Treasury Regulations interpret and expand upon provisions of the Internal Revenue Code. They are promulgated by the Internal Revenue Service and issued under the authority of the Treasury Department. When conducting research, it is important to identify any relevant Treasury Regulations in order to fully understand and analyze a provision of the Internal Revenue Code.
Legislative Regulations: regulations promulgated pursuant to a specific grant of authority by Congress to the Secretary of the Treasury. Legislative regulations are given the highest level of judicial deference.
Interpretive Regulations: even without a direct grant of authority, the Secretary of the Treasury still as the authority to promulgate regulations pursuant to I.R.C. § 7805(a) which provides a general mandate that the Treasury Department "shall prescribe all needful rules and regulations" in order to enforce the Internal Revenue Code. These types of regulations are know as interpretive regulations. They are given less judicial deference than legislative regulations but will be followed if it carries out Congressional intent.
When issuing legislative regulations, the IRS must follow the Administrative Procedures Act (APA). The IRS is not required to follow the APA when issuing interpretive regulations, but generally does. Under the APA, the IRS must first issue a proposed regulation. The proposed regulation is issued in the form of a Notice of Proposed Rulemaking and is published in the Federal Register. The public then has a an opportunity to comment on the proposed rule. Once the comment period has closed and the IRS has taken into consideration the public comments, it will issue the final regulation by filing a Treasury Decision in the Federal Register which will contain a preamble along with the text of the final regulations as they will appear in the Code of Federal Regulations.
 Research Tip: the preamble of the Treasury Decision issuing a final regulation will usually contain a summary of the comments received and explain why the IRS followed or rejected comments. The preamble can also provide information on the intent or purpose for the regulations which can be helpful in interpreting or applying the regulation in practice. |
In addition to proposed and final regulations, the IRS may issue temporary regulations. Temporary regulations are issued when the IRS wants to provide immediate guidance to the public without having to wait for the conclusion of the notice and comment period. Temporary regulations are often issued when new tax legislation has been passed and the public needs guidance on the new tax laws. Temporary regulations have the same authority as a final regulation. However, when the IRS issues temporary regulations, it must also issued a proposed regulation. For temporary regulations issued after November 20, 1988, the IRS has three years to bring the proposed regulation to final regulation or the temporary regulation expires and is no longer effective or authoritative. Temporary regulations issued prior to November 20, 1988 remain effective even if they were never issued as a final regulation and carry the same authority of a final regulation.
Once a final or temporary regulation is published in the Federal Register as a Treasury Decision it will be published in Title 26 of the Code of Federal Regulations (C.F.R.). The C.F.R. is a codification of federal regulations of all federal agencies in subject-arrangement. Title 26 of the C.F.R. includes most regulations related to tax.
Although Treasury regulations are published in Title 26 of the Code of Federal Regulations, tax practitioners more commonly cite to tax regulations as Treas. Reg. § 1.451-3 (2022). If it is a temporary or proposed regulation, add that information prior to the word "Treas." (e.g. Prop. Treas. Reg. § 1.704-1). For more information on citing Treasury regulations, see Bluebook T1.
Anatomy of a CitationA Treasury regulation cite has three parts separated by a decimal and a hyphen. The number preceding the decimal point indicates the type of regulation and the subject. The number between the decimal point and the hyphen reflects the Internal Revenue Code section being interpreted. The numbers following the hyphen are for internal organization of the regulations and have no relation to the Internal Revenue Code. .