Writing Tax Research Memos
BA 630
Individual Tax
Purposes
To find a solution to the tax
problems of one’s clients or employer
• To organize the facts, issues, and
conclusions of the project
 To facilitate a review of the
research activities by colleagues
 To allow for subsequent examination of
the research issue
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Audience
Users :
 are well versed in federal tax law
 understand frequent and complete
references to primary and secondary
sources of the tax law
 need no introduction to the hierarchy of tax
authority or to statutory citation practices
Organization
Tax research memo consists of three
main parts:
1. Brief Introduction
• Summary of the facts
• List of the issues
• Conclusions
2. Supporting Analysis
3. Recommended Actions
Introduction
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􀂾 Include the date
􀂾 Provide a complete list of facts
􀂾 Clearly state tax issues that the
client faces
􀂾 Immediately after issues, provide an
unambiguous conclusion as derived
from supporting analysis
Facts
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􀂾 Provide a heading to clearly identify and
set off the facts
􀂾 Provide a complete statement of facts
􀂾 Include only facts provided by the client
􀂾 Pay attention to the timing of the events
􀂾 Combine all related facts together so
that they reside in one location
Issues
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􀂾 State issues clearly and unambiguously
􀂾 Write issues in question form
􀂾 Provide sufficient detail so that the
issue’s tax implication is clear, but
avoid including a detailed cite within
the issue
􀂾 Number and arrange issues in the most
logical order
Issues: Examples
Not a question and
vague
Question and
specific
A question arises as
to how much a
taxpayer can deduct
the payment he made
for the lessons.
Can part or all of the
$13,000 payment be
deducted and, if so,
what is the character
of the deduction?
Issues: Examples
Unclear tax concept
Explicit tax concept
What is the tax
treatment for a
company under
Reg. §1.162-5(c)(1)
when it pays its
employee’s tuition?
Can Borden
Company deduct the
$2,300 it pays to
Smith to cover his
tuition?
Issues: Examples
Accounting concept
Tax concept
Can Bikes-R-Us, Inc.
expense the rental
payment to its chief
financial officer?
Can Bikes-R-Us, Inc.
deduct the rental
payment to its chief
financial officer?
Conclusions
􀂾 For each issue in dispute, give a
clear and unambiguous conclusion
in a separate sentence
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􀂾 Then, proceed to explain logically
how you arrived at your conclusion
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Supporting Analysis
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􀂾 Discuss tax authority in sufficient detail
to show its relationship to the client’s
situation
􀂾 Connect logically each cited authority
with the facts
􀂾 Make your line of reasoning so clear
that misinterpretation is impossible
Supporting Analysis
Insufficient
Better
The theft loss is
deductible in 2001
according to §165(e).
Section 165 (e)
indicates that theft
losses are deductible
in the taxable year
sustained. Thus, the
theft loss is deductible
in 2001.
Supporting Analysis
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If the clearest tax authority is a ruling or
judicial decision, always begin with the
most relevant Code provisions
Next, discuss any related Regulation if it
narrows the focus or clarifies the statutory
law
Finally, finish with the on-point or
analogous judicial decision or ruling
Recommendations
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􀂾 State the required follow-up actions
􀂾 If the research is related to proposed
transactions, explain the recommended
changes
Use of abbreviations
􀂾 Abbreviate common tax terms, especially in
citations:
- Reg. rather than Regulation or
Treasury Regulation
- Rev. Rul. rather than Revenue Ruling
- IRC rather than Internal Revenue Code
􀂾 Avoid, however, the temptation to abbreviate
many words and phrases beyond commonly
accepted
The End!
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Materials used:
• Writing Tax Research Memos Web site
http://www2.gsu.edu/~accerl/
• Federal Tax Research by W. Raabe