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About the Authors
Roby B. Sawyers, Ph.D., CPA, CMA, is a professor in the Poole College of Management at
Photo Courtesy of Roby B. Sawyers
North Carolina State University. He earned his undergraduate accounting degree from the
University of North Carolina at Chapel Hill, his master’s degree from the University of
South Florida, and his Ph.D. from Arizona State University. He has taught a variety of
undergraduate and graduate tax courses at NC State and has been a visiting professor in
the International Management Program at the Catholic University in Lille, France, and the
Vienna School of Economics and Business (Wirtschaftsuniversitat Wien). He has also
developed and taught continuing education courses for the AICPA, NCACPA, BDO
Seidman, McGladrey, Dixon Hughes Goodman, and PricewaterhouseCoopers.
In addition to being on the author team of Federal Tax Research, Dr. Sawyers is an author
of Managerial Accounting: A Focus on Ethical Decision Making (Fifth Edition) and Managerial
ACCT and writes frequently for leading academic, policy, and professional tax journals.
Dr. Sawyers has been an active member of the AICPA’s Tax Division, currently
serving as chair of the Tax Legislation and Policy Committee. He has also served on the
Tax Executive Committee, as chair of the Trust, Estate and Gift Tax Technical Resource
Panel, and chair of the AICPA’s task force on estate tax reform.
William A. Raabe, Ph.D., CPA, is the Distinguished Professor of Accounting in the College
Photo Courtesy of William A. Raabe
of Business and Economics of the University of Wisconsin–Whitewater. A graduate of

Carroll University (Wisconsin) and the University of Illinois, Dr. Raabe’s teaching and
research interests include international and multistate taxation, technology in tax educa-
tion, and personal financial planning. Professor Raabe also writes and edits the Southwest-
ern Federal Taxation series and the PricewaterhouseCoopers Tax Case Studies. Dr. Raabe
has been a visiting tax faculty member for a number of public accounting firms, bar asso-
ciations, and CPA societies. He has received numerous teaching awards, including the
Accounting Educator of the Year award from the Wisconsin Institute of CPAs. He has
been the faculty adviser for student teams in the Deloitte Tax Case Competition (national
finalists at three different schools) and the PricewaterhouseCoopers Tax policy competition
(national finalist). For more information about Dr. Raabe, visit BillRaabeTax.com and
BillRaabeTax on YouTube and Twitter.
Photo Courtesy of Gerald E. Whittenburg
Gerald E. Whittenburg, Ph.D., CPA, EA, is a professor in the Charles W. Lamden School
of Accountancy at San Diego State University. A graduate of the University of Houston,
Dr. Whittenburg is interested in individual and corporate taxation, tax pedagogy, and tax
research methodology.
Dr. Whittenburg is also an author of the textbook Income Tax Fundamentals (which
is in its 33rd edition). In addition, he has published more than 90 articles in journals such
as Accounting Education: An International Journal, Accounting Review, Advances in Taxa-
tion, Practical Tax Strategies, Taxes— The Tax Magazine, Group Decision and Negotiation,
Journal of Business and Accounting, Journal of Legal Tax Research, Journal of Taxation of
Investments, Journal of Taxation of Employee Benefits, Journal of Taxation of Financial
Institutions, Valuation Strategies, Journal of Small Business Strategy, The Tax Adviser, and
Journal of Accounting Education. He has received numerous awards for teaching, including
the Trustee’s Outstanding Faculty Award for the entire California State University System.
Isabelle Rozenbaum/PhotoAlto Agency RF Collections/Getty Images
vii
viii About the Authors
Dr. Whittenburg was awarded a Fulbright Fellowship (2003) to the Ukraine. In addition,
he has been a visiting scholar at the University of Adelaide (1999 and 2005) and the
University of South Australia (2009 and 2010).
In August 2013, Dr. Whittenburg stepped down as director of the Charles W. Lamden
School of Accountancy and returned to the teaching faculty. This was his fourth time
serving as director of the School of Accountancy in his 38 years on the faculty.
Steven L. Gill, Ph.D. is an Associate Professor in the Charles W. Lamden School of

Accountancy at San Diego State University. He received a BS in Accounting from the
Photo Courtesy of Steven L. Gill
University of Florida, an M.S. in Taxation from Northeastern University (Boston) and a

Ph.D. in accounting from the University of Massachusetts. Before entering academia,
Professor Gill worked for 12 years in the field of accounting, including roles in public
accounting, internal audit, and corporate accounting and, ultimately, as a vice president of
finance.
Professor Gill’s research interests include a concentration in taxation including mutual
funds and college savings (“529”) plans and wider interests in corporate internal control
structure and weaknesses, management overconfidence, and earnings quality. Professor
Gill has taught at both the undergraduate and graduate levels, and his teaching interests
include taxation and financial accounting. In addition to being on the author team of
Federal Tax Research, Dr. Gill is an author of Income Tax Fundamentals.
Brief Contents
PART I THE TAX RESEARCH ENVIRONMENT 1
CHAPTER 1 Introduction to Tax Practice and Ethics 3

CHAPTER 2 Tax Research Methodology 51
PART II PRIMARY SOURCES OF FEDERAL TAX LAW 81

CHAPTER 3 Constitutional and Legislative Sources 83
CHAPTER 4 Administrative Regulations and Rulings 117
CHAPTER 5 Judicial Interpretations 149
PART III RESEARCH TOOLS 189

CHAPTER 6 Thomson Reuters Checkpoint 191
CHAPTER 7 CCH IntelliConnect 239
CHAPTER 8 Other Tax Services and Tax Periodicals 279
CHAPTER 9 Multijurisdictional Taxes 323
CHAPTER 10 Financial Accounting Research 385
PART IV IMPLEMENTING THE RESEARCH TOOLS 407

CHAPTER 11 Communicating Research Results 409
CHAPTER 12 Tax Planning 433
CHAPTER 13 Working with the IRS 457
CHAPTER 14 Tax Practice and Administration 489
Glossary 531
Index 543

ix
Contents
Preface xvii Step 1: State the Issue as a Question 65

Step 2: Identify the Keywords 66
PART I Step 3: Construct a Research Query 66
Step 4: Select a Database and Execute the
The Tax Research Environment 1
Search 67
Step 5: Interpret and Refine the Search 67
Chapter 1
Research on irs.gov 67
Introduction to Tax Practice and Ethics 3
Tax Research Practical Considerations 68
Elements of Tax Practice 5 Research on the CPA Exam 70
Tax Compliance 5 Summary 71
Tax Planning 6
Quiz Yourself 71
Tax Litigation 6
Key Words 72
Tax Research 7
Discussion Questions 72
Rules and Ethics in Tax Practice 7
Exercises 75
Circular 230 7
Research Cases 77
Proposed Changes to Circular 230 15
AICPA Code of Professional Conduct 17
Statements on Standards for Tax Services 22 PART II
Sarbanes-Oxley and Taxation 28 Primary Sources of Federal Tax Law 81
ABA Model Rules of Professional Conduct 29
Nonregulatory Ethical Behavior Models 29 Chapter 3
Ethical Dilemmas 29 Constitutional and Legislative Sources 83
Ethical Professional Behavior 31 Sources of Federal Tax Law 84
Ethics Training and Education 35 History of U.S. Taxation 84
Legal Research by Certified Public Accountants 36 Who Pays the Income Tax? 86
Summary 38 Tax Protesters 87
Quiz Yourself 38 U.S. Constitution 88
Key Words 38 Tax Treaties 89
Discussion Questions 39 The Legislative Process 91
Exercises 42 Where to Find Committee Reports 94
Research Cases 46 Internal Revenue Code 95
Organization of the Internal Revenue Code 96
Chapter 2
Where to Find the Internal Revenue Code 99
Tax Research Methodology 51
Interpreting the Internal Revenue Code 102
The Tax Research Process 53 Summary 104
Step 1: Establish the Facts 53 Quiz Yourself 104
Step 2: Identify the Issues 54 Key Words 104
Step 3: Locate Authority 57 Discussion Questions 105
Step 4: Evaluate Authority 59 Exercises 106
Step 5: Develop Conclusions and
Research Cases 112
Recommendations 60
Step 6: Communicate the Recommendations 60
Overview of Online Tax Research 62 Chapter 4
Benefits of Using Online Tax Services 62 Administrative Regulations and Rulings 117
Using an Online Tax Service to Conduct Tax Regulations 118
Research 65 Temporary Regulations 119
xi
xii Contents
Effective Date of Regulations 120 PART III

Citing a Regulation 120 Research Tools 189
Assessing Regulations 122
Locating Regulations 123 Chapter 6
Revenue Rulings 123 Thomson Reuters Checkpoint 191
Revenue Ruling Citations 125 Using Tax Services for Research 192
Locating Revenue Rulings 125 Thomson Reuters Checkpoint 193
Revenue Procedures 125 Illustrative Research Example 193
Letter Rulings 127 Approaching the Research Problem 194
Private Letter Rulings 127 Accessing Tax Information 194
Technical Advice Memoranda 128 Databases 195
Determination Letters 129 Finding Relevant Tax Information 202
Precedential Value of PLRs, TAMs, Keyword Search 202
and Determination Letters 129 Index Search 210
Written Determination Numbering System 130 Contents Search 213
Locating Written Determinations 130 Citation Search 215
Other IRS Pronouncements 130 Citators 218
Acquiescences and Nonacquiescences 130 Other Tax Law Sources 222
Internal Revenue Bulletin 132 Tax Treatises 222
Chief Counsel Memoranda 134 Tax Periodicals 225
Announcements and Notices 134 Utilizing Treatises and Periodicals in Tax
Miscellaneous Publications 134 Research 225
Summary 137 Other Research Tools 225
Quiz Yourself 137 Summary 227
Key Words 138 Quiz yourself 227
Discussion Questions 138 Key Words 227
Exercises 141 Discussion questions 227
Research Cases 144 Exercises 229
Research Cases 232
Chapter 5 Advanced Cases 236
Judicial Interpretations 149 Cumulative Case 237
Federal Court System 150
Legal Concepts and Terminology 152 Chapter 7
U.S. Tax Court 155 CCH IntelliConnect 239
District Courts 161 Using Tax Services for Research 240
Court Reporters 163 CCH IntelliConnect 241
Court of Federal Claims 163 Illustrative Research Example 241
Court Reporters 164 Approaching the Research Problem 242
Courts of Appeals 164 Accessing Tax Information 242
Court Reporters 167 Databases 243
Supreme Court 167 Finding Relevant Tax Information 248
Court Reporters 171 Keyword Search 249
Case Briefs and Headnotes 171 Index Search 253
Summary 172 Contents Search 257
Quiz Yourself 174 Citation Search 258
Key Words 174 Citators 260
Discussion Questions 174 Other Tax Law Sources 263
Exercises 177 Tax Treatises 264
Research Cases 180 Tax Periodicals 265
Contents xiii
Utilizing Tax Treatises and Periodicals in Tax Public Law 86-272 329
Research 265 State Tax Structure 330
Other Research Tools 266 Constitution 330
Summary 267 Legislative 331
Quiz Yourself 268 Administrative 331
Key Words 268 Judicial 332
Discussion Questions 268 Multistate Taxation 333
Exercises 269 Illustrative Research Example 334
Research Cases 273 Checkpoint State and Local Tax (SALT)
Advanced Cases 276 Service 335
Cumulative Case 278 CCH IntelliConnect State 340
Bloomberg BNA 342
Chapter 8 Lexis Tax Center 345
Other Tax Services and Tax Periodicals 279 LexisNexis Academic 345
BNA Bloomberg 280 WestlawNext State Services 350
BNA Portfolios 281 Other Resources 351
Searching the BNA Collections 281 Periodicals and Internet Sites 351
Browsing the BNA Collections 284 International Taxation 352
Westlaw 289 International Tax Models 353
Searching WestlawNext 290 Transfer Pricing 354
KeySearch and KeyCite 293 Sourcing of Income and Deductions 356
LexisNexis 294 Tax Treaties 357
Tax Center 295 Researching International Tax 358
LexisNexis Academic 300 Checkpoint 358
LexisNexis & Shepard’s Citators 303 CCH IntelliConnect 360
Tax Periodicals 306 Bloomberg BNA 362
Annual Proceedings 307 Tax Treaties 364
Scholarly Reviews 308 Westlaw 365
Professional Journals 308 LexisNexis 366
Newsletters 309 Internet Sites 370
Tax Analysts 309 Summary 370
BNA Publications 311 Quiz Yourself 370
Locating Relevant Tax Articles 311 Key Words 370
Citing Articles in Tax Periodicals 312 Discussion Questions 371
Summary 313 Exercises 372
Quiz Yourself 313 Research Cases 377
Key Words 313 Cumulative Case-State 382
Discussion Questions 313 Cumulative Case – International 383
Exercises 314
Research Cases 318 Chapter 10
Financial Accounting Research 385
Chapter 9 Accounting for Income Taxes 386
Multijurisdictional Taxes 323 GAAP and the Financial Accounting Standards
State and Local Tax 324 Board (FASB) 387
Importance of State and Local Taxes 325 International Standards 388
Legal Perspective 326 The FASB Codification 388
Taxing Out-of-State Taxpayers 328 FASB Accounting Standards Codification Research
Due Process Clause 328 System (CRS) 389
Commerce Clause 328 Structure 390
xiv Contents
Browsing 393 Summary 452

Search 397 Quiz Yourself 453
Go To 397 Key Words 453
Join Sections 399 Discussion Questions 453
Cross Reference 399 Exercises 454
Other Sources and Services 401 Problems 454
Summary 403
Quiz Yourself 403 Chapter 13
Key Words 403 Working with the IRS 457
Discussion Questions 403
The Internal Revenue Service 458
Exercises 404
Organization of the IRS 458
Research Cases 404
Taxpayer Rights 466
The Audit Process 466
Preliminary Review of Returns 467
PART IV
Selection of Returns for Examination 468
Implementing the Research Tools 407
Examinations 471
Correspondence Examinations 471
Chapter 11
Office Examinations 472
Communicating Research Results 409
Field Examinations 472
Communications and the Tax Professional 410 Dealing with an Auditor 473
The Heart of Tax Research Communication: Conclusion of Examination 474
The File Memo 412 30-Day Letter 474
Evaluating the Sources of Law 415 File a Protest or Go Straight to Court? 474
Client Letters 416 The Appeals Process 475
Comprehensive Illustration of Client File 420 Registered Tax Return Preparers and Unenrolled
Oral Presentations of Research Results 422 Return Preparers 475
Summary 426 Appeals Conference 476
Quiz Yourself 426 90-Day Letter 476
Key Words 426 Entering the Judicial System 477
Tax Research Assignments 426 Statutory Agreements 481
Research Cases 427 Closing Agreements 481
Offers in Compromise 482
Summary 484
Chapter 12
Quiz Yourself 484
Tax Planning 433
Key Words 484
The Economics of Tax Planning 434 Discussion Questions 484
Tax Rate Terminology 436 Exercises 485
Tax Base 436 Problems 487
Tax Rates 437
Research Cases 487
Tax Planning in Perspective 440
Fundamentals of Tax Planning 441
Avoiding Recognition of Taxable Income 443 Chapter 14
Changing the Timing of Recognition of Income, Tax Practice and Administration 489
Gains, Deductions, Losses, and Credits 444 Taxpayer Penalties 490
Changing Tax Jurisdictions 446 Civil Penalties 491
Changing the Character of Income 447 Criminal Penalties 502
Tax Planning among Related Taxpayers 448 Penalties on Return Preparers 505
Avoiding Tax Traps 450 Definition of Return Preparer 505
Statutory Tax Traps 450 Preparer Disclosure Penalties 507
Judicial Tax Traps 451 Preparer Conduct Penalties 507
Contents xv
Injunctions 512 Mitigation of Statute of Limitations 521

Action to Enjoin TRPs 512 Summary 521
Action to Enjoin Promoters of Abusive Tax Quiz Yourself 521
Shelters 513 Key Words 521
Interest 513 Discussion Questions 522
Interest-Computation Conventions 513 Exercises 523
Statutes of Limitations 516 Research Cases 526
Assessment 516
Collection 518
Claim for Refund or Credit 518 GLOSSARY 531
Suspension of Period of Assessment and
Collection 520 INDEX 543
Preface
The Tenth Edition of Federal Tax Research includes the deepest analysis of the online
research tools available to assist with tax and accounting research. As a result, we believe
that the Tenth Edition is indispensable to learning and performing real-world research.
New features in the Tenth Edition include:
• A research-case-classification matrix for all chapters with research cases. The new
matrix classifies all research cases in the book by primary tax law source (legislative,
administrative, judicial), jurisdiction (federal, state, international), entity type or
issue, tax type, the similarity of the research case to the facts in the primary sources,
the types of research sources needed to answer the case questions, and the expected
student response (short paragraph, research memo, etc.).
• Cumulative research problems that continue from chapter to chapter.
• A complete reorganization of the Research Tools section of the book with separate
chapters for Thomson Reuters Checkpoint and CCH IntelliConnect. Coverage and
illustrations of research using BNA Bloomberg, Westlaw, and LexisNexis have been
combined into a third chapter, with state and international tax services combined
into a fourth chapter on multijurisdictional tax issues.
• Additional updated examples of tax research memos and client letters.
• Updates of rules affecting tax practice, including Circular 230 revisions and regula-
tions, the AICPA Statements on Standards for Tax Services (SSTS), CPA mobility
across states, and recent IRS litigation concerning registered tax-return preparers.
• Updated information on tax and research on the CPA exam as well as on conduct-
ing searches at irs.gov.
• Increased focus on tax planning, including the importance of considering both par-
ties in a transaction and examples of calculating marginal tax rates in the presence
of net operating losses.
The book has been prepared as a comprehensive, stand-alone reference tool for the
user who wishes to become proficient in federal, multistate, and international
tax research as well as financial accounting research. It is written for readers who are
familiar with the fundamentals of the tax law, at a level that typically is achieved on the
completion of two comprehensive introductory courses in taxation in either the account-
ing program in a business school or second- or third-year courses in a law school. Nearly
every accounting, tax, and tax law student can benefit from the tools and strategies found
in this book. The text is most appropriate for:
• Upper-level accounting students in a business school (i.e., seniors in a four-year
program or those in the fifth year of a 150-hour program) who desire additional
information concerning the practice of taxation.
• Students enrolled in a non-tax graduate program in business administration (e.g., an
MBA or MS–management program) and would like further practical training in the
functions of taxation in today’s business environment.

xvii
xviii Preface
• Second- or third-year law school students, especially those who desire a more
detailed and pragmatic introduction to a specialized tax practice.
• Students commencing a graduate degree program in taxation, in either a business
school or a law school, and require a varied and sophisticated introduction to the pro-
cedures of tax research and to the routine functions and implications of a tax practice.
• Practicing accountants and attorneys who need an introduction, an update, or a
refresher concerning tax practice and research as an element of their career paths.
Structure and Pedagogy

Too often, existing textbooks ignore the detailed, pragmatic approach that students
require in developing effective and efficient tax research skills. That is why we have
included an unprecedented degree of hands-on tax research analysis throughout the
text. This book does not simply discuss tax research procedures or the sources of the
tax law nor does it provide a mere sample of the pertinent tax reference material. Rather,
the book reflects our conviction that students learn best by active learning and real-world
experience using the most comprehensive and important sources of tax law. We have
applied this conviction to the many important features of the Tenth Edition, including:
• Dozens of exercises, problems, and research cases in each chapter.
• “Spotlight on Taxation” boxes in every chapter to provide additional research tips,
news, and background information to students.
• Chapters on working with the IRS and on tax practice and administration that pro-
vide details on important topics such as preparer penalties, statutes of limitations,
and the IRS audit and appeals process.
• Assignments requiring students to construct case briefs, file memos, client letters,
and other elements of a comprehensive client file—vital communication skills they
will need in practice.
• Hundreds of reproductions, illustrations, and screen captures from the most impor-
tant tax reference materials to expose students to the real world of tax research.
• Summary charts, diagrams, and other study aids integrated throughout the text.
Other important features for students and instructors include the following:
• The “Quiz Yourself” feature at the end of each chapter directs students to the online
quizzes located on the book’s Web site through www.cengagebrain.com. Here,
students will have access to online quizzes, complete with immediate answers and
feedback for questions answered incorrectly. The feedback will direct students to
the section of the chapter that contains the correct answer.
Students can also access chapter-by-chapter study content at the CengageBrain.com
home page and can search by author name, title (Federal Tax Research), or ISBN
(1285439392) using the search box at the top of the page. This will bring readers to a
link for the tenth edition of Federal Tax Research.
The instructor’s portion of the Web site for the text, located at www.cengagebrain.com,
includes the solutions for the end-of-chapter material, a test bank, instructor PowerPoint
slides, lecture notes, and the new research case classification matrix to help guide instructors
through the course.
Preface xix
Using the Text

The main tax services are reviewed in a hands-on manner. Learning how to use the
services is explained through example projects that guide the reader with step-by-step
explanations and screen shots to illustrate what is actually seen on the screen. The
text’s exercises, cases, and advanced cases offer enough variety in both difficulty and
subject matter that they may be assigned to individual readers, or to student groups
of two or three, for their optimal use. The instructor also should consider giving each
student in the course a different research case to complete, thereby discouraging joint
work.
Given both the nature of the tax research process and the limited tax research
databases available to most firms and universities, the instructor must take care to
assign discussion materials for which the necessary resources are available and also
to work through the assignment himself or herself, to ascertain that one’s target
solution to the assignment reflects the very latest in the development of the federal
tax law.
The instructor may want to defer the assigning of certain research cases until a
specific research service is discussed, which will provide additional illustrations. Alterna-
tively, the reader could be encouraged to rework a previous assignment as specific
research services are introduced.
Acknowledgments
We are grateful to our supplement authors and reviewers who provided valuable
comments and insights, which guided us in the development of the Tenth Edition.
Beth Howard, Tennessee Technological University
Chuck Pier, Angelo State University
Courtney H. Edwards, University of North Carolina at Chapel Hill
Fernando Rodriguez
George Starbuck, McMurry University
J. David Golub, Northeastern University
James P. Trebby, Marquette University
Jeff Varblow, The College of Lake County
Lucia Smeal, Georgia State University
Paul A. Shoemaker, University of Nebraska–Lincoln
Rose L. Bailey, East Carolina University
Sally Cook, Texas Lutheran University
Sandra Owen, Indiana University–Bloomington
Susan E. Anderson, Appalachian State University
Tori Fischer Golden Gate University
Wilson Seda, Lehman College, CUNY
We wish to thank all of the book’s student and faculty readers who have provided
their detailed feedback and suggestions. Without their responses, our efforts would
have been greatly diminished in scope. Any errors, of course, are the sole responsibility
of the authors.
xx Preface
We welcome your comments and suggestions for further improvements to this text.
Please feel free to use the following addresses to convey these remarks:
Roby B. Sawyers
Department of Accounting, Poole College of Management
NC State University
Raleigh, NC 27695-8113
roby_sawyers@ncsu.edu
William A. Raabe
College of Business and Economics
University of Wisconsin-Whitewater
Whitewater, WI 53190
raabew@uww.edu
Gerald E. Whittenburg
Charles W. Lamden School of Accountancy
San Diego State University
San Diego, CA 92182-8221
gwhitten@mail.sdsu.edu
Steven L. Gill
Charles W. Lamden School of Accountancy
San Diego State University
San Diego, CA 92182-8221
sgill@mail.sdsu.edu
Roby B. Sawyers
William A. Raabe
Gerald E. Whittenburg
Steven L. Gill
January 2014
PART I
The Tax Research Environment
CHAPTER 1 Introduction to Tax Practice and Ethics 3
CHAPTER 2 Tax Research Methodology 51
CHAPTER 1
Introduction to Tax Practice

and Ethics
LEARNING OBJECTIVES
• Describe the elements of modern tax practice in the United States.

• Distinguish between open and closed transactions.
• Recall the sources of legal and ethical standards that guide those who engage in tax
practice.
• Explain the major collections of ethical standards that bear upon tax practitioners today.
• Organize tax issues in a broader context of ethics and morality.
• Summarize the limitations on tax research by CPAs and other nonattorneys.
CHAPTER OUTLINE
Elements of Tax Practice 5 Compliance with Standards 20 • Rule 203:

Tax Compliance 5 Accounting Principles 20 • Rule 301:
Tax Planning 6 Confidential Client Information 20 • Rule
Tax Litigation 6 302: Contingent Fees 21 • Rule 501: Acts
Tax Research 7 Discreditable 21 • Rule 502: Advertising and
Rules and Ethics in Tax Practice 7 Other Forms of Solicitation 21 • Rule 503:
Circular 230 7 Commissions and Referral Fees 22 • Rule
505: Form of Organization and Name 22
Who May Practice [Circular 230 § 10.3] 9 •
Statements on Standards for Tax Services 22
Limited Practice [Circular 230 § 10.7] 11 •
SSTS No. 1: Tax Return Positions 22 • SSTS
Return Preparation and Application of
No. 2: Answers to Questions on Returns 23 •
Rules to Other Individuals [Circular 230
SSTS No. 3: Certain Procedural Aspects of
§ 10.8] 11 • Duties and Restrictions
Preparing Returns 24 • SSTS No. 4: Use of
Relating to Practice Before the IRS [Circular
230 Subpart B] 12 Estimates 24 • SSTS No. 5: Departure from a
Proposed Changes to Circular 230 15 Position Previously Concluded in an
Administrative Proceeding or Court Decision
AICPA Code of Professional Conduct 17
25 • SSTS No. 6: Knowledge of Error: Return
Rule 101: Independence 19 • Rule 102:
Preparation and Administrative Proceedings
Integrity and Objectivity 20 • Rule 201:
26 • SSTS No. 7: Form and Content of
General Standards 20 • Rule 202:
Advice to Taxpayers 26
3
4 Part I The Tax Research Environment
Sarbanes-Oxley and Taxation 28 Ethical Professional Behavior 31

ABA Model Rules of Professional Conduct 29 Morality 31 • Social Responsibility 32 •
Nonregulatory Ethical Behavior Models 29 Business Ethics 32 • Other Ethical Standards
Ethical Dilemmas 29 34
Ethical Reasoning 30 Ethics Training and Education 35
End-Based Ethical Reasoning 30 • Rule-Based Legal Research by Certified Public Accountants 36
Ethical Reasoning 30 • Care-Based Ethical
Reasoning 31
TAX PRACTICE AND TAX RESEARCH have evolved over the last twenty or thirty
years into an electronic and often paperless system. For example, in 2012 more than 80
percent of individual taxpayers e-filed their tax returns. In keeping with this continuing
transition to an all-electronic tax system, today tax research is almost 100 percent online
based. The Uniform CPA Exam recognizes this transition and includes a set of simulation
questions that require the candidate to demonstrate accounting and tax research skills by
completing short research cases using online searches of authoritative literature, including
the Accounting Standards Codification (ASC) and the Internal Revenue Code (I.R.C.).
However, before the tax practitioner can complete a tax research project, he or she must
understand the tax research process and all its elements and how each element relates to
solving a specific tax problem. The primary purpose of this book is to inform the user on
how to effectively obtain tax research results in a timely and efficient manner.
The practice of taxation is the process of applying the tax laws, rules, regulations, and
judicial rulings to specific transactions in order to determine the tax consequences to the
taxpayer involved. There are many ways to practice tax. Certified public accountants
(CPAs), tax attorneys, and enrolled agents often provide compliance and planning
services for clients. In addition, tax can be practiced by controllers, chief financial officers
(CFOs), tax directors, and other individuals who do tax work as part of their duties
within a corporation or other business entity. An understanding of taxation and the tax
practice environment is essential to the individual who wants to have a career in the tax
area.
Taxation is the process of collecting revenue from citizens to finance government
activities. In a modern technological society such as that of the United States, however,
taxation comprises an interaction among several disciplines that is far from simple. The
tax system is derived from law, accounting, economics, political science, and sociology
(Exhibit 1-1). Principles of economics, sociology, and political science provide the
environment, while law and accounting precepts are applied in a typical tax practice.
Tax policy questions concerning the effects that a specified tax law change will have
on economic growth, the effects of projected inflation on the implementation of the tax
law and vice versa, and the effects of the tax law on the United States’ balance of
payments are addressed by economists. Political scientists, economists, and sociologists
examine issues such as who bears the ultimate burden of a tax, how a tax bill becomes
law (including practical effects of the legislative process), the social equity of a tax, and
whether a tax is discriminatory. Attorneys interpret taxation statutes, and accountants
apply the tax laws to current or prospective economic transactions.
Chapter 1 Introduction to Tax Practice and Ethics 5
EXHIBIT 1-1: Elements of Taxation
Economics
Accounting Law
TAXATION
Political Processes Societal Concerns
Elements of Tax Practice

The tax laws of a democratic country such as the United States are created by a political
process. In recent years, the result of this political process has been a set of laws that
levies taxes on income, sales, estates, gifts, and other items that usually are reflected by
the accounting process. Modern tax practice can be separated into three elements: com-
pliance, planning, and litigation, which are all supported by tax research. How these ele-
ments of tax practice fit together is illustrated in Exhibit 1-2.
Tax Compliance
In general, tax compliance consists of two separate but related components—tax return
preparation and, for certain corporate entities, the preparation of the tax provision on a
company’s financial statements.
Tax return preparation consists of the gathering of pertinent information, the evalua-
tion and classification of such information, and the filing of necessary tax returns with
the appropriate governmental agency. In the United States, this will typically be the
Internal Revenue Service (IRS) or the appropriate state agency. Tax compliance also
includes other functions necessary to satisfy governmental requirements, such as repre-
sentation at a client’s IRS audit. Registered tax return preparers, enrolled agents (EAs),
EXHIBIT 1-2: Elements of Tax Practice
Tax Practice
Tax Research
Tax Compliance Tax Planning Tax Litigation
attorneys, and CPAs all perform tax compliance to some extent. Relatively simple indi-
vidual, partnership, and corporate tax returns often are completed by registered tax
return preparers. EAs, attorneys, and CPAs usually are involved in the preparation of
more complex tax returns; in addition, they provide tax-planning services and represent
their clients before the IRS.
A corporation’s income tax expense as reported on its financial statements is often
different from the income tax on its tax return. Financial statements are prepared using
generally accepted accounting principles (GAAP) rather than tax law as set out in the
Internal Revenue Code, related Treasury Regulations, and other administrative pro-
nouncements and court cases. Both tax return preparation and the preparation of the
tax provision on financial statements are examined in more detail in later chapters.
Tax Planning
Tax planning is the process of arranging one’s financial affairs to minimize tax liabilities.
While this usually means minimizing current tax payments, that is not always the case.
Whereas tax avoidance is a legitimate objective of modern tax practice, tax evasion con-
stitutes the illegal nonpayment of a tax and cannot be condoned. Fraudulent acts of any
kind are unrelated to the professional practice of tax planning.
Tax planning can be divided into two major categories: open transactions and closed
transactions. In an open transaction, the tax practitioner maintains some degree of con-
trol over the potential tax liability because the transaction is not yet completed; for
example, the title to an asset has not yet passed. If desired, some modifications to an
incomplete transaction can be made to receive more favorable tax treatment. In a closed
transaction, however, all of the pertinent actions have been completed; therefore, tax
planning may be limited to the presentation of the facts to the government in the most
favorable, legally acceptable manner possible.
SPOTLIGHT ON TAXATION
Case Quotation
There is nothing inherently illegal or immoral in the avoidance of taxation (i.e., tax
planning) according to the tax system’s rules. The eminent judge Learned Hand best
expressed this doctrine in the dissenting opinion of Commissioner v. Newman, 159
F.2d 848 (CA-2, 1947):
Over and over again, courts have said that there is nothing sinister in so arrang-
ing one’s affairs as to keep taxes as low as possible. Everybody does so, rich or
poor, and all do right, for nobody owes any public duty to pay more than the
law demands: taxes are enforced extractions, not voluntary contributions.
Tax Litigation
A specialized area within the practice of taxation is the concentration on tax litigation.
Litigation is the process of settling a dispute with another party (in the United States,
usually the IRS or a state revenue department) in a court of law. Typically, a tax attorney
handles tax litigation that progresses beyond the initial appeal of an IRS or state revenue
department audit result. Accountants and other financial advisers can also serve in a
support capacity. Later chapters of this book contain additional discussions of the vari-
ous opportunities and strategies available in tax litigation.
Tax Research
Tax research is undertaken to answer taxation questions. The tax research process
includes the (1) identification of pertinent issues, (2) determination of proper authorities,
(3) evaluation of the appropriateness of these authorities, and (4) application of these
authorities. Tax research methodology, sources of federal tax law, and tax research tools
are examined in Chapters 2 through 8 of this book.
Rules and Ethics in Tax Practice

A person who prepares tax returns for monetary or other compensation, or who is
licensed to practice in the tax-related professions, is subject to various statutes, rules, and
codes of professional conduct. Tax practitioners (as defined by the IRS) are regulated by
Circular 230, Regulations Governing Practice before the Internal Revenue Service.
The ethical conduct of an attorney is also governed by the laws of the state(s) in which he or
she is licensed to practice. Most states have adopted, often with some modification, guidelines
that are based on the American Bar Association (ABA) Model Rules of Professional Conduct.
Certified public accountants (CPAs) who are members of the American Institute of
Certified Public Accountants (AICPA) must follow its Code of Professional Conduct
and any other rules generated by the state board(s) of accountancy. The AICPA has
also produced a series of Statements on Standards for Tax Services (SSTS), which contain
advisory guidelines for AICPA members who prepare tax returns. Although CPAs who
are not members of the AICPA are not bound by the Code of Professional Conduct and
the SSTS, those rules and standards are a useful source of guidance for all members of
the profession. In addition, CPAs are regulated by the state(s) in which they are licensed.
As a result, there can be additional statutes, regulations, and requirements that must be
met by individuals who practice in certain states.
Statutory tax law also specifies certain penalties and other rules of conduct that apply
to all tax return preparers. Chapter 14 addresses these rules.
The basic overlapping sources of rules and ethics for tax practitioners are illustrated
in Exhibit 1-3.
Circular 230
Circular 230, which constitutes Part 31 of the Treasury Department Regulations, is
designed to provide protection to taxpayers and the IRS by requiring tax preparers to
be technically competent and to adhere to ethical standards.1 In 2011, the IRS issued
final regulations (T.D. 9527) that made previously unenrolled return preparers (return
preparers who are not attorneys, CPAs, or EAs) who prepare and file tax returns for
compensation subject to Circular 230 for the first time. These individuals are referred
to as registered tax return preparers. However, a court battle ensued in which three tax
return preparers argued that the IRS had no authority to regulate their preparation of tax
returns. In January 2013, the District Court for the District of Columbia stopped the IRS
from enforcing the regulations.2 In March 2013, the U.S. Court of Appeals for the Dis-
trict of Columbia Circuit denied the IRS’s motion to stay the injunction halting the
return preparer regulation program. The IRS appealed the lower court ruling. The
Court of Appeals heard oral argument on September 24, 2013.3
1
Circular 230 can be found on the IRS’s Website at www.irs.gov/pub/irs-pdf/pcir230.pdf.
2
Loving, No. 12-385 (D.D.C. Jan. 18, 2013).
3
Loving v. IRS No. 13-5061 (D.C. Cir. Argued Sept. 24, 2013).
EXHIBIT 1-3: Sources of Rules and Ethics for Tax Practitioners
IRS Circular 230
AICPA
State Rules Statements on
and Standards for
Regulations Tax Services
AICPA Code Internal Revenue

of Conduct Code
ABA Model Rules

of Professional
Conduct
At present, Circular 230 contains the following definition of practice before the IRS
in Section 10.2 of Subpart A:
Practice before the Internal Revenue Service comprehends all matters connected with a
presentation to the Internal Revenue Service or any of its officers or employees relating
to a taxpayer’s rights, privileges, or liabilities under laws or regulations administered
by the Internal Revenue Service. Such presentations include, but are not limited to,
preparing documents; filing documents; corresponding and communicating with the
Internal Revenue Service; rendering written advice with respect to any entity, transac-
tion, plan or arrangement, or other plan or arrangement having a potential for tax
avoidance or evasion; and representing a client at conferences, hearings, and
meetings.
Who May Practice [Circular 230 § 10.3] Under Section 10.3, Subpart A, of Circular
230, the following individuals may practice before the IRS:
1. Attorneys
2. Certified Public Accountants (CPAs)
3. Enrolled agents (EAs)
4. Enrolled actuaries
5. Enrolled retirement plan agents
6. Registered tax return preparers
These individuals are collectively referred to as Circular 230 practitioners.
In order to practice before the IRS, an attorney must be a member in good standing
of the bar of the highest court in any state, possession, territory, or commonwealth or
the District of Columbia. Likewise, CPAs and enrolled actuaries must be qualified to
practice in any state, possession, territory, or commonwealth or the District of Columbia.
No further substantive examination is required.
CPA Mobility
While CPAs are licensed by their home state, a uniform system allowing CPAs to
practice across state lines has been endorsed by the AICPA and the National Associ-
ation of State Boards of Accountancy (NASBA). A total of 49 states and the District
of Columbia have passed mobility laws that essentially allow a CPA with a license
from one state to practice outside his or her home state without getting an addi-
tional license in the state in which he or she will be serving a client.
Individuals who are not attorneys or CPAs can qualify to practice before the IRS by
becoming an enrolled agent (EA). An EA is someone who has either passed a special
IRS examination or worked for the IRS for five years. The procedures for becoming an
EA are detailed in Circular 230, Subpart A, §§ 10.4, 10.5, and 10.6. EAs have the same
rights as attorneys and CPAs to represent clients before the IRS. Under Circular 230, an
EA must renew his or her enrollment card on a three-year cycle.
The Enrolled Agent Special Enrollment Examination (SEE) is an online exam given
throughout the year that consists of three parts covering individual taxation, business
taxation and representation, and practices and procedures. For additional information
on the SEE, see the Prometric Testing Website: https://www.prometric.com/en-us
/clients/SEE/Pages/landing.aspx.
For each enrollment cycle, EAs, like attorneys and CPAs, must meet certain continu-
ing education requirements as defined in Subpart A, § 10.6. For an EA’s enrollment card
to be renewed, he or she must complete 72 hours (i.e., an average of 24 hours per year)
of qualifying continuing education for each three-year enrollment period. In addition, a
minimum of 16 hours of continuing education credit must be completed during each
year of an enrollment cycle. Subpart A, § 10.6(f) defines what qualifies as continuing
education for EAs.
For more information on EAs, see www.irs.gov/taxpros/agents and www.naea.org.
As mentioned earlier, in 2011 the IRS finalized regulations allowing the IRS to regu-
late individuals who prepare all, or substantially all, of a federal tax return for compen-
sation. Under § 10.3(f)(2) as currently written, practice as a registered tax return
preparer is limited to preparing and signing tax returns and claims for refund, and
other documents for submission to the IRS.
In addition, under § 10.3(f)(3), a registered tax return preparer may represent tax-
payers before revenue agents, customer service representatives, or similar officers and
employees of the IRS (including the Taxpayer Advocate Service) during an examination
if the registered tax return preparer signed the tax return or claim for refund for the tax-
able year or period under examination. However, this right does not permit such individ-
ual to represent the taxpayer before appeals officers, revenue officers, counsel, or similar
officers or employees of the IRS or the U.S. Treasury Department. A registered tax return
preparer’s authorization to practice under this part also does not include the authority to
provide tax advice to a client or another person except as necessary to prepare a tax
return, claim for refund, or other document intended to be submitted to the IRS.
Under § 10.4(c), registered tax return preparers must demonstrate competence in fed-
eral tax return preparation matters by written examination, possess a valid preparer tax
identification number, and not have engaged in any conduct that would justify the sus-
pension or disbarment of a practitioner.
Section 10.6(e) requires registered tax return preparers to obtain a minimum of 15
hours of continuing education each year, to include 2 hours of ethics or professional
conduct, 3 hours of federal tax law updates, and 10 hours of federal tax law topics. For
additional information on the status of the new tax return preparer requirements, see the
IRS Website. The frequently asked questions (FAQ) section on the proposed require-
ments is currently located at www.irs.gov/taxpros/article/0,,id=218611,00.html.
Study of Tax Return Preparers Accuracy

In a 2006 report, the U.S. Government Accountability Office (GAO) released the
results of a study conducted to determine the accuracy of paid tax return preparers.
In this study (GAO-06-563T, A Statement Before the Committee on Finance, U.S.
Senate), the GAO found that paid prepared returns were often incorrect, with tax
consequences that were sometimes significant.
Refund Amounts over or under Correct Amount in 19 Cases

Refund error
$2,000
1,600
1,200
800
400
0
−400
−800
−1,200
−1,600
−2,000
(Continued )
SPOTLIGHT ON TAXATION (CONTINUED)
Some of the most serious problems involved preparers not reporting business
income, not asking about where a child lived and claiming an ineligible child for the
earned income tax credit, failing to take the most advantageous postsecondary edu-
cation tax benefit, and failing to itemize deductions or failing to claim all available
deductions. These and other documented problems formed the basis for the IRS’s
2007 proposal for a new registration program for tax return preparers.
Limited Practice [Circular 230 §10.7] In Circular 230, the IRS has authorized lim-
ited practice rights for certain individuals who are not practitioners. For example, indivi-
duals (with proper identification) can represent themselves under § 10.7(a) and
participate in IRS rule making as provided for under § 10.7(b). In addition, under
§ 10.7(c), an individual who is not a practitioner may represent a taxpayer before the
IRS in the following situations:
1. An individual may represent a member of his or her immediate family.
2. A regular full-time employee of an individual employer may represent the employer.
3. A general partner or regular full-time employee of a partnership may represent the
partnership.
4. A bona fide officer or regular full-time employee of a corporation (including a par-
ent, subsidiary, or other affiliated corporation), an association, or organized group
may represent the corporation, association, or organized group.
5. A trustee, receiver, guardian, personal representative, administrator, executor, or
regular full-time employee of a trust, receivership, guardianship, or estate may rep-
resent the trust, receivership, guardianship, or estate.
6. An officer or regular employee of a governmental unit, agency, or authority may
represent the governmental unit, agency, or authority in the course of his or her
official duties.
7. An individual may represent any individual or entity before personnel of the IRS
who are outside the United States.
Circular 230 requires that such person must not be disbarred or suspended from
practice before the IRS or from his or her profession.
Return Preparation and Application of Rules to Other Individuals [Circular

230 § 10.8] A compensated individual who prepares or assists with the preparation
of all or substantially all of a tax return or claim for refund must have a preparer tax
identification number (PTIN). In general, the individual must be an attorney, CPA,
EA, or registered tax return preparer to obtain a PTIN. In addition, any individual who
for compensation prepares or assists with the preparation of all or substantially all of a
tax return or claim for refund (or prepares all or a substantial portion of a document
pertaining to any taxpayer’s tax liability for submission to the IRS) is subject to the
duties and restrictions relating to practice in subpart B, as well as to the sanctions for
violation of the regulations in subpart C [§ 10.8(a)] and [§ 10.8(c)].
Compensated individuals who prepare less than substantially all of a tax return or
claim for refund do not require a PTIN. Nevertheless they may appear as a witness for
the taxpayer before the IRS or furnish information at the request of the IRS or any of its
officers or employees [§ 10.8(b)].
Duties and Restrictions Relating to Practice Before the IRS [Circular 230 Sub-
part B] Subpart B of Circular 230 provides a set of rules, duties, and restrictions for
those individuals authorized to practice before the IRS:
1. A practitioner must furnish information, on request, to any authorized agent of the
IRS, unless the practitioner has reason to believe that the request is of doubtful legal-
ity or the information is privileged [§ 10.20(a)].
2. A practitioner must provide the Director of Practice of the IRS, on request, any
information concerning the violation of any regulation pertaining to practice before
the IRS. The tax practitioner must testify in a disbarment or suspension proceeding,
unless there is reason to doubt the legality of the request or the information is pri-
vileged [§ 10.20(b)].
3. A practitioner who knows of client noncompliance, error, or omission with regard to
the tax laws must advise the client of that noncompliance, error, or omission [§10.21].
4. A practitioner must exercise due diligence [§ 10.22]. Due diligence is not defined in
Circular 230. However, the U.S. Court of Appeals for the Second Circuit held in
Harary v. Blumenthal, 555 F.2d 1113 (CA-2, 1977) that due diligence requires that
the tax practitioner be honest with his or her client in connection with all IRS
related matters. In the view of the IRS, the failure to exercise due diligence involves
conduct that is more than a simple error, but less than willful and reckless miscon-
duct (Coursebook Training 994-102, IRS, December 1992). In determining if a prac-
titioner has exercised due diligence, the IRS uses several factors, including the nature
of the error, the explanation of the error, and other standards that apply (e.g., the
AICPA SSTS that are discussed later in this chapter). In essence, due diligence
•
means a tax practitioner should use reasonable effort to comply with the tax laws.
E X A M P L E 1-1
Judy is a CPA who fails to include rental income on a tax return she completed
for a client. The omitted rental income was from a new rental property the cli-
ent purchased this year and therefore had not been reported on prior years’ tax
returns. The taxpayer did not mention the new rental property to Judy in any
communications with her. Under these circumstances, Judy has exercised due
diligence in preparing the tax return. However, if Judy also kept the rental
income records for the new rental property and still omitted the income from
the tax return, then she would not be exercising due diligence.
5. A practitioner must not unreasonably delay matters before the IRS [§ 10.23].
6. A practitioner must not accept assistance from or employ a disbarred or suspended
person or a former IRS employee who is disqualified from practice under another
rule or U.S. law [§ 10.24].
7. Partners of governmental employees cannot represent anyone for whom the govern-
mental employee-partner has (or has had) official responsibility. For example, a
CPA firm with an IRS agent as a partner cannot represent any taxpayer that is (or
was in the past) assigned to the IRS agent/partner. Likewise, no former governmen-
tal employee shall, subsequent to his or her governmental employment, represent
anyone in any matter administered by the IRS if such representation would violate
other U.S. laws [§ 10.25].
8. A practitioner may not act as a notary public for his or her clients [§ 10.26].
9. In general, fees for tax work must not be contingent or unconscionable [§ 10.27] A
contingent fee is any fee that is based, in whole or in part, on whether or not a posi-
tion taken on a tax return or other filing avoids challenge by the IRS or is sustained
either by the IRS or in litigation. Contingent fees include a fee that is based on a per-
centage of the refund reported on a return, that is based on a percentage of the taxes
saved, or that otherwise depends on the specific result attained. Also, fees are contin-
gent if they include any fee arrangement in which the practitioner will reimburse the
client for all or a portion of the client’s fee in the event that a position taken on a tax
return or other filing is challenged by the IRS or is not sustained, whether pursuant to
an indemnity agreement, a guarantee, rescission rights, or any other arrangement with
a similar effect. Practitioners may charge contingent fees for services rendered in con-
nection with the IRS’s examination of, or challenge to, (1) an original tax return; or
(2) an amended return or claim for refund or credit for which the amended return
or claim for refund or credit was filed within 120 days of the taxpayer receiving a
written notice of the examination of, or a written challenge to, the original tax return.
The intent of this exception is to discourage the tactical preparation of a refund claim
or amended return filed late in the examination process. A practitioner may also
charge a contingent fee for services rendered in connection with a claim for credit or
refund filed solely in connection with the determination of statutory interest or penal-
ties assessed by the IRS, and for services rendered in connection with any judicial pro-
•
ceeding arising under the Internal Revenue Code.
E X A M P L E 1-2
Oak Corporation has been audited by the IRS for its tax return filed two years
ago. The company’s controller completed the original return. The IRS is asserting
that Oak underpaid its taxes by $100,000. Oak contacted Joe, a CPA, and engaged
him to handle the appeals process with the IRS. In this situation, Joe can use a
contingent fee arrangement. (For instance, Joe’s fee could be 30 percent of any
amount by which he could get the IRS to reduce the $100,000 assessment.)
While unconscionable is not defined in Circular 230, if a tax practitioner charges a fee
that is out of line with some measure of the value of the service provided to a client, then
the fee would be unconscionable. For example, a CPA could not charge a fee of $10,000
to an unsophisticated taxpayer (such as an elderly person) for simple tax work that most
CPAs would complete for less than $500.
10. In general, a practitioner must, at the request of a client, promptly return any and
all of the client’s records that are necessary for the client to comply with his or her
federal tax obligations. The practitioner may retain copies of the records returned to
a client [§ 10.28].
11. No tax practitioner can represent conflicting interests before the IRS unless he or
she has the express consent of the directly interested parties [§ 10.29].
12. A practitioner may not use, in any form of public communication or private solicita-
tion, false, fraudulent, coercive, misleading, or deceptive statements or claims
[§ 10.30]. Types of public communication allowed by this provision include billboards,
telephone books, and advertisements in newspapers, on radio, and on television.
If done in a dignified manner, examples of items that a practitioner may communicate
to the public include (1) his or her name, address, and telephone number; (2) names
of individuals associated with the practitioner; (3) a factual description of services
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FIG. 23. MOSAIC PICTURE
Floors in early times were of hardened earth, paving stones, or

plaster. In the fifth century pebbles set in cement came into use in
Greece, and from this kind of floor mosaic, plain and patterned, was
derived. Pictures or decorative designs made of fine glass mosaic
were also used as wall decorations. Three examples are on the tops
of Cases 1 and 2 (fig. 23).
FIG. 24. OLD MAN SEATED ON A KLISMOS
The Greek and Roman furniture which has come down to us is

necessarily small in amount and fragmentary because, like most
modern furniture, it was made of wood and consequently has been
destroyed by damp. There remain, however, some fairly complete
pieces, and a considerable number of metal fittings and casings, as
well as some models and many illustrations from vases. Among the
objects from Cyprus in wall-cases in the corridor are two bronze
tripods, and three ornaments consisting of goats’ feet and bulls’
heads from another. The bronze lions’ paws were feet for a large
chair or chest. We have also a little terracotta chair with a diminutive
figure in it and a three-legged table of the kind used to set beside a
dining-couch, both from Cyprus, as well as a round table on three
legs, of much later date (Case 2). Two lekythoi in Case K in the
Fourth Room, decorated with interior scenes, show chairs of a very
graceful and comfortable type, the Greek klismos, and the same kind
of chair is seen on the grave-monument of a lady in the Sculpture
Gallery (No. 4), and on a large amphora on a pedestal in the Fifth
Room (fig. 24). The lady playing a kithara in the wall-painting in the
Eighth Room is seated in a large armchair, the thronos. In Case 5 is
a bronze casing of beautiful work for a piece of furniture, and in Case
2 a bronze chair-leg and an ornament terminating in the head of a
young bullock. Two tripods and some bronze mountings from Cyprus
will be found in wall-cases in the corridor. In the cubiculum from
Boscoreale is a table of marble and bronze. The bronze rim which
surrounds the marble top is inlaid with silver and niello in a beautiful
pattern of palmettes and rosette ornaments. A couch, probably for
dining (wrongly restored as a seat), and a footstool stand in the
corridor between the Eighth and Ninth Rooms. Bedsteads, which
were similar to this couch in shape, were merely frames on which
thongs were stretched, like the old-fashioned corded beds, the
interlaced leather bands acting as springs. The wooden frames were
frequently decorated with bronze fittings, and in the Hellenistic and
Roman periods inlay and mountings of silver, gold, ivory, and
tortoise-shell were employed for the rich. Couches and beds were
usually supplied with a raised head-rest, often finished with bronze
animal-heads, such as the mule-heads in Case A in the Seventh
Room and Case L in the Eighth Room.
FIG. 25. BRONZE CAULDRON
FIG. 26. GREEK TABLE-WARE OF PAINTED TERRACOTTA
Clothing was kept in chests, which were well adapted to the large
pieces of cloth composing a costume. A good illustration of a chest
may be seen in Case W in the Fourth Room, on an amphora
decorated with a scene from the story of Danaë and Perseus, and in
Case 2 there is a miniature chest of white stone from which the
cover has been lost.
FIG. 27. BRONZE PATERA
Household utensils, since they were made of metal or pottery,

exist in considerable numbers. Cooking was usually done over an
open fire, though stoves of a simple type came into use in the
Hellenistic and Roman periods. The bronze cauldrons used for
boiling (Case S in the Third Room and wall-cases in-the corridor)
were valued highly, and were offered frequently as prizes in athletic
contests (fig. 25). At the funeral games of Patroklos (Iliad XXIII, vv.
267-268) Achilles gives a ‘bronze cauldron untouched by fire’ as a
prize for the chariot race, and records of later contests prove that the
custom was a common one. An amphora in Case Y in the Fourth
Room is decorated with the figure of a youth, evidently a victor in the
games, carrying away upon his shoulders a cauldron which he has
won. The metal hook in Case N in the Seventh Room was used for
drawing pieces of meat from the cauldron. Pails, finely made and
decorated, especially as to the handles and their attachments,
probably served some purpose at table, as, for example, to hold cold
water or snow in which a vessel of wine was placed to cool.
FIG. 28. BRONZE WINE-JUG
FIG. 29. BRONZE JUG
FIG. 30. BRONZE BEAKER

FIG. 32. BRONZE WINE-
FIG. 31. BRONZE STRAINER
LADLE FOR WINE
The pottery in the various rooms of the collection shows the kinds
of dishes in use in Greek and Italian houses. There are cups of
different shapes, pitchers and jugs for water, wine, and other liquids,
kraters (large bowls for mixing water and wine), plates for food, and
lekythoi (oil-cruets) (fig. 26). The modern china, that is, high-fired
pottery covered with a vitreous glaze, was not known, and glass did
not become common until the Imperial period. In the Eighth Room
and the corridor are many examples of the glass vessels of that time,
some plain, others with ornaments in relief, and still others of colored
glass in patterns of remarkable beauty (Cases N and O in the Eighth
Room). Much of the plain glass has become iridescent owing to
exposure to damp in graves. The pottery in museum collections is
naturally the finer product of the workshop; receptacles for storing
and for kitchen use were of undecorated clay and more carelessly
made. In the Cesnola Collection on the tops of Cases 58-63 are
some of the tall jars, called pithoi by the Greeks and dolia by the
Romans, which were used for storing and exporting wine, grain, and
many other articles, taking the place of the casks, barrels, and
boxes, and the paper bags and cartons of modern times. The
pointed ends were driven into earthen floors.
FIG. 33. ROMAN SILVER CUP
FIG. 34. ROMAN SILVER SPOONS
Another piece of table-ware which should be mentioned is a

special plate for fish, made in Italy, which had a depression in the
center for holding the sauce. These plates are decorated with
interesting and surprisingly accurate drawings of fish (Case Q in the
Sixth Room, tail-piece, p. 31).
In Case E in the Third Room is a bronze table service of Greek
work from an Etruscan tomb, and in Case O in the same room are
bronze jars and jugs of various fine shapes (figs. 27-30), and ladles
for dipping wine (fig. 31). In Case A in the Fourth Room is a wine-
strainer (fig. 32). The remarkably beautiful handles from vessels in
these cases are a further proof of the taste and care expended upon
household utensils. Silver table services were not common among
the Greeks, but silver and even gold dishes were used by wealthy
Romans. In Case C in the Eighth Room are four cups of Roman date
(fig. 33) with a ladle and a little jug or cup with a spout.
Food was usually cut into convenient pieces in the kitchen and
eaten with the fingers, but spoons were used to a considerable
extent by the Romans. Several bronze spoons are exhibited in Case
5, and there are some silver spoons of various shapes in the case
with the silver cups in the Eighth Room (fig. 34).
The habit of rising and going to bed early which prevailed in
Greece and Italy is easily understood when we see the meagre
arrangements for lighting which they possessed. In the street torches
were carried, and they were also used in the house in early times. A
bronze torch-holder of the late sixth century from Cyprus in the
corridor and a terracotta example in Case 2 appear to have been
made so that they could be set on a table. The Romans and
Etruscans made candles of pitch and also wax ones very similar to
our own, but the Greeks were not acquainted with them until they
were introduced by the Romans. The iron candelabrum in Case S in
the Third Room was designed to hold candles on the prickets around
the top. Lamps were commonly of terracotta or bronze. Olive oil was
burnt in them with a wick of flax, but at best the light must have been
poor and flickering. Candelabra were commonly made of wood, but
handsomer ones were of bronze. A fine Etruscan candelabrum
stands in the Fifth Room. It was probably furnished with hooks or
other attachments for hanging lamps, or with prickets for candles
(fig. 35). A group of lamps of various shapes is shown in Case 2 (fig.
36).
FIG. 36. BRONZE LAMP ON A
STAND
FIG. 35. BRONZE

CANDELABRUM
IV
OCCUPATIONS OF WOMEN
CASES 2, 3, AND 5
FIG. 37. WOMAN EMBROIDERING OR

MAKING A NET
The home in ancient times, especially the country house, was a
manufactory on a small scale, like many American homes of a
century ago. Most of the clothing for the family was made there, and
consequently the mistress of the house must understand wool-
working in every stage and the making of linen cloth, and must also
be able to teach and direct the slave women. Wool was often bought
in the raw state or even in the fleece, which necessitated cleansing
it, certainly a disagreeable task. The Syracusan lady in the Fifteenth
Idyll of Theokritos scolds because her husband has bought five dirty
fleeces of poor quality—“work upon work” for her. For making the
roves a pottery shield, called epinetron or onos, was placed on the
knee and the fibers rubbed over it. An interesting example,
decorated with drawings of women at work (see head-band, p. 32),
has the upper surface covered with a scale pattern which furnished
the slightly roughened surface necessary for making the roves (Case
2, top shelf, fig. 38). The covering, however, was sometimes
dispensed with; a finely decorated toilet-box in Case A in the Fourth
Room has on one side a drawing of a woman carding over her bare
knee (fig. 39). This box also shows the next stage in the making of
cloth, the spinning, for which distaff and spindle were used (see tail-
piece, p. 39). A small weight, the spindle-whorl, usually of terracotta,
was attached to the thread below the spindle to increase the twisting
motion. An example is in Case 5. This primitive method of spinning is
still in use among the Greek country-folk, witness a photograph
taken in 1922 (fig. 41).
FIG. 38. ONOS OR EPINETRON

FIG. 39. WOMAN CARDING WOOL
FIG. 40. EMBROIDERED CLOTHING

The loom used in Greece and Italy was upright, consisting of two
posts with a cross-bar. The threads of the warp, alternately long and
short, were held by terracotta weights tied to the lower ends. A loom-
weight from Crete is marked with the owner’s name, Kaleneika, wife
or daughter of Teriphos (Case 5).
FIG. 41. GREEK COUNTRY-WOMAN SPINNING
Cloth was woven in the size desired for a particular garment, so

that no cutting was necessary and consequently there were no
edges to hem. Sewing was therefore restricted to seams, of which
few were required, but a great deal of time and skill could be devoted
to embroidered ornament upon fine garments. The earlier fashion,
seen on black-figured vases, was to cover the cloth with patterns,
but later only borders were used, or bands of figures. On an
oinochoë of the fifth century, in Case C in the Fifth Room, are two
ladies perfuming clothes. The garments and head-dresses they are
wearing and the clothes they are folding are worked with beautiful
borders in the wave pattern and ornaments in the form of
conventionalized flowers (fig. 40). Besides providing fine apparel for
themselves and their families, women also expended their skill on
garments which they offered to the goddesses: the treasuries of
Athena and of Artemis at Athens contained chests full of many-
colored robes offered by worshippers (fig. 37). Naturally in the
course of time various industries sprang up which contributed
manufactured products to the household, but spinning and weaving
continued to be domestic occupations, at least to provide clothing for
the slaves. Some conservative families in Rome prided themselves
upon wearing garments made at home; the Emperor Augustus is
said to have worn, except on special occasions, the handiwork of the
ladies of his family as an example of simplicity in a period of general
extravagance.
FIG. 42. BAKING BREAD IN A PRIMITIVE OVEN

FIG. 43. WOMEN WINNOWING AND GRINDING CORN
The preparation of food likewise required the housewife’s

direction, though the master of the house, or in large establishments
a trusted steward, attended to the marketing. Two small terracottas
from Cyprus on the bottom of Case 3 illustrate the making of bread
by very primitive methods. In the first (fig. 43), the woman at the left
is winnowing grain with a sieve, which she holds, and a winnowing-
fan shaped like a shovel, which lies by her side. The other woman
(whose head is unfortunately missing) is grinding the corn on a
saddle-quern; she draws the upper millstone back and forth over the
lower, which is provided with side boards to prevent the meal from
falling off—a hard day’s work, one would say. The other terracotta
represents a primitive method of baking bread. A clay oven like a
huge bowl was built up by hand in a convenient place. The usual
fuel, dried grasses, was placed in and around it and after the oven
became heated and the fire had died down, the housewife set the
flat loaves around the inside to bake (fig. 42).
FIG. 44. WOMEN AT A WELL-HOUSE IN ATHENS

Another task often represented on vases is the drawing and
carrying of water. In many places the public well-houses were the
principal source of supply, as the piping of water into dwellings was
unusual in Greece until Roman times. A hydria in Case 2 shows a
group of women carrying away their jars on their heads from a public
well-house (fig. 44).
FIG. 45. MARRIAGE-VASE
In Athens, and probably more or less throughout the Greek world,

a woman’s life was rather monotonous. Ladies did not go out
unattended, and indeed were not expected to go out at all without
good reason. A wife did not receive her husband’s guests or take
part in his social life; but women were included in family gatherings
such as weddings and dinners after the birth of children, they made
visits to women relatives and friends, and shared in the frequent
religious festivals, which at Athens included the theatre. In the earlier
vase paintings there are comparatively few figures of women, and

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Federal Tax Research 10th Edition,

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of Business and Economics of the University of Wisconsin–Whitewater. A graduate of

Steven L. Gill, Ph.D. is an Associate Professor in the Charles W. Lamden School of

University of Florida, an M.S. in Taxation from Northeastern University (Boston) and a

PART I THE TAX RESEARCH ENVIRONMENT 1

CHAPTER 1 Introduction to Tax Practice and Ethics 3

PART II PRIMARY SOURCES OF FEDERAL TAX LAW 81

PART III RESEARCH TOOLS 189

PART IV IMPLEMENTING THE RESEARCH TOOLS 407

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Preface xvii Step 1: State the Issue as a Question 65

Effective Date of Regulations 120 PART III

Browsing 393 Summary 452

Injunctions 512 Mitigation of Statute of Limitations 521

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Structure and Pedagogy

Using the Text

The Tax Research Environment

CHAPTER 1 Introduction to Tax Practice and Ethics 3

CHAPTER 2 Tax Research Methodology 51

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Introduction to Tax Practice

• Describe the elements of modern tax practice in the United States.

Elements of Tax Practice 5 Compliance with Standards 20 • Rule 203:

Sarbanes-Oxley and Taxation 28 Ethical Professional Behavior 31

EXHIBIT 1-1: Elements of Taxation

Political Processes Societal Concerns

Elements of Tax Practice

EXHIBIT 1-2: Elements of Tax Practice

Tax Compliance Tax Planning Tax Litigation

Rules and Ethics in Tax Practice

EXHIBIT 1-3: Sources of Rules and Ethics for Tax Practitioners

IRS Circular 230

AICPA Code Internal Revenue

ABA Model Rules

Study of Tax Return Preparers Accuracy

Refund Amounts over or under Correct Amount in 19 Cases

SPOTLIGHT ON TAXATION (CONTINUED)

Return Preparation and Application of Rules to Other Individuals [Circular

Floors in early times were of hardened earth, paving stones, or

The Greek and Roman furniture which has come down to us is

FIG. 26. GREEK TABLE-WARE OF PAINTED TERRACOTTA

FIG. 27. BRONZE PATERA

Household utensils, since they were made of metal or pottery,

FIG. 30. BRONZE BEAKER

FIG. 33. ROMAN SILVER CUP

FIG. 34. ROMAN SILVER SPOONS

Another piece of table-ware which should be mentioned is a

FIG. 35. BRONZE

FIG. 37. WOMAN EMBROIDERING OR