The five steps in tax research are:
· understand the facts
· identify issues
· locate relevant authorities
· analyze the tax authorities
· communicate research results.
The two types of tax services that tax professionals use in tax research are annotated tax services, arranged by code section, and topical services, arranged by topic.
Research questions often consist of questions of fact or questions of law.
· The answer to a question of fact hinges upon the facts and circumstances of the taxpayer’s transaction.
· The answer to a question of law hinges upon the interpretation of the law, such as interpreting a particular phrase in a code section.
When the researcher identifies that different authorities have conflicting views, she should evaluate the “hierarchy,” jurisdiction, and age of the authorities.
Once the tax researcher has identified relevant authorities, she must make sure that the authorities are still valid and up to date.
The most common end product of a research question is a research memo, which has five basic parts: (1) facts, (2) issues, (3) authority list, (4) conclusion, and (5) analysis.
Discuss facts relevant to the question presented—that is, facts that provide necessary background of the transaction (generally, who, what, when, where, and how much) and those facts that may influence the research answer. Keeping the fact discussion relatively brief will focus the reader’s attention on the relevant characteristics of the transaction.
Sample Solution
