Treasury regulations

Treasury Regulations are the tax regulations issued by the United States Internal Revenue Service (IRS), a bureau of the United States Department of the Treasury. These regulations are the Treasury Department’s official interpretations of the Internal Revenue Code and are one source of U.S. federal income tax law.

Section 7805 of the Internal Revenue Code gives the United States Secretary of the Treasury the power to create the necessary rules and regulations for enforcing the Internal Revenue Code. These regulations, including but not limited to the “Income Tax Regulations,” are located in Title 26 of the Code of Federal Regulations, or “C.F.R.” Each regulation is generally organized to correspond to the Internal Revenue Code section interpreted by that regulation. Citations to the Treasury Regulations may appear in different formats. For instance, the definition of gross income in the regulations may be cited to as “26 C.F.R. 1.61-1” or as “Treas. Reg. 1.61-1.” Both citations refer to the same regulation, which interprets Internal Revenue Code section 61, "Gross income defined."

Under this authority, the Secretary of the Treasury can promulgate final regulations. In the process of enacting final regulations, the Treasury issues proposed or temporary regulations. Proposed regulations do not become effective until after comments and testimony are received ("notice and comment"), and a final regulation is issued. Proposed Regulations may offer guidance for a specific section of the Code, and are useful in determining a taxpayer's liability for the given year, although they have limited precedent value.Interpretive Regulations may be dismissed if they are determined to be at variance with the statute; it is not unknown, however, for courts to accord interpretive regulations with "force of law" status. In 2011, the Supreme Court of the United States decision in Mayo Foundation v. United States effected a shift away from the distinction between "Interpretive Regulations," under 7805 and regulations specifically authorized by their corresponding Internal Revenue Code sections. Courts now evaluate Treasury Regulations based on the standard laid out in the 1984 decision Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc..

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