+ All Categories
Home > Documents > 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

Date post: 19-Jan-2016
Category:
Upload: elijah-palmer
View: 214 times
Download: 0 times
Share this document with a friend
35
1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall
Transcript
Page 1: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-1©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 2: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-2

TAX RESEARCHTAX RESEARCH(1 of 2)(1 of 2)

Overview of tax researchSteps in the tax research processImportance of facts to the tax

consequencesSources of tax lawTax services

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 3: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-3

TAX RESEARCHTAX RESEARCH(2 of 2)(2 of 2)

CitatorsComputers as a research toolStatements on standards for tax

services

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 4: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-4

Overview of Tax Overview of Tax ResearchResearch

(1 of 2)(1 of 2)

Close-fact or tax complianceFacts already occurredDiscovery of tax consequencesProper disclosure

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 5: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-5

Overview of Tax Overview of Tax ResearchResearch

(2 of 2)(2 of 2)

Open-fact or tax-planningBefore structuring or concluding a

transactionMinimization of taxesCareful compliance permits legal

avoidance of taxation

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 6: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-6

Steps in the Tax Steps in the Tax Research ProcessResearch Process (1 of 2)(1 of 2)

Determine the factsIdentify the issues (questions)Locate applicable authoritiesEvaluate authorities

Choose which to follow when authorities conflict

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 7: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-7

Steps in the Tax Steps in the Tax Research ProcessResearch Process (2 of 2)(2 of 2)

Analyze facts in terms of applicable authorities

Communicate conclusions and recommendations to client

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 8: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-8

Importance of the Importance of the Facts to the Tax Facts to the Tax ConsequencesConsequences

Ambiguous situations (gray areas)Facts are clear but the law is notLaw is clear but the facts are not

Advance planning permits facts to develop that produce favorable tax consequences

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 9: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-9

Sources of Tax LawSources of Tax Law(1 of 2)(1 of 2)

Legislative processInternal Revenue CodeTreasury RegulationsAdministrative pronouncements Judicial decisionsTax treatiesTax periodicals

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 10: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-10

Legislative ProcessHouse Ways and Means CommitteeVoted on by full HouseSenate Finance CommitteeVoted on by full SenateConference Committee

Voted by both full House and SenateSigned or vetoed by President

Override veto by 2/3 vote by both houses

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 11: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-11

Internal Revenue Code (IRC)

Title 26 of the United States Code enacted by Congress

OrganizationTitle

SubtitleChapter

Subchapter - Part

- Subpart - Section

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 12: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-12

Treasury Regulations(1 of 3)

Treasury Dept. delegates authority to IRS to promulgate Treas. Regs.

Types of Treasury Regulations Proposed: no authoritative weightTemporary

Provide immediate guidanceSame authority as Final Regs.

Final

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 13: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-13

Treasury Regulations(2 of 3)

Interpretative regulationsInterpret related Code sectionLess authority than IRC

Legislative regulationsAlmost the same authority as IRC

Legislative reenactment doctrine

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 14: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-14

Treasury Regulations(3 of 3)

1.165-51 – Income tax165 – IRC citation5 – 5th regulation

Subject matter1 – Income tax20 – Estate tax25 – Gift tax301 – Admin/procedural matters601 – Procedural rules

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 15: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-15

Administrative Pronouncements (1 of 5)

Revenue RulingsMore specific than Regs.Less authority than Regs.

Revenue ProceduresIRS guidance on procedural

matters

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 16: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-16

Administrative Pronouncements (2 of 5)

Citation of Revenue Rulings and ProceduresRev. Rul. (or Proc.) 97-4, 1997-1

C.B. 54th Rev. Ruling of 1997

Beginning with 2000, all four digits of the year are used (e.g., Rev. Rul. 2007-5)

In Cumulative Bulletin 1997-1 on p. 5

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 17: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-17

Administrative Pronouncements (3 of 5)

Letter RulingsReply to specific taxpayer questionOnly authority for specific taxpayerLtr. Rul. 200130006 (August 6,

2001)2001 – year30 – week006 – 6th letter ruling of the 30th week

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 18: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-18

Administrative Pronouncements (4 of 5)

Other interpretationsTechnical Advice Memoranda

IRS advice to an IRS agent on technical matters

Issued to public in form of letter rulingsInformation releases

Like press releasesWritten in lay terms Sent to newspapers

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 19: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-19

Administrative Pronouncements (5 of 5)

Other interpretations (continued)Announcements and notices

More technical than information releases

Address current tax developmentsIRS bound by to follow

Just like Revenue Rulings and Procedures

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 20: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-20

Judicial Decisions

Overview of court systemU.S. Tax CourtU.S. District CourtsU.S. Court of Federal ClaimsU.S. Supreme CourtPrecedential value of various

decisions

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 21: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-21

Overview of Court System

U.S. TaxCourt

U.S . District Courtfor taxpayer's

district

Court of Appeals fortaxpayer's geographicaljurisdiction (1st - 11th &

D.C. Circuits)

U.S . Court ofFederal Claims

U.S. Court of Appealsfor Federal Circult

Suprem e Court

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 22: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-22

U.S. Tax Court(1 of 3)

Taxpayer does not pay deficiency before litigating case

No jury trial availableRegular and Memorandum

decisionsSmall Cases ProcedureAcquiescence policy

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 23: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-23

U.S. Tax Court(2 of 3)

Regular decisionsFirst time court hears case

Memo decisionsFactual variations of previous cases

Small cases procedureCases of <$50,000 eligibleLess formal than regular tax court

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 24: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-24

U.S. Tax Court(3 of 3)

Acquiescence policyIRS announces whether or not it

agrees with Tax Court decisions

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 25: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-25

U.S. District Courts

May request a jury trialMust pay deficiency firstUnreported decisions

Decisions not officially reportedPublished by RIA and CCH

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 26: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-26

U.S. Court of Federal Claims

No jury trialMust pay deficiency firstDecisions appealable to Circuit

Court of Appeals for the Federal Circuit

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 27: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-27

Circuit Courts of Appeals

Losing party at trial level may appeal decision to appellate court

Circuit Courts of Appeals Appeals from Tax Court & district courtsBased upon geography

Court of Appeals for the Federal CircuitAppeals from U.S. Court of Federal Claims

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 28: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-28

Supreme Court

Very few tax cases are heardHears cases when

Circuit courts are divided orIssue of great importance

Same authority as IRC

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 29: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-29

Precedential Value of Decisions

Same Court

Tpayer’s Circuit

Supreme Court

Golsen Rule

DC X X X

TC X X X X

CFC X X X

CA X X

SC X

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 30: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-30

Tax ServicesTax Services (1 of 2)(1 of 2)

Annotated servicesOrganized by IRC sectionUnited States Tax Reporter by RIAStandard Federal Tax Reporter by

CCH

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 31: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-31

Tax ServicesTax Services (2 of 2)(2 of 2)

Topical services organized by topicFederal Tax Coordinator 2d by RIALaw of Federal Income Taxation

(Mertens) by West GroupTax Management Portfolios by BNACCH Federal Tax Service by CCH

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 32: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-32

CitatorsCitatorsHistory of the caseList of other authorities that

have cited the case in questionFigure C1-5 summarizes how to use

a citator as part of the research process

CCH CitatorRIA Citator 2nd Series

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 33: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-33

Computers as a Computers as a Research ToolResearch Tool

Computerized sources No findings list

Cross referencing facilitated by hyperlinksNo cumulative supplements

New developments integrated into main textPrimary sources accessible from

explanatory paragraphs via hyperlinksCitator symbols explicitly spelled out

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 34: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

1-34

Statements on Statements on Standards for Tax Standards for Tax Services (SSTSs)Services (SSTSs)

Issued by AICPA Not legally enforceable

May be cited in a negligence lawsuit as “standard of care” for tax practitioners

Professionally enforceable by AICPAViolations could result in suspension or

loss of license

See Appendix E

©2009 Pearson Education, Inc. Publishing as Prentice Hall

Page 35: 1-1 ©2009 Pearson Education, Inc. Publishing as Prentice Hall.

Comments or questions about PowerPoint Slides?Contact Dr. Richard Newmark at University of Northern Colorado’s

Kenneth W. Monfort College of [email protected]

1-35©2009 Pearson Education, Inc. Publishing as Prentice Hall


Recommended