1. Chapter 16 Tax Research Murphy & Higgins
Concepts in Federal Taxation, 2018 edition
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2. 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
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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
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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
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5. How a Bill Becomes Law Senate President Senate Finance Committee
House of
Representatives
Senate
House Ways & Means
Committee
Joint
Conference
Committee
President
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6. 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
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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
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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)
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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
Bloomberg BNA’s Tax Management Portfolios
CCH’s Federal Tax Service
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10. 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
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11. 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
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12. 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
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