Legal Definitions - Revenue Procedure

A Revenue Procedure (often abbreviated as Rev. Proc.) is an official statement issued by the Internal Revenue Service (IRS) that provides detailed guidance on the administrative and procedural aspects of tax laws. Unlike a Revenue Ruling, which interprets how tax law applies to a specific set of facts, a Revenue Procedure explains howtaxpayers or the IRS itself should carry out certain actions, comply with requirements, or administer specific tax programs. It outlines the steps, forms, and methods for various tax-related processes.

• Example 1: Applying for Tax-Exempt Status

  Imagine a newly formed non-profit organization that wants to apply for tax-exempt status under federal law. The IRS would issue a Revenue Procedure detailing the *exact application process*, including which forms to use (such as Form 1023), what supporting documents are required, where to submit the application, and the criteria the IRS uses to review such requests. This Revenue Procedure doesn't define what makes an organization tax-exempt, but rather explains the *administrative steps* a non-profit must follow to apply for and maintain that status.

• Example 2: Requesting a Private Letter Ruling

  Consider a large corporation planning a complex financial transaction. Before proceeding, they want to get a definitive opinion from the IRS on how certain tax rules will apply to their specific situation. The IRS publishes an annual Revenue Procedure that meticulously outlines the *steps, fees, and required information* for taxpayers to request a "Private Letter Ruling" (PLR) – a written statement from the IRS interpreting tax law for a specific taxpayer's unique facts. This procedure ensures a standardized and clear path for taxpayers seeking such individualized guidance.

• Example 3: Guidance on Electronic Filing Requirements

  Suppose the IRS mandates that certain types of information returns (like W-2s or 1099s) must be filed electronically by employers and businesses meeting specific thresholds. A Revenue Procedure would be issued to explain *how* these electronic filings should be performed. It would detail the acceptable data formats, the specific software or online portals to use, the submission protocols, and any technical requirements for successful electronic transmission. This procedure provides the operational instructions for businesses to comply with the electronic filing mandate.