1. Chapter 1:
Tax
Research
Chapter 1: Tax Research

2. TAX RESEARCH (1 of 2) Types of tax research Tax research process
How facts affect tax consequences
Sources of tax law and authoritative value
Tax services

3. TAX RESEARCH (2 of 2) Citators Tax practice guidelines for CPAs
Computerized tax research
Work papers and client communications

4. Types of Tax Research (1 of 2)
Close-fact or tax compliance
Facts already occurred
Discovery of tax consequences
Proper disclosure

5. Types 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

6. Steps in Tax Research Process (1 of 2)
Determine the facts
Identify the issues (questions)
Locate applicable authorities
Assess and evaluate authorities
Choose which to follow when authorities conflict

7. Steps in Tax Research Process (2 of 2)
Analyze facts in terms of applicable authorities
Communicate conclusions and recommendations to client

8. How Facts Affect 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

9. Sources of Tax Law and Authoritative Value (1 of 2)
Legislative authority
The legislative process
Internal Revenue Code
Tax treaties
Administrative authority
Treasury Regulations
Administrative interpretations

10. Sources of Tax Law and Authoritative Value (2 of 2)
Judicial decisions
Overview of courts
Trial courts
Courts of appeals
Supreme Court
Precedential value of decisions
Forum shopping
Tax periodicals

11. Legislative Authority: 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

12. Legislative Authority: Internal Revenue Code (IRC)
Title 26 of the United States Code enacted by Congress
Organization
Title
Subtitle
Chapter
Subchapter
- Part
- Subpart
- Section

13. Administrative Authority: Treasury 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

14. Administrative Authority: Treasury Regulations (2 of 2)
Interpretative regulations
Interpret related Code section
Less authority than IRC
Legislative regulations
Same authority as IRC
Legislative Reenactment Doctrine

15. Administrative Authority: Admin. Interpretations (1 of 2)
Revenue Rulings
More specific than Regs.
Less authority than Regs.
Revenue Procedures
IRS guidance on procedural matters

16. Administrative Authority: Admin. Interpretations (2 of 2)
Letter Rulings
Reply to specific taxpayer question
Only authority for specific taxpayer
Other interpretations
Technical Advice Memoranda
Information releases
Announcements and notices

17. Judicial Decisions: Overview of Courts

18. Judicial Decisions: Trial Courts (1 of 2)
Tax Court
Taxpayer does not pay deficiency first
No jury trial available
Regular and Memorandum decisions
Small Cases Procedure
Acquiescense policy

19. Judicial Decisions: Trial Courts (2 of 2)
Federal District Courts
May request a jury trial
Must pay deficiency first
U.S. Court of Federal Claims
No jury trial

20. Judicial Decisions: 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

21. Judicial Decisions: Supreme Court
Very few tax cases are heard
Hears cases when
Circuit courts are divided or
Issue of great importance
Same authority as IRC

22. Judicial Decisions: Precedential Value of Decisions

23. Tax Services (1 of 2) Annotated services Organized by IRC section
United States Tax Reporter by RIA
Standard Federal Tax Reporter by CCH

24. Tax Services (2 of 2) Topical services organized by topic
Federal Tax Coordinator 2d by RIA
Law of Federal Income Taxation by Clark Boardman & Callaghan (Mertens)
Tax Management Portfolios by BNA
CCH Federal Tax Service by CCH

25. Citators History of the case
List of other authorities that have cited the case in question
Figure C1-5 summarizes how to use a citator as part of the research process
CCH Citator
RIA Citator 2nd Series

26. Computerized Research
Web based services integrate several research services and databases
CCH Internet Tax Research Network
RIA CHECKPOINT
Other useful websites

27. CPA Guidelines AICPA Statements on Standards for Tax Services
Not legally enforceable
May be cited in a negligence lawsuit as “standard of care” for tax practitioners
Professionally enforceable by AICPA
Violations could result in suspension or loss of license
IRS Circular 230

28. End of Chapter 1
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