Chapter 16
Tax Research
Kevin Murphy
Mark Higgins
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Introduction
Tax research is the process by which
the tax consequences of a completed or
proposed transaction are determined.
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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:
Executive/Administrative
 Treasury Regulations
 Interpretive versus Legislative
 Proposed, temporary, and final
 Revenue Rulings and Procedures
 Acquiescence and Non-acquiescence
 Letter Rulings
 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. District
Court
U.S. Court of Appeals
for the Federal Circuit
U.S. Court of
Federal Claims
Small claims
division of
U.S. Tax Court
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Citations to Primary Authorities
References made to a primary authority
should include a full citation
Examples are
Internal Revenue Code
Treasury Regulation
Revenue Ruling
U.S. Tax Court Case
Sec. 108
Reg. Sec. 1.61-12
Rev. Rul. 54-56, 1954-2 C.B. 108
Julian S. Danenberg, 73 T.C. 370 (1979)
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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
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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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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Types of Research
Tax Compliance Research
Facts are known
Goal is to determine the consequence of a
completed transaction
Tax Planning Research
Facts are open-ended
Goal is to structure a future transaction for
taxpayer’s advantage
Non-tax factors must be considered
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Tax Research Process
Determine the facts and establish
relevance
Determine the issue(s)
Locate and evaluate the relevant
authorities
 Assess the importance of each
 Understand the hierarchy of weight
Reach a conclusion and communicate
the results
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