Unfortunately, not every client’s situation fits perfectly to the letter of the tax code. Many times,
clients have circumstances that are not laid out within the tax code, but rather you need to dig
much deeper to find the correct course of action for your client. There are, however, many different
sources that tax professionals can use to delve further into primary and secondary sources to find
something that mostly matches their client’s situation and facts. Temporary and final regulations
are one such primary source that can be used, along with court cases, private letter rulings, tax
treaties and committee reports.
Court cases and tax treaties are primary sources as they are original information that has been put
forth by the judicial system and/or Congress. The IRS states that “A private letter ruling, or PLR, is a
written statement issued to a taxpayer that interprets and applies tax laws to the taxpayer’s
represented set of facts. A PLR is issued in response to a written request submitted by a taxpayer.”
As this is a case-by-case scenario, these private letter rulings should not and cannot be relied on by
taxpayers or tax professionals as precedent [ CITATION Tax19 \l 1033].
Committee Reports according to Sawyers & Gill (2018), “explain the elements of the proposed
changes to the bill and the reasons for each of the proposals.” These reports are produced by the
House and Sentate committees and are usually either “reports that accompany a legislative
measure when it is reported for chamber action, reports resulting from oversight or investigative
activities, reports of conference committees, or committee activity reports, published at the
conclusion of a Congress” [ CITATION Abo19 \l 1033]. If you use a committee report that is from the
Joint Committee on taxation, tax professionals would have to be careful as this type of report is a
step lower than if it were a committee report by the House or Senate committee. I would not rely
solely on committee reports for my research as court cases, treasury regulations, tax treaties, and
private letter rulings are also great resources besides the IRC and could give you clarity into your
client’s situation.
Though I have never worked in the accounting or tax field and have not had the opportunity to look
at client’s tax facts, I think that I would use additional sources would be greatly beneficial when
laws change such as the many laws that were affected by the Tax Cuts and Jobs Act of 2017. IRC
168, accelerated cost recovery systems, was repealed until TCJA and thus it was good to look at
committee reports involved with Bonus depreciation such as COMREP ¶ 1681.0000077 and PL 115-
97.
References
IRC 168 About Committee Reports of the U.S. Congress. (2019). Retrieved from Congress:
https://www.congress.gov/congressional-reports/about
Sawyers, R., & Gill, S. (2018). Federal Tax Research (11 ed.). Boston, MA: Cengage Learning.
Tax Exempt Bonds Private Letter Rulings. (2019, March 29). Retrieved from IRS:
https://www.irs.gov/taxexempt-bonds/teb-private-letter-ruling-some-basic-concepts
