GUIDE TO PREPARING TAX RESEARCH MEMOS

A tax research memo is written to inform others (typically colleagues within a business) of the
answers to tax questions and the reasoning for the conclusion reached. The memo should be
written in professional business language. Passive voice should be avoided. Points will be
deducted from your grade for grammatical and spelling errors. A tax research memo is typically
prepared in four sections, as follows:

Facts: Here you will summarize the facts in the problem. Be concise, but do not omit important
details.

Issue: The issue should be stated as a question worded so that if a person were glancing at the
page, the subject being researched could be easily identified.

Conclusion: Provide a one-sentence answer to the question stated in the issue section. Do not
include any explanation in the conclusion section. No authority should be cited in this section.

Reasoning: This section is the most important part of your memo. Here you will explain how and
why you reached your conclusion. You will cite the authorities on which you are relying for your
answer. Always start with the highest authority, the Internal Revenue Code. If the Code provides
your answer, you will not need to go any further. If the answer is not clear from the Code, then
you will need to consult additional authorities such as the Regulations, Revenue Rulings and
court cases. Always include the proper citation of any authority cited. Example: “According to
IRC Section 212, costs that benefit more than one tax period must be capitalized. The Supreme
Court addressed the issue of whether costs should be capitalized or deducted as business
expenses in Indopco v. Commissioner (112 S. Ct. 1038 (1992)).”

Be sure to relate the authorities to the facts in the specific situation you are addressing. Explain
why the authorities that you found are important in determining your conclusion. Don’t just say
“My client’s facts are similar, so this item is (is not) deductible.” Explain how your facts are
similar. Avoid quoting directly from authorities. Close the reasoning section with a summary.

Checklist for Research Memos

1. Does memo have four sections, as described above?
2. Are facts clearly stated and unnecessary details omitted?
3. Is the issue worded as a question?
4. Is the conclusion a one-sentence response to the issue?
5. Does the authorities section start with a discussion of the Internal Revenue Code, then
proceed to Regulations, cases, and other authorities?
6. Are any authorities mentioned in the conclusion?
7. Are all citations complete?
8. Are authorities discussed, then applied to the facts?
9. Is there a concluding statement?

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10. Are there long quotations? If so, rephrase in your own words.
11. Are all words spelled correctly?
12. Is each sentence complete (subject and verb)?
13. Do all subjects and verbs agree?
14. Are major applicable authorities discussed?
15. Are the conclusions logical based on the discussion of the authorities?
16. Are conflicts between authorities addressed?