How Are the Regulations Used in Practice?
Tax practitioners rely heavily on the regulations, because they are easier to read and provide more detail than the Internal Revenue Code itself. They also many times include common hypothetical situations to help illustrate the provisions of the Code section.
However, the drawback is that the Treasury Department has difficulty in issuing regulations that keep up with the Code, which is constantly changing. This can result in situations where the regulations are inconsistent with the Code.
Accordingly, a sound research strategy is to:
1. Read the relevant code section first
2. Find any temporary or final regulations that apply to the code section
3. If a temporary or final regulation exists for that code section, read it together with the code, and ensure that it does not contradict the code section. The code section controls.
4. Look for proposed regulations that might provide guidance as to interpretation of the code section, keeping in mind that they are not authoritative.
See Christopher S. Dykes, Federal Income Tax Law: A Legal Research Guide (Wm. S. Hein & Co, Inc. 2010) for further information.