Chapter
1
Tax Research
(Day 1)
Dr. Richard Ott
ACCTG 833, Fall 2007
Slide D1-2
Tax Research Process
Contexts:
Closed-fact or tax compliance situations
Open-fact or tax planning situations
Slide D1-3
Tax Research Process
Goal of tax planning:
Maximize NPV of after-tax cash flows
Must consider:
Tax consequences to all parties
Nontax costs
Financial reporting consequences (publicly
traded corporations)
Slide D1-4
Tax Research Process
Determine the Facts
Identify issues and research questions
Locate applicable authorities
Evaluate authorities (conflicts)
Analyze facts in terms of the authorities
Communicate conclusions and
recommendations (usually written)
Slide D1-5
Sources of Tax Law
Statutory authorities
Administrative authorities
Judicial authorities
Statutory Authorities
Slide D1-7
Statutory Authorities
U.S. Constitution, 16th Amendment (1913)
Tax Treaties
The Internal Revenue Code
Slide D1-8
Internal Revenue Code
The Internal Revenue Code is the law as
enacted by Congress, signed by President
Highest weight of authority in conflicts
Slide D1-9
Internal Revenue Code
The Internal Revenue Code is Title 26 of
the U.S. Code and is organized as follows:
A. Subtitles
1. Chapters
C. Subchapters
III. Parts
A. Subparts
351 Sections
Slide D1-10
The Internal Revenue Code
Sections are numbered sequentially from
the beginning to the end of Title 26 and are
divided as follows:
351 Section
(g) Subsections
(1) Paragraphs
(A) Subparagraphs
(i) Clauses
Slide D1-11
The Internal Revenue Code
Examples of acceptable citations:
Internal Revenue Code §351(g)(1)(A)(i)
IRC §351(g)(1)(A)(i)
IRC Section 351(g)(1)(A)(i)
Code §351(g)(1)(A)(i)
Code Section 351(g)(1)(A)(i)
Section 351(g)(1)(A)(i) of the IRC
Section 351(g)(1)(A)(i) of the Code
26 USC §351(g)(1)(A)(i)
Slide D1-12
For Next Class:
Read Chapter 1 through page 1-13 in the
Prentice Hall textbook
Note to self: There was ½ hour of extra
class time available on each of Days 1 and
2 and 20 minutes extra time on Day 3. Next
time combine Chapter 1 into just 2 days.