6.1 Tax Law Research
4 min read•august 15, 2024
Tax law research is a complex yet crucial skill for legal professionals. It involves navigating a maze of statutes, regulations, and case law to understand and apply tax rules. From the to IRS guidance, researchers must master various sources to tackle tax issues effectively.
Effective tax law research requires utilizing specialized databases and resources. Commercial platforms like and offer comprehensive coverage, while the provides free access to official documents. Researchers must also employ strategic approaches, from starting with secondary sources to using citators for thorough analysis.
Primary Sources of Tax Law
Internal Revenue Code and Treasury Regulations
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- The Internal Revenue Code () is the main body of statutory tax law in the United States
- Organized into subtitles, chapters, subchapters, and sections
- Establishes the legal framework for federal income, estate, gift, and excise taxes
- are administrative rules and interpretations issued by the Department of the Treasury and the Internal Revenue Service (IRS)
- Provide guidance on the implementation and enforcement of the IRC
- Three types: Final, Temporary, and Proposed
Tax Case Law and IRS Guidance
- Tax case law consists of judicial decisions that interpret and apply tax statutes and regulations
- Decisions come from , , , , and the
- Establish precedents and clarify ambiguities in the tax law
- Other important primary sources include , , Notices, Announcements, and
- Provide official interpretations and guidance from the IRS on specific tax issues
- Help taxpayers and practitioners understand how the IRS applies tax law in different situations
Tax Law Databases and Resources
Commercial Databases and Specialized Platforms
- Westlaw, LexisNexis, and are the main commercial databases for tax law research
- Offer comprehensive access to primary and secondary tax law sources
- Provide powerful search tools and analytics to streamline research
- and are specialized tax research platforms
- Provide extensive coverage of tax laws, regulations, cases, and commentary
- Include practice tools, calculators, and other resources for tax professionals
IRS Website and Secondary Sources
- The IRS website (irs.gov) is a free online resource for tax law research
- Provides access to official tax forms, publications, instructions, and guidance
- Offers a searchable database of IRS written determinations and a tax code navigator
- Tax law treatises, practice guides, and journals are valuable secondary sources
- Examples include and the
- Offer in-depth analysis and expert commentary on tax law topics
Tax Law Interpretation and Application
Statutory Interpretation and Regulatory Analysis
- Statutory interpretation involves examining the plain language, context, and purpose of tax code provisions
- Requires applying (ordinary meaning rule, rule against surplusage, ejusdem generis rule)
- Helps determine the meaning and scope of tax statutes
- When interpreting tax regulations, researchers must consider several factors
- Validity (consistency with the underlying statute)
- Level of authority (final vs. temporary vs. proposed)
- Degree of deference under administrative law principles
Case Law Analysis and Application to Scenarios
- Analyzing tax case law requires understanding the hierarchy of judicial authority
- Binding or persuasive value of decisions from different courts
- Distinguishing between holdings and dicta
- Applying principles of and common law reasoning
- Applying tax law sources to specific scenarios involves several steps
- Identifying relevant facts and characterizing transactions and relationships
- Determining applicable law and reasoning by analogy or distinction
- Reaching a conclusion or recommendation based on legal analysis
Research Strategies for Tax Law
Starting with Secondary Sources and Formulating Searches
- Begin research with secondary sources (treatises, practice guides, commentaries)
- Gain an overview of relevant tax law principles, issues, and authorities
- Identify key concepts and terms to guide further research
- Formulate search queries using key terms, Boolean operators, and field restrictions
- Locate relevant primary sources (code sections, regulations, cases) in tax law databases
- Refine searches based on initial results and new information
Using Citators and Documenting Findings
- Use citators (, ) to check the current status and treatment of primary sources
- Identify related authorities and trace the development of legal issues over time
- Ensure reliance on good law and up-to-date information
- Analyze and synthesize relevant authorities to construct legal arguments
- Identify potential counterarguments and address them proactively
- Reach a well-reasoned conclusion or recommendation on the research question
- Document and communicate research findings clearly and concisely
- Use appropriate citation formats (Bluebook, ALWD)
- Explain the reasoning and authorities relied upon to support conclusions
Key Terms to Review (27)
Audit: An audit is a systematic examination of financial statements, records, and practices to ensure accuracy and compliance with relevant laws and regulations. In the context of tax law, audits serve to verify a taxpayer's financial information and assess whether the correct amount of taxes has been reported and paid. This process can reveal discrepancies that may lead to additional tax assessments or penalties.
Bloomberg Law: Bloomberg Law is a comprehensive legal research platform that provides access to primary and secondary legal materials, including case law, statutes, and legal news. It integrates advanced technology and data analytics to enhance legal research processes and improve the efficiency of legal professionals in their work.
Canons of construction: Canons of construction are a set of principles and rules used by courts and legal professionals to interpret statutes and legal texts. These canons provide guidance on how to ascertain the meaning of ambiguous language and ensure consistent application of the law. They play a critical role in statutory interpretation, helping to clarify legislative intent and achieve fair outcomes in legal disputes.
CCH IntelliConnect: CCH IntelliConnect is an advanced online research platform that provides comprehensive access to tax law resources, including federal, state, and international tax codes, regulations, cases, and primary materials. This platform integrates a variety of tools and features designed to streamline the research process for tax professionals, offering sophisticated search capabilities, customizable content, and expert commentary to facilitate informed decision-making.
Internal Revenue Code: The Internal Revenue Code (IRC) is the comprehensive set of federal tax laws in the United States, which governs the taxation of individuals, businesses, and other entities. It is organized into various sections that detail specific provisions regarding income tax, estate tax, gift tax, and other tax-related topics, making it a crucial reference for tax law research.
IRC: IRC stands for Internal Revenue Code, which is the comprehensive set of tax laws created by the United States Congress. The IRC outlines all federal tax regulations, including income taxes, estate taxes, and gift taxes, serving as the backbone for tax policy and enforcement in the U.S. The code is essential for understanding tax obligations and benefits, providing the legal framework for taxpayers and tax professionals alike.
IRS Revenue Rulings: IRS Revenue Rulings are official interpretations by the Internal Revenue Service (IRS) of how tax laws apply to specific factual situations. They provide guidance on the application of tax regulations, helping taxpayers and tax professionals understand the IRS's stance on various tax issues, which is essential for effective tax law research.
IRS Website: The IRS website is the official online platform of the Internal Revenue Service, providing resources, tools, and information related to federal tax law and regulations in the United States. It serves as a comprehensive hub for taxpayers, tax professionals, and researchers, offering access to forms, instructions, publications, and the latest updates on tax policies.
Journal of Taxation: The Journal of Taxation is a professional publication that focuses on various aspects of tax law, policy, and practice. It serves as a vital resource for tax professionals, scholars, and practitioners by providing articles, case studies, and commentary on current issues in taxation, making it an essential tool in the field of tax law research.
KeyCite: KeyCite is a legal research tool provided by Westlaw that helps users verify the current status of a legal case or statute and find relevant case law, citing references, and other legal resources. It enables researchers to track the treatment of a case over time, ensuring they are relying on valid and authoritative legal precedents. KeyCite is essential for updating case law and plays a significant role in enhancing legal research by connecting users to related legal documents and ensuring thoroughness in their findings.
LexisNexis: LexisNexis is a comprehensive online legal research database that provides access to a vast collection of legal resources, including case law, statutes, regulations, legal journals, and secondary sources. It is a critical tool for legal professionals and students to conduct thorough and efficient research across various areas of law.
Mertens Law of Federal Income Taxation: Mertens Law of Federal Income Taxation refers to the principle that courts should respect the taxpayer's choice of entity for tax purposes, focusing on the form of business entity chosen and the associated tax implications. This law emphasizes the importance of understanding the legal structure selected by taxpayers and how it impacts their tax obligations, particularly in the context of litigation involving tax disputes.
Private Letter Rulings: Private letter rulings are official interpretations issued by the Internal Revenue Service (IRS) in response to a taxpayer's specific request regarding the tax implications of a particular transaction or situation. These rulings provide clarity on how the IRS will apply tax laws to the facts presented, offering guidance and certainty to taxpayers in their tax planning and compliance efforts.
Revenue Procedures: Revenue procedures are official guidelines issued by the Internal Revenue Service (IRS) that provide detailed instructions on how to comply with tax laws and regulations. They serve as important resources for taxpayers, tax professionals, and attorneys, outlining procedures for various tax-related issues, including filings, elections, and penalties. These procedures help clarify the application of tax laws and ensure consistency in their implementation.
Shepard's: Shepard's is a legal research tool that provides citation analysis, helping users verify the status and authority of legal cases, statutes, and other legal documents. By using Shepard's, researchers can quickly determine if a case has been overturned, affirmed, or cited in subsequent decisions, which is crucial for ensuring that legal arguments are based on valid and current authority.
Stare decisis: Stare decisis is a legal principle that means to stand by things decided, which promotes the consistent application of the law by requiring courts to follow established precedents. This principle ensures that similar cases are decided in a similar manner, fostering stability and predictability in the legal system.
Tax avoidance: Tax avoidance is the legal strategy of arranging one's financial affairs in such a way as to minimize tax liability. It involves taking advantage of the provisions in tax laws and regulations to achieve lower tax payments, contrasting with tax evasion, which is illegal. Tax avoidance often includes tactics like deductions, credits, and utilizing specific exemptions.
Tax Evasion: Tax evasion is the illegal act of not paying taxes owed to the government, either by underreporting income, inflating deductions, or hiding money in offshore accounts. This unethical practice undermines the tax system and can lead to severe penalties, including fines and imprisonment. Tax evasion differs from tax avoidance, which is the legal practice of minimizing tax liabilities through legitimate means.
Tax shelter: A tax shelter is a financial strategy that allows individuals or businesses to reduce their taxable income through various deductions, exemptions, or credits. These strategies often involve investments in certain assets or participation in specific programs that the government incentivizes, ultimately leading to a lower tax liability. Understanding tax shelters is crucial for effective tax planning and compliance with tax laws.
Thomson Reuters Checkpoint: Thomson Reuters Checkpoint is an online research platform that provides comprehensive resources for tax professionals, offering access to a wealth of tax law information, tools, and analysis. It is designed to streamline tax research by aggregating primary sources, news, guidance, and various analytical tools into a single platform, making it easier for users to find accurate and relevant information for their needs.
Treasury Regulations: Treasury regulations are rules issued by the U.S. Department of the Treasury that interpret and provide guidance on the Internal Revenue Code (IRC). These regulations help taxpayers understand how the tax laws apply to their specific situations and outline the procedures for compliance, thus playing a critical role in tax law research and application.
U.S. Court of Federal Claims: The U.S. Court of Federal Claims is a specialized federal court that hears monetary claims against the United States government. This court is important for individuals and entities seeking compensation for claims arising from federal contracts, takings, tax refunds, and other financial disputes involving the government.
U.S. Courts of Appeals: The U.S. Courts of Appeals are intermediate appellate courts in the federal judiciary system, established to review decisions made by district courts and certain federal administrative agencies. They play a crucial role in interpreting federal law and ensuring uniformity across different jurisdictions, impacting a wide range of legal issues, including tax law.
U.S. District Courts: U.S. District Courts are the general trial courts of the federal court system, where most federal cases begin. These courts have jurisdiction over civil and criminal cases involving federal laws, as well as certain cases involving state laws when diversity of citizenship exists. They play a crucial role in the legal process, particularly in the area of tax law, where they adjudicate disputes related to federal tax regulations and statutes.
U.S. Supreme Court: The U.S. Supreme Court is the highest court in the federal judiciary of the United States, responsible for interpreting the Constitution and adjudicating legal disputes. It has the ultimate authority in judicial review, allowing it to invalidate laws and executive actions that are deemed unconstitutional, significantly impacting various areas of law, including tax law.
U.S. Tax Court: The U.S. Tax Court is a federal court that specializes in handling disputes between taxpayers and the Internal Revenue Service (IRS) regarding federal income tax. It provides taxpayers with a venue to challenge IRS determinations before paying any disputed taxes, making it a crucial part of the federal tax system.
Westlaw: Westlaw is a comprehensive online legal research service that provides access to a vast database of legal resources, including case law, statutes, regulations, and secondary sources. It serves as an essential tool for legal professionals, offering features that enhance the research process through advanced search capabilities and detailed analysis.