Now that I am aware that the Internal Revenue Manual (IRM) is statutorily enforceable pursuant to IRS Reconstruction and Reform Act, which rendered the Internal Revenue Manual enforceable; there is a whole lots of information found there such as this tidbit
below.
It is not advisable to use legislative court decision to support your arguments, unless you find a Supreme Court decision that backs it up. David Myrland has done an extraordinary research for Supreme Court decision to support many lower courts’ decisions. Although pursuant to 4.10.7.2.9.8.1. 4,3 “However, the Service will recognize the precedential impact of the opinion on cases arising within the venue of the deciding circuit.” The way I
understand this is that i.e., I live in in the 11th Circuit and if the 11th Circuit made a favorable decision that would protect me great, but not if I lived in the 10th Circuit.
Pursuant to the IRM the IRS must follow Supreme Court decisions! All other courts such as Tax Court, District Courts or Claims Court are only binding on the IRS on the individual’s case.
4.10.7.2.9.8
(01-01-2006)
Importance of Court Decisions
- Decisions made at various levels of the court system are considered to be interpretations of tax laws and may be used by either examiners or taxpayers to support a position.
- Certain court cases lend more weight to a position than others. A case decided by the U.S. Supreme Court becomes the law of the land and takes precedence over decisions of lower courts. The Internal Revenue Service must follow Supreme Court
decisions. For examiners, Supreme Court decisions have the same weight as the Code.
- Decisions made by lower courts, such as Tax Court, District Courts, or Claims Court, are binding on the Service only for the particular taxpayer and the years litigated. Adverse decisions of lower courts do not require the Service to alter its position for other taxpayers.
