Troubleshooting the Research Memo

When reviewers (i.e., professors, managers, or supervisers) evaluate your tax memo, they may provide review notes indicating how you can improve your research. This web page contains a few troubleshooting “tips” that may assist you in learning from your experiences. Generally, conclusions and recommendations may be questioned if you (1) fail to locate a relevant source of the tax law, (2) misinterpret tax authority, or (3) apply the tax law inappropriately (or not at all) to the client fact pattern.

Locating Tax Authority

Sometimes a reviewer may identify a ruling or judicial decision that you did not find. Locate and read it. Watch for key words that might have led you to this tax authority. Return to the key word index or key word search engine that you originally used. Search with your new key words to confirm that they lead you to the ruling or judicial decision. Think about why your original key words did not lead you to this tax authority. If the electronic library you used has a history function, you can look back at all the search requests you submitted.

To avoid overlooking relevant rulings and judicial decisions in the future, consider following up your initial research using a different tax service or electronic library. For example, if you used the BNA Tax Management portfolios initially, you might consider redoing your search for tax authorities using RIA’s Checkpoint.

Also, consider whether using a key word index is better than using a key word search engine or vice versa. A key word index is more appropriate when searching for broad legal concepts such as “capital asset” or “fringe benefit.” In contrast, a key word search engine is better when looking for specific terms such as “golden parachute” or “phantom stock.” When you can identify both broad legal concepts and specific terms, consider using both approaches. Using a table of contents to drill down to relevant documents is a third approach. For more guidance, visit the Locating Tax Authority site.

Interpreting Tax Authority

Misinterpreting tax authority may be due to simply not reading it carefully enough. No substitute exists for reading and rereading the relevant source until its meaning is clear. On the other hand, when the tax law is complex or deals with unfamiliar territory, seek interpretations from secondary sources (e.g., tax treatises or journal articles).

Always interpret regulations, rulings, and judicial decisions in the context of the statutory law. If the Code’s language has changed since the regulation, ruling, or decision was issued, it may no longer be valid (in part or in whole). Always compare non-statutory authorities to the Code and closely examine any differences until you can reconcile them. As you probably know, citators identify inconsistencies between judicial decisions or revenue rulings. However, no comparable resource identifies inconsistencies between the Code and other tax law sources. For more guidance, visit the Evaluating Tax Authority site.

Applying Tax Authority

Even when tax law has been interpreted properly, it must be clearly applied to the client’s facts. To see how this is done, review the example research memo.