Chapter 16 Tax Research Murphy & Higgins Concepts in Federal Taxation, 2018 edition ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Introduction Tax research - process by which the tax consequences of a completed or proposed transaction are determined Tax treatment must be based on some supporting authority Tax research is simply the means by which these authoritative pronouncements are located, evaluated, and applied to specific set of facts ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Tax Authorities There are two classes of tax authorities Primary Authoritative law and writings of the three branches of the federal government: legislative, executive, and judicial Secondary Supporting materials which provide interpretation of the primary authorities ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Primary Authorities: Legislative U.S. Constitution Article 1, Section 7 Sixteenth Amendment Internal Revenue Code of 1986 (the Code) Statutory language Legislative intent Tax treaties ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

How a Bill Becomes Law Senate President Senate Finance Committee House of Representatives Senate House Ways & Means Committee Joint Conference Committee President ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Primary Authorities: Administrative Sources Treasury Regulations Interpretive versus Legislative Proposed, temporary, and final Revenue Rulings and Procedures Acquiescence and Non-acquiescence Letter Rulings Other IRS Pronouncements Memorandums Notices, announcements, publications, instructions ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Primary Authorities: Judicial U.S. Supreme Court Appellate level U.S. Courts of Appeals U.S. Court of Appeals for the Federal Circuit U.S. Tax Court U.S. District Court U.S. Court of Federal Claims Trial level Small Claims Division of U.S. Tax Court ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Citations to Primary Authorities References made to a primary authority should include a full citation Examples are Internal Revenue Code - Sec. 108 Treasury Regulation Reg. - Sec. 1.61-12 Revenue Ruling - Rev. Rul. 54-56, 1954-2 C.B. 108 U.S. Tax Court Case - Julian S. Danenberg, 73 T.C. 370 (1979) ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Secondary Authorities: Tax Services Tax services fall into two categories Services with limited editorial discussion but many short interpretive comments CCH’s Standard Federal Tax Reporter RIA’s United States Tax Reporter Services with extensive editorial discussion and interpretation of the law RIA’s Federal Tax Coordinator 2d Bloomberg BNA’s Tax Management Portfolios CCH’s Federal Tax Service ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Secondary Authorities: Others CATR - Computer assistance tools are used to speed research CCH, RIA, Tax Analysts, Bloomberg BNA, LEXIS & WESTLAW Internet access Citators are used to determine the history of a judicial decision Tax Periodicals are used to keep up with current developments ©2018Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Tax Compliance versus Tax Planning Facts are known Goal is to determine the consequence of a completed transaction Planning Facts are not set (situation is open-ended) Goal is to structure a future transaction for the taxpayer’s advantage Non-tax factors must be considered ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Steps in theTax Research Process Establish the Facts and Determine the Issues Locate the Relevant Authorities Assess the Importance of the Authorities Code and Regulations Pronouncements Court Decisions Reach Conclusions, Make Recommendations, and Communicate the Results ©2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.