What is the difference between primary and secondary sources for the tax
system? Primary source of tax system comes from statutory, administrative, and judicial
sources. This includes, but is not limited to: Internal Revenue Code, Revenue Rulings,
Financial Accounting Standards Board (FASB), U.S. Tax Court, Supreme Court, Circuit
Court of Appeals, Tax Treaties, and Treasury Regulations. Secondary source of tax
system unofficial sources of tax information such as journals, tax services, and
newsletters. More specifically, sources include, but are not limited to: IRS publications,
Tax journals and newsletters, Tax services, Press releases, and Annotated services.
Where do the different source types stem from, and how does each play an
important role in tax research? Once tax professionals have located their tax
research sources, they must then assess and analyse different tax systems. This could
be the most time-consuming and challenging aspect of the tax research process. Tax
practitioners must determine whether the tax source, primary or secondary, applies to
the facts and issues of their client’s particular situation, and assess the importance. This
is not always straightforward. Even trusted primary source like IRS or a state tax
website, can still present inefficiencies because they must then apply that information to
the specific situation their client is facing. Plus, guidance on these sites can sometimes
be difficult to fully understand. Thats why it is important to scan both primary and
secondary tax sources to bridge the gap between interpreting tax law.
When you think of primary and secondary sources, they are just what they sound like,
and for research purposes, they serve the same functions, and their definitions do not
change. For example, if I were writing a research paper on the origination of the
Generally Accepted Accounting Principles, I would likely have primary sources from the
AICPA or other government organizations charged with those rules' compliance. A
secondary source would come from a user of the primary source's information. There is
a great secondary source to utilize, known as The Journal of Accountancy.
The primary and secondary source definitions are the same for all research. Specifically
related to tax research, primary sources are documents that the government and
secondary sources issue. Secondary sources are prepared by vendors who provide tax
research services. [ CITATION Arg19 \l 1033] A few examples of these vendors are
legal analysts, scholars, and tax professionals. [ CITATION Saw20 \l 1033] The use of
both primary and secondary sources is significant when completing tax research, but
what may be more important is knowing when you will need to use a primary or
secondary source. While your research is being completed, you will decide what type of
source would be most valuable. There are several different tax systems, so the type of
tax system you are researching will drive the type of support needed. [ CITATION Arg19
\l 1033]
Primary sources are excellent sources for tax researchers to obtain evidence about the
outcome of a particular tax issue. Subject matter experts used to testify in court cases
will rely on primary source research because this is the more respected version of
information that can be provided in court. [ CITATION Saw20 \l 1033] Primary sources
are also commonly used to clarify any discrepancies that may have been presented
improperly via a secondary source. Secondary sources are important because they
attempt to provide an easier way to discern what the primary source means. Secondary
sources make difficult things like the tax code easier for the people who did not write the
tax code to understand. This is extremely important because there may be multiple
primary resources presenting conflicting information. During your research, you will have
to find a way to discern what is indeed fact. If this occurs, you could find that a
secondary source is needed to support the primary source that you have retrieved.
References
AICPA. (2017, May 16). Tax Research Information and Tools. Retrieved from aicpa.org:
https://www.aicpa.org/interestareas/tax/resources/practicemanagement/tax-research/
Argawal, P. (2019, September 30). Types of Taxes. Retrieved from
untelligenteconomist.com: https://www.intelligenteconomist.com/types-of-taxes/
Sawyer, R., & Gill, S. (2020). Federal Tax Research (12th ed.). Cengage Learning.
Retrieved February Various, 2021, from
https://bookshelf.vitalsource.com/#/books/9780357366448
Roby Sawyers, & Gill, S. L. (2020). Federal Tax Research. (12th ed.). South-Western.
