16:09
Just got my Michigan rejection
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Simple English definitions for legal terms
revenue ruling
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A quick definition of revenue ruling:
A revenue ruling is a statement made by the Internal Revenue Service (IRS) about how they will handle tax questions in the future. It comes from a specific question asked by a taxpayer about their tax liability. These rulings are helpful for people who want to know how the IRS will treat their taxes, but it's important to remember that they only apply to specific situations and may not be relevant in all cases.
A more thorough explanation:
A revenue ruling is an official statement by the Internal Revenue Service (IRS) that explains how it will apply tax laws to specific situations. These rulings are based on a particular taxpayer's question about their tax liability and are published for general use by taxpayers, tax preparers, accountants, and attorneys.
For example, let's say a housepainter paints a lawyer's house in exchange for legal services. The IRS might issue a revenue ruling stating that the fair market value of the legal services received by the housepainter is considered taxable income under the Internal Revenue Code (IRC) § 61(a) and Treasury Regulation 1.62–2. This means that the housepainter would need to report the value of the legal services as income on their tax return.
It's important to note that revenue rulings are based on specific facts and circumstances, so they may not apply to every situation. Additionally, changes in tax laws or court decisions may make a revenue ruling obsolete over time.