Question

Sources of Tax Law for Tax Research. What are Primary vs. Secondary authorities? Can you give examples of each? Consider the following sources of tax law: statutes, case law, IRS announcements (i.e., Revenue Rulings, Revenue Procedures, etc.). Which would seem the strongest to you, if any? What about court cases vs. statutes? To what extent does it matter which court the decision comes from, i.e., which courts are more authoritative than others for tax law?

Answer 1

What are Primary vs. Secondary authorities?

Primary authority are the bare act which govern the law. It is documented and are binding upon all the citizens, government and the courts.

Secondary authority is the one that clears the ambiguity in the verbal text of primary authority and settle the disputes between taxpayer and tax authorities. They are generally in public domain and are authored by private organisations, NPOs, individuals in the simpler language to help in better understanding.

Can you give examples of each?

Examples of primary authority are:

• Constitutions;
• Basic laws;
• Statutes (whether codified or uncodified);
• Treaties and certain other international law materials;
• Municipal charters and ordinances;
• Court opinions;^[1]
• Rules of court procedure;
• Rules of evidence;
• Rules governing the conduct of lawyers;
• Administrative regulations;
• Executive orders.

Examples of secondary authority are:

• Legal briefs and memoranda;
• Tax forms and instructions published by governments
• Government publications explaining or summarizing the laws

Consider the following sources of tax law: statutes, case law, IRS announcements (i.e., Revenue Rulings, Revenue Procedures, etc.). Which would seem the strongest to you, if any?

• In legal hierarchy, IRS announcements are considered as 2nd highest authority after regulations

What about court cases vs. statutes?

Case laws are decided by courts on a matter of dispute presented before them. It can be based upon question of law as well as fact. Whereas statue is a policy which governs the city, council or a country. It is generally considered subordinate to constituion law. Statues interpret the policy and law where as case laws interpret statues governing the case.

To what extent does it matter which court the decision comes from, i.e., which courts are more authoritative than others for tax law?

It matters which court is taking decision because of the complext structure of the judicial system of USA.

The judicial appeals process is summarized as follows:

Courts of Original Jurisdiction or Trial Courts

U.S. Tax Court

U.S. District Courts

U.S. Court of Federal Claims

Appellate Courts

U.S. Circuit Court of Appeals

U.S. Court of Appeals for the Federal Circuit

Supreme Court of the United States

It is important to know from which court decision comes because:

• Appeals originating from the order of the Tax Court and the District Courts are to the Circuit Courts of Appeals and the Appeals from the Court of Federal Claims are filled to the Court of Appeals for the Federal Circuit.
• Only few cases of national importance are heared by supreme court during the year,