1. Writing Tax Research Memos
BA 630
Individual Tax

2. Purposes
To find a solution to the tax problems of one’s clients or employer
• To organize the facts, issues, and conclusions of the project
To facilitate a review of the research activities by colleagues
To allow for subsequent examination of the research issue

3. Audience Users : are well versed in federal tax law
understand frequent and complete
references to primary and secondary
sources of the tax law
need no introduction to the hierarchy of tax
authority or to statutory citation practices

4. Organization Tax research memo consists of three main parts:
1. Brief Introduction
• Summary of the facts
• List of the issues
• Conclusions
2. Supporting Analysis
3. Recommended Actions

5. Introduction 􀂾 Include the date 􀂾 Provide a complete list of facts
􀂾 Clearly state tax issues that the
client faces
􀂾 Immediately after issues, provide an unambiguous conclusion as derived from supporting analysis

6. Facts 􀂾 Provide a heading to clearly identify and set off the facts
􀂾 Provide a complete statement of facts
􀂾 Include only facts provided by the client
􀂾 Pay attention to the timing of the events
􀂾 Combine all related facts together so that they reside in one location

7. Issues 􀂾 State issues clearly and unambiguously
􀂾 Write issues in question form
􀂾 Provide sufficient detail so that the issue’s tax implication is clear, but avoid including a detailed cite within the issue
􀂾 Number and arrange issues in the most logical order

8. Issues: Examples Not a question and vague A question arises as
to how much a
taxpayer can deduct
the payment he made
for the lessons.
Question and
specific
Can part or all of the
$13,000 payment be
deducted and, if so,
what is the character
of the deduction?

9. Issues: Examples Unclear tax concept What is the tax treatment for a
company under
Reg. § (c)(1)
when it pays its
employee’s tuition?
Explicit tax concept
Can Borden
Company deduct the
$2,300 it pays to
Smith to cover his
tuition?

10. Issues: Examples Accounting concept Can Bikes-R-Us, Inc.
expense the rental
payment to its chief
financial officer?
Tax concept
Can Bikes-R-Us, Inc.
deduct the rental
payment to its chief
financial officer?

11. Conclusions 􀂾 For each issue in dispute, give a
clear and unambiguous conclusion
in a separate sentence
􀂾 Then, proceed to explain logically
how you arrived at your conclusion

12. Supporting Analysis
􀂾 Discuss tax authority in sufficient detail to show its relationship to the client’s situation
􀂾 Connect logically each cited authority with the facts
􀂾 Make your line of reasoning so clear that misinterpretation is impossible

13. Supporting Analysis Insufficient The theft loss is deductible in 2001
according to §165(e).
Better
Section 165 (e)
indicates that theft
losses are deductible
in the taxable year
sustained. Thus, the
theft loss is deductible in 2001.

14. Supporting Analysis
If the clearest tax authority is a ruling or judicial decision, always begin with the most relevant Code provisions
Next, discuss any related Regulation if it narrows the focus or clarifies the statutory law
Finally, finish with the on-point or analogous judicial decision or ruling

15. Recommendations 􀂾 State the required follow-up actions
􀂾 If the research is related to proposed transactions, explain the recommended changes

16. Use of abbreviations
􀂾 Abbreviate common tax terms, especially in citations:
- Reg. rather than Regulation or
Treasury Regulation
- Rev. Rul. rather than Revenue Ruling
- IRC rather than Internal Revenue Code
􀂾 Avoid, however, the temptation to abbreviate many words and phrases beyond commonly accepted

17. The End! Materials used: • Writing Tax Research Memos Web site
• Federal Tax Research by W. Raabe