How an Accountant Analyzes Tax Cases in 10 Minutes with Gemini (Subsidiary Trademark Royalties)

How Accountants Analyze Tax Cases in 10 Minutes with Gemini

Hello, have you ever felt that you don't have enough time to read and interpret the complex and vast amount of tax case law? Reviewing case law is essential in the daily work, but it can sometimes be the most burdensome task.

Today, I will share the know-how of analyzing difficult tax cases (analyzing the case of 'Affiliate Trademark Royalty') in just 10 minutes using AI, especially Gemini, which I have used directly in practice and dramatically increased work efficiency. If you follow today's content well, I am sure that the time for future case analysis will be drastically reduced.

For more details, please refer to the link below.

Table of Contents

1. Why is it necessary to analyze tax cases using AI?
2. Practical Example: Analyzing the 'Affiliate Trademark Royalty' Case
3. How to use Gemini: Summarizing Case Law in Just 2 Steps
4. The true meaning and practical implications of this case (Core)
5. Q&A for Practitioners

1. Why is it necessary to analyze tax cases using AI?

One of the most important criteria for determining the direction of tax work is case law. This is because disputes between tax authorities and taxpayers go to trial, and the resulting case law becomes an important guideline for future similar cases.

However, directly reading the original text of the case law and grasping the core requires a considerable amount of time and concentration. The burden is even greater when you have to review multiple cases at the same time.

At this time, you can grasp the core content of the case law much faster and easier with the help of AI. I have tested various AIs, and Gemini, which I will introduce today, showed more satisfactory results in interpreting and summarizing complex texts and documents. It is important to see the original text for education or individual capacity building, but when efficiency is needed, Gemini can be a powerful weapon.

2. Practical Example: Analyzing the 'Affiliate Trademark Royalty' Case

Today's case law that we will analyze with AI is a topic that is often an issue in practice.

> "The failure to receive trademark royalties between affiliates is subject to denial of undue behavior calculation, but the state lost the case because the tax authority's assessment of the royalty value was not reasonable."
>

Here, 'denial of undue behavior calculation' means that if related parties (e.g., affiliates) trade with the purpose of unfairly reducing taxes, the trade is denied and taxes are recalculated and imposed based on the normal market price.

The main issues of this case law were largely two.

Classification

Tax Authority (Defendant) Claim

Taxpayer (Plaintiff) Claim

Issue 1

Not receiving royalties for affiliates' use of trademarks is an unfair tax evasion act. (Imposition of corporate tax)

We are separate legal entities, but we moved like one body, and the group trademark has no value.

Issue 2

If taxes must be paid, the amount and method of the royalties we calculated are fair.

The method of calculating taxes by the tax authority is unreasonable.

In conclusion, the taxpayer won both the first and second trials. We will examine the reason in detail through Gemini.

3. How to use Gemini: Summarizing Case Law in Just 2 Steps

The method is surprisingly simple.

Step 1: Copy the entire original text of the case law

Copy the original text of the case law you want to analyze by dragging it with your mouse (Ctrl+C).

Step 2: Paste and ask questions to Gemini

Paste the copied content into the Gemini chat window (Ctrl+V) and ask the following clear question.

> "The following is a case law. Please summarize it in an easy-to-understand way, tell me what it means, and what you should pay attention to based on this case law in the future."
>

If you ask like this, the AI will summarize the outline of the case law, the court's judgment, the main issues, and the meaning of the case law in a well-organized manner in a few seconds. It is much faster than reading and organizing it myself.

4. The true meaning and practical implications of this case (Core)

Based on the analysis results of Gemini, let's point out the core of this case law.

The court determined that the act of not receiving royalties between affiliates 'corresponds to the denial of undue behavior calculation'. In other words, the court sided with the tax authority that it is right to receive royalties in principle.

So, why did the taxpayer win?

The problem was in the tax amount calculation method. The tax authority calculated the tax by simply dividing the total trademark royalty by the number of affiliates (10) (1/n).

The court considered this method to be **"unreasonable."**

• It did not consider the affiliates' contribution to the increase in trademark value, such as joint advertising,
• It ignored the actual contribution, such as the scope and frequency of the actual use of the trademark,
• It was deemed unfair to simply distribute it evenly.

Decisively, the court ruled that it could not cancel the 'all' of the tax assessment because it was impossible to calculate the correct tax amount based on the submitted data. This gives very important implications to accountants and those in charge of tax practice.

It is the burden of proof of the tax assessment that is applied very strictly to the tax authority. It is a representative case law that shows that even if it is subject to taxation in principle, the case can be lost if the reasonableness of the amount calculation method is not clearly proven.

5. Q&A for Practitioners

Q1: So, is it okay not to receive trademark royalties between affiliates from now on?

A1: Absolutely not. The case law clearly stated that the act of not receiving royalties itself corresponds to 'denial of undue behavior calculation.' In other words, royalties should be received in principle. However, it means that a reasonable standard reflecting joint contribution, etc., should be prepared when calculating the amount.

Q2: You said this case law is favorable to taxpayers, why is that?

A2: Because when the tax authority imposes taxes, it emphasized the responsibility to prove the reasonableness of 'how much and on what basis' taxes are imposed, as well as 'why' taxes should be imposed, very specifically. This provides taxpayers with an important logic to defend against tax assessments. It is a very useful point for accountants like us.

Q3: Do I have to use Gemini? Are other AIs not good?

A3: Other AIs are also excellent. However, based on my experience of analyzing various text-based tax data, Gemini showed slightly more natural results in understanding the context of sentences and explaining legal terms. I recommend that you use various AIs yourself and choose the tool that suits you better.