out2 - Introduction to Taxation Fall, 2009 CHAPTER 2: TAX...

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Introduction to Taxation Fall, 2009 CHAPTER 2: TAX PRACTICE AND RESEARCH A. Tax research in general 1. Defined 2. Types a. Closed fact (after-the-fact) b. Open fact situations (before-the-fact) B. Tax research process 1. The answer to most tax questions is a function of three variables: a. The facts b. The law c. The interpretation of the law as it applies to a particular set of facts (i.e., an administrative and judicial process) 2. The approach taken to solve most tax problems requires several basic steps. a. Determine all of the facts b. Identify the issue and state the tax question precisely 1) Questions of fact 2) Questions of law c. Find and read the authoritative tax law (primary and secondary authorities) d. Evaluate the authority 1) Primary authority: the law and official interpretations of the law 2) Secondary authority: unofficial interpretations of the law; editorial opinions, articles e. Formulate the answer f. Communicate the answer in an effective manner C. Primary authority in general 1. Defined a. The actual law (i.e., the statute) b. Official interpretations of the law, both administrative and judicial Statutory sources: U.S. Constitution, Acts of Congress, Tax Treaties U.S. Constitution
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Tax Treaties Internal Revenue Code (Title 26 of United States Code (which is codification of all U.S. laws) Language of the statute Legislative history and intent (committee reports) Administrative sources: Treasury Regulations Revenue Rulings Revenue Procedures Other written determinations Miscellaneous IRS Publications Judicial sources: Supreme Court Courts of Appeals Courts where the case was originally heard Tax Court Tax Court, Small Claims Division Claims Court District Courts 2. The law is comprised of the Constitution, the Acts of Congress and tax treaties 3. Administrative interpretations of law are issued by the Treasury Department and the IRS (which is a department within the Treasury), including regulations, rulings, revenue procedures, etc. 4. Judicial interpretations include all of the various court decisions that bear on tax issues,
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out2 - Introduction to Taxation Fall, 2009 CHAPTER 2: TAX...

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