tax-position-memo

Reference Files

• references/authority-hierarchy.md - Complete federal tax authority hierarchy (IRC through treatises), confidence thresholds (MLTN, substantial authority, reasonable basis), penalty exposure by level, and disclosure form guidance. Read this in Step 3 when compiling authorities and in Step 5 when stating the confidence level and disclosure requirement.

Overview

Based on "Federal Tax Research" by Sawyers and Gill - the standard reference for tax research methodology. A tax position memo is the written record that a tax position meets the applicable confidence standard: substantial authority, more-likely-than-not (MLTN), or reasonable basis. If the IRS examines the return, the memo is the evidence that the position was not taken recklessly.

The FIRAC structure (Facts, Issue, Rule/Authority, Analysis, Conclusion) is the professional standard for tax memos. The analysis section is the most important: it applies the authority to the specific facts. A memo that cites authority without applying it to the facts is not a tax memo - it is a list of citations.

Workflow

Step 1: State the facts

Write a precise, complete statement of the relevant facts. Do not include irrelevant facts. Do not omit facts that are unfavorable to the position.

FACTS