MGA 403: Tax research

MGA 403
FALL 2020
RESEARCH ASSIGNMENT
Goals of Assignment
• gain experience with primary source material in tax law and the distinction between primary
and secondary source material
• learn the basics of a professional-level approach to tax research and communication of research
• acquire introductory-level experience with a computer-based professional-level tax research toolYou will conduct your search on RIA Checkpoint only. Note that when you conduct your search, you
will want to commence the search using an index and table of contents approach and first do
background reading. At this level of your tax background, it is not recommended that you do a keyword search as it is often fruitless for the inexperienced tax student or leads you down the wrong path.
Once you have conducted an appropriate level of background reading, use the relevant Internal
Revenue Code section as your home base for linking to other resources. Keyword searches are
normally ineffective for primary sources. It is important to first view the posted Tax Research classrecordings posted under week 5, and read the research approach guidance in Attachment A. See
Attachment C for research question choices.
Research MemoWith respect to your selected topic, you will prepare a memo (one to two pages), in your own
words, discussing the tax treatment of your chosen topic given your reading of the following,
referencing in the guidance from the primary sources noted below. See the designated format in
Attachment B.
Research Documentation file
You will search for and turn in the following (label and upload as separate documents):
1. Relevant Internal Revenue Code section(s)—highlight relevant portions; include the entire Code
Section, not excerpts
2. Relevant Treasury Regulation(s)—highlight relevant portions
3. At least one relevant court case or revenue ruling or revenue procedure—highlight relevant
portions
4. Citator report on your chosen court case or revenue ruling (when case/ruling is active on screen,click on “Citator” and then click on case name in the sidebar)
5. Editorial Commentary (i.e. Fed Tax Coordinator Analysis (FTC)) that relates to this issue—
secondary source material—discussion of relevant issue; not annotations
6. Your full research path (“history” button on top of screen)—capture your full history—export to
Word or pdf; don’t use a screenshot; it will cut off.
Make sure you read the “header” so you know what kind of document you are in (e.g. the actual court
case vs. the annotation of the case, or the actual reg. vs. RIA explanation of the reg.). Make sure youactually read the Code section, regulation, case or ruling so you know it is on point and highlight
relevant passages (export to Word and highlight).
Submission—on UBLearns:
• Research memo in Word—Submit your Research memo through SafeAssign in Word
format——Make sure you check the “plagiarism” box
• Research Documentation—Submit a pdf file of each of items 1-6 above through the
Assignment upload function. Upload as separate files for each document, clearly label what
the item is in the file name. Include the entire source documents with relevant passages
highlighted
• Make sure you capture and export your FULL history as we need to review the entire history
(every session since first signing on)—check the options re days selected and make sure all daysare selected.—do not use a screenshot.
Note–IRS Publications are not primary (authoritative) sources and cannot be cited. Do not click on
“Federal Tax Handbook.” It is too basic.
Note that the memo must be in your own words and make sure you refer to the Code section(s)
and specific regulation, and ruling or case that provides the basis for your conclusion. If you have anyquestion as to what constitutes plagiarism, please contact your instructor. Your research path (i.e.
history) must support your findings. Do not discuss any document that you have not actually read.
DUE DATE: October 16, 2020
• On-line submissions (research memo file + documentation files)—9:00 AM
CAUTION—this assignment is about the process of professional tax research, not just the final
answer. Your research process through RIA Checkpoint is the primary basis of your grade so do
not waste time with Google, etc. Use of sources other than RIA Checkpoint will result in a grade
of -0-.
For submission online of memo, make sure you check the plagiarism checkbox. If we have to ask
you to re-submit after the deadline because you did not do so, there is a 5-point late filing penalty
ATTACHMENT A
SUGGESTED RESEARCH APPROACH
• Background reading through Federal Tax Coordinator analysis—use index/table of contents
search approach to locate appropriate chapter—don’t just read about narrow question; gain an
understanding of the broader tax issues involved. From this background reading you will
determine the IRC section(s) involved.
• Primary Sources
o Read the IRC section—can get to it through “Find by Citation” or Table of Contents
tabs on research screen or can link from FTC background reading
o Use IRC section as your home base to link to other sources
 Regulations
 Court Cases/Revenue Rulings/Revenue Procedures—find these by linking to
“Annotations” from IRC section; you may also read about relevant cases in your
background reading
 Note—IRS Publications are not an authoritative source; they can only be used
for background reading
o Once have case or rulings that are relevant, check the judicial history through Citator
o Capture your full history.
ATTACHMENT B
RESEARCH MEMO FORMAT
Name
Class time
Tax Research Memo
Facts and Issue: Recap the client’s issue and any relevant information relayed by client; what is thetax issue
Analysis:
• Relevant IRC sections—summarize general provisions of the Code section(s) including
purpose/key purpose of section, key definitions, operating provisions and exceptions relevant
to issue—discuss topic broadly, not just your narrow issue
• Regulations (keyed to above Code section(s))—summarize this, further fleshing out of relevant
Code provisions, as relevant to issue (more expansive definitions, operating provisions and
examples)
• Court Cases/Revenue Rulings or Procedures—Summarize the (1)fact pattern in the
case/ruling and how it is similar to or departs from the client situation, (2)the taxpayer’s and
IRS’ arguments and (3)the court’s ruling and legal reasoning (this will usually have the closest
guidance specific to client fact pattern)
When discussing above in Analysis, give specific reference to the relevant Code section(s), key
sections of regulations, and rulings or court cases. Do not conclude; just explain the relevant
primary sources in relation to your issue (key definitions, allowance or disallowance of related
income/deduction issue, key criteria, key exceptions, etc). Use an unbiased, clinical voice; just lay
out the relevant information from the sources and discuss.
Conclusion: State your conclusion and the basis for your conclusion. If there are additional
considerations that could change the treatment, discuss.
Use the above headings in your research writeup—it is a business memo; no intro is needed.
Your memo should include phrases such as According to IRC Sec. 219(b), according to Treasury Reg.
1.219-2, in U.S. v Cohen 100AFTR 2d 2007-7212, etc, but NOT according to RIA¶K-2800 (this is
RIA’s opinion, not authoritative).
ATTACHMENT C
RESEARCH QUESTIONS
Choose one question from the following list for your research assignment:
• The client won a lottery. The stated prize is $1,000,000 paid out in installments over 20 years.
The client plans to sell the rights to the lottery prize winnings to a settlement company for a
lump sum amount, resulting in a gain of $800,000. Can the taxpayer get capital gain treatment
for the gain?
• A client earned an accounting degree several years ago, but did not take the CPA exam. He
worked for a bookkeeping and payroll tax service business for a few years. He is now selfemployed and has established his own bookkeeping and payroll tax service business. He thinksthat the credential of passing the CPA exam will increase the success of his business and enablehim to attract larger clients. Can he deduct the cost of the CPA review course he plans to take
to prepare for the exam?
• A client has a child with severe autism. The client spends a substantial amount to send the childto a private school that specializes in educating and training children with autism. Does the
tuition qualify for a medical deduction?
• A client’s child has won a national beauty pageant. The winner is a freshman in college but will
be able to meet the public appearance and speaking requirements expected of the winner on
school breaks and weekends. In addition to a cash prize, the winner is also awarded a college
scholarship to fund the final three years of undergraduate education. Is the college scholarship
taxable?
Note—for all questions, if you determine a tax benefit is potentially available, you should discuss
relevant criteria.