Title

•An Analysis of Tax Court Cases Relevant to Financial Planners

Document Type

Article

Publication Date

4-2012

Publication Source

Journal of Academy of Business and Economics (JABE)

Volume

12

Issue

4

Inclusive pages

75-83

Peer Reviewed

yes

Abstract

Tax implications of financial planners' advice have a significant impact on the wealth of their clients. Tax Court cases can be a valuable source for their research on relevant tax issues. Unfortunately, Daily et al. (2010) show that the opinions in Tax Court cases mentioning "depreciation" have become increasingly difficult to read. If the prior finding holds true for the court cases that financial planners frequently refer to, the declining readability may hinder and/or prolong their tax research.

Our study assesses the readability of Tax Court cases citing the Internal Revenue Code (I.R.C.) Sections that are particularly relevant to financial planners. These code sections include Retirement Savings Account (RSA) Sections and General Financial Planning (GFP) Sections. We find that there is no significant difference in the readability between court cases based on the type of case decisions (regular or memorandum). In contrast, there is a significant difference in the readability of these court cases by code sections. Such difference in the two sections is reinforced by the finding that the readability only deteriorates for the court cases citing the GFP Sections. These results suggest that tax research on court cases can be burdensome and, therefore, detract from financial planning efforts.

Keywords

Financial Planners, Tax Court Cases, Readability

Disciplines

Accounting | Finance and Financial Management

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