Chapter 16
Tax Research
Murphy & Higgins, Concepts in Federal Taxation, 2010 edition
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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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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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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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How a Bill Becomes Law
House of
Representatives
Senate Finance
Committee
Senate
House Ways & Means
Committee
Joint
Conference
Committee
President
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Primary Authorities:
Administrative Sources

Treasury Regulations





Revenue Rulings and Procedures
Acquiescence and Non-acquiescence
Letter Rulings


Interpretive versus Legislative
Proposed, temporary, and final
Before or after the action
Other IRS Pronouncements


Memorandums
Notices, announcements, publications, instructions
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Trial level
Appellate level
Primary Authorities: Judicial
U.S. Supreme
Court
U.S. Courts
of Appeals
U.S. Tax
Court
U.S. Court of Appeals
for the Federal Circuit
U.S. District
Court
U.S. Court of
Federal Claims
Small claims
division of
U.S. Tax Court
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except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use.
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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. 1.61-12
Revenue Ruling - Rev. Rul. 54-56, 1954-2
C.B. 108
U.S. Tax Court Case - Julian S. Danenberg,
73 T.C. 370 (1979)
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except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use.
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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
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except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use.
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Secondary Authorities:
Tax Services

Services with extensive editorial
discussion and interpretation of the
law
• RIA’s Federal Tax Coordinator 2d
• BNA’s Tax Management Portfolios
• Merten’s Law of Federal Income Taxation
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except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use.
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Secondary Authorities: Others

Computer assistance tools are used
to speed research

LEXIS & WESTLAW
Internet access
 CD-ROM

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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except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use.
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Computer-Assisted Tax
Research (CATR)

To reduce costs and improve efficiency,
tax practitioners have shifted their use of
tax services printed on paper to CATR
tools
Citators
 Tax Periodicals

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16-12
Tax Compliance versus Tax
Planning
Establish the Facts and Determine the
Issues
 Locate the Relevant Authorities
 Assess the Importance of the
Authorities

Code and Regulations
 Pronouncements
 Court Decisions

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except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use.
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Tax Compliance versus Tax
Planning

Reach Conclusions, Make
Recommendations, and Communicate
the Results
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except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use.
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