Tax Return Position Paper

1 January 2017

Position Tax law was established in order to govern tax transactions and events. The primary source of tax law is the internal revenue code, which was established in the year 1939, and has been revised multiple times since then. In addition to information regarding company income tax, employment tax, and other pertinent tax options. The legislative process is also a primary source of tax law, which is initiated in the House of Representatives, where new tax bills can be proposed.

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Once a proposed bill makes it to the House of Representatives, they can vote to decide whether or not to incorporate the proposed tax bill. Treasury regulations can help with the understanding of the application of internal revenue code provisions. As a secondary source of tax law, citations to treasury regulations are used in order to substantiate propositions and help locate underlying authority. Administrative pronouncements, such as revenue rulings and letter rulings, pertain to consequences issued in relation to tax transactions and tax practice.

Judicial decisions, which are also significant in reference to tax law, involve decisions made by judges on tax related laws and their subsequent consequences. Substantial authority refers to the factor of whether or not a penalty will be applied in the event a taxpayer did not adhere to the guidelines of tax law. Normally, taxpayers would be subject to a penalty if they do not adhere to the tax law according to the internal revenue code, although if there is substantial authority, that penalty would not be incurred.

The title of having substantial authority allows for the taxpayer to have special treatment in regards to the tax ruling in question. The courts, as well as the Internal Revenue Service play a major role in the application and interpretation of tax law. It is the duty of the court system to ensure that tax laws are properly applied in relation to litigation claims that may arise into legal matters. Decisions by the court can be exercised via a regular decision or a memorandum decision, both which hold the same authoritative power.

The small cases procedure, however, does not hold the same authoritative power as a regular decision and a memorandum decision because the case is not heard by a judge. In the even a tax payer decides to use the small cases procedure, not only is the claim at a maximum of $50,000 for the year, but the case is not heard by a judge, and is instead heard by commissioners. The taxpayer is not required to have an attorney to represent them in order to have their case heard, and the decision is not published like that of a regular decision or a memorandum decision.

Some decisions made by the court are able to be appealed. In the event that a taxpayer has requested an appeal, they would be able to do so where the case was originally claimed. IN order to be able to have a case heard by the U. S. Supreme Court, the case must have great importance. If a taxpayer is able to have their case heard in the U. S. Supreme Court, the decision of the court would overrule all other decisions that had been previously made by other courts in the taxpayers’ jurisdiction.

The majority of tax court is nationally represented, and does not take into account the location of the place of the businesses involved, nor does it take into account the location of the place in which the residence of the taxpayers or any of the people that are involved in the case. Tax court serves as a uniform entity which provides fair and sound decisions based on the laws and regulations at hand.

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