Chapter 1 Lecture Notes
Chapter 1: Tax Research
Learning Objectives:
1. Overview of tax research
2. Describe the steps in the tax research process
3. Explain how the facts influence the tax consequences
4. Identify the sources of tax law and understand the authoritative value of each
5. Consult tax services to research an issue
6. Use a citator to assess authorities
7. Grasp the basics of Internet-based tax research
8. Understand professional guidelines that CPAs in tax practice should follow
9. Prepare work papers and communicate to clients
Overview of Tax Research
Policy-oriented tax research
Typically conducted by economists or in an academic setting to help formulate tax research.
Client-oriented tax research
Typically conducted by accountants and lawyers.
Help determine the tax consequences to taxpayers due to various transactions.
Tax compliance research – “closed-facts”; determine the tax consequences after the fact.
Tax-planning research – “open facts”; advise the client on tax-planning opportunities before engaging in a transaction.
What is the primary objective of tax research?
Which parties should be considered in tax-planning?
What other types of implications should be considered?
Steps in the Tax Research Process
Establish the facts – focus on the relevant facts for the question
Identify the issues
State the issue as a question
Based on the issues, questions may arise relating to facts and law (if application or law or meaning is uncertain, or if the law is incomplete or non-existent)
Locate authority (“tax law” includes multiple types of authority)
Primary authority
Examples?
Secondary authority
Examples?
Evaluate authority
Considerations (non-exclusive):
Rank
Age
Jurisdiction
Is the IRS bound to follow?
Closeness of facts
Develop conclusions and recommendations
May not be a clear solution
Professional judgment and consideration of client preferences are needed
If applicable, inform the client about alternative
Learning Objectives:
1. Overview of tax research
2. Describe the steps in the tax research process
3. Explain how the facts influence the tax consequences
4. Identify the sources of tax law and understand the authoritative value of each
5. Consult tax services to research an issue
6. Use a citator to assess authorities
7. Grasp the basics of Internet-based tax research
8. Understand professional guidelines that CPAs in tax practice should follow
9. Prepare work papers and communicate to clients
Overview of Tax Research
Policy-oriented tax research
Typically conducted by economists or in an academic setting to help formulate tax research.
Client-oriented tax research
Typically conducted by accountants and lawyers.
Help determine the tax consequences to taxpayers due to various transactions.
Tax compliance research – “closed-facts”; determine the tax consequences after the fact.
Tax-planning research – “open facts”; advise the client on tax-planning opportunities before engaging in a transaction.
What is the primary objective of tax research?
Which parties should be considered in tax-planning?
What other types of implications should be considered?
Steps in the Tax Research Process
Establish the facts – focus on the relevant facts for the question
Identify the issues
State the issue as a question
Based on the issues, questions may arise relating to facts and law (if application or law or meaning is uncertain, or if the law is incomplete or non-existent)
Locate authority (“tax law” includes multiple types of authority)
Primary authority
Examples?
Secondary authority
Examples?
Evaluate authority
Considerations (non-exclusive):
Rank
Age
Jurisdiction
Is the IRS bound to follow?
Closeness of facts
Develop conclusions and recommendations
May not be a clear solution
Professional judgment and consideration of client preferences are needed
If applicable, inform the client about alternative