“The hardest thing in the world to understand is the income tax.” — Albert Einstein
It is generally accepted that the subject of taxation can be difficult to grasp. Luckily, practical resources are available to help individuals better understand the rules and their interpretation. One of the many research databases the Law Library provides as a resource for visitors, students, and faculty is the Tax Practice Series, part of the BNA Premier subscription. The site provides an array of useful materials to aid in researching questions related to tax.
Access the Tax Practice Series database from the Law Library website. Click on Law Library Databases and then select BNA Premier. From the BNA Premier homepage, scroll to the Tax category and select Tax Practice Series. As you can see below, the Tax Practice Series main page is divided into several informational sections related to common tax research needs — Tax Forms, Expert Analysis, Practice Tools, and Source Documents. You also have the option to search Indexes. (Click image to enlarge.)
The Tax Form section is useful if you need to find a specific IRS form. Although the IRS also offers these forms to the public, the Tax Practice Series offers an interactive function that allows you to input information directly into the form and computer calculations based on the provided information.
Another convenient tool on the main page is the “Go To Document By Citation.” Here you can choose to select a source to search (e.g., Internal Revenue Code) using the drop down menu. It’s important to type in the exact citation for the document you wish to locate. For instance, if I want to find the treasury regulations for § 262 (relating to personal, living, and family expenses), I need to know the starting cite is 1.262-1. Of course for those advanced enough to know that the Regs are filled with dashes and dots, this isn’t a problem. But many of us are used to search engines that recognize what we are looking for — even when we don’t state it exactly. However, one solution, if you aren’t clear about the correct citation format, is to click on “Citation Formats” just below the search box (see below). From here you can obtain citation examples for the individual tax collections.
Now the reason I was looking into § 262 in the first place is because I have a question about business related deductions. During a recent conversation with a friend, who happens to be a yoga instructor and also works at a store that sells fancy yoga gear, I learned that she plans to deduct the expense of the clothes she buys from the store. She believes she can deduct this expense because she uses these clothes in her business as a yoga teacher. In the back of my mind I recalled my tax professor telling our tax class that this is a type of deduction that is not allowed because these clothes are suitable for everyday wear — unlike say, police uniforms, which are not, and thus may be deducted. If my friend was my client — or if this situation happened to come up in my practice as a lawyer — I would need to be sure about my answer. I decide to use the Tax Practice Series database as a resource to research how I would answer this question.
I begin by looking under “Expert Analysis, which lists common tax topics. Based on my question, I opt to click on “Deductions.” The page that opens contains a long list of topics related to deductions.
To view the material, I like to use the “split-screen” option (instead of the default full -screen option). The split-screen allows me to easily navigate the sections while also viewing the content. I scroll down the list of sections on deductions to ¶ 2810, which discusses personal, living, and family expenses, and expand the section (see below; click image to enlarge).
By the way, don’t be confused by the ¶ symbols you see. Most loose leaf style services such as this one, which began as print resources, utilize paragraph symbols to identify sections and parts of documents and have retained it in their online formats.
I expand ¶ 2810 and find concise, plain-language explanations relating to personal expense deductions. The materials include citations to the relevant code sections and regulations, along with important case law interpretations. Although I can’t cite to this specific loose leaf as an authority to the court, and although the section and paragraph numbers don’t correspond with the Internal Revenue Code, the information does lead me to the correct code sections, regulations, tax court decisions, and revenue rulings — all of which I can cite as authority.
After reading through the information, I conclude that my friend is not allowed to deduct her yoga clothing as a business expense. Luxury yoga wear is so commonplace and fashionable that it cannot be considered an ordinary and necessary business expense. Because it can be worn in a non-business context for her own personal wear, she shouldn’t be deducting this cost.
Another handy tool, especially for new attorneys, is the “client letter,” which you can find under Practice Aids at ¶ 2810.100. It provides you with a template that you can use to draft a letter to send to your client and includes all of the relevant information related to personal expense deductions (see below; click image to enlarge). Thus, if my yoga teacher friend was also my client, I could use the client letter as a template for the one I would write and send.
It’s pretty clear that BNA Premier’s Tax Practice Series is great if you have an idea of what you are looking for and are familiar with tax law language. However, if you feel you need assistance conducting a search, consider using either Advanced Search or Guided Search. Both provide template-style searching that helps you locate information easily — great when you are new to tax law research.
For example, to use Guided Search open the template and select a collection to search — say, Tax Practice Series, specifically deductions. Then scroll to the bottom of the screen and enter search terms related to your question. Using my client scenario, entering “work clothing” is one possibility (see below; click image to enlarge). Search results bring up the Tax Practice Series: Deductions. When you expand the section you’ll see that you end up in the same place as I located above.
The advanced search option also leads you to the answers you need, but be prepared to sift through information and navigation tabs before you find what you want. Also, don’t forget the Help button located at the top of the screen for more exhaustive assistance. (Click image to enlarge.)
The site has an old-school feel, but contains valuable information for students, practitioners, and faculty. I wish I had known about this database when I was first taking tax courses because it can be used as a supplemental study aid. Now that I do have a basic understanding of how the database works, I can use it for class, work, and personal use.