"Next time a friend of yours gets audited by the IRS, tell them that the IRS regulations aren't the same thing as the LAW.
Also, please provide your friend with your mailing address so that he can keep in touch from Leavenworth."
Uhh Patrick, I know a lot of people (assuming corporations are people, my friend) who get audited by the IRS (I call them "clients") and I tell them, the IRS and the occasional judge all the time that regulations aren't the same thing as law. They are issued pursuant to law (legal authorization) and, unless challenged in certain ways, are binding, but just how binding and how challenge-able usually depends upon the law they are issued pursuant and what kind of regulations they are (look up "Chevron deference" or pay me a bunch an hour)