Assignment
WEEK LECTURE FOR QUESTIONS 1 AND 2
In the first two weeks of the course we talked about the 4-steps approach to tax research and we covered the main sources used for it: the Internal Revenue Code, the regulations, procedures and rulings, and administrative and judicial interpretations of the tax law. However, these are often not enough to find and support an answer to the tax question. That is when secondary sources come to the rescue.
As we discussed earlier, primary sources are published by various authorities on the tax law, whether it be the Congress, the Treasury, the IRS, or courts. They all vary in the level of their authorities and relevance to specific facts, but they serve as the basis and references for all tax research. Secondary sources differ from primary in two main ways - first, they are published by private parties and experts , and, second, they aid understanding and interpretation of the law, but do so without the authority and should be used as such.
The key secondary sources we discuss during this week are:
• Reference services. These resources can be seen as maps to tax law, and include explanations of the law (text that summarizes and interprets the key concepts) and reference services (a way to provide links between various primary sources of the law).
• Treaties and textbooks. These resources typically include longer texts discussing specific tax technical subjects of the law. They also include tax textbooks used for education among students studying to obtain tax degrees, and those professionals who study tax laws to further advance their technical knowledge and keep up with continuing education requirements set by the governing bodies.
• Journal articles and tax conference materials. These resources represent tax literature published either by tax and law academia, or by tax research services, such as CCH, RIA, and BNA.
• Annual tax summaries and tax newsletters. Each tax research service always offers complimentary newsletters on various topics that users can subscribe to and get daily alerts in their email. These are the least useful for research, as they are more educational in nature, but sometimes can point the researcher in the right direction in his or her work.
The two key takeaways to remember on this topic is that (a) secondary sources are either Code or topic- oriented in nature, and (b) secondary sources are not to be used as references in the final deliverable containing research, but they can aid in the research by pointing the researcher in the right direction, and aid understanding of the complex laws, regulations and cases.
CHAPTER 5
1. Why is it unwise to base your research conclusions solely on what you read in a reference service? Use this week's readings and lecture to support your answer.
2. What are the factors to consider in selecting the type of reference service that is best for your research project? Use this week's readings and lecture to support your answer.
WEEK LECTURE FOR QUESTIONS 3 AND 4
Up to this point in the class we discussed the topics of tax research that typically take the longest time to complete: formulating the question, and consulting the appropriate resources, starting with the primary sources and adding secondary sources for additional guidance and wisdom. There comes a point in this process when the next step is to stop the research and put it in formal writing. Sometimes it is easy to do because the answer is clear and the research is completed. Other times, however, it is not easy to do because the answer is still unclear. This week, we discuss how one can determine when to stop the research process. We will also talk about how to solve some of the ethical issues that arise in the process.
One of the things you no doubt learned so far in this course is that there is no lack of resources to use when doing tax research. There's the extensive and long Internal Revenue Code, followed by even longer Treasury regulations, rulings, procedures, and case law. One can spend weeks and months researching the topic, but never feel like an answer is clear.
Sometimes this happens because the research is performed inefficiently by using the wrong sources. Other times it is because the question is complex and there is no clear answer. However, we do not have an unlimited supply of time, and as tax professionals we often work under the pressures of filing deadlines and financial budgets, forcing us to wrap-up our work earlier than we want.
What should a good tax professional do in such situations?
When this happens, it is important to go back to the basics and review the steps in the tax research process. Are all the facts clear enough and is the question properly formed? Are the authorities consulted appropriately for the question? Is there an answer out there at all, or should the law be interpreted by the tax consultant?
In addition, when there is no clear answer to the problem researched, there are issues of ethical questions tax professionals need to consider. Some of the solutions to these issues are governed by the standards of the profession (such as Curricular 230 and AICPA Code of Professional Conduct). Other solutions are found in the boundaries set by the engagement documents between the professional and the client and how professionals manage their risk in providing tax advice.
At the end of the day, tax professionals want to continue to practice tax, and despite the pressure of earning the fee from the client, or internal pressure of working as a practicing professional inside a finance department of an organization, they need to stay true to the principles of the professional code of conduct.
CHAPTER 4
3. Watch the Forbes Tax Day Protest Targets Twitter multi-media segment. Do you agree or disagree with the protestor being interviewed and why? Use this week's readings and lecture to support your answer.
4. Assume you complete all the research steps, but you still do not feel comfortable with your conclusion. What do you do? Use this week's readings and lecture to support your answer.