Are You Using ‘Fake News’ for Your Tax Research?

The amount of free information on the Internet seems to grow each day. This makes it an essential resource for finding quick answers on topics ranging from vacation destinations to the merits of different tooth whitening formulas. But the axiom that “you get what you pay for” still applies to the quality of information on the Web. It would be a mistake to completely rely on the Internet for important medical advice.

Quality of information is also an important element for tax research, George Farrah, editorial director of Bloomberg BNA Tax & Accounting recently noted in the Tax Executive.   

There is an abundance of tax information on the Web. Google provides search results for most tax terms, taxing authorities offer direct online access to laws, and law and accounting firm websites feature detailed articles written by professionals. But do these free online resources offer the best results? Relying too heavily on this type of information could lead to mistakes that might negatively impact a taxpayer’s bottom line. Farrah notes, among other things, that: 

  • Online searches are not always reliable,

  • Tax law is not always black and white, and

  • Free tax research is more time-consuming than it seems.

For example, an executive at a manufacturing company planning for the potential impact of tax reform would likely yield multiple hits from an online search for “tax reform.” But most of the results would probably be articles discussing the pros and cons of tax reform with little insight on concrete actions her company might take.

 It’s important to analyze the quality of the tax information you find, Farrah says, by asking these questions: 

  • Does the research include references, and is it supported by regulations, statutes, administrative determinations, and case law?
  • Are the authors experts in their fields?
  • Do the authors offer unbiased opinions, or do they advocate particular positions?
  • Does the research offer an alternative opinion or outline the risks of a position?
  • Has the research gone through a formal editing process that includes legal review?
  • Do the authors offer or refer to additional articles on the topic?
  • Is the research timely and current? Is it maintained and updated?
  • Does the research meet key criteria for quality such as accuracy, usefulness, understandability, and expected market impact?
  • Is the research actionable (e.g., is it integrated with other research tools that help you meet your deliverable such as a research memo, a client letter, or a detailed plan)?
  • Does the research offer ways to digest the information?
  • Does the research offer guidance on how to get additional information on the topic?

Gauging the quality of your sources is essential to protecting against making poor conclusions that could negatively impact your company’s bottom line, Farrah said. “It is imperative that tax professionals put safeguards in place to ensure that their tax research is of the highest quality.”  

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