The same is true of judicial decisions. All potentially relevant facts should be stated clearly. Depending on the situation, the tax professional may bear the cost of these mistakes and resulting inefficiencies. In the analysis of each issue, sometimes the clearest tax authority is a ruling or judicial decision.
The reviewer does not need this additional information since, under the method we recommend, the authoritative support is provided in Section B. For example, the dollar amount of the fines is used in the issue.
We refer to the support materials as Section B. In tax research, reviewers understand statutory cites to be references to the Internal Revenue Code and regulatory cites to be references to Treasury Regulations.
To be understandable, the system should not be unnecessarily complex. Similarly, each page of support materials could be numbered B-1, B-2, B-3, etc. Headnotes are not part of the official opinion, carry no legal weight, and sometimes are ambiguous, misleading, or wrong.
DC-Pa,Smith v. Did John request a determination letter to ascertain that a deductible charitable contribution was made. Highlight your conclusion up front. The tax professional should provide complete and specific cites.
This sentence applies the Welch v. Writing Tax Research Memos Tax professionals often must document and communicate their tax research. The main text is the portion the researcher writes and consists of facts, issues, conclusions, and analyses.
Attaching copies of support materials avoids these potential inefficiencies. Issues should be written in question form. Never highlight the headnote or syllabus of a ruling or judicial decision. Do not force the reviewer to interpret the tax authority, wonder how your cited authority relates to the issue, or otherwise guess your line of reasoning.
Does the researcher wish to determine whether the donee organization possesses a determination letter. After reviewing these communication principles, please read the fact scenario that we provide for practice, complete the research, and write a research memo following the lesson guidelines.
Be specific with the kind of research memo that you will put into writing. The nonresident alien in Johansson v. Pages in both Sections A and B should be numbered, and the number should appear in the same location on each page to provide ease of reference e.
Another common mistake is to emphasize financial accounting concepts, such as net income and expense, rather than the analogous tax concepts, namely gross income and deduction. Do not expect the reviewer to wade through several highlighted sentences or paragraphs to find the specific passage that you reference.
For example, the reviewer may know that Malat v.
After the research has begun, the tax professional may realize the need for additional facts or clarifications, which might be obtained through a follow-up telephone conversation, e-mail correspondence, or a formal letter.
The facts should be written clearly so that whoever continues the research project or deals with the issues in a later IRS audit will understand them with virtually no chance of misinterpretation. The paging system should be logical, understandable, and expandable. But it saves the reviewer time.
Another possibility is that the researcher meant to refer to a qualified receipt rather than a determination letter. The tax professional should provide complete and specific cites.
This procedure allows the reviewer to examine your supporting authority in context if he or she wishes. Writing Tax Research Memos Tax professionals often must document and communicate their tax research.
The court held that the one event was so significant that it constituted a U. This sentence applies the Welch v. Generally, the more time taken to prepare a research memo, the less time necessary to review it. Example of a Tax Research Memo The tax research memo on this web site illustrates one way in which tax research can be documented and communicated.
Before reviewing this memo, study the lesson for writing a research memo, read the fact scenario we provide, complete the research, and write a research memo following the lesson guidelines. You can check out my work with these sample research memos – Sample Memo #1 – Dependent Exemption of Divorced Parents.
Sample Memo #2 – Principal Residence Exclusion. Sample Memo #3 – Formless LLC Conversions. Over the past year David has provided invaluable tax research for my firm.
He is responsive and timely and his work accurate. Writing a tax research memo is an art.
Tax professionals do not universally use the same techniques. Generally, the more time taken to prepare a research memo, the less time necessary to review it. Sample Format. Raabe, Whittenburg, Sanders. Federal Tax Research, 8e. Your Firm.
Your Town and State. Date. Relevant Facts. Specific Issues. Conclusions. Support. Tax Research Memorandum To: John Davis Date: January 24, By: Student (Put your name on the back of this Memorandum) Re: Deductible payments in FACTS The relevant facts of the situation are as follows: 1.
John Davis operates a consulting business which reports on %(35). A quality tax research memo is the result of thorough research, careful interpretation of the tax authority located, application of the tax authority to the client’s facts, and clear communication of the research analysis and conclusions.Tax research memo example