Doctors: Don't Rely on IRS Publications - They Can Betray You in Court.
Another Episode of “Tax Law Is Crazy.”
Most doctors rely on IRS publications on tax matters the way they rely on UpToDate for medical practice.
They pull up Pub 463, Travel, Gift and Car Expenses, to determine whether they can deduct certain expenses.
They skim the examples.
they see language that seems to apply.
And they assume:
“If the IRS said it, I’m safe.”
Not exactly.
Here’s the uncomfortable truth that surprises a lot of people.
Tax Pearl:
IRS publications are not binding legal authority. They are helpful summaries, but they are not “the law,” and they are not considered “substantial authority” for a tax position in controversy. Courts have consistently warned taxpayers that reliance on IRS publications is at their own risk.
Let that sit for a second.
Why This Actually Matters
IRS publications are written to simplify complex tax law for the general public. That’s their purpose.
But simplification has a cost.
Nuance gets lost.
Technical requirements get shortened.
Exceptions get glossed over.
Legally precise words get softened for readability.
And when a simplified explanation conflicts with the actual law?
The Internal Revenue Code wins.
The Treasury Regulations win.
The courts win.
The IRS publication loses.
In cases like Adler v. Commissioner, the court refused to let a taxpayer rely on an IRS publication to override the tax law when claiming dance lessons as a medical deduction. The court made it clear: IRS publication cannot change the meaning of the tax law.
Thank about that.
You could rely entirely on an IRS publication.
You could follow it in good faith.
You could still lose in Tax Court if it conflicts with the Code, regulations, or controlling case law.
So Why Does the IRS Publish Them?
Because tax law is complicated.
Congress writes the law.
Treasury writes regulations interpreting that law.
Courts interpret both.
No busy doctors with a full clinical schedule is going to sit down and analyze IRC § 199A word by word to understand every limitation embedded in the qualified business income deduction.
So the IRS translates the law into plain English.
The goal is accessibility.
Not legal precision.
That’s the trade‑off.
How Do You Know if Your Tax Position is Defensible?
You start with the actual hierarchy of authority for federal tax law.
From strongest to weaker:
Internal Revenue Code (the supreme tax law of the land)
Treasury Regulations
Court cases
IRS rulings and procedures (revenue rulings, revenue procedures, notices, announcements, etc.)
IRS publications and other explanatory materials
Items #1-4 are where serious tax positions should be grounded.
IRS publications are secondary authority. They explain. They do not control. They are not substantial authority. They do not bind the IRS. They do not bind the courts.
This is why serious tax planning cannot rely on publications alone.
If you are taking a meaningful position - a large dollar deduction, entity structuring, real estate professional status, material participation, cost segregation, 199A aggregation - you want your position anchored in:
Specific Code sections
Applicable Treasury Regulations
Supporting case law
Where relevant, on-point IRS rulings or procedures
Not just a convenient paragraph from Pub 463.
This is also why two tax professionals can give different answers.
One may be quoting a IRS publication.
The other may be reading the Code, regulations, and cases directly.
Only one of those approaches aligns with the actual hierarchy of authority when the issue is litigated.
Final thought
Publications are a useful starting points. They are educational tools.
If you are making real money, investing in real estate, running a practice, claiming a significant deductions, or structuring entities, your advice should be anchored in the Internal Revenue Code, regulations, case law, and official IRS pronouncements.
IRS publications can help explain the law.
They are not the law.
Authority matters.
Hierarchy matters.