Wood and Sons Tax AdvisorsWood & SonsTax Advisors LLC

Our approach

How we evaluate a tax strategy

We check the rules, how they apply to your circumstances, the records that would support the idea, and the costs and risks. Then we explain what we found. This page is an informational tool. It is not a formal tax opinion and not advice for your own facts. Robert Wood, EA, will not sign a return on a strategy we cannot support.

How we check the rules

Where the support has to come from.

  1. 01

    The Code

    We look for the section of the Internal Revenue Code that actually allows the result. If no one can name the statute, there is nothing to evaluate.

  2. 02

    Treasury regulations

    We review the regulations to understand how the law applies.

  3. 03

    Published IRS positions

    We consider IRS rulings, procedures and notices alongside the relevant law and regulations.

  4. 04

    Case law

    Court decisions matter when the facts are like yours. A case about a different situation is not enough.

  5. 05

    What is not authority

    A sales presentation, a podcast, an IRS publication, a blog, or “everyone does this” is not substantial authority. Publications are helpful guidance. They are not the law.

The questions we ask

What still has to be true.

Statutory fit

We check that the tax rule supports the claimed result for your circumstances.

Economic substance · IRC §7701(o)

The transaction changes economic position in a meaningful way apart from federal income tax, and the taxpayer has a substantial non-tax purpose.

Business purpose

A real non-tax reason a reasonable person would do this even if the tax disappeared.

Substance over form

What actually happened matches the labels on the paper. Circular cash and same-day round trips fail here.

Step transaction

The IRS may collapse steps done in substance as one deal. If the tax result depends on ignoring that, it does not hold.

Assignment of income

Income is taxed to the person who earned it. Moving a check to a child, a trust, or an entity you still control is not proof.

Listed and reportable · §6011 / §6707A

Listed transactions, transactions of interest, and penalty bases under §6662A. If someone says not to file Form 8886, we will not recommend the idea.

Preparer standard · §6694

Robert Wood, EA, signs a return only with substantial authority, or with a reasonable basis plus disclosure. A hope is not a position we will sign.

Try the questions

See how an idea holds up.

This is a screen, not a ruling. Even a favorable result still needs records and a written fee before we would put it on a return. You can save a fuller worksheet in the client portal.

Non-tax business purpose
Economic substance apart from tax
Listed or reportable transaction
Warning signs

Records

Records we would need.

  1. 01A written fee and scope that says what this idea is, and what it is not
  2. 02A signed statement of the facts from you
  3. 03The Code section, regulation, and any ruling or case, cited rather than summarized from a brochure
  4. 04Records showing economic substance and a purpose other than tax, such as contracts, capital, and operations
  5. 05Books and records you will actually have at year-end, not only a projection
  6. 06A trail of related-party items, basis, contributions, and distributions
  7. 07How Michigan treats it, including conformity, additions, and any state filing
  8. 08A written decision on whether Form 8886, 8275, or 8275-R is required
  9. 09How the position would be reported on the return, and who would sign it

This page is general information, not tax advice for your situation. We are not your tax advisors until the fee is in writing. Robert Wood, EA · Kenneth Rood, Advisor · Williamston, Michigan, and New Port Richey, Florida.