These regulations are the Treasury Department's official interpretations of the Internal Revenue Code[1] and are one source of U.S. federal income tax law.
Both citations refer to the same regulation, which interprets Internal Revenue Code section 61, "Gross income defined.
Proposed Regulations may offer guidance for a specific section of the Code, and are useful in determining a taxpayer's liability for the given year, although they have limited precedent value.
Courts now evaluate Treasury Regulations based on the standard laid out in the 1984 decision Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc..
Proposed Treasury Regulations are drafted by the Internal Revenue Service and published in the Federal Register.