Tax Research Memo: Template, Structure, and a Worked Sample

By Forrest Baumhover, CFP®, EA · Last verified September 20, 2026

What a tax research memorandum contains, a fill-in template you can copy, and one complete sample memo on a fictional client, with the authorities a memo can lean on and the ones it cannot.

What a tax research memo is for

A tax research memorandum answers one specific question about how the tax law applies to a specific set of facts, and shows the work: which authorities apply, how they apply, and where the answer could go the other way. It is usually an internal document. It records what you found so a reviewer can check it, and so that you or someone else can tell later why a position was taken.

It is also the working file behind written advice. Under Circular 230, a practitioner giving written advice on a federal tax matter must, among other things, base it on reasonable factual and legal assumptions, reasonably consider all relevant facts, and "relate applicable law and authorities to facts" (31 CFR § 10.37(a)(2)). A memo that has a facts section, an authority list, and an analysis is the ordinary way to show each of those was done.

The five parts, and where the order comes from

The structure most tax-course materials teach has five parts: facts, issues, authority list, conclusion, and analysis. That is the order used in a university tax-course handout that reproduces a textbook chapter on tax research (Prof. Till, Spring 2016, linked in the sources below). Note the placement: the conclusion comes before the analysis so the reader gets the answer first.

This is a teaching convention, not a rule. No statute or regulation prescribes a memo format. Firms and courses vary: many lead with the question and a short answer, then facts, then discussion, and some fold the authority list into the analysis. If you work for a firm or a professor with a house format, use theirs. What matters is that every part below is present somewhere and in an order your reader can follow.

The five parts of a tax research memo, as the course handout describes them, with the most common way each goes wrong.
Part	What goes in it	Common failure
Facts	The facts that give the transaction its background (generally who, what, when, where, and how much) and any that could change the answer. Kept brief. Say which facts are open (not yet happened, so they can still be changed) and which are closed.	Leaving out a fact you did not ask about, then researching the wrong question. Or stating an assumption as if the client had confirmed it.
Issues	The specific question or questions the memo answers, each in one or two sentences.	An issue so broad ("Is the home office deductible?") that no single answer fits it.
Authority list	The authorities that apply to each issue: Code sections, regulations, court cases, rulings. Enough for a clear understanding of the issue, not every authority you found.	Listing a secondary source (a treatise, an article, a colleague's opinion) as if it were authority. See the next section.
Conclusion	One conclusion per issue, as short as possible, ideally with the reason.	A conclusion that hedges so much it does not answer the question, or one the analysis below does not support.
Analysis	The reasoning. Typically the general area of law first (the Code section), then the specific authorities (regulations, cases, rulings), then the application to these facts. Includes authorities that cut against the conclusion.	A list of what each authority says with no application to the facts. Circular 230 asks the practitioner to relate the law to the facts, not just recite it.

What counts as authority, and what does not

For the substantial-authority standard that applies to the accuracy-related penalty, Treas. Reg. § 1.6662-4(d)(3)(iii) lists the only things that are authority: Code and other statutory provisions; proposed, temporary, and final regulations; revenue rulings and revenue procedures; tax treaties and official explanations of them; court cases; congressional intent as reflected in committee reports, conference reports, and floor statements made before enactment by one of a bill's managers; the Joint Committee on Taxation's General Explanations (the Blue Book); private letter rulings and technical advice memoranda issued after October 31, 1976; actions on decisions and general counsel memoranda issued after March 12, 1981; IRS information or press releases; and notices, announcements, and other administrative pronouncements published in the Internal Revenue Bulletin.

The same paragraph says that conclusions reached in treatises, legal periodicals, legal opinions, or opinions rendered by tax professionals are not authority, though the authorities underlying such an opinion may be. It also says an authority stops being one to the extent a body with power to overrule or modify it has done so. That is why a memo should check that each authority is still good, and why a district court opinion reversed by its own circuit should not appear as support.

That list defines authority for one specific purpose (substantial authority). It is still the list practitioners reach for when deciding how much weight a source can carry in a memo. It is not a ranking. Where authorities conflict, the course handout says to evaluate the hierarchy, jurisdiction, and age of each.

Blank template

Copy the block below into your own document and replace the bracketed text. Delete any instruction in brackets before you send it anywhere.

MEMORANDUM

To: [reviewer or file] From: [your name] Date: [date] Re: [client or matter, plus a short description of the question]

Facts. [Who, what, when, where, how much. Mark each fact as confirmed by the client, taken from a document, or assumed. List any facts you still need. If the transaction has not happened yet, say which facts are open.]

Issues. [One or two sentences per issue. Number them if there is more than one.]

Authorities. [For each issue: the Code section, then regulations, then cases and rulings, then any IRS guidance you are relying on only for the IRS's stated position. Give a full citation for each. Note any authority you looked for and did not find, and any you did not read.]

Conclusion. [One conclusion per issue: the answer, and the main reason. State your confidence honestly. If the answer depends on a fact that could change, say which.]

Analysis. [General law first, then specific authorities, then application to these facts. Address authorities that point the other way and explain why they do or do not control. End by stating what would change your conclusion.]

Worked sample memo (fictional)

Everything in this sample is invented. The person, the facts, and the dates are illustrative and do not describe any real client or matter. The law cited is real and was read for this page, but the memo is deliberately short. Where a real memo would do more research, this one says so instead of pretending to have done it.

MEMORANDUM

To: File From: Preparer Date: September 20, 2026 Re: Alex Rivera (fictional), Schedule C: home office deduction where the studio also serves as a guest room

Facts. Alex Rivera is a self-employed freelance illustrator who files Schedule C and has no employees and no other office. Alex works from a spare bedroom of about 120 square feet in a home of about 1,500 square feet. The room holds a desk, a drawing tablet, and client-call equipment, and Alex does all of the work of the business there. The room also contains a fold-out sofa bed, which stays in place year-round. Relatives stay overnight in that room on about three weekends a year. Alex has told us these facts. We have not seen the room. Not yet known: whether Alex would be willing to stop using the room for guests.

Issue. Does the spare bedroom satisfy the requirement in IRC § 280A(c)(1) that a portion of the home be "exclusively used on a regular basis" as the principal place of business, when the room is also used as a guest room a few nights a year?

Authorities. IRC § 280A(a) and (c)(1). IRS Publication 587 (2025), "Exclusive Use" and its den example. Not reviewed for this sample: Treas. Reg. § 1.280A-2 (the copy could not be retrieved while preparing this page, so no paragraph of it is cited) and any court decisions on partial or occasional personal use. A memo relied on for a return position would need both.

Conclusion. Probably not, as the facts stand. Personal use of the room by guests means the room is not used only for the business, even though the personal use is infrequent. The answer changes if the room stops being used for guests, and that is a fact Alex can control.

Analysis. Section 280A(a) generally disallows deductions for a dwelling unit the taxpayer uses as a residence. Section 280A(c)(1) makes an exception for any item allocable to a portion of the dwelling unit that is "exclusively used on a regular basis" as the principal place of business for the taxpayer's trade or business. The statute also says "principal place of business" includes a place used for administrative or management activities if there is no other fixed location where the taxpayer does substantial administrative or management work. Alex has no other office and does the illustration work in the room, so the principal-place-of-business and regular-use elements look satisfied. The open question is exclusivity.

The statutory text quoted above has no exception for small amounts of personal use. Publication 587 gives the IRS's stated view: to meet the exclusive use test you must use a specific area of the home only for the trade or business, and you do not meet the test if you use the area both for business and for personal purposes. Its example is an attorney who uses a den to write briefs and prepare clients' returns while the family also uses the den for recreation; the den does not qualify. Overnight guests sleeping in the studio is personal use of the same area. The sources read for this sample state no threshold below which occasional personal use is disregarded, so on these facts the room likely fails the test.

Two limits on this conclusion. First, Publication 587 states the IRS's position; it is the weakest kind of support here and should not be the only cite in a real memo. The statute carries the rule, and a real memo would confirm the regulation and look for cases before relying on the answer. Second, the conclusion is about the room as used today. If Alex removes the sofa bed and stops hosting guests in the studio, the exclusivity problem goes away, provided that is the actual practice and not just a plan.

What would change the answer: the room no longer serves as a guest room; a different room is dedicated to business; or research into the regulation and case law turns up an authority that treats infrequent personal use differently than the sources read here.

What this page does not do

It does not give a format that is accepted everywhere, because none exists. It does not tell you the sample's conclusion is right for any real taxpayer: the sample is a demonstration of structure on invented facts, and stops short of the research a return position would need. And it does not replace checking each authority, in the version that applies to the tax year and the jurisdiction, before you rely on it.

Common Questions

What is a tax research memo?

A written document that answers a specific question about how the tax law applies to specific facts, showing the facts, the authorities relied on, the reasoning, and the conclusion. It is usually internal and serves as the record behind advice or a return position.

What sections does a tax research memo have?

The common teaching structure has five: facts, issues, authority list, conclusion, and analysis. Formats vary by firm and course; some put the question and a short answer first. No rule requires one format.

Where should the conclusion go in a tax research memo?

In the five-part structure taught in the course handout cited on this page, the conclusion comes before the analysis so the reader sees the answer first. Some firms use a different order.

What sources can a tax research memo rely on as authority?

The list in Treas. Reg. § 1.6662-4(d)(3)(iii) covers Code sections, regulations, revenue rulings and procedures, court cases, treaties, legislative history, and certain IRS pronouncements. Treatises, articles, and opinions of tax professionals are not authority, though the authorities beneath them may be.

How long should a tax research memo be?

As long as the issue requires and no longer. The handout cited here asks for brief facts, issues stated in one or two sentences each, and enough authorities to give a clear understanding of the issue. It sets no page count.

Is there a sample tax research memo?

Yes, on this page. It is a short memo on an invented taxpayer and invented facts, using real law. It marks the research it does not do.

Does Circular 230 require a research memo?

No. It requires that written advice on federal tax matters meet standards such as reasonable assumptions, consideration of relevant facts, and relating the law to the facts (31 CFR § 10.37(a)(2)). A memo is a common way to document meeting them.