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ACCT 5135

RESEARCH ASSIGNMENT #1
(Spring 2016)
Assignment #1 is worth 20 points. It is worth 5.5% of your final grade. More importantly, learning
how to conduct tax research is a crucial part of learning tax law. Since almost all tax research is
now done electronically, the purpose of this assignment is to introduce you to computer-based tax
research using one of the most popular web-based research tools.
You are encouraged to work in groups (which usually makes the research easier and more "fun"). If
you do work in groups (maximum four students per group), each member of the group must fully
participate and make a significant contribution to each question. It is not acceptable to split the
assignment into parts for each member to complete. Only one answer sheet need be turned in if
done in a group, but make sure the names of all members are clearly identified in alphabetical order
by last name. The answers need not be typed but must be clearly legible on a separate sheet.
Please note that all the answers are short: usually just a citation to authority and perhaps a
yes/no or a few words. There is no need to attach your research.
No single question should take more than 10 minutes. There are some cheat sheet hints at the end
of the assignment on some of the more difficult problems if you are having trouble. If you are
having difficulty after due diligence, skip it and email my teaching assistant (Joseph Birkett
[birke070@umn.edu) or see him when he is in the CSOM lab in L-112 (hours will be announced in
class and posted on Moodle).
Introduction to Computer Research
In the beginning, there were only paper services. One of the largest annotated services (organized
and annotated by Code sections) was the Standard Federal Tax Reporter published by Commerce
Clearing House (CCH). When CCH got into computer research it did so by simply taking their
annotated paper services and making it available electronically. In other words, the material is the
same as the original paper services, but with two major improvements. First, the researcher is not
limited to the paper indexes, but can search via his/her own key words. Second, the addition of
other primary materials (cases, rulings, etc.) means the researcher can simply link directly to this
material. Of course by using a web-based service like CCH Intelliconnect, a practitioner can do tax
research whenever and wherever he/she has web access.
But key word searching with computer-based resources often gives novices a false sense of security.
There is a belief that typing in some key words will always pull up what is needed. This is probably
because most young practitioners are used to general web searching (i.e., google) where almost any
search request will eventually get you to something close to what you were asking. But tax research
is far more exacting. You must find everything of relevance and do so in an efficient manner
(clients/bosses dont want you sifting through tons of irrelevant authority). It is often hard to predict
the words or phrases that a particular authority might use. And unless your key word search

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matches language used in that authority, it is far too easy to miss important authority necessary for a
proper analysis of your tax issue.
All too often a key word query will either result in too many hits to efficiently browse, or will
result in no authority on point. The problem with the latter is deciding whether there isnt any
applicable authority (not uncommon in tax), or is it because your research query is flawed?
Keep in mind that computer research involves a lot of trial and error. You must approach research
problems from several possible angles in an attempt to find all relevant authority. So be creative in
thinking of key words (when applicable) and diligent in the formation of your search requests.
CCH Intelliconnect Introduction
Access to CCH Intelliconnect is through the University libraries at:
https://www.lib.umn.edu/libdata/page.phtml?page_id=5174 You should be asked to create an
account the first time you log in. Remember that the use of this resource is for academic purposes
and should not be used for any private purposes.
Although this is a self-learning introduction, my experience is that students find the mechanics of
computer resources easy to use (most of you being computer savvy anyway). There are several
ways you can learn how to use CCH Intelliconnect. For starters there is Take a Tour in the lower
right hand corner of the home page (under Getting Started). The main demo is about 10 minutes.
It is important that you familiarize yourself with the different Boolean search connectors. Under
Advanced Search (right of the search key) you will find a quick help connection to Boolean
connectors. See also proximity connectors, wildcard searching and exact phrasing (discussed
further below).
Part I:
Lets begin with some relatively straightforward key word searches. The default search is the entire
library in our subscription, so on many searches you can narrow the search to federal primary
authority and sometimes particular authority therein. When you see a + sign, you can click to
expand if you want to check off only particular sources within a category. Also once you do a
keyword search you can filter the documents by choosing a particular file
Now you are ready to frame your search request in the Enter Keywords box. For a list of
connectors click the thesaurus/query tool link on the top right hand corner of the screen.
The idea is to create good Boolean searches! Besides using connectors and/or, additional important
search connectors include:

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xxxxx xxxxx
xxxx w/7 xxxx

---

the use of quotes to search a particular exact phrase


computer will look for these two words with no more than 7
intervening words between them (can use any

number)
xxxx /sen xxxx
deprec*

---

within same sentence (or /par within same paragraph)


the use of * is a crucial research tool, since it will pull up all
words beginning with deprec in this instance (depreciate,
depreciation, depreciated, etc.). This is probably the
important research tool! Computer will pull normal
automatically.

most
plurals

Question 1: Janet participated in a weight-loss program to improve her general health


and appearance. Do the costs related to the weight loss program qualify as a medical expense?
Indicate the IRS position and correctly cite any authority you are relying upon.
Note: See "How To" citation guide on Moodle for correct citation form. You are
expected to make a reasonable attempt to correctly cite authority you find for
purposes of this assignment and points may be taken off for consistently poor
citation form.
Question 2: A client calls. One of his daughters is blind and they have to buy all her
school books as well as other books in Braille which cost significantly more than comparable books
without Braille. He wants to know whether such costs would qualify as a medical expense under
Section 213. Just cite the authority you would rely upon.
Note: There are some cheat sheet hints at the end of the assignment if you need
help, but try it first on your own!
The next two questions are designed to make you think how easily you can miss key
authority if you arent creative in thinking about your keyword choices.
Question 3: You have a big issue as to whether a group of workers should be classified as
employees or independent contractors for purposes of FICA and income tax withholding. You are
generally aware that the IRS still generally relies on a 20-factor test in determining whether an
employment relationship exists between an individual and an employer, and youd like to review
those 20 factors. Find and cite the original public revenue ruling that articulated this 20-factor test.
Again, there is a cheat sheet hint at the end of the assignment, but only use after youve tried on
your own!

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Question 4: College educators receive a large number of unsolicited text books from
publishers each year. The publishers hope that their books are adopted for use in class. No
restrictions are imposed on the use of such books. Some faculty members give the textbooks to
their school libraries, and then take a charitable deduction worth hundreds of dollars. Is there any
authority dealing with the tax consequences in this situation, or is it simply a windfall for college
educators? Find and properly cite a 7th Circuit decision on this issue. Again, there is a cheat sheet
hint at the end of the assignment, but only use after youve tried on your own!
Part II:
Besides a key word search, you can do a Citation Search. The idea is that if you have a
citation (a case, a ruling, a regulation, etc.) you can use that to draw up the actual authority.
For example, lets assume you just wanted to pull up the case of Rosenspan v.United States, 71-1
USTC 9241 (2d Cir.). First use Citation link (dont confuse it with the citatory link discussed
below) on the top toolbar to pull up the Rosenspan case. Note you have to open up the correct
citation format for United States Tax Cases and enter the citation correctly(see cheat sheet for
additional detail if necessary). Now answer the following questions:
Question 5:
a.
b.

What is the exact date the case was decided?


Who won the case (government/IRS or taxpayer)?

Just because you are doing computerized research does not lessen the need to make sure that the
authority you are finding is still good law. Tax researchers update their research by using a
Citator. A Citator permits a tax researcher to learn about a court cases history and to evaluate
the strength of its holdings. It is essential in legal research because it enables a researcher to
determine whether a case is good law. If a researcher were basing much of his/her work on a
District Court case, for example, s/he would want to know if that case had been appealed to the
Federal Court of Appeals or even to the U.S. Supreme Court. If so, was the case affirmed or
reversed in those higher courts? If the District Court case were subsequently reversed, then ones
work could no longer be based on that case. Other cases may refer to the given District Court
case, as well. A citator will list all (or most) of the cases that have subsequently referred to a
given case.
Once you have found a case that is relevant to your research inquiry you should be able to find
prior authority simply by finding and reading the actual case. Remember that all cases are
decided on the basis of precedent, and so a well-written case should discuss other relevant cases
decided previously. A Citator is then used to (i) check on the subsequent history (if any) of the
actual case you just read, and (ii) check to see if any subsequent cases cited the case you just
read as precedent. In this way the tax researcher is able to bring his/her research current.

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Question 6: Use of the citators is very easy using electronic research. Clear everything
and use the citator link and enter the citation again for the Rosenspan case above. At the bottom
of the page you will first see links to annotations where the case is discussed in the editorial
content of the CCH system. Next youll see any links to subsequent history of the case. After
that you will find later courts that cited the Rosenspan case.
a. Was the the Supreme Court asked to hear the case? What happened if so?
b. What is the most recent 8th Circuit case that cited Rosenspan?
Those of us who began doing research back in the dark ages before the web and even personal
computers feel at an advantage in doing computer tax research because we understand how the
services work in their paper cousins. But you too can use Intelliconnect much as if in the paper
library, but through your computer! Remember this can be important because of the limitations
that can sometimes arise with only using key word searching.
Begin by expanding the Federal Tax Practice area (hit the + sign on the left). Now keep
scrolling down until you find Topical Indexes near the bottom which you can expand again.
Expand Federal Standard Reporter Topical Index to answer the following:
Question 7: Lets assume you have a friend who is a blackjack dealer at Mystic Lake
casino and wonders if he has to include his tips (also called tokes) into income. Properly cite a
9th Circuit opinion which held that such tips would have to be included in income (interestingly,
the 9th Circuit reversed the lower court that held such tips were not income, differentiating such
tips from those earned by waitresses and cab drivers).
Question 8: Another way to search without key word searching is to simply expand
content. Lets do this with the Standard Federal Tax Reporter. The SFTR is CCHs annotated
tax service, meaning it is organized and annotated by Code section. So find and expand SFTR
(under Federal Tax Editorial Content) and find and expand Code Section 119 which deals with
meals and lodging for the convenience of the employer. Note the paper service is set up by Code
section, legislative history, regulations and explanations. Intelliconnect simply imitates the paper
version. Lets assume you wanted to know whether the Minnesota governor can exclude from
his income the value of staying in the governors residence that the state provides him. What is
the answer and cite the authority you would rely upon?

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Part III:
Okay, one last question to pull it all together!
Question 9: Phyllis lived with Martin for about ten years without being married. Martin
was very wealthy, and orally agreed to leave Phyllis his entire estate. However, when Martin died,
the only will that could be found left everything to another mistress. Phyllis sued Martins estate for
breach of promise. The court held that an oral promise to make a will was not legally enforceable
under state law. However, the court also held that an oral promise to provide services was legally
enforceable, and since Phyllis performed traditional wifely services during their 10 years together,
awarded Phyllis about 1/8 of the estate. On her tax return, Phyllis reported no income from the
award using Section 102, which exempts gifts, bequests and inheritances from gross income. The
IRS, however, has taken the position that Section 102 does not apply under these facts since the
income is compensation for services rendered. Who is right? Find and cite a Second Circuit Court
of Appeals decision on this point.

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Cheat Sheet Hints (only look at if youre stuck or after you found the answer)
General Hint #1:
Generally you want to cite the highest authority that directly
answers the question. This isnt as easy as it sounds. For example youd choose to cite a Code
section rather than an IRS Revenue Ruling, but often the higher authority is vague (thats why
you are researching the question!). So if the Revenue Ruling directly answers the question then
you should choose that over the ambiguous wording of the Code.
General Hint #2:
In order to cite the best authority it is essential that you at least
skim authority and try and find the one closest factually to our research question.
Questions 2: One great research query is to use a Code section. So while medical will be a
good search term, so will Section 213.
Question 3: If you use the number 20 you wont find the authority directly (you can find it
indirectly by reading other authority). To find the authority directly, you need to spell out
twenty. Did you even think about this when forming your keyword search?!
Question 4: What are you using in your key word search, textbooks as one word or text
books as two words? Perhaps books will be good enough. Turns out that Intelliconnect will
pick up either in this instance, but other tax research tools will not. Plus you have to make sure
you are spelling correctly (no auto-correct!). Are you beginning to see some of the limitations of
key word searching?
Question 7: May have to play around with the key words. Actually most direct is the easiest in
this case!
Question 8: Once you find Section 119 just scroll down the annotation headings. Remember the
governor is just another governmental employee!
Question 9: First of all remember using a Code section in quote marks (Section 102) is a great
key word search because courts will always cite it in its decisions! Now you want to add other key
words or phrases. Finally remember to cite the Second Circuit case, not the lower court Tax Court
case!