Week 1 Discussions
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School
Lone Star College System, Woodlands *
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Course
1393
Subject
Law
Date
Feb 20, 2024
Type
docx
Pages
3
Uploaded by stidwell2015
1.
What are the purpose(s) of tax research?
a.
The purpose of tax research is to help you answer taxation questions and understand the
tax effects/impacts for certain situations. The research allows you to make more informed
decisions for tax strategies.
2.
What are the six basic steps in conducting tax research? Briefly discuss each step in the tax research process.
a.
Step 1: Establish the Facts
– the researcher must fully understand all the relevant facts and circumstances related to the tax outcome. b.
Step 2: Identify the Issue
– the researchers must rely on their education, training, and experience to develop a list of issues. There are two different categories. Fact issues
(information having an objective reality) and Law Issues
(facts are well established). This step can sometimes be the most difficult element of tax research. c.
Step 3: Locate Authority
– The researcher must locate authority, and this can come from many different sources. Primary Authority
is an original pronouncement that comes from statutory, administrative, or judicial sources. Secondary authority is interpretations of
primary authority and is an unofficial source of tax information. Researchers should not rely to heavily on secondary authority. Tax journals are a good source of information because tax practitioners can stay aware of many current problems. d.
Step 4: Evaluate Authority
– The researcher must evaluate the usefulness of that authority. This includes analyzing the status and precedential value of the authority. e.
Step 5: Develop Conclusions and Recommendations – The researcher arrives at their
conclusion after evaluating the first four steps. They must use their professional judgement in making recommendations. f.
Step 6
: Communicate the Recommendations – the researcher must communicate the facts, assumptions, issues, sources of authority, and conclusions to the client. 3.
In each of the following independent situations, indicate whether the item generally would be a tax (T) or a nontax (NT) consideration in solving a tax research or tax planning problem.
a.
The taxpayer hates to pay federal taxes. He will take any legal action to avoid paying any
federal income, estate, or gift taxes. TAX
b.
The taxpayer does not trust the U.S. banking system and moves all her money to a bank in Switzerland. NONTAX
c.
The taxpayer is married, and his spouse is financially naive. Since he is in bad health, the
taxpayer wants to make sure his wife will be taken care of financially if he were to suddenly die. TAX
d.
The taxpayer wants to purchase rental real estate. He wants to make sure that he will not
be subject to a high state tax where he buys. TAX
e.
The taxpayer owns City of San Diego bonds instead of putting his money in a commercial
bank. NONTAX
4.
What is deemed to be substantial authority under the IRC § 6662 regulations? Why is this important?
a.
“The regulations under § 6662 specify the sources of “substantial authority” to include the
provisions of the IRC, temporary and final regulations, court cases, administrative pronouncements, tax treaties, and congressional intent as reflected in committee reports.
This list also includes proposed regulations, private letter rulings, technical advice memoranda, actions on decisions, general counsel memoranda, information or press releases, notices, and any other similar documents published by the IRS in the Internal Revenue Bulletin. Treatises and articles in legal periodicals, however, are not considered substantial authority under this statute” (Pg. 52). It is important to know these sources because they could help prevent penalties from being applied to a tax return under review. 5.
What are the major steps in developing an effective online tax research query?
a.
Step 1: State the Issue – this should be stated as a question after the facts have been established and the issues have been identified.
b.
Step 2: Identify the Keywords – use words that will find tax authorities that are “on point”.
c.
Step 3: Construct a Research Query – allows researchers to search using natural language or terms and connectors.
d.
Step 4: Select Sources and Execute the Search – identify the practice area and confine the search to types of sources to be used.
e.
Step 5: Interpret and Refine the Search – if the information you need is not produced you can broaden your search criteria.
Response # 1 – Group 3 – Monica Zbylot
1.
I like that you pointed out how most tax issues do not have a clearly defined answer. I feel like that is the biggest reason tax research is so important. 2.
Wonderful job listing out the steps involved in conducting tax research. I had a tough time trying to explain step 4, but your posting spells it out very clearly. It is also important to note that in step 3 researchers should not rely to heavily on secondary sources because they are mostly just interpretations of primary authority and is not official tax information. 13. I agree with all your choices for this question. 19. You are right, it is important for the researcher to know which cases are the most relevant because if they are using data from an outdated case their conclusion and recommendations may not
be accurate. 30. Another way to reduce the number of retrieved documents is to search within results.
Great discussion post over Chapter 2 (: Response #2 – Group 2 – Alex Horton
1.
Nice. Just to add, a big reason tax research is so important is because tax problems vary by each
case and do not have a clearly defined answer. By doing research we can find a common ground on the tax topic being researched. 2.
Excellent job listing the steps involved in conducting research. Knowing which authority has precedence is especially important. 3.
We got slightly different answers for this question. C – I choose tax consideration because he wants his spouse to be financially taken care of if he suddenly passed. I do realize this is more personal, but I think that tax estate planning should be considered here also so the wife can keep as much money as possible. 4.
I agree with your response to this question. 5.
Great job explaining the steps to set up an effective online tax research query. I found the wild cards to be very interesting. Great discussion post over Chapter 2 (:
Response #3 – Group 1 – Alex Horton
1.
There can be many purposes of tax research, but the one you listed is the most obvious, I think. 2.
You listed the steps in conducting tax research perfectly. Just to elaborate on step 3, it is important to note that authority can be classified as either primary or secondary. Primary authority
is an original pronouncement that comes from statutory, administrative, or judicial sources. Secondary authority consists of interpretations of primary authority and is an unofficial source of tax information. It is important to notate the different between these two authorities because of the
enactment of IRC § 6662, which allows penalties to be imposed on substantial understatements of tax. 3.
I agree with all your responses to this question.
4.
Great explanation for this question. New information, tax codes changing, and different issues are
constantly arising so it may be necessary to revisit some of these steps more than once.
5.
Love your response to this. When being provided so much data it can become very hard to differentiate between factual data and things that are far outdated. Great discussion post over Chapter 2 (:
Response #4 – Group 5 – Courage Klutse
Great response to all these discussion questions. You thoroughly explained your responses which I love because it provides a much better understanding. For question 7 I agree with your answer, but I do think that this could be a tax consideration as well because estates involve taxation as well. I also love how you
explained question 33. This is where knowing how to effectively develop a tax research query becomes important, because if you do not know how to search for accurate data you could waste a lot of time. Good luck this semester!
Response #5 – Group 6 – Shonte Auguster
Hi Shonte, I found your responses to all these questions clear and to the point. I love that you mention how in most tax situations there is not one answer that fits all, which is why it is so important to do your research. For question 20 your response is excellent. I know that talking aloud with other colleagues really does help me answer so many of my questions, so I really like that you pointed that out as another alternative to reaching a conclusion. For question 33 you are right, being able to find that balance to provide concise and accurate data to meet standards and satisfy out clients is especially important. We do not want to provide clients with inaccurate conclusions or recommendations. Response #6 – Group 4 – Crystal Banda
Hi Crystal, Great discussion post over chapter 2! You are right, tax problems can be extremely complex, which is an important thing to mention when it comes to the purpose of tax research. Tax research helps us answer taxation questions and understand the tax effects/impacts for certain situations. The research allows you to make more informed decisions for tax strategies. For question 16, citators can also be useful when trying to determine if a case or statute is still a valid law. I also really like how you explained the purpose of each search connector. This gives me a much better idea on words and symbols I can use in my future
research. Good luck this semester! (:
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