When you are in a battle with the IRS, you need to know which documents will help your case.
You likely noted that the articles in your Tax Reduction Letter are written in plain English for the business owner but annotated for the tax professional. The articles are “battle ready.”
Even if you are not in a battle, you find comfort in your Tax Reduction Letter articles because they contain the references you can rely on for the strategies presented.
This article helps you understand the sources of tax authority, rules that absolutely bind the IRS, and rules the IRS gives credence to.
Know Your Audience
When you search for tax rules, keep your audience in mind. As you’ll see, the IRS and the courts disagree over the persuasiveness of the different sources of tax law.
Unless you are fighting a case in court, focus your research on the documents that convince the IRS. If you are like most business owners, your audit will begin and end with the IRS.
Most tax disputes never go to trial.
Tax Law Hierarchy
Here are three general rules on the persuasiveness of tax documents:
1.
Statutes and regulations are highly persuasive with both the courts and the IRS.
2.
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