Understanding IRS Guidance for Notices

What is IRS Guidance?

You'll notice that the IRS Notices include language like the following, " Guidance on the Employee Retention Credit under Section 2301 of the Coronavirus Aid, Relief, and Economic Security Act...I. PURPOSE This notice provides guidance on the employee retention credit..." (Notice 2021-20). 

In the IRS article entitled, " Understanding IRS Guidance - A Brief Primer," it states, 

"For anyone not familiar with the inner workings of tax administration, the array of IRS guidance may seem, well, a little puzzling at first glance. To take a little of the mystery away, here's a brief look at seven of the most common forms of guidance.

"In its role in administering the tax laws enacted by the Congress, the IRS must take the specifics of these laws and translate them into detailed regulations, rules and procedures. The Office of Chief Counsel fills this crucial role by producing several different kinds of documents and publications that provide guidance to taxpayers, firms and charitable groups..."

"A notice is a public pronouncement that may contain guidance that involves substantive interpretations of the Internal Revenue Code or other provisions of the law. For example, notices can be used to relate what regulations will say in situations where the regulations may not be published in the immediate future."

Published Guidance and Other Guidance to Taxpayers

In the IRS' Published Guidance and Other Guidance to Taxpayers, Part. 32, it reads, (08-11-2004) 

Purpose of Revenue Rulings, Revenue Procedures, Notices, Announcements, and News Releases 

  1. Official publications published by the Service provide information and guidance for taxpayers, Service personnel, and others. Their purpose is to help Service personnel apply the tax laws correctly and uniformly and to help taxpayers voluntarily comply with the tax laws. (04-14-2017)
  1. Each publication has its own general characteristics and uses. To ensure consistency, care should be taken to select the appropriate vehicle for disseminating information to the public.
  2. Attorneys must consider the appropriate form of guidance and document the decision to use that form of guidance in the related file. Factors to consider when determining the appropriate form of guidance may include, but are not limited to, the following:
    • The purpose of the guidance and the possible guidance alternatives
    • The scope of the guidance’s application
    • The effect on taxpayer’s rights
    • The effect on taxpayer’s duties
    • The degree of deference needed for the guidance
    • Whether the guidance will be controversial
    • Whether public comments are necessary or helpful
    • Longevity of the guidance
    • Whether the guidance should include the application of law to a factual scenario
    • Advantages of the type of guidance selected
    • What prompted the IRS to provide the guidance in the first place

We Don't Give Legal Advice

This is one of the major reasons why ERC Specialists doesn't give legal or tax advice. If you still have questions about this, please reread #2 under Definitions directly above. 


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