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2. TAX RESEARCH Overview of tax research Steps in the research process
Importance of facts to tax consequences
Tax services
The Internet as a tax research tool
Citators
Professional guidelines for tax service
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3. Overview of Tax Research (1 of 2)
Close-fact or tax compliance
Facts already occurred
Discovery of tax consequences
Proper disclosure
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4. Overview of Tax Research (2 of 2)
Open-fact or tax-planning
Before structuring or concluding a transaction
Minimization of taxes
Careful compliance permits legal avoidance of taxation
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5. Steps in the Tax Research Process (1 of 3)
Determine the facts
Identify the issues (questions)
Locate applicable authorities
Evaluate authorities
Choose which to follow when authorities conflict
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6. Steps in the Tax Research Process (2 of 3)
Analyze facts in terms of applicable authorities
Communicate conclusions and recommendations to client
Treas. Dept. Circular 230 covers all written advice communicated to clients
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7. Steps in the Tax Research Process (3 of 3)
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8. Importance of the Facts to the Tax Consequences
Ambiguous situations (gray areas)
Facts are clear but the law is not
Law is clear but the facts are not
Advance planning permits facts to develop that produce favorable tax consequences
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9. Sources of Tax Law Legislative process Internal Revenue Code
Treasury Regulations
Administrative pronouncements
Judicial decisions
Tax treaties
Tax periodicals
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10. Legislative Process House Ways and Means Committee
Voted on by full House
Senate Finance Committee
Voted on by full Senate
Conference Committee
Voted by both full House and Senate
Signed or vetoed by President
Override veto by 2/3 vote by both houses
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11. Internal Revenue Code (IRC) (1 of 2)
Title 26 of the United States Code enacted by Congress
Organization
Title
Subtitle
Chapter
Subchapter
- Part
- Subpart
- Section
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12. Internal Revenue Code (IRC) (2 of 2)
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13. Treasury Regulations Types of Regulations (1 of 2)
Treasury Dept. delegates authority to IRS to promulgate Treas. Regs.
Types of Treasury Regulations
Proposed: no authoritative weight
Temporary
Provide immediate guidance
Same authority as Final Regs.
Final
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14. Treasury Regulations Types of Regulations (2 of 2)
Interpretative Regulations
Interpret related Code section
Same weight as legislative regulations
Courts can overturn in limited circumstances
Legislative Regulations
Legislative re-enactment doctrine
Check date of Regs.
Law may have changed after written
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15. Treasury Regulations Citation Format
1 – Income tax
165 – IRC citation
5 – 5th regulation
Subject matter
20 – Estate tax
25 – Gift tax
301 – Admin/procedural matters
601 – Procedural rules
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16. Administrative Pronouncements Revenue Rulings & Procedures (1 of 2)
More specific than Regs.
Less authority than Regs.
Revenue Procedures
IRS guidance on procedural matters
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17. Administrative Pronouncements Revenue Rulings & Procedures (2 of 2)
Citation format
Rev. Rul. (or Proc.) 97-4, C.B. 5
4th Rev. Ruling of 1997
Beginning with 2000, all four digits of the year are used (e.g., Rev. Rul )
In Cumulative Bulletin on p. 5
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18. Administrative Pronouncements Letter Rulings
Reply to specific taxpayer question
Only authority for specific taxpayer
Ltr. Rul (August 6, 2001)
2001 – year
30 – week
006 – 6th letter ruling of the 30th week
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19. Administrative Pronouncements Other Interpretations (1 of 2)
Technical Advice Memoranda
IRS advice to an IRS agent on technical matters
Issued to public in form of letter rulings
Information releases
Like press releases
Written in lay terms
Sent to newspapers
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20. Administrative Pronouncements Other Interpretations (2 of 2)
Announcements and notices
More technical than information releases
Address current tax developments
IRS bound by law to follow
Just like Revenue Rulings and Procedures
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21. Judicial Decisions Overview of court system U.S. Tax Court
U.S. District Courts
U.S. Court of Federal Claims
Circuit courts of appeals
U.S. Supreme court
Precedential value of various decisions
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22. Overview of Court System (1 of 2)
Appellate
Courts
Courts
Trial
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23. Overview of Court System (2 of 2)
Circuit
States Included in Circuit
1st
ME, MA, NH, RI, PR
2nd
CT, NY, VT
3rd
DE, NJ, PA, VI
4th
MD, NC, SC, VA, WV
5th
LA, MS, TX
6th
KY, MI, OH, TN
7th
IL, IN, WI
8th
AR, IA, MN, MO, NE, ND, SD
9th
AK, AZ, CA, HI, ID, MT, NV, OR, WA, GU, MP
10th
CO, KS, NM, OK, UT, WY
11th
AL, FL, GA
D.C.
District of Columbia
Federal
All jurisdictions (appeals from U.S. Ct. of Fed. Claims
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24. U.S. Tax Court (1 of 3)
Taxpayer does not pay deficiency before litigating case
No jury trial available
Regular and Memorandum decisions
Small Cases Procedure
Acquiescence policy
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25. U.S. Tax Court (2 of 3) Regular decisions Memo decisions
First time court hears case
Memo decisions
Factual variations of previous cases
Small cases procedure
Cases of <$50,000 eligible
Less formal than regular tax court
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26. U.S. Tax Court (3 of 3) Acquiescence policy
IRS announces whether or not it agrees with Tax Court decisions
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27. U.S. District Courts May request a jury trial
Must pay deficiency first
Unreported decisions
Decisions not officially reported
Published by RIA and CCH
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28. U.S. Court of Federal Claims
No jury trial
Must pay deficiency first
Decisions appealable to Circuit Court of Appeals for the Federal Circuit
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29. Circuit Courts of Appeals
Losing party at trial level may appeal decision to appellate court
Circuit Courts of Appeals
Appeals from Tax Court & district courts
Based upon geography
Court of Appeals for the Federal Circuit
Appeals from U.S. Court of Federal Claims
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30. Supreme Court Very few tax cases are heard Hears cases when
Circuit courts are divided or
Issue of great importance
Same authority as IRC
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31. Precedential Value of Decisions
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32. Tax Services (1 of 2) Annotated services Organized by IRC section
United States Tax Reporter by RIA
Standard Federal Tax Reporter by CCH
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33. Tax Services (2 of 2) Topical services organized by topic
Federal Tax Coordinator 2d by RIA
Tax Management Portfolios by BNA
CCH Federal Tax Service by CCH
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34. Internet as a Research Tool CHECKPOINT & INTELLICONECT Libraries
Information
CHECKPOINT
INTELLICONNECT
Recent developments
Newsstand
Tax News, Journals, Newsletters
Primary & secondary sources
Federal
Federal Tax
State and local reporters
State & Local
State Tax
All int’l references
International
International Tax
Estate tax
Estate Planning
Financial & Estate Planning
Pension taxation
Pension & Benefits
Pension/Benefits
Payroll taxation
Payroll
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35. Internet as a Research Tool Search Methods
Searching methods for CHECKPOINT and INTELLICONNECT
Keyword
Index
Citation
Content
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36. Internet as a Research Tool Search Connectors
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37. Citators (1 of 2) History of the case
List of other authorities that have cited the case in question
INTELLICONNECT Citator
CHECKPOINT Citator
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38. Citators (2 of 2)
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39. Professional Guidelines for Tax Services Treas. Circular 230
Pertains to all tax practitioners
Rules to practice before IRS
Guidance on written advice to taxpayers
Gives gov’t authority to impose fines for violations of rules
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40. Professional Guidelines for Tax Services AICPA SSTSs
Ethical framework for taxpayer/client relationship
High standards of care
No duty to verify client information if not suspicious
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