Sources of Law and Choice of Courts
The American legal framework consists of dual systems: state and federal. Within each system, cases are resolved by considering constitutions, statutes, regulations, and common law. Taxes are imposed by both the state and federal governments. Each state has its own constitution, statutes, regulations, and common law, but often these are not considered by federal courts in resolving federal tax issues, which are the focus of this book.
Sources of federal tax law and administrative guidance include the Internal Revenue Code, Treasury Regulations, Revenue Rulings, Revenue Procedures, Private Letter Rulings, and court decisions. Tax cases are heard by the United States Supreme Court, Federal Circuit Courts of Appeal, the United States Tax Court, Federal District Courts, the Court of Federal Claims, and, occasionally, United States Bankruptcy Courts.
Structure of the American Legal System
State laws may conflict with federal law. When this happens, federal law trumps, and all courts, state and federal, must follow federal law under the doctrine of Supremacy. State tax issues are resolved in state court, but such issues are beyond the scope of this book.
The Constitution, Statutes, and Regulations
The United States Constitution is the supreme law of the land. If the U.S. Constitution speaks to an issue, it trumps any other law. To the extent any other law conflicts, it is unconstitutional and invalid.
The statutes of the United States, ...