- Written by Joshua Fluegel
In this information age, it is not hard to find information on current tax law and recommended practices. It seems that you could even look on the back of your kid’s cereal box and probably find a cartoon tiger explaining Circular 230 requirements. The true trial of even today’s most experienced tax practitioners is finding an up-to-date authoritative source of information that is recognized by the IRS.
The IRS expects professionals to know the ins and outs of every law relevant to a return as well as the correctness of that return. All related documents and affidavits are spelled out in Circular 230 § 10.22 Diligence as to accuracy:
In general. A practitioner must exercise due diligence —
- In preparing or assisting in the preparation of, approving, and filing tax returns, documents, affidavits, and other papers relating to IRS matters;
- In determining the correctness of oral or written representations made by the practitioner to the Department of the Treasury; and
- In determining the correctness of oral or written representations made by the practitioner to clients with reference to any matter administered by the IRS.
A professional’s efforts to conduct his/her due diligence on behalf of a client can be in vain if the source of information is not reliable. While referencing current tax code is undisputedly the best practice, tax code does not often address unique tax situations. Even more maddening is that some information from the IRS, such as commentary, analysis, publications and forms, are not considered authority. These frequent situations will lead a professional to look for sometimes obscure but reliable sources. Some IRS approved sources of tax interpretation are:
- Code and other statutory provisions.
- Temporary, proposed and final regulations.
- Revenue rulings and revenue procedures.
- Congressional intent per committee reports.
- Letter rulings and technical advice memoranda.
- Actions on decisions and general counsel memoranda.
- Explanations of tax legislation released by the Joint Committee on Taxation.
- Press releases, notices, announcements or any similar documents published by the IRS in the Internal Revenue Bulletin and tax court decisions.
Searching the Internet for information can be a hazardous line to walk between IRS approved fact and utter fantasy. However, there is good information out there if one only knows where to look.
The U.S. Tax Court’s Web site has press releases, various court required forms and videos describing the tax court process.
FindLaw is a database with easy-to-find information on recent tax cases and laws for all 50 states including the District of Columbia and Guam.
Commercial tax research vendors offer a great deal of information that is timely and accurate. Most of it is available as a subscription service.
Operating since 1913, CCH is a provider of research tax, accounting and audit information, services and software tools such as ProSystem fx Suite and IntelliConnect. For research visit www.cch.com and click on IntelliConnect on the right side under tax products. Do not expect free tax research on this site.
BNA Tax and Accounting Center offers practitioners an extensive federal tax library. The BNA Portfolios provide analysis of federal tax transactions including primary sources, case law analysis, sample documents, and election statements. Visit www.bna.com and select the Tax and Accounting tab. There is a federal tax blog, a news section and seven-day free trials for income portfolio and tax practice.
Thomson Reuters Checkpoint combines online guidance and analysis from RIA, WG&L and PPC experts, with content from primary sources. Visiting www.ria.thompsonreuters.com/taxresearch and searching Tax Watch, will provide recent tax updates including the often-interesting RIA Observation. There are links to RIA Checkpoint tax research and the option for a 30-day free trial.