Final answer:
IRS employees are indeed bound by revenue rulings, which are public decisions by the IRS providing guidance to both its personnel and taxpayers on tax law interpretation to ensure consistency and reduce the tax gap.
Step-by-step explanation:
Are IRS employees bound by revenue rulings? Yes, IRS employees are expected to follow revenue rulings, which are official interpretations by the Internal Revenue Service (IRS) that serve as guidance for taxpayers and agency personnel. These rulings provide a consistent approach to how the tax laws are applied. As indicated by the IRS's commitment to reducing the tax gap, which is the difference between what is owed and what is paid, revenue rulings ensure that staff apply tax laws accurately and uniformly.
Revenue rulings are crucial in the administration of tax law and in addressing issues like tax evasion and free riding, which significantly impact the treasury. They interpret the tax code to clarify how it applies to specific situations, thereby instructing both IRS employees and taxpayers on the proper execution of tax law. With the circumstances of shrinking staff and resources as noted by Robert A Weinberger, adherence to revenue rulings becomes even more essential to maintain the integrity of the tax system.