IRS regulations, also known as treasury regulations or tax regulations, are the regulations issued by the Internal Revenue Services (IRS) to interpret the Internal Revenue Code (IRC).
Section 7805 of the IRC authorizes the Secretary of the Treasury to create rules and regulations necessary to enforce the IRC. The Department of the Treasury, therefore, issues regulations to interpret the IRC.
IRS regulations may not create new taxes or enlarge taxing statutes. If an IRS regulation’s interpretation of the IRC is found at variance with the IRC’s statutory language, the regulation may be struck down by a federal court.
The IRS issues three types of regulations: proposed, temporary, and final regulations.
- Proposed regulations are announced by the IRS to the public via a Notice of Proposed Rulemaking (NPRM). These regulations do not yet have the force of law and may ultimately be altered or canceled entirely before becoming effective final regulations. The public can submit comments to the IRS regarding proposed regulations.
- Temporary regulations are created to provide immediate guidance to the public prior to the publication of final regulations. Temporary regulations are effective when published in the Federal Register but expire within three years of issuance.
- Final regulations are effective regulations issued with the force of law after the IRS has considered and responded to public comments on proposed regulations through their NPRMs.
A temporary or final regulation is published as a Treasury Decision (TD). A TD includes the regulation’s text and a preamble explaining the regulation. A TD is binding on both taxpayers and the IRS. TDs, excluding their explanatory preambles, are published in Title 26 of the Code of Federal Register (CFR).
[Last updated in July of 2023 by the Wex Definitions Team]