Legal Definitions - Treasury Regulation

Definition: A Treasury Regulation is a rule created by the U.S. Treasury Department to explain or interpret a specific part of the Internal Revenue Code. These regulations are legally binding for all taxpayers.

For example, if the Internal Revenue Code states that a certain type of income is taxable, a Treasury Regulation may provide further details on how that income should be reported and taxed. This helps ensure that taxpayers understand their obligations and can comply with the law.

Another example of a Treasury Regulation might be one that explains how deductions for charitable donations should be calculated. By providing clear guidelines, the regulation helps ensure that taxpayers are able to claim the appropriate deduction and avoid penalties for underpayment.