8e-sm-02 - Federal Tax Research, Eighth Edition Page 2-1 1...

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Unformatted text preview: Federal Tax Research, Eighth Edition Page 2-1 1 CHAPTER 2 TAX RESEARCH METHODOLOGY DISCUSSION QUESTIONS 2-1. The primary purpose of tax research is to aid in finding solutions to tax problems. See page 48 of the text. 2-2. The basic steps in conducting tax research include the following. Establish the Facts This step involves the gathering of facts, including tax and nontax considerations. Identify the Issues The tax researcher must identify both issues of fact and issues of law. In so doing, the researcher must rely on a combination of education, training, and experience. Locate the Appropriate Authority The researcher must locate authority relevant to the client's situation. Authority may include both primary and secondary authority. Evaluate the Authority This step in the tax research process requires the researcher to analyze the authority, including the current status of the authority and the precedential value of the authority. Develop Conclusions and Recommendations The researcher must arrive at his or her conclusions based on the first four steps of the tax research process. Communicate the Recommendations The final step in the research process is to communicate to the client the facts, assumptions, issues, sources of authority, and conclusions and recommendations. See page 49 of the text. 2-3. First, the researcher must understand the mechanical techniques that are used to identify and locate the tax authorities that relate to solving a problem. Second, the researcher must be creative and explore all of the relevant relationships among the facts and the problems at hand. See page 48 of the text. Page 2-2 INSTRUCTORS MANUAL 2-4. Significant tax facts that a tax practitioner might want to obtain could include any of the following. The clients tax entity(ies). The client's family status and stability. The client's past, present, and projected marginal tax rates. The client's legal domicile and citizenship. The client's motivation for the transaction. Relationships among the client and other parties involved in the transaction. Whether special tax rules apply. Whether the transaction is proposed or completed. See pages 49 and 50 of the text. 2-5. The researcher should be aware of the following pitfalls. 1. The researcher may attempt to research a problem before fully understanding the facts and circumstances relevant to the client's situation. 2. Often the researcher may have a tendency to ignore new questions that arise as the research task progresses. 3. The client may fail to provide all of the information that is vital to an accurate solution. 4. The tax researcher may approach a tax problem without considering other constraints on the solution to the problem, such as economic factors or personal preferences of the client....
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This note was uploaded on 07/26/2011 for the course TAX 772 taught by Professor Ber during the Spring '11 term at Hartford.

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8e-sm-02 - Federal Tax Research, Eighth Edition Page 2-1 1...

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