and reports on tax law published by institutions that offer commercial services in tax research.

These secondary sources mainly find, scrutinize, clarify and interpret what the primary sources have provided. Question Three Substantial authority entails the recognized standards frequently used for the defense of a tax preparer in the possible event of negligence and understatement. As per the provisions of IRC 1.6694-2, a tax preparer is required to support such tax positions as prepared with the sources he used (Don, 2008). The sources are evaluated basing on their authority, where the primary sources bear the most authority.

If the tax preparer is found to have relied on and used substantial authority in arriving at the position presented for the returns, a possible penalty is waived. The intended objective of substantial authority is to determine that most primary sources of tax law support the preparer’s position. The constituents of substantive authority include the Internal Revenue Code, statutory provisions, tax treaties, committee reports, and the Treasury Department’s official position on treaties. Question Four The IRS, which operates under the Treasury Department as an administrative body, has the key role of processing tax returns and examining them for deficiencies.

It also issues Revenue Rulings, Notices and Revenue Procedures, which are administrative decisions explaining specific taxpayer issues or the precise manner in which items must be treated. The IRS also the mandate to alter rulings or regulations and, in such a case, courts hearing future cases will encounter new questions. On the