Role of the Irs in Interpreting and Providing Guidance on the Tax Law

Role of the IRS in interpreting and providing guidance on the tax law
The role of the IRS in interpreting and providing guidance on the Tax Law is to help taxpayers to understand and comply with the tax law and ensure that those who does not comply pay their fair share of the penalty. The IRS has to apply the tax law with integrity and fairness to all.
Types of tax law guidance are published by the IRS
The authoritative instrument of the IRS for announcing official rulings (Revenue Rulings and Revenue Procedures) and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislations, and other items of general interest is the Internal Revenue Bulletin. The Internal Revenue Bulletin also has Technical Information Releases and Announcements to advise the public of various technical matters.
Another documents that IRS issues are letter rulings, determination letters and technical advice memoranda. These documents are part of the IRS Ruling Program, which includes published rulings from the Internal Revenue Bulletin, and intend to communication with individual taxpayers and IRS personnel.
IRS also develops and issues IRS Publications that address a variety of general and specific topics of concern to taxpayers to assist them to be in compliance with requirements of the Internal Revenue Code and regulations. A typical IRS Publication highlights changes in the tax law in specific area, explains the purpose of the law, defines terminology, lists exemptions, provides several examples, and includes sample worksheets and filled-in forms.

The role of the Constitution in creating tax law is ultimate source of the power to tax. Current tax law is resulting from Sixteenth Amendment to the Constitution as passed by the Congress on July 12, 1909. The amendment stated: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived without apportionment among the several States, and without regard to any census or enumeration”. U.S. Constitution includes steps that should be followed to create a tax law, which I described below under “…..
The role of the U.S. Congress in creating the tax law is that all legislative power, including tax law, are vested in a Congress of the United States, which consists of a Senate and House of Representatives. Sometimes Tax Bill originate with the president, another times with the Congress. But it is the Congress that creates Bill, pass it first in the House of Representative, then in the Senate and after the vote on the final version of the Bill, it passes to the President to become a law.
Tax bill originate with the President sending message to Congress or with congressional initiative on a tax bill. Because the Constitution requires that revenue legislation originate in the House, the first step is the Tax Bill is screened by the House Ways and Means Committee. Many influential bodies present their recommendations to this committee including the Secretary of the Treasury and the Office of Management and Budget. After the Bill is completed, it is considered by the House of Representative. The passed Bill is sent to the Senate Finance committee. After passage by the Senate if there are any differences between the House and Senate versions of the bill, it goes to the Joint Conference Committee. The last is composed of seven ranking members of the House Ways and Means Committee and five members of the Senate Finance Committee. The Conference Committee version of the Bill must be accepted or rejected, after it, if passed by the Congress, the bill becomes law when approved by the President. If it is vetoed, both the Senate and the House must vote affirmatively by a two-third majority to override the President’s veto.