If youâve already retained the services of a business lawyer in Wichita to manage affairs that involve corporate law , youâve made a wise decision. Your business lawyer can ensure that your company remains in compliance with all relevant regulations and he or she can provide specific guidance on certain situations as they arise. However, it never hurts to familiarize yourself with the basics of the regulations that apply to your business, particularly tax law. Before reading these regulations, it can be helpful to have a basic understanding of common tax law terminology.
Regulations
You can find IRS regulations published in the Federal Register. Regulations serve as guidance for new additions to the tax code. They help taxpayers understand their obligations and how to remain in compliance with legislation . The IRS may also publish regulations to resolve any issues that may arise with already existing tax codes.
Private Letter Rulings
Sometimes, a taxpayer or a business attorney might submit a written request to the IRS for information. For example, the taxpayer may wish to know how the IRS tax code applies to a particular transaction or other circumstance. In response, the IRS will issue a private letter ruling (PLR), which interprets relevant sections of the tax code for the taxpayer and helps the individual understand how tax laws are applicable to the situation. Provided the taxpayer fully and accurately informed the IRS of the situation and acts as instructed, the PLR is binding on the IRS.
Revenue Rulings
Like regulations, revenue rulings are a form of guidance issued by the IRS to help taxpayers and tax professionals understand how tax laws apply to certain situations. Revenue rulings are considered to be official interpretations made by the IRS. For example, a revenue ruling might explain how a taxpayer might deduct a home office.
Revenue Procedures
Revenue procedures are similar to revenue rulings. However, while revenue rulings provide information on the position of the IRS regarding a particular situation, a revenue procedure provides taxpayers and professionals with instructions. For example, a revenue ruling might explain the circumstances in which a home office deduction is allowed. A revenue procedure might explain how to determine the percentage of the home that is devoted entirely to business purposes and how to claim the deduction.