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Statement of Principles
of Internal Revenue
The function of the Internal Revenue Service is to
administer the Internal Revenue Code. Tax policy
for raising revenue is determined by Congress.
With this in mind, it is the duty of the Service to
carry out that policy by correctly applying the
laws enacted by Congress; to determine the
reasonable meaning of various Code provisions in
light of the Congressional purpose in enacting
them; and to perform this work in a fair and
impartial manner, with neither a government nor
a taxpayer point of view.
At the heart of administration is interpretation of
the Code. It is the responsibility of each person
in the Service, charged with the duty of
interpreting the law, to try to find the true meaning
of the statutory provision and not to adopt a
strained construction in the belief that he is
"protecting the revenue." The revenue is properly
protected only when we ascertain and apply the
true meaning of the statute.
The Service also has the responsibility of applying
and administering the law in a reasonable,
practical manner. Issues should only be raised by
examining officers when they have merit, never
arbitrarily or for trading purposes. At the same
time, the examining officer should never hesitate
to raise a meritorious issue. It is also important
that care be exercised not to raise an issue or to
ask a court to adopt a position inconsistent with
an established Service position.
Administration should be both reasonable and
vigorous. It should be conducted with as little
delay as possible and with great courtesy and
considerateness. It should never try to overreach,
and should be reasonable within the bounds of
law and sound administration. It should, however,
be vigorous in requiring compliance with law and
it should be relentless in its attack on unreal tax
devices and fraud.
These principles of tax administration were previously published
in the Internal Revenue Bulletin as Revenue Procedure 84-22,
1964-1 (Part I) C.B. 689. They are restated here to emphasize
their importance to all employees of the Internal Revenue Service,
do not have the force and effect of Treasury De-
partment Regulations, but they may be used as
precedents. Unpublished rulings will not be relied
on, used, or cited as precedents by Service per-
sonnel in the disposition of other cases. In apply-
ing published rulings and procedures, the effect
of subsequent legislation, regulations, court deci-
sions, rulings, and procedures must be consid-
ered, and Service personnel and others concerned
are cautioned against reaching the same conclu-
sions in other cases unless the facts and circum-
stances are substantially the same.
The Internal Revenue Bulletin is the authoritative
instrument of the Commissioner of Internal Reve-
nue for announcing official rulings and procedures
of the Internal Revenue Service and for publish-
ing Treasury Decisions, Executive Orders, tax con-
ventions, legislation, court decisions, and other
items of general interest.
It is the policy of the Service to publish in the
Bulletin all substantive rulings necessary to pro-
mote a uniform application of the tax laws, in-
cluding all rulings that supersede, revoke, modify,
or amend any of those previously published in the
Bulletin. All published rulings apply retroactively
unless otherwise indicated. Procedures relating
solely to matters of internal management are not
published; however, industry regulations appear-
ing in internal management documents and
statements of internal practices and procedures
that affect the rights and duties of taxpayers are
Revenue Rulings represent the conclusions of the
Service on the application of the law to the entire
state of facts involved. In those that are based on
positions taken in rulings to taxpayers or techni-
cal advice to service field offices, identifying de-
tails and confidential information are deleted to
prevent unwarranted invasions of privacy and to
comply with statutory requirements, such as 18
U.S.C. 1905 and 26 U.S.C. 7213 concerning dis-
closure of information obtained from members of
Rulings and procedures reported in the Bulletin
Cumulative Bulletin 1974-1 is a consolidation of
all items of a permanent nature published in the
weekly Bulletins 1974-1 through 1974-25 for the
period of January 1 through June 30, 1974. It in-
cludes a cumulative list of announcements relat-
ing to decisions of the Tax Court published in the
Internal Revenue Bulletins.
The Bulletin Index-Digest System, a research and
reference service supplementing the Bulletin,
may be obtained from the Superintendent of
Documents on a subscription basis. It consists of
four Services: 1-Income Tax, 2—Estate and
Gift Taxes, 3—Employment Taxes, and 4 Excise
Taxes. Each Service consists of a basic volume
and a cumulative supplement that provide (1)
finding lists of items published in the Bulletin,
(2) digests of Revenue Rulings, Revenue Proce-
dures, and other published items, and (3) topical
indexes of Public Laws, Treasury Decisions, and
(2) dice lists of ite supp
The contents of this publication are not copyrighted and may be
reprinted freely, a citation of the Cumulative Bulletin as the
source would be appropriate.
Revenue Service to the Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury, effective July 1, 1972, Treasury Department Order No. 221, 1972-2 C.B. 899.)
The Internal Revenue Cumulative Bulletin is prepared in five parts as follows: Part 1.—1954 Code. This part includes rulings and decisions based on provisions of the Internal Revenue Code of 1954 other than those pertaining to alcohol, tobacco, and firearms. Arrangement is sequential according to Code and regulations sections. The Code section is shown at the top of each page. Part 11.-1939 Code. No rulings or decisions based on provisions of the Internal Revenue Code of 1939 and other laws were published during the period January-June 1974. Part III.-Reserved. (This part contained all matters pertaining to alcohol, tobacco, firearms, and explosives prior to the transfer of the Alcohol, TObacco and Firearms Division from the Internal
Part IV.-Treaties and Tax Legislation. This part is divided into three subparts as follows: Subpart A, Revenue Ruling related to Tax Conventions; Subpart B, Legislation; Subpart C, Committee Reports. House, Senate, and Conference Committee Reports printed in the Bulletin do not include the portion entitled "Changes in Existing Law."
Part 1.—Administrative, Procedural, and Miscellaneous. To the extent practicable, pertinent cross-references to these subjects are contained in the other Parts and Subparts. Included in this Part is a list of persons disbarred or suspended from practice before the Internal Revenue Service.
The synopses preceding Revenue Rulings, Revenue Procedures, and Court Decisions are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.
The following abbreviations in current use and formerly used will appear in material published in the Bulletin.
A, B, C, etc. The names of individuals.
A.R.R. Committee on Appeals and Review recom-
A.T. Alcohol and tobacco tax ruling.
B.T.A. Board of Tax Appeals.
C.B. Cumulative Bulletin.
CFR Code of Federal Regulations.
C.T. Carriers Taxing Act of 1937.
Ct. D. Court Decision.
Del. Order Delegation Order.
D.C. Treasury Department circular.
DISC Domestic International Sales Corporations.
E.O. Executive Order.
E.T. Estate and gift tax ruling.
Em. T. Employment tax ruling.
F.A.A.A. Federal Alcohol Administration Act.
FICA Federal Insurance Contributions Act.
F.R. Federal Register.
FUTA Federal Unemployment Tax Act.
G.C.M. Chief Counsel's memorandum (formerly
General Counsel's memorandum).
I.R.B. Internal Revenue Bulletin.
IR-Mim. Published IR-Mimeograph.
I.T. Income tax ruling.
M, N, X, Y, Z, etc. The names of corporations,
places or businesses, according to context. M.T. Miscellaneous tax ruling. Mim. Published mimeograph. 0.D. Office Decision. P.L. Public Law. PS Pension, profit-sharing, stock bonus or annuity
plan ruling. Rev. Proc. Revenue Procedure. Rev. Rul, Revenue Ruling. R.S. Revised Statute. S.M. Solicitor's Memorandum. Sol. Op. Solicitor's Opinion. S.P.R. Statement of Procedural Rules. S.R. Solicitor's Recommendation. S.S.T. Social Security Tax. S.T. Sales tax ruling. Stat. Statutes at Large. T.C. The Tax Court of the United States. T.D. Treasury Decision. T.I.R. Technical Information Release. U.S.C. United States Code. x and y are used to represent certain numbers and when used with the word "dollars" represent sums of money.