Research Basics – Authority and Methodology Part 2 of a 6 Part Series on Research

TaxConnections Picture - BooksLet’s do a quick review of the levels of authoritative research sources for the IRS. We are always being told that IRS pubs are not binding or authoritative in scope by the IRS so when we do research we need to dig deeper. The pubs are handy for helping the layman understand the process and they have some pretty good examples and formula computations. But you always need the underlying internal Revenue Code (IRC) for the pub. The IRC is the Holy Bible for the IRS. It gives them their cans and cant’s. It gives them their authority and also limits that authority. It is from whence all things income tax flows. If the IRC is the Bible then the Internal Revenue Manual (IRM) is the how-to manual.

The authority on this subject, and the person who I strive to emulate, is Peter J. Scalise. His article, Tax Research Techniques, used with his permission, is the basis for the rest of this post.

• Step 1: Establish the facts and circumstances (Joe Friday Style: Just the facts, Ma’am!)

• Step 2: Determine all tax issues (even if the IRS hasn’t brought them up yet)

• Step 3: Identify the specific authorities involved: (who are YOU dealing with?)

Statutory Authority – The Internal Revenue Code (IRC)

Administrative Authority

Treasury Regulations
Revenue Rulings
Revenue Procedures
Private Letter Rulings
Technical Advice Memorandum
General Counsel Memorandum
Circular 230
Internal Revenue Manual (IRM)
Audit Technique Guides (ATG)
IRS Field Service Advice
IRS Determination Letters
IRS Notices

Judicial Authority

US Tax Court
US District Court
US Court of Federal Claims
US Circuit Court of Appeals
US Court of Appeals for the Federal Circuit
US Supreme Court

• Step 4: Standards of the Applicable Level of Opinions (Where do YOU stand?)

“Will” Standard (95% chance of success)
“Should” Standard (70% chance of success)
“More Likely Then Not” Standard (50% chance of success)
“Substantial Authority” Standard (40% chance of success)
“Realistic Possibility of Success” Standard (33.33% chance of success)
“Reasonable Basis” Standard (not deliberately improper)
“Non-Frivolous” Standard (10% chance of success)
“Frivolous” Standard (Never! Never!)

Tomorrow – Other great non-IRS sites and techniques for research!

Anything and everything taxes. I also write the Louisiana State book to go to our new Income Tax Course learners and the state-wide training for upper level Tax Professionals. I am an Instructor of all levels of tax related classes. I love to teach and write as well as taking the absolute best care of my clients all year round.

26 years in Law Enforcement (13 in the Air Force and 13 at the Bossier City PD), 20 years doing income taxes professionally.
My goals now are to spend many years being my 3 grandchildren’s MeeMaw, taking the absolute best care of my clients, and continually learning new things.
Taxes! I specialize in military, states, small business, and rentals.
The postings made on this site are my own and do not necessarily represent HR Block’s positions, strategies or opinions.

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2 comments on “Research Basics – Authority and Methodology Part 2 of a 6 Part Series on Research

  • thank you for these types of postings – i do corporate taxes for a pretty complicated company and sometimes it is really nice to see the more foundational concepts/ items like this spelled out.

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