How to Conduct Federal Tax Research

May 12, 2022
How to Conduct Federal Tax Research

[Learn more about Bloomberg Tax Research tools to help you recommend and make the right tax planning decisions and strategies.]  

Why is tax research so important? Because it’s impossible to memorize the entire Internal Revenue Code (IRC) and the way it changes over time. Add to that the regulations and other interpretive rules that are necessary to implement the statutory rules of the IRC, and it can be extremely difficult to find everything you need to effectively communicate your findings to stakeholders. And that’s only federal tax law.

That’s why even experienced tax professionals turn to a comprehensive resource like Bloomberg Tax Research as they go through the steps of the tax research process. Bloomberg Tax Research pairs the proven expertise and perspective of its network of 1,000+ leading tax practitioners in our renowned Tax Management Portfolios with integrated news, in-depth analysis and insights, primary sources, and practice tools to help you understand complex tax topics and make informed decisions.

As the source for the most comprehensive and practical analysis of more than 500 tax and accounting topics, Bloomberg Tax Management Portfolios give you objective and balanced perspectives as well as real-world insights and guidance to help you complete your research.

[Bloomberg Tax Management Portfolios integrate expert analysis and guidance with primary sources, practice tools, and news to enhance and accelerate your search. Complete a demo to receive a free portfolio.]

What is tax research and why is it necessary?

The purpose of tax research is to help you properly define the tax effect or impact of certain tax positions. The results help your company and/or your clients make informed decisions for tax strategies, planning, and compliance. Tax research can also help you prepare for an IRS audit.

Tax research identifies relevant binding and persuasive authorities for a specific point of tax law or issue. For tax issues, this includes legislative, administrative, and judicial authorities.

When you conduct tax research, you’re looking for binding authorities (also known as controlling or mandatory authorities) and persuasive authorities. Binding authorities are anything that a court must follow (such as constitutions, legislation, and some court decisions depending on the jurisdiction) because they bind the court. Persuasive authorities are anything that the court may follow (including some cases, statutes, and regulations, but also opinions, law review articles, and other secondary sources) but does not have to follow.

There’s another categorization as well. Primary sources are source law such as statutes, regulations, and case law. Secondary sources are discussions of source law such as law review articles.

Given all the different sources of information you’ll need for your research, the most efficient way to approach it is to rely on a comprehensive resource that brings together everything you need in one place.

When a complex question comes up, we can start with the code, go to the regulations, build an argument and be able to support and document it – all made possible by the tools within the Bloomberg Tax platform.
Senior Vice President of Taxes, Match Group

What tax research methodology should I use?

It’s important to follow proven steps for conducting tax research. Following a trusted process can help you make sure you’ve done your due diligence when researching tax issues.

The steps for tax research include:

  1. Identifying and defining the facts and issues
  2. Collecting relevant authorities
  3. Analyzing the research
  4. Developing conclusions and recommendations
  5. Communicating the results

Fortunately, there is a one-stop resources available that make it easier and faster to conduct your tax research, leaving you more time to develop your conclusion and communicate recommendations. Bloomberg Tax Management Portfolios can help you complete the tax research process with confidence by providing comprehensive and practical analysis on the issue you’re researching.

Our Tax Management Portfolios help you understand the potential implications and considerations for both tax and nontax issues. You get commentary as well as citations to relevant authorities – from statutes to cases to administrative pronouncements.

Bloomberg Tax also goes beyond simple citations by integrating with our advanced research tools, including:

  • BCite: A proprietary case citator for detailed analysis and updated information on tax cases, relevant court opinions, strength of authority, and the judicial history of a case to ensure it remains good law.
  • Points of Law: Leverages machine learning and our database of court opinions to quickly finds the best language to support legal arguments. It includes links to other relevant case law, the citation map, and related points of law.
  • Versions Compare: Easily compare current and prior Treasury regulations and the Internal Revenue Code with a redlined side-by-side view.

The portfolios are particularly helpful and save considerable time in researching a niche question related to a broader practice area. Instead of trying to read through separate treatises, the IRC, or cases, you can get up to speed with practical analysis before drilling down into the most relevant primary sources.

How can I conduct tax research if I’m new to the topic or issue?

Daily Tax Report

The first steps in the tax research process are to analyze the available facts, pinpoint the legal issues involved, and formulate an appropriate tax question (or questions) to be researched. But what if you don’t have enough knowledge to be able to identify the specific issues to research?

That’s where it helps to have explanations and analysis from more than 1,000 expert tax practitioners at your fingertips. You can start with an overview of the more general topic in Bloomberg Tax Management Portfolios or Tax Practice Series.

The overview can help you formulate initial keywords and phrases to further explore the topic. Extensive planning points, practical examples, what-if scenarios, and comments by our expert authors help you confidently navigate and understand the issue.

Then, you can find the latest news on the topic from the Daily Tax Report, a comprehensive source for news on federal, state, and international legislative, regulatory, and judicial tax-related developments, including pensions and accounting. Daily Tax Report’s extensive network of Capitol Hill reporters and national correspondents keep you up to date with the news that impacts your company and clients as it happens.

With the Federal Tax Developments Tracker, you can track administrative documents, cases, legislation, and regulation across a wide breadth of topics in a concise summary that links to the source document. It’s the most timely and up-to-date place to find federal tax developments

Our practice guides are another place to gain a baseline understanding of a topic. These concise, easy-to-use, practitioner-written guides give you a quick overview of a topic. They’re linked to relevant Tax Management Portfolios for a deeper dive, and contain downloadable checklists.

With Bloomberg Tax, we can conduct our own research, write a position paper, and develop a conclusion before asking for a review or opinion from an external advisor.
Jennifer Koorie, Manager of Corporate Tax, Victaulic

How should I use technology to improve my tax research?

While the internet contains nearly 5 million terabytes of data, you shouldn’t rely on a service like Google for your tax research. That’s because Google doesn’t vet the information it’s indexing. There are no standards for quality and accuracy. There’s also no curation of content to make sure it’s relevant, up to date, and from trusted sources.

Which is why research technology specifically developed and managed for tax professionals will always be the most efficient, expedient, and comprehensive approach to tax research. Bloomberg Tax Research is a comprehensive tax research and planning solution designed by tax practitioners for tax practitioners.

Practice Guide

With Bloomberg Tax Research, you can improve your research by:

  • Quickly navigating between the IRC, analysis, and related tax research tools
  • Using Practice Guides & Checklists for a quick overview of the topic
  • Relying on the BCite citatory tool to help you document your research and conclusions
  • Reading Daily Tax Report to stay up to date with the news as it happens
  • Staying current with trackers to automate and track upcoming legislation and changes

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