Chapter 5
Tax Research for Compliance and Tax Planning
The goal of tax research is to help clients legally minimize taxes within the client's overall goals and desired risk tolerance. Thus, producing the lowest possible tax liability is not necessarily the best objective for the tax advisor. Some clients may not wish to engage in complicated tax plans. Not all clients want to increase their risk of a tax audit with its potential hassle and expense. Some clients want certainty of tax result more than achieving minor differences in the actual cost of the taxes.
Consider tax research as a review of all relevant tax laws to determine the appropriate tax consequences given the facts of a client's situation. Begin tax research by determining the relevant facts. Tax research for compliance is the same as for tax planning. However, tax planning may involve restructuring a proposed transaction so the facts will meet the requirements of the applicable law. Remember that some tax disputes involve questions of fact instead of law. Also, consider the relevancy of the facts, which depends upon the applicable law.
