Tax law has three goals. I.R.M. 4.10.7.2 (2006).
- Correlation between tax decisions and the weight of evidence is mandatory and authorities relied upon must be properly cited.
- Tax examiners must be well-informed.
- In tax examination, haste is not a virtue.
The Internal Revenue Service is designed to implement the responsibilities of the office of the Secretary of the Treasury under 26 U.S.C. § 7801.
There are four goals for tax law research:
- Finding primary authorities,
- Finding secondary authorities and related news,
- Finding practitioner tools, and,
- Communicating results using tax research memos
The overarching goal of tax memos is to equip students to reframe tax issues as legal issues by applying relevant legal principles to factual tax situations.
31 C.F.R., part 10, also known as Circular 230, sets out the level of competence required to provide legal guidance on tax. Section 10.35, dealing with competence, requires the practitioner to possess the “appropriate level of knowledge, skill, thoroughness, and preparation necessary for the matter for which the practitioner is engaged.” Similarly, § 10.33 obligates tax advisors to establish the facts, determine which facts are relevant, evaluate the reasonableness of any assumptions or representations, relate the applicable law (including potentially applicable judicial doctrines) to the relevant facts, and arrive at a conclusion supported by law and the facts.
- The facts. Tax law is one area where brevity is not golden. All facts relating to the client’s situation are potentially relevant.
- Become familiar with the law. Use primary and secondary sources to gain an appropriate “level of knowledge” of the law as necessary. Rely on definitions provided in the Code. Tax dictionaries, decisions of the court, and administrative materials are great sources of guidance.
- Issues spotting. Determine legal issues involved.
- Determine applicable law:
- Analogous statutory provisions or case law that supports the client’s case that may be dispositive of the case.
Start with mandatory authorities: Title 26 of the United States Code, Supreme Court decisions, and Court of Appeals decisions on tax law. Below the Court of Appeals are the trial courts: the U.S. Tax Court, U.S. District Court, AND the U.S. Court of Federal Claims.
- Authorities that are contrary to the client’s position must be distinguished from the dispositive authority.