In Module 1 we looked at the legislative authorities and history of IRC sec. 104(a)(2). In Module 2 we are examining how administrative authorities affect the application, interpretation, and enforcement of legislative authority.

The Executive branch of the government is charged with enforcing the laws.

The Department of the Executive branch which oversees the enforcement of the tax laws (the Code) is the Department of the Treasury.

The Treasury is headed by the Secretary of the Treasury, a cabinet member appointed by the President.

Within the Department of the Treasury, much of the practical authority for enforcement of the tax laws has been delegated to the Internal Revenue Service.

The Internal Revenue Service is headed by the Commissioner of Internal Revenue (appointed by the President).

The IRS administers the tax law system on a day-to-day basis.

It does this by enforcing and interpreting the tax rules, primarily the Internal Revenue Code.

The result is a series of written administrative pronouncements which act as guidelines/authorities to taxpayers and practitioners in applying the tax laws.

It also is responsible for collecting tax liabilities.

IRS Pronouncements constitute the primary source of the administrative tax authority.

IRS pronouncements that are required to be published by law include the following:

(1) Regulations

(2) Revenue Rulings

(3) Revenue Procedures

Select one of the main sources of administrative authority (Treasury Regulations (final and proposed), Revenue Rulings, Revenue Procedures, Technical Advice Memoranda, Private Letter Rulings, etc.) and write a brief memorandum describing how an example of that type of administrative authority (that is, a specific ruling, etc., not a discussion of that type of ruling in general) expands, limits, explains or otherwise affects the "black letter" rule contained in the statute (here, IRC sec. 104(a)(2)).

A good place to begin research of this kind is the editorial material prepared by the Checkpoint or CCH Intelliconnect editors explaining IRC sec. 104(a)(2)).