Tax accounting
raymondobl
Checkpoint.pptxTax Research
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Textbook Reading Assignment
Before beginning your research project, please read pages 71-89 and 97-106 in chapter 2 of your textbook.
The sample problem in these slides is the same as the one in your textbook (starting on page 85)
The sample “memo to file” solution starts on page 87 in your textbook
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Primary Sources of Authority
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Legislative Sources
Legislative Sources are also known as Statutory Sources (derive authority from Constitution)
Internal Revenue Code
Committee reports indicate the legislative intent of a bill
House Ways & Means Committee
Senate Finance Committee
Joint Conference Committee
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Administrative Sources of Authority
Interpretations
and specific
applications
of the IRC
Revenue Rulings
Treasury Regulations
Revenue Procedures
Letter Rulings
& other pronouncements
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Judicial Sources
U. S. Court of
Federal Claims
U. S. Court of
Appeals for
Federal Circuit
U. S.
District
Court
U. S. Court of
Appeals
The
Supreme
Court
U. S. Tax Court
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Steps in Research Process
Gather the facts and identify the issues
Locate the sources of authority
Evaluate the relevant authorities
Communicate the recommendations
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Locate Authorities
Link to Checkpoint on Blackboard under Web Links
To sign on Checkpoint you will need a user name and password
All of our user names begin with UN12- (note that is UN for university NOT UM)
We must share user names, so if you get an error message that it is not a valid user name or password then try another user name (because someone else is probably using that user name)
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Checkpoint
Remember only ONE person can use a user name at a time
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Checkpoint Home Screen
“My Quick Links” take you to templates for locating authorities
Clicking on “Search” takes you to the Search screen
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Search Screen
Left panel allows you to choose method of searching
Middle of screen is used for keyword searching
Table of Contents can for accessed at top
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Search by Citation
In left panel of Search screen, select Find by Citation, and then click on “Code & Regs.”
Enter the Section number in the appropriate box and click on the [Search] button
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Full Text of Code Section
Buttons above Code Section can be used to go directly to related materials. [Expl] for U.S. Tax Reporter editorial explanations; [Annot] for annotations (summaries of cases & rulings); [FTC] for Federal Tax Coordinator editorial explanations; [Regs] for Regulations; [Com Rpts] for Committee Reports; [Hist] retrieves the history for the Code section and [New Law Analysis] for recent relevant legislation.
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IRS Rulings and other IRS Pronouncements
To retrieve an IRS Ruling, Procedures, Announcement or other IRS pronouncement when you know the citation, in the left panel of the Search screen, under Find by Citation, click on “Rulings/IRB”
Enter the citation in the appropriate box and click on the [Search] button.
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Court Cases
To retrieve a court case when you know the name or the citation, under Find by Citation in left panel, click on “Cases”
Enter the name or citation in the appropriate box and click on the [Search] button.
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Using a Topical Index
In left panel of Search screen under GO TO, select “Indexes”
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Select Index
Click on the second Index “Code Arranged Annotations & Explanations (USTR) Topic Index” to locate an editorial summary of the law along with relevant cases and rulings.
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Alphabetical listing
Select the letter of the index to locate your topic.
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Facts for Example
Royal Trump, Inc. plans to open a new hotel and casino in Atlantic City. Royal Trump plans to require its employees to stay on the business premises during their working hours and has decided to provide free meals to those employees in an on-premises employee cafeteria for two reasons. First, if employees ate off-premises, they would have to go through two security checks a day (one when they went to lunch and a second one at the end of their shift). Additionally, there are not a sufficient number of fast-food eating establishments within a reasonable distance of the casino that could accommodate the large number of employees that would flood the area restaurants if they did not eat on-premises. Royal Trump would like your advice regarding the correct tax treatment of these cafeteria meals.
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Identify the Issues
Identify the issues and state them as questions
Royal Trump’s situation appear to have two separate issues:
Are the meals tax free to employees?
Are the costs of the employee cafeteria deductible by Royal Trump?
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Click on Search
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Accessing a Topical Index
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Code Arranged Annotations & Explanations Topic Index
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Look under M for Meals
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Click on paragraph number
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Editorial Explanations
You CANNOT cite explanations (EXP ¶)
Hyperlinks are included to relevant Code sections and other relevant sources
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Follow Links to IRC Section
Sec. 132(e)(2) tells us that certain eating facilities operated by an employer may be considered de minimis fringe benefits.
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Exporting Document
Document tool icons at top of screen allow you to print, export (this is the second icon from the left). Do not attempt to email because it will only send it to MY email because my email is the one of record.
Clicking on the Export icon will bring up a popup box allowing you to select the format for saving the file.
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Annotations
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Court Case
Scroll down to get to headnote (summary of case)
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Headnote
You cannot reach a conclusion based on headnote, but must read entire case
Hyperlinks are included to relevant Code sections and other authorities
Scroll back up to top of screen and click on Citator
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Citator
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IRC Sec. 119
Sec. 119 provides for an exclusion from employees’ gross income when meals are furnished for convenience of employer on business premises.
Sec. 119(b)(4) says all meals will be treated as furnished for convenience of employer if qualified meals furnished to more than half of employees
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IRC Sec. 274
Sec. 274(n)(1) contains the general 50% limit on deduction but Sec. 274(n)(2)(B) contains an exception allowing full deduction.
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Searching by USTR Code Section
In left panel of Search screen, select “USTR Code Section.” You can also access the USTR template from the Table of Contents screen by clicking on the link under the Jump To heading.
Select “Income (USTR),” choose “Current,” and enter the Code Section number in the box. Click on [Go to USTR] button
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USTR Code Section Search
Results include links to the full text of the Code Section, related committee reports, related Regulations, editorial explanations, and annotations.
Clicking on the plus (+) displays the next level of documents.
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Look at Regulations
Regulations may contains more a detailed description of the rules, definitions, and examples.
Work your way through the rest of the relevant sources for each important Code Section.
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Keyword Searching
In the Search screen, enter your keyword in the box and check the sources you wish to search.
Natural language searching lets you use conversational phrasing to state your question. Terms & Connectors lets you perform a more advanced search. Click on “Thesaurus/Query Tool” to select connectors.
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Selecting Connectors
Click on the [Spelling] button to check spelling of your keyword.
Add keywords by highlighting the desired connector, clicking the [Append] button, and entering the additional keyword in the Current Query box. Click on [OK] button when you are done.
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Begin Search
Clicking on the [OK] button returns you to the main Search screen with your keywords and connectors in the box.
Click on the [Search] button to start your keyword search.
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Search Results
Your search results are displayed by source and show the number of documents that include your keywords.
Click on any of the links to review the documents retrieved.
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Table of Contents
To browse the table of contents for any editorial or source materials, click on “Table of Contents” near the top of the screen.
You can drill down through the content by clicking on the plus (+) sign to display the next level. Click on the subheading to go to the full text.
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Top Toolbar
Click on “History” to access your recent searches and documents viewed.
Do not attempt to use “Folders” to save and later retrieve documents because you are sharing this username with other students who will access what is in your folder
Click on “Help” to learn more about using Checkpoint features.
When you have finished your research, click on “Sign Out.” Do NOT just close your browser (because it may not logoff the user name preventing someone from signing back on right away)
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Evaluate Authorities
Consider the following when evaluating the authorities
Internal Revenue Code – read every Code section that is applicable and watch for language that indicates quantities or a time period
Committee Reports – it is usually best to start with the Joint Conference Committee report as that will indicate whether the House or Senate version was enacted
Regulations – check the publication date to see if updated for latest amendments to the Code
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Evaluate Authorities
Revenue rulings – reflect current IRS policy and carry considerable weight
Letter rulings & notices – carry less weight but are still good authorities
Court Cases
Tax Court
Federal District Courts
U. S. Court of Federal Claims
Appellate Courts
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Evaluating Judicial Authorities
When a case involves a number of issues, the court will decide each issue separately
The opinion is the court’s statement of the reasons for its decision
Citations for decisions should be checked in a citator to find out:
The decision’s history
What other courts have said about that case
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Evaluating Judicial Authorities
Acquiescence – IRS agrees with a court decision it has lost
IRS issues a nonacquiescence when it disagrees with a decision
A reversal by an appellate court means that the party who won in the lower court now loses and the other party becomes the winner on that issue
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Communicating Recommendations
Memo to the file usually contains:
Restatement of relevant facts
Issues
Conclusions (one conclusion for each issue)
Discussion of reasoning and authorities (one discussion section for each issue)
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Memo to File
A Memo to File for this sample problem is presented on pages 87-88 of your textbook.
You will be expected to prepare a similar Memo to File for your research project.
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The End
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