The Anatomy of a Persuasive Written Tax Appeal
Dr Benjamin Poh
Citation:  LR 399
*399 The Anatomy of a Persuasive Written Tax Appeal
To write a persuasive tax appeal, an effective advocate should deliberately strategise, structure and organise the three key elements of a tax appeal, to assist the Revenue or the court to decide for their clients.
Preparation of a tax appeal can be challenging. This is because at first, you have to analyse and comprehend the whole factual situation of your client; second, you have to identify the key tax issues in dispute; third, you have to thoroughly research the relevant tax legislations and case laws applicable to the factual situation of your client; and last, you have to present your legal arguments or submission by using admissible evidence relevant to your legal arguments. However, by understanding the process involved in strategising, structuring and organising these three key elements of your tax appeal, you will be in a better position to persuade the Revenue or the court to decide for your clients.
As a tax advocate, our principal role is to persuade the Revenue or the court to accept our legal arguments on tax issues raised in any tax appeal. To be persuasive, you have to guide and offer assistance to the Revenue or the court to make their decisions just and reasonable, so that they can discharge their statutory duties and responsibilities. Nothing is more frustrating to the Revenue or the court, if you were to give a misleading or an incorrect factual situation to them (“statement of facts”), fail to identify the key tax and legal issues in dispute (“ statement of issues ”), and misinterpret the tax laws and authorities, or omit relevant tax laws and authorities both for and against your client’s case (“statement of arguments”).
How do you go about making your tax appeal persuasive to the Revenue or the court, so that you can assist them to decide the case in a just and reasonable manner? The honourable Justice KM Hayne, AC (Australia High Court judge) said in his seminar presentation about persuasive advocacy:
*400 A written argument must be prepared in a way that makes it valuable at three radically different stages in the disposition of an appeal. It must be useful to each judge preparing the case. It must be useful to each judge during oral argument. It must be useful to each judge preparing reasons for judgement.
At every one of those stages, the utility of written argument is diminished, even destroyed, if it is not clear, concise, accurate and comprehensive. If it is not clear, when do you propose to clarify the point? You cannot depend upon your audiences not noticing obfuscation. If it is not concise, why would you expect your audience’ s attention to remain focused through the diffusion? If it is not accurate, why would the audiences not be minded to put your document aside in favour of your opponent’s? If it is not comprehensive, when do you propose to fill in the gaps?1
In summary, an anatomy of an appeal is not more than to strategise, structure and organise your statement of facts, statement of issues, and statement of arguments to persuade the court. And to be persuasive and useful to the court, these statements should be clear, concise, accurate and comprehensive.
When you prepare for a tax appeal, you should begin to write the appeal with the end in mind. This means you should start to identify key tax issues in dispute with the Revenue. Then you should start to write your legal argument about why your client should win the appeal, even before you start to interview your client. Writing your legal argument first at the beginning will force you to think critically of what are the relevant facts and evidence you require from your client to win the appeal. Your preliminary draft of your legal argument will help you to identify the relevant facts and evidence you require from your client when you start interviewing your client. If your client has all the required documents and evidence to meet the threshold of your legal argument, then there is little to refine the substance of the legal argument. But in practice, you may encounter some practical issues or gaps such as missing documents, misplaced documents, insufficient documents, witnesses unwilling to testify or cannot be traced, accounting errors, etc. These practical issues or gaps require you to continually refine your draft legal argument so as to be consistent with the relevant facts and evidence you can obtain from your client.
If the factual situation of your client and evidence are insufficient to meet the threshold of your legal argument, then it would be better for your client to negotiate an amicable settlement with the Revenue, rather than waste unnecessary time and cost to litigate the matter in court.
Statement of facts
In writing the statement of facts, the key principle is balance. The following principle is well summarised by Justice Ruggero J Aldisert, Senior United States Circuit judge:
In selecting the facts, the brief writer walks on a very tight rope. The job requires consummate skill because the writer must constantly seek balance on several levels-the balance between being scrupulously accurate and putting the most favourable emphasis on your version of what happened; the balance between furnishing the relevant facts favouring your client and protecting yourself from a possible charge by your opponent that you have withheld vital facts from the court; and the balance between putting your best evidence before the appellate court and adhering to the actual findings in the trial court. The exceptional advocate balances these conflicting duties and still convey the impression that his or her client deserves to win.2
In other words, you should include facts that are relevant and favourable to your legal argument. Facts that are relevant but unfavourable to your client should be included too, but these facts can be neutralised and reasonably explained before your adversary does so. Facts should be written concisely and comprehensively to keep the interest of the readers alive without being argumentative. Facts shall be presented in a chronological order so that the reader can follow the entire story that leads to the current situation. Evidence that will be used to support your legal argument should be laid out in a cohesive manner so as to gradually build up your case.
Statement of issues
The statement of issues is a series of questions you identify and deliberately frame for the court to answer. Bryan A Garner, a well-known American lawyer, lexicographer, and teacher said about the issues framing:
Any piece of persuasive or analytical writing must deliver three things: the question, the answer and the reasons for that answer. The better the writing, the more clearly and quickly those things are delivered.3
You should identify the key tax issues, as this is significant to direct the court ’s attention and interest in answering the right question in a tax dispute. The court normally does not have the luxury of time to guess what are the tax issues involved.
Framing tax issues clearly and sufficiently is significant for you to answer the questions for the court to consider, without having the court to formulate their own issues or questions you do not want. Your answers to the key tax issues should provide reasons for the court to find for your client’s favour.
*402 Following is some advice on how to frame an issue concisely and persuasively:4
(a) Put it up front.
(b) Break it into separate sentences using a format based on asserting a fact, stating a premise that flows from the fact, then raising the legal issue to be decided by the court.
(c) Weave in enough facts so that the reader can truly understand the problem, but summarise – don ’t over particularise.
(d) Present each issue in a way that suggests that there is only one possible answer: the one you want.
(e) Phrase the issues in separate sentences.
(f) Use a maximum sentence length of no more than 15-20 words.
(g) Do not start with “Whether” or any other interrogative word ( ”why”, “where”, “how”, or “what”) (as that indicates you are not sure of your answer to the issue unless you know the factual merits are not with you).5
(h) Wherever possible use “Can”, “Is”, “Should”, “Must”, and “Was” since these tend to push the reader towards the desired answer.
(i) Limit the total of the issues to a maximum of about 75 words, or five sentences. If you cannot do so you do not have a sufficient understanding to be able to convey the issues clearly to the reader.
Now, let’s take a real practical example of a tax issue framing by utilising the above advice. Your client who is involved in a logistics business incurred substantial traffic compounds and he had claimed tax deductions for these traffic compounds but the same were subsequently disallowed by the Revenue.
The tax issue can be framed in two alternative ways:
“Whether the Revenue was wrong to disallow the taxpayer to claim tax deduction for the traffic compounds incurred?”; or
*403 Example 2
“Income tax law provides that all outgoings and expenses wholly and exclusively incurred during the period are deductible in the production of gross income of that period unless specifically prohibited. Traffic compounds are generally incurred in the course of any logistics business. Can the taxpayer claim traffic compounds for its logistics business?”
Example 1 provides no information to the reader why traffic compounds should be given tax deduction. The word “whether” that is used, tends to project a wrong impression to the court that the tax advocate is uncertain on whether tax deduction should be allowed under the prevailing tax laws and regulations.
Example 2 uses 52 words to provide more useful information to the reader on what is the principle of income tax law ( “the legal premise ”) on tax deduction for all outgoings and expenses incurred. It also provides the reader with a general idea that traffic compounds are generally incurred in the course of operating a logistics business (“the factual premise”). The reader is also informed that the taxpayer is involved in a logistics business and claiming traffic compounds incurred as a tax deduction for his logistics business. Example 2 puts in general legal premise for tax deduction for an expense, and enough specific facts relevant to the taxpayer to claim tax deduction for the traffic compound. The reader can truly understand the laws and the tax issues involved, but not over particularised. If the reader needs further details of the facts, he can obtain the same from the statement of facts.
This legal issue framing technique is advocated by Bryan A Garner as “deep issue” method where the deep issue is cast loosely as a syllogism, with the legal premise first, then the factual premises, followed by a short, punchy question, is the best method for achieving clarity, speed and power in legal writing.6
Nevertheless, you should remember the following advice on legal issue framing by the Honourable Justice KM Hayne, AC (Australia High Court judge):
The key of framing issue lies in the way the premises (legal or factual or the combination) for the question are stated. The issue you frame will be discarded by the court as irrelevant if you base it on disputed premises. Especially is that so if you base it on disputed factual premises. So, to take a very simple example, if you framed the issue in a shipping collision case upon the premise that the defendant ship was travelling too fast, and argument subsequently showed that this premise was false, your whole *404 statement of the issue would be falsified. So beware of the disputed and disputable premise.7
Statement of arguments
In writing your statement of arguments, you should cite relevant evidence from the statement of facts, and your legal research on relevant tax legislations and case authorities that are applicable to your client ’s factual situation. Just citing relevant evidence, tax legislations and case authorities are not sufficient to write your legal argument. You must show your legal analysis, and your comments on the evidence, tax legislations and case authorities which are relevant to your client ’s case, to persuade the court why your client should win. These analytical and integrative skills are what make the tax advocate stand out.
From the statement of facts, you derive your statement of issues in dispute that enable you to transition to your statement of arguments smoothly. For the relationship between statement of issues and arguments, the Honourable Justice KM Hayne, AC (Australia High Court judge) said: If the statement of issue is useful, it will tend to impose an order upon the statement of argument. If the premises for the issue are undisputed, a short restatement coupled with some cross-references to the summary of facts (if the premises are factual) or to the relevant statements of principle or applicable law (if the premises are legal) may well suffice. Then you may plunge into answering the question that has been posed in the statement of issue.8
Most of the time, the tax issues in dispute arise from the interpretation of the tax statute or question of law, or question of law and fact rather than purely question of facts. If the specific provisions of tax law have been properly interpreted and settled by the court, and these provisions are applicable to your client’s situation, then cite the case precedents and present to the court to argue that these case precedents are equally applicable to your client ’s situation. If your adversary offers a counterargument, you should think seriously why the counterargument is not applicable to or is distinguishable from your client’s case. Remember in practice, less is more. Citing one leading case for interpretation of a specific provision of tax law in dispute is usually sufficient unless your client’s factual situation is substantially different from the leading case, and this leading case does not give a general principle of tax law to support your client’s case.
If there is no case precedent to support your client ’s case, then you need to resort to general principles of statutory interpretation, and to search for legislative intention on the specific provisions of the tax law passed in *405 Parliament. There are internal aids and external aids to assist you in the interpretation of a tax provision. You can employ textual (construe the plain meaning of words used), contextual (construe the whole Act or provision in its proper context) and purposive (discover the purpose of the new provision or amended provision of the Act) approach to interpretation of tax statute.
You may search for general tax principles derived from cases decided by domestic superior courts; proposals or consultations by members of Parliament; explanatory notes to the Bill; tax cases decided by superior courts from common law countries such as the UK, Australia, New Zealand, Singapore, which had similar tax provisions; authoritative textbooks or journal articles written by local and foreign tax experts and lawyers.
Your legal analysis of the case and comments on these internal and external aids will help you to formulate your legal proposition and interpretation of the specific tax provisions in dispute. You may need your peers or colleagues to play the role of devil ’s advocate to think of an alternative interpretation to the tax provisions unless you can anticipate and prepare for your adversary ’s legal arguments. Anyway, you should think of a possible counterargument to your interpretation or your adversary ’s legal interpretation, so that you can anticipate that the court will test the merits of your case and your adversary’s case.
Last, when you seek an order from the court, such order includes dismissing your adversary’s case with costs, asking the court to set aside the order of the court below, asking the court to declare the illegality of an administrative decision, etc. You must remember the order you seek from the court, is justified by the facts and your legal argument, and is legally permissible under the relevant legislations.
In conclusion, to write your tax appeal persuasively in practice, your statement of facts, issues, arguments and the order you seek from the court should be logical, cohesive and consistent with each other.
*399 The Anatomy of a Persuasive Written Tax Appeal
*. , Vol 10/No. 2/2017/Q2 Issue.
- Honourable Justice KM Hayne, AC, “Written Advocacy, A Paper Delivered as Part of the Continuing Legal Education Program of the Victoria Bar” (2007) at p 5.
- Ruggero J Aldisert, Winning on Appeal-Better Briefs and Oral Argument, 2nd edn, NITA, p 164.
- Garner, A Dictionary of Modern Legal Usage, 2nd edn (1995), p 471.
- Andrew Goodman, Effective Written Advocacy in Practice-Influencing the Judicial Mind (Universal Law Publishing Co, 2009), p 48.
- Garner, Legal Writing in Plain English (The University of Chicago Press, 2001), p 58.
- Ibid, at p 61.
- Honourable Justice KM Hayne, AC, “Written Advocacy, A Paper Delivered as Part of the Continuing Legal Education Program of the Victoria Bar” (2007) at p 14.
- Ibid, at p 24.