1. Chapter 1 1 Tax Research (Day 1) Dr. Richard Ott ACCTG 833, Fall 2007

2. Slide D1-2 Tax Research Process Contexts: Closed-fact or tax compliance situations Open-fact or tax planning situations

3. Slide D1-3 Tax Research Process Goal of tax planning: Maximize NPV of after-tax cash flows Must consider: Tax consequences to all parties Nontax costs Financial reporting consequences (publicly traded corporations)

4. Slide D1-4 Tax Research Process Determine the Facts Identify issues and research questions Locate applicable authorities Evaluate authorities (conflicts) Analyze facts in terms of the authorities Communicate conclusions and recommendations (usually written)

5. Slide D1-5 Sources of Tax Law Statutory authorities Administrative authorities Judicial authorities

6. Statutory Authorities

7. Slide D1-7 Statutory Authorities U.S. Constitution, 16 th Amendment (1913) Tax Treaties The Internal Revenue Code

8. Slide D1-8 Internal Revenue Code The Internal Revenue Code is the law as enacted by Congress, signed by President Highest weight of authority in conflicts

9. Slide D1-9 Internal Revenue Code The Internal Revenue Code is Title 26 of the U.S. Code and is organized as follows: A. Subtitles 1. Chapters C. Subchapters III. Parts A. Subparts 351 Sections

10. Slide D1-10 The Internal Revenue Code Sections are numbered sequentially from the beginning to the end of Title 26 and are divided as follows: 351 Section (g) Subsections (1) Paragraphs (A) Subparagraphs (i) Clauses

11. Slide D1-11 The Internal Revenue Code Examples of acceptable citations: Internal Revenue Code §351(g)(1)(A)(i) IRC §351(g)(1)(A)(i) IRC Section 351(g)(1)(A)(i) Code §351(g)(1)(A)(i) Code Section 351(g)(1)(A)(i) Section 351(g)(1)(A)(i) of the IRC Section 351(g)(1)(A)(i) of the Code 26 USC §351(g)(1)(A)(i)

12. Slide D1-12 For Next Class: Read Chapter 1 through page 1-13 in the Prentice Hall textbook Note to self: There was ½ hour of extra class time available on each of Days 1 and 2 and 20 minutes extra time on Day 3. Next time combine Chapter 1 into just 2 days.