The Tax Research Process

The overriding purpose of tax research is to find solutions to the tax problems of your clients or employer. The process is similar to that of traditional legal research. The researcher must find authority, evaluate the usefulness of that authority, and apply the results of the research to a specific situation.

One can identify two essential tax research skills:

• The first is using certain mechanical techniques to identify and locate the tax authorities that relate to solving a problem.
• The second entails a combination of reasoning and creativity and is more difficult to learn. A researcher must begin with native intelligence and imagination and add training and experience to search efficiently and effectively. In many cases, no legal authority directly addresses the problem. In that situation, the researcher must combine seemingly unrelated facts, ideas, and legal authority to arrive at a novel conclusion. This creative ability often spells the difference between success and failure in the research process.

Outline of Tax Research Process

As the tax problems of the client become more significant, the related tax research can become time-consuming and expensive. The tax researcher must work as efficiently as possible to obtain the solution to the client’s problem. A framework for the research process is essential.

The tax research process can be categorized into six major steps. Tax researchers (especially those without a great amount of experience at the task) must approach the resolution of a tax problem in a structured manner, so that the analysis of the problem will be thorough and the solution complete.

1. Establish the facts.
2. Identify the issues.
3. Locate the authority.
4. Evaluate the authority.
5. Develop conclusions and recommendations.
6. Communicate the recommendations.