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of Internal Revenue Tax Administration

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 64-22, 1964-1 (Part I) C.B. 689. They are restated here to emphasize their importance to all employees of the Internal Revenue Service.

The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, 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 promote a uniform application of the tax laws, including 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, statements of internal practices and procedures that affect the rights and duties of taxpayers are published. 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 technical advice to Service field offices, identifying details and confidential information are deleted to comply with statutory requirements. Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations, but they may be used as precedents. Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. Cumulative Bulletin 1981-1 is a consolidation of all items of a permanent nature published in the weekly Bulletins 1981-1 through 1981-26 for the period of January 1 through June 30, 1981. It in

cludes a cumulative list of announcements relating to decisions of the Tax Court published in the Internal Revenue Bulletins. The Internal Revenue Cumulative Bulletin is prepared in three parts as follows: Part 1.—1954 Code. This part includes rulings and decisions based on provisions of the Internal Revenue Code of 1954. Arrangement is sequential according to Code and regulations sections. The Code section is shown at the top of each page. Part II.-Treaties and Tax Legislation. This part is divided into two subparts as follows: Subpart A, Tax Conventions, and Subpart B, Legislation and Related Committee Reports. Part III.-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. Notice of Proposed Rulemaking The preambles and text of proposed regulations that were published in the Federal Register during this six-month period are printed in this sec


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: Service No. 1, Income Tax, Service No. 2, Estate and Gift Taxes; Service No. 3, Employment Taxes; Service No. 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 procedures, and other published items, and (3) topical indexes of Public Laws, Treasury Decisions, and Tax Conventions.

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 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 rulings and revenue proce the prior ruling is modified because it rate rulings. If the new ruling does dures (hereinafter referred to as "rul corrects a published position. (Com more than restate the substance of a ings) that have an effect on previous pare with amplified and clarified, prior ruling, a combination of terms rulings use the following defined terms above.)

is used. For example, modified and to describe the effect:

Obsoleted describes a previously superseded describes a situation where Amplified describes situation published ruling that is not considered the substance of a previously pubwhere no change is being made in a

determinative with respect to future lished ruling is being changed in part prior published position, but the prior transactions. This term is most com and is continued without change in position is being extended to apply monly used in a ruling that lists pre part and it is desired to restate the to a variation of the fact situation set viously published rulings that are ob valid portion of the previously pubforth therein. Thus, if an earlier ruling soleted because of changes in law or lished ruling in a new ruling that is held that a principle applied to A, and regulations. A ruling may also be ob self contained. In this case the prethe new ruling holds that the same

soleted because the substance has been viously published ruling is first modiprinciple also applies to B, the earlier included in regulations subsequently fied and then, as modified, is super

seded. ruling is amplified. (Compare with adopted. modified, below).

Revoked describes situations where Supplemented is used in situations

the position in the previously pub- in which a list, such as a list of the Clarified is used in those instances where the language in a prior ruling

lished ruling is not correct and the names of countries, is published in a

correct position is being stated in the ruling and that list is expanded by is being made clear because the lan

new ruling guage has caused, or may cause, some

adding further names in subsequent confusion. It is not used where a posi

Superseded describes a situation rulings. After the original ruling has tion in a prior ruling is being changed.

where the new ruling does nothing been supplemented several times, a

more than restate the substance and new ruling may be published that inDistinguished describes a situation

situation of a previously published cludes the list in the original ruling where a ruling mentions a previously ruling (or rulings). Thus, the term is and the additions, and supersedes all published ruling and points out an

used to republish under the 1954 prior rulings in the series. essential difference between them.

Code and regulations the same posi Suspended is used in rare situations Modified is used where the sub tion published under the 1939 Code to show that the previous published stance of a previously published posi and regulations. The term is also used rulings will not be applied pending tion is being changed. Thus, if a prior when it is desired to republish in a some future action such as the issuruling held that a principle applied to single ruling a series of situations, ance of new or amended regulations, A but not to B, and the new ruling names, etc., that were previously pub the outcome of cases in litigation, or holds that it applies to both A and B, lished over a period of time in sepa the outcome of a Service study. Abbreviations The following abbreviations in cur F.A.A.A.-Federal Alcohol Adminis Pub.L.-Public Law. rent use and formerly used will appear tration Act.

PS-Pension, profit-sharing, stock in material published in the Bulletin. FICA-Federal Insurance Contribu bonus or annuity plan ruling. A, B, C, etc.--Names of individuals. tions Act.

R.E.I.T.-Real Estate Investment Acq.--Acquiescence. F.R.-Federal Register.

Trust. A.R.R.—Committee on Appeals and

FUTA-Federal Unemployment Tax Rev. Proc.—Revenue Procedure. Review recommendation.


Rev. Rul.-Revenue Ruling. A.T.-Alcohol and tobacco tax rul

G.C.M.-Chief Counsel's memoran R.S.-Revised Statute. ing.

dum (formerly General Counsel's S.M. Solicitor's Memorandum. B.T.A.—Board of Tax Appeals.


Sol. Op.-Solicitor's Opinion. C.B.-Cumulative Bulletin.

I.R.B.—Internal Revenue Bulletin. S.P.R.-Statement of Procedural CFR-Code of Federal Regulations.

IR-Mim. Published IR-Mimeo Rules. C.T.-Carriers Taxing Act of 1937. graph.

S.R.-Solicitor's Recommendation.
Ct.D.-Court Decision.
I.T.-Income tax ruling.

S.S.T.–Social Security Tax.
Del. Order-Delegation Order. M, N, X, Y, Z, etc.—Names of cor S.T.-Sales tax ruling
D.C.-Treasury Department circular. porations, places or businesses, ac Stat.-Statutes at Large.
DISC—Domestic International Sales cording to context.

T.C.-Tax Court.

M.T.-Miscellaneous tax ruling. T.D.-Treasury Decision.
E.O.-Executive Order.
Mim.-Published mimeograph.

T.I.R.-Technical Information ReERISA-Employee Retirement In- Nonacq.-Nonacquiescence.

lease. come Security Act. O.D.-Office Decision.

U.S.C.-United States Code. E.T.-Estate and gift tax ruling.

P.T.E.-Prohibited Transactions Ex x and y represent numbers and suns Em. T.-Employment tax ruling.


of money.

Court Decisions: 2002, 36 2003, 591 2004, 378 2005, 324 2006, 373 2007, 219 Delegation Orders: 67 (Rev. 14), 609 67 (Rev. 15), 609 88 (Rev. 5), 609 165 (Rev. 2), 610 165 (Rev. 3), 610 Notices: 81-1, 610 81-2, 613 81-3, 614 81-4, 614 81-5, 615 81-6, 615 81.7, 615 81-8, 616 81-9, 616 Prohibited Transaction Exemptions: 80-83, 522 81-6, 530 81.7, 539 Proposed Regulations: LR-1993, 703 LR-1994, 706 LR-8-81, 766 LR-48-80, 746; 765 LR-50-81, 765 LR-64-80, 729 LR-78-80, 733 LR-88-79, 746 LR-108-80, 753 LR-133-78, 751 LR-135-76, 735 LR-157-80, 766 LR-173-78, 708 LR-173-80, 762 LR-205-76, 713 LR-214-76, 768 LR-222-78, 767 LR-234-76, 763 LR-245-76, 724 LR-267-79, 757 Railroad Retirement Quarterly Rate: 482, 483 Revenue Procedures: 81-1, 617 81-2, 617 81-3, 618 81-4, 619 81-5, 619 81-6, 620 81-7, 621 81-8, 623 81-9, 623 81-10, 647 81-11, 651 81-12, 652 81-13, 654 81-14, 669 81-15, 670 81-16, 688 81-17, 688 81-18, 688 81-19, 689

Revenue Procedures Continued 81-20, 690 81-21, 691 81-22, 692 81.23, 692 81-24, 693 81-25, 695 Revenue Rulings: 81-1, 18 81-2, 78 81-3, 125 81-4, 126 81-5, 171 81-6, 385 81-7, 474 81-8, 42 81-9, 178 81-10, 172 81-11, 227 81-12, 228 81-13, 229 81-14, 456 81-15, 457 81-16, 17 81-17, 75 81-18, 295 81-19, 353 81-20, 471 81-21, 482 81-22, 510 81-23, 50 81-24, 79 81-25, 132 81-26, 200 81-27, 228 81-28, 328 81-29, 329 81-30, 388 81-31, 475 81-32, 131 81-33, 173 81-34, 173 81-35, 255 81-36, 255 81-37, 368 81-38, 386 81-39, 396 81-40, 508 81-41, 121 81-42, 216 81-43, 350 81-44, 384 81-45, 483 81-46, 514 81-47, 55 81-48, 174 81-49, 174 81-50, 410 81-51, 458 81-52, 9 81-53, 439 81-54, 476 81-55, 52 81-56, 53 81-57, 182 81-58, 331 81-59, 334 81-60, 335 81-61, 355 81-62, 355 81-63, 455 81-64, 575 81-65, 583

Revenue Rulings—Continued 81-66, 19 81-67, 175 81-68, 349 81-69, 351 81.70, 389 81.71, 496 81-12, 497 81-73, 501 81-74, 175 81.75, 356 81-76, 516 81.77, 582 81-78, 604 81-79, 605 81-80, 44 81-81, 122 81-82, 127 81-83, 434 81-84, 451 81-85, 452 81-86, 504 81-87, 580 81-88, 585 81-89, 129 81-90, 572 81.91, 123 81-92, 133 81.93, 322 81-94, 330 81.95, 332 81-96, 359 81-97, 498 81-98, 40 81-99, 312 81-100, 326 81-101, 352 81-102, 369 81-103, 447 81-104, 503 81-105, 256 81-106, 169 81-107, 201 81-108, 327 81-109, 347 81-110, 479 81-111, 509 81-112, 598 81-113, 176 81-114, 207 81.115, 315 81-116, 333 81-117, 346 81-118, 453 81-119, 512 81-120, 20 81-121, 43 81-122, 202 81-123, 207 81-124, 371 81-125, 515 81-126, 206 81-127, 357 81-128, 469 81-129, 481 81-130, 499 81-131, 582 81-132, 603 81-133, 21 81-134, 177 81-135, 203 81-136, 231 81-137, 232 81-138, 358

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