1. ©2009 South-Western, a part of Cengage Learning
Chapter 16
Tax Research
Kevin Murphy
Mark Higgins
©2009 South-Western, a part of Cengage Learning

2. Introduction
Tax research is the process by which the tax consequences of a completed or proposed transaction are determined.

3. 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

4. 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

5. How a Bill Becomes Law Senate President Senate Finance Committee
House of
Representatives
Senate
House Ways & Means
Committee
Joint
Conference
Committee
President

6. Primary Authorities: Executive/Administrative
Treasury Regulations
Interpretive versus Legislative
Proposed, temporary, and final
Revenue Rulings and Procedures
Acquiescence and Non-acquiescence
Letter Rulings
Before or after the action
Other IRS Pronouncements
Memorandums
Notices, announcements, publications, instructions

7. 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
© 2009 South-Western, a part of Cengage Learning
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8. 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
Revenue Ruling Rev. Rul , C.B. 108
U.S. Tax Court Case Julian S. Danenberg, 73 T.C. 370 (1979)

9. 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
BNA’s Tax Management Portfolios
Merten’s Law of Federal Income Taxation

10. Secondary Authorities: Others
Computer assistance tools are used to speed research
LEXIS & WESTLAW
Internet access
CD-ROM
Citators are used to determine the history of a judicial decision
Tax Periodicals are used to keep up with current developments

11. Types of Research Tax Compliance Research Tax Planning Research
Facts are known
Goal is to determine the consequence of a completed transaction
Tax Planning Research
Facts are open-ended
Goal is to structure a future transaction for taxpayer’s advantage
Non-tax factors must be considered

12. Tax Research Process Determine the facts and establish relevance
Determine the issue(s)
Locate and evaluate the relevant authorities
Assess the importance of each
Understand the hierarchy of weight
Reach a conclusion and communicate the results