[Code of Federal Regulations]
[Title 26, Volume 20]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR601.601]

[Page 110-114]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 601_STATEMENT OF PROCEDURAL RULES--Table of Contents
 
                 Subpart F_Rules, Regulations, and Forms
 
Sec. 601.601  Rules and regulations.


    (a) Formulation. (1) Internal revenue rules take various forms. The 
most important rules are issued as regulations and Treasury decisions 
prescribed by the Commissioner and approved by the Secretary or his 
delegate. Other rules may be issued over the signature of the 
Commissioner or the signature of any other official to whom authority 
has been delegated. Regulations and Treasury decisions are prepared in 
the Office of the Chief Counsel. After approval by the Commissioner, 
regulations and Treasury decisions are forwarded to the Secretary or his 
delegate for further consideration and final approval.
    (2) Where required by 5 U.S.C. 553 and in such other instances as 
may be desirable, the Commissioner publishes in the Federal Register 
general notice of proposed rules (unless all persons subject thereto are 
named and either personally served or otherwise have actual notice 
thereof in accordance with law). This notice includes:
    (i) A statement of the time, place, and nature of public rulemaking 
proceedings;
    (ii) Reference to the authority under which the rule is proposed.
    (iii) Either the terms or substance of the proposed rule or a 
description of the subjects and issues involved.
    (3)(i) This subparagraph shall apply where the rules of this 
subparagraph are incorporated by reference in a notice of hearing with 
respect to a notice of proposed rule making.
    (ii) A person wishing to make oral comments at a public hearing to 
which this subparagraph applies shall file his written comments within 
the time prescribed by the notice of proposed rule making (including any 
extensions thereof) and submit the outline referred to in subdivision 
(iii) of this subparagraph within the time prescribed by the notice of 
hearing. In lieu of the reading of a prepared statement at the hearing, 
such person's oral comments shall ordinarily be limited to a discussion 
of matters relating to such written comments and to questions and 
answers in connection therewith. However, the oral comments shall not be 
merely a restatement of matters the person has submitted in writing. 
Persons making oral comments should be prepared to answer questions not 
only on the topics listed in his outline but also in connection with the 
matters relating to his written comments. Except as provided in 
paragraph (b) of this section, in order to be assured of the 
availability of copies of such written comments or outlines on or before 
the beginning of such hearing, any person who desires such copies should 
make such a request within the time prescribed in the notice of hearing 
and shall agree to pay reasonable costs for coping. Persons who make 
such a request after the time prescribed in the notice of hearing will 
be furnished copies as soon as they are available, but it may not be 
possible to furnish the copies on or before the beginning of the 
hearing. Except as provided in the preceding sentences, copies of 
written comments regarding the rules proposed shall not be made 
available at the hearing.
    (iii) A person who wishes to be assured of being heard shall submit,

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within the time prescribed in the notice of hearing, an outline of the 
topics he or she wishes to discuss, and the time he or she wishes to 
devote to each topic. An agenda will then be prepared containing the 
order of presentation of oral comments and the time allotted to such 
presentation. A period of 10 minutes will be the time allotted to each 
person for making his or her oral comments.
    (iv) At the conclusion of the presentations of comments of persons 
listed in the agenda, to the extent time permits, other persons may be 
permitted to present oral comments provided they have notified, either 
the Commissioner of Internal Revenue (Attention: CC:LR:T) before the 
hearing, or the representative of the Internal Revenue Service stationed 
at the entrance to the hearing room at or before commencement of the 
hearing, of their desire to be heard.
    (v) In the case of unusual circumstances or for good cause shown, 
the application of rules contained in this subparagraph, including the 
10-minute rule in subdivision (iii), above, may be waived.
    (vi) To the extent resources permit, the public hearings to which 
this subparagraph applies may be transcribed.
    (b) Comments on proposed rules--(1) In general. Interested persons 
are privileged to submit any data, views, or arguments in response to a 
notice of proposed rule making published pursuant to 5 U.S.C. 553. 
Further, procedures are provided in paragraph (d)(9) of Sec. 601.702 
for members of the public to inspect and to obtain copies of written 
comments submitted in response to such notices. Designations of material 
as confidential or not to be disclosed, contained in such comments, will 
not be accepted. Thus, a person submitting written comments in response 
to a notice of proposed rule making should not include therein material 
that he considers to be confidential or inappropriate for disclosure to 
the public. It will be presumed by the Internal Revenue Service that 
every written comment submitted to it in response to a notice of 
proposed rule making is intended by the person submitting it to be 
subject in its entirety to public inspection and copying in accordance 
with the procedures of paragraph (d)(9) of Sec. 601.702. The name of 
any person requesting a public hearing and hearing outlines described in 
paragraph (a)(3)(iii) of this section are not exempt from disclosure.
    (2) Effective date. This paragraph (b) applies only to comments 
submitted in response to notices of proposed rule making of the Internal 
Revenue Service published in the Federal Register after June 5, 1974.
    (c) Petition to change rules. Interested persons are privileged to 
petition for the issuance, amendment, or repeal of a rule. A petition 
for the issuance of a rule should identify the section or sections of 
law involved; and a petition for the amendment or repeal of a rule 
should set forth the section or sections of the regulations involved. 
The petition should also set forth the reasons for the requested action. 
Such petitions will be given careful consideration and the petitioner 
will be advised of the action taken thereon. Petitions should be 
addressed to the Commissioner of Internal Revenue, Attention: CC:LR:T, 
Washington, DC 20224. However, in the case of petitions to amend the 
regulations pursuant to subsection (c)(4)(A)(viii) or (5)(A)(i) of 
section 23 or former section 44C, follow the procedure outlined in 
paragraph (a) of Sec. 1.23-6.
    (d) Publication of rules and regulations--(1) General. All Internal 
Revenue Regulations and Treasury decisions are published in the Federal 
Register and in the Code of Federal Regulations. See paragraph (a) of 
Sec. 601.702. The Treasury decisions are also published in the weekly 
Internal Revenue Bulletin and the semiannual Cumulative Bulletin. The 
Internal Revenue Bulletin is the authoritative instrument of the 
Commissioner for the announcement of official rulings, decisions, 
opinions, and procedures, and for the publication of Treasury decisions, 
Executive orders, tax conventions, legislation, court decisions, and 
other items pertaining to internal revenue matters. It is the policy of 
the Internal Revenue Service to publish in the Bulletin all substantive 
and procedural rulings of importance or general interest, the

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publication of which is considered necessary to promote a uniform 
application of the laws administered by the Service. Procedures set 
forth in Revenue Procedures published in the Bulletin which are of 
general applicability and which have continuing force and effect are 
incorporated as amendments to the Statement of Procedural Rules. It is 
also the policy to publish in the Bulletin all rulings which revoke, 
modify, amend, or affect any published ruling. Rules relating solely to 
matters of internal practices and procedures are not published; however, 
statements of internal practices and procedures affecting rights or 
duties of taxpayers, or industry regulation, which appear in internal 
management documents, are published in the Bulletin. No unpublished 
ruling or decision will be relied on, used, or cited by any officer or 
employee of the Internal Revenue Service as a precedent in the 
disposition of other cases.
    (2) Objectives and standards for publication of Revenue Rulings and 
Revenue Procedures in the Internal Revenue Bulletin--(i)(a) A Revenue 
Ruling is an official interpretation by the Service that has been 
published in the Internal Revenue Bulletin. Revenue Rulings are issued 
only by the National Office and are published for the information and 
guidance of taxpayers, Internal Revenue Service officials, and others 
concerned.
    (b) A Revenue Procedure is a statement of procedure that affects the 
rights or duties of taxpayers or other members of the public under the 
Code and related statutes or information that, although not necessarily 
affecting the rights and duties of the public, should be a matter of 
public knowledge.
    (ii) (a) The Internal Revenue Bulletin is the authoritative 
instrument of the Commissioner of Internal Revenue for the publication 
of official rulings and procedures of the Internal Revenue Service, 
including all rulings and statements of procedure which supersede, 
revoke, modify, amend, or affect any previously published ruling or 
procedure. The Service also announces in the Bulletin the Commissioner's 
acquiescences and nonacquiescences in decisions of the U.S. Tax Court 
(other than decisions in memorandum opinions), and publishes Treasury 
decisions, Executive orders, tax conventions, legislation, court 
decisions, and other items considered to be of general interest. The 
Assistant Commissioner (Technical) administers the Bulletin program.
    (b) The Bulletin is published weekly. In order to provide a 
permanent reference source, the contents of the Bulletin are 
consolidated semiannually into an indexed Cumulative Bulletin. The 
Bulletin Index-Digest System provides a research and reference guide to 
matters appearing in the Cumulative Bulletins. These materials are sold 
by the Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402.
    (iii) The purpose of publishing revenue rulings and revenue 
procedures in the Internal Revenue Bulletin is to promote correct and 
uniform application of the tax laws by Internal Revenue Service 
employees and to assist taxpayers in attaining maximum voluntary 
compliance by informing Service personnel and the public of National 
Office interpretations of the internal revenue laws, related statutes, 
treaties, regulations, and statements of Service procedures affecting 
the rights and duties of taxpayers. Therefore, issues and answers 
involving substantive tax law under the jurisdiction of the Internal 
Revenue Service will be published in the Internal Revenue Bulletin, 
except those involving:
    (a) Issues answered by statute, treaty, or regulations;
    (b) Issues answered by rulings, opinions, or court decisions 
previously published in the Bulletin;
    (c) Issues that are of insufficient importance or interest to 
warrant publication;
    (d) Determinations of fact rather than interpretations of law;
    (e) Informers and informers' rewards; or
    (f) Disclosure of secret formulas, processes, business practices, 
and similar information.

Procedures affecting taxpayers' rights or duties that relate to matters 
under the jurisdiction of the Service will be published in the Bulletin.
    (iv) [Reserved]

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    (v) (a) Rulings and other communications involving substantive tax 
law published in the Bulletin are published in the form of Revenue 
Rulings. The conclusions expressed in Revenue Rulings will be directly 
responsive to and limited in scope by the pivotal facts stated in the 
revenue ruling. Revenue Rulings arise from various sources, including 
rulings to taxpayers, technical advice to district offices, studies 
undertaken by the Office of the Assistant Commissioner (Technical), 
court decisions, suggestions from tax practitioner groups, publications, 
etc.
    (b) It will be the practice of the Service to publish as much of the 
ruling or communication as is necessary for an understanding of the 
position stated. However, in order to prevent unwarranted invasions of 
personal privacy and to comply with statutory provisions, such as 18 
U.S.C. 1905 and 26 U.S.C. 7213, dealing with disclosure of information 
obtained from members of the public, identifying details, including the 
names and addresses of persons involved, and information of a 
confidential nature are deleted from the ruling.
    (c) Revenue Rulings, other than those relating to the qualification 
of pension, annuity, profit-sharing, stock bonus, and bond purchase 
plans, apply retroactively unless the Revenue Ruling includes a specific 
statement indicating, under the authority of section 7805(b) of the 
Internal Revenue Code of 1954, the extent to which it is to be applied 
without retroactive effect. Where Revenue Rulings revoke or modify 
rulings previously published in the Bulletin the authority of section 
7805(b) of the Code ordinarily is invoked to provide that the new 
rulings will not be applied retroactively to the extent that the new 
rulings have adverse tax consequences to taxpayers. Section 7805(b) of 
the Code provides that the Secretary of the Treasury or his delegate may 
prescribe the extent to which any ruling is to be applied without 
retroactive effect. The exercise of this authority requires an 
affirmative action. For the effect of Revenue Rulings on determination 
letters and opinion letters issued with respect to the qualification of 
pension, annuity, profit-sharing, stock bonus, and bond purchase plans, 
see paragraph (o) of Sec. 601.201.
    (d) Revenue Rulings published in the Bulletin do not have the force 
and effect of Treasury Department Regulations (including Treasury 
decisions), but are published to provide precedents to be used in the 
disposition of other cases, and may be cited and relied upon for that 
purpose. No unpublished ruling or decision will be relied on, used, or 
cited, by any officer or employee of the Service as a precedent in the 
disposition of other cases.
    (e) Taxpayers generally may rely upon Revenue Rulings published in 
the Bulletin in determining the tax treatment of their own transactions 
and need not request specific rulings applying the principles of a 
published Revenue Ruling to the facts of their particular cases. 
However, since each Revenue Ruling represents the conclusion of the 
Service as to the application of the law to the entire state of facts 
involved, taxpayers, Service personnel, and others concerned are 
cautioned against reaching the same conclusion in other cases unless the 
facts and circumstances are substantially the same. They should consider 
the effect of subsequent legislation, regulations, court decisions, and 
revenue rulings.
    (f) Comments and suggestions from taxpayers or taxpayer groups on 
Revenue Rulings being prepared for publication in the Bulletin may be 
solicited, if justified by special circumstances. Conferences on Revenue 
Rulings being prepared for publication will not be granted except where 
the Service determines that such action is justified by special 
circumstances.
    (vi) Statements of procedures which affect the rights or duties of 
taxpayers or other members of the public under the Code and related 
statutes will be published in the Bulletin in the form of Revenue 
Procedures. Revenue Procedures usually reflect the contents of internal 
management documents, but, where appropriate, they are also published to 
announce practices and procedures for guidance of the public. It is 
Service practice to publish as much of the internal management document 
or communication as is necessary for an understanding of the procedure. 
Revenue Procedures may also be based on

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internal management documents which should be a matter of public 
knowledge even though not necessarily affecting the rights or duties of 
the public. When publication of the substance of a Revenue Procedure in 
the Federal Register is required pursuant to 5 U.S.C. 552, it will 
usually be accomplished by an amendment of the Statement of procedural 
Rules (26 CFR Part 601).
    (vii) (a) The Assistant Commissioner (Technical) is responsible for 
administering the system for the publication of Revenue Rulings and 
Revenue Procedures in the Bulletin, including the standards for style 
and format.
    (b) In accordance with the standards set forth in subdivision (iv) 
of this subparagraph, each Assistant Commissioner is responsible for the 
preparation and appropriate referral for publication of Revenue Rulings 
reflecting interpretations of substantive tax law made by his office and 
communicated in writing to taxpayers or field offices. In this 
connection, the Chief Counsel is responsible for the referral to the 
appropriate Assistant Commissioner, for consideration for publication as 
Revenue Rulings, of interpretations of substantive tax law made by his 
Office.
    (c) In accordance with the standards set forth in subdivision (iv) 
of this subparagraph, each Assistant Commissioner and the Chief Counsel 
is responsible for determining whether procedures established by any 
office under his jurisdiction should be published as Revenue Procedures 
and for the initiation, content, and appropriate referral for 
publication of such Revenue Procedures.
    (e) Foreign tax law. (1) The Service will accept the interpretation 
placed by a foreign tax convention country on its revenue laws which do 
not affect the tax convention. However, when such interpretation 
conflicts with a provision in the tax convention, reconsideration of 
that interpretation may be requested.
    (2) Conferences in the National Office of the Service will be 
granted to representatives of American firms doing business abroad and 
of American citizens residing abroad, in order to discuss with them 
foreign tax matters with respect to those countries with which we have 
tax treaties in effect.

[32 FR 15990, Nov. 22, 1967, as amended at 33 FR 6826, May 4, 1968; 35 
FR 16593, Oct. 24, 1970; 38 FR 4971, Feb. 23, 1973; 39 FR 15755, May 6, 
1974; 41 FR 13611, Mar. 31, 1976; 41 FR 20883, May 21, 1976; 43 FR 
17821, Apr. 26, 1978; 47 FR 56333, Dec. 16, 1982; 48 FR 15624, Apr. 12, 
1983; 52 FR 26673, July 16, 1987]