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What a Revenue Ruling is
A Revenue Ruling is a published interpretation by the Internal Revenue Service of the tax law as applied to a specific set of facts. Revenue Rulings are published in the Internal Revenue Bulletin. They are one form of the substantive published guidance by which the Service announces its position on questions of tax law.
A Revenue Ruling is not the tax law itself. The tax law is the Internal Revenue Code and the regulations promulgated under it. A Revenue Ruling is the Service's published interpretation of that law applied to a stated set of facts.
The structure
Every Revenue Ruling — one page or twenty — is organized in the same order.
- Issue. A one-sentence statement of the question of law addressed.
- Facts. The stipulated facts against which the Service applies the law.
- Law and Analysis. The provisions cited and the reasoning by which the Service applies them to the stated facts.
- Holding. The Service's answer to the Issue, applied to the stated Facts.
- Application. Effective date, transition rules, and effect on other published guidance.
Why the order matters
“A Revenue Ruling's Holding is bound by its Facts. Read the Facts first; read the Holding last.”
The Holding of a Revenue Ruling is a legal conclusion about the specific stipulated Facts. Change the facts, and the Holding does not transfer. This is why the Service publishes the Facts first: they scope the answer. It is also why a Revenue Ruling addressing an ostensibly similar situation should not be assumed to control unless the facts of the reader's situation are materially the same as those stated in the Ruling.
How Revenue Rulings are modified
The Service uses a stable vocabulary to describe the relationship between a new Revenue Ruling and prior published guidance. Read the Application section for these terms:
- Amplified — additional facts or reasoning added.
- Clarified — no substantive change; language made unambiguous.
- Modified — a substantive change; part is affected, the rest remains.
- Superseded — the prior ruling is fully replaced.
- Revoked — the position is withdrawn without replacement.
- Obsoleted — the ruling is no longer determinative.
Reading the 2007-14 cluster
The four Revenue Rulings published together in Internal Revenue Bulletin 2007-14 — Rev. Rul. 2007-19, 2007-20, 2007-21, and 2007-22 — are a useful set for practicing the reading. Each is short; each follows the five-part structure; each identifies the class of frivolous positions the Service will not entertain. Read them in order, and then read the accompanying Bulletin to see how the four Rulings relate.