Process of finding a competent and professional conclusion to tax problem
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Objective of research is to determine tax result of what has already taken place
Complete transaction
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Research purpose is concern with determination of possible alternatives tax
consequences
Proposed transaction
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Problem may result from
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Start with compilation of relevant facts involved
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All facts that might have bearing on problem must be gathered
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Refining the Problem
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Further Refinement of the Problem
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1-6a (Identifying the Problem)
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Keyword search using online tax services
After problem is defined
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If not complex, researcher may bypass tax service and turn directly to IRC and Treasury
Regulations
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1-6b (Locating the Appropriate Tax Law Sources)
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Assess source in light of problem at hand
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Proper assessment involves careful interpretation of tax law and consideration
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Difficult to comprehend
Must be read carefully for restrictive languages
If answer not in code, may need to resort to Regulation and judicial decisions
Interpreting the Internal Revenue Code
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Treasury Regulations are often said to have force and effect of law
Assessing the Validity of Treasury Regulation
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Revenue ruling issued by IRS carry less weight than Treasury Department Regulation
Ruling are important, in that they reflect the positon of the IRS on tax matters
Assessing the Validity of Other Administrative Sources of Tax Law
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Decision rendered by trial court carries less weight than one issued by
appellate court
U.S supreme court has last word
The level of the court
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Decision of appellate court in tax payer's circuit carries more weight than
one rendered by an appellate court in different circuit
The legal residence of the taxpayer
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Supported by result reached by other courts
Whether the decision represents the weight of authority on the issue
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If decision was appealed, what was the result
The outcome or status of the decision on appeal
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How much reliance can be placed on particular decision depends on following variable
Assessing the Validity of Judicial Sources of the Tax Law
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1-6c (Assessing the Validity of Tax Law Sources)
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1-6 (Working with the Tax Law - Tax Research)
Taxation Page 10
If decision was appealed, what was the result
Constitution□Legislative history materials□Statutes treaties□Treasury regulation□IRS pronouncementsJudicial decisions Primary sources of tax law include Assessing the Validity of Other Sources○
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IRS regards only primary sources as substantial authority
Reference to secondary materials such a legal periodicals can be useful
Clear-cut answer may not be possible
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Uncertainty does not detract from the value of research
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Often guarded judgement is best possible solution to tax problem
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1-6d (Arriving at the Solution or at Alternative Solutions)
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Once problem has been researched adequately, memo, letter, or spoken presentation
setting forth result may be required
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Clear statement of issue
