Key Players & Their Roles
1. Procedural Regulations
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Issued by: Commissioner of the IRS (not the Treasury Secretary).
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Authority: Derived from the procedural and administrative provisions of the IRC.
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Binding Effect:
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Binding on the IRS if they affect a vital/personal taxpayer interest (e.g., filing deadlines).
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Have the force of law when describing form-filing obligations.
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2. Proposed, Temporary, and Final Regulations
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Issued by: Treasury Department (via the Office of the Chief Counsel, IRS).
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Approved by: Secretary of the Treasury.
| Type | Purpose | Authority Level | Duration |
|---|---|---|---|
| Proposed | Seek public comments; published in the Federal Register. | Weak authority (non-binding). | Until finalized. |
| Temporary | Provide immediate guidance until final rules are issued. | Binding (same as final regulations). | Max 3 years. |
| Final | Adopted after public feedback; codified as Treasury Decisions (TDs). | Full force of law. | Permanent (until amended/repealed). |
Key Differences
| Aspect | Procedural Regulations | Other Regulations (Proposed/Temporary/Final) |
|---|---|---|
| Issuer | IRS Commissioner | Treasury Department (via IRS Chief Counsel) |
| Legal Force | Binding on IRS for vital taxpayer interests. | Proposed: Weak; Temporary/Final: Binding. |
| Public Input | No public comment period. | Proposed: Public comments required. |
Example Workflow
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Temporary Regulation:
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Treasury issues a temporary regulation on cryptocurrency reporting (effective immediately).
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Concurrently proposes it for public comment.
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Expires in 3 years unless finalized.
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Final Regulation:
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After public feedback, Treasury adopts it as a final regulation (published as a TD).
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Procedural Regulation:
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IRS Commissioner issues rules on e-filing Form 1040 deadlines.
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Exam Takeaways
✅ Procedural regulations = IRS Commissioner’s domain (e.g., filing procedures).
✅ Substantive regulations = Treasury’s domain (e.g., tax calculations).
✅ Temporary = Binding immediately; Proposed = Non-binding draft.
Mnemonic:
"Treasury Makes Laws, IRS Enforces Procedures"
Treasury: Proposed/Temporary/Final Regulations.
IRS: Procedural Regulations.