Law Commons^™

Significant Developments In Federal Tax Administration During 1965, Bertrand M. Harding

William & Mary Annual Tax Conference

No abstract provided.

Panel Discussion: Certain Problem Areas Under The Internal Revenue Code, Carrington Williams, Howard A. Rumpf, William H. Westphal, Lawrence Phillip Roesen

William & Mary Annual Tax Conference

No abstract provided.

Collateral Estoppel In Civil Tax Fraud Cases Subsequent To Criminal Conviction, Michigan Law Review

Michigan Law Review

To secure compliance with federal income tax laws, Congress has provided both criminal and civil penalties. Fines and imprisonment are imposed under section 7201 of the Internal Revenue Code if the Government can prove beyond a reasonable doubts a willful attempt to evade or defeat taxation. Section 6653(b) authorizes, as a civil sanction, a fifty per cent addition upon findings by the Commissioner of fraudulent underpayment. These findings, if challenged by the taxpayer, need only be sustained by a preponderance of the evidence. Because of the similarity between the acts condemned by sections 7201 and 6653(b), conviction under section 7201 …

Widow's Success In Common-Law Property State To Husband's Rights In Her Half Of Community Property Is Taxable And Valued At One-Half Of Entire Community--In Re Kessler's Estate, Bailey H. Kuklin

Faculty Scholarship

No abstract provided.

Stock Received In Lieu Of Salary By Stockholder-Employees Whose Proportionate Interest Remains Unchanged Is Taxable Income--Commissioner V. Fender Sales, Inc., Michigan Law Review

Michigan Law Review

Transactions involving forgiveness by stockholder-employees of corporate indebtedness are shrouded in legal uncertainty. The conflicting positions espoused by the Commissioner, the Tax Court, and the circuit court in the principal case focus attention on a few salient problems. The Commissioner, in arguing that the receipt of stock by the individual taxpayers constituted taxable income, considered the individuals solely as employees, believing it immaterial that they were also stockholders. Thus, he reasoned that when they, as employees, received stock in payment of their accrued salaries, they realized income. In contrast, the Tax Court viewed the individual taxpayers as stockholders who had …

Widow's Succession In Common-Law Property State To Husband's Rights In Her Half Of Community Property Is Taxable And Valued At One-Half Of Entire Community--In Re Kessler's Estate, Michigan Law Review

Michigan Law Review

While residing with his wife in California, decedent purchased stock, which under California law became community property. The couple later moved to Ohio, a common-law property state, where decedent died. An Ohio probate court approved the executor's determination that the widow's one-half interest in the stock was not subject to the Ohio succession tax. On appeal by the state tax commissioner to the Ohio Supreme Court, held, reversed, three judges dissenting. A wife's succession to her husband's right to manage and control her half of the community property is subject to the Ohio succession tax on joint and survivorship …

Costs Of Unsuccessful Criminal Defense Are Deductible "Ordinary And Necessary" Business Expenses--Tellier V. Commissioner, Michigan Law Review

Michigan Law Review

Taxpayer, a broker and underwriter, was convicted for violations of the Securities Act of 1933 and the federal mail fraud statute, and for conspiracy to violate those statutes. He claimed a deduction for the legal expenses incurred in his defense. The Commissioner's disallowance of the deduction was sustained by the Tax Court. On appeal to the Court of Appeals for the Second Circuit sitting en banc, held, reversed. Legal expenses incurred in an unsuccessful defense against criminal charges arising out of a trade or occupation are deductible "ordinary and necessary" business expenses.

"Property" In The Capital Asset Definition: Influence Of "Fruit And Tree", Louis A. Del Cotto

Buffalo Law Review

No abstract provided.

When Will The Corporate Form Save Taxes?, Richard L. Strecker

Vanderbilt Law Review

While major emphasis will be placed upon the tax considerations involved in answering the question posed by the title, the broader problem is aptly stated in the familiar phrase, "Choice of Business Form."' It is not possible to consider this problem realistically without taking into account the context of the business and private law considerations which must enter into the decision, and may indeed be controlling over the tax factors. Therefore, the question, "When Will the Corporate Form Save Taxes?" will be discussed in the light of the full legal and business milieu.

Condominium: A Reconciliation Of Competing Interests?, James C. Clark

Vanderbilt Law Review

This note will first examine some of the operative provisions of the condominium statutes. Particular emphasis will be placed upon those provisions which are basic to the creation, existence, and dissolution of this unique form of property ownership. The FHA Model Statute For Creation of Apartment Ownership will be the principal vehicle of analysis, for it is the basis of many of the state condominium statutes. State provisions which differ from the Model Act will then be examined to discover the best statutory answer to the needs of condominium housing. Finally, attention will be focused on the tax implications of …

Inconsistent Taxation Of Grantor Powers, Leslie A. Nicholson, Iii

Vanderbilt Law Review

"Certainty," Lord Hardwicke declared in 1753, "is the mother of repose and therefore the law aims at certainty."' This note will explore the extent to which the law has missed the mark of certainty in the taxation of trust grantors. The heavy burden of federal income and estate taxation has prompted many persons to divest themselves of property during their lives. The property is usually given to a relative in order to shift the income from the property into a donee's lower tax bracket and to avoid the payment of an estate tax on the property by incurring an inter …

National Tax Administration In The Philippines, Elias E. Vega, Ralph B. Short

Washington Law Review

On August 1, 1964, the Philippine Bureau of Internal Revenue held a picnic in Taytay, Rizal Province, attended by more than 2,000 persons, to celebrate the 60th anniversary of its founding. The Philippine Bureau of Internal Revenue was organized on August 1, 1904, some six years after the Philippines came under the control of the United States. Its present complement of approximately 6,000 employees administers a variety of National Government taxes and can claim credit for providing roughly sixty per cent of total National Government revenues.

Tax Consequences Of Doing Business In The Philippines, Ricardo J. Romulo

Washington Law Review

The impact of the Philippine system of taxation is of great importance to American investors and businessmen. According to the American Chamber of Commerce of the Philippines, the total direct United States investment in the Philippines at the end of 1963 was 415 million dollars and of this amount 110 million dollars are invested in manufacturing. Consequently, the aim of this Article, after briefly tracing the history of Philippine tax laws, is to present a thorough but concise discussion of the tax consequences of establishing and operating a business, with emphasis on American owned or controlled corporations, in the Philippines.

Recent Cases, Law Review Staff

Vanderbilt Law Review

Attorneys--Interstate Legal Services and the Unauthorized Practice of Law

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Conflict of Laws--New York Public Policy Permits Enforcement of Foreign Gambling Obligation

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Conscientious Objectors--Universal Military Training and Service Act--Supreme Court Test of"Belief In A Relation to A Supreme Being

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Constitutional Law--Abatement of Convictions Occurring Prior to Passage of Civil Rights Act of 1964

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Escheats--Disputes Between States Concerning Unclaimed Corporate Obligations

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Labor Law--Failure To Bargain--Employer Required To Bargain With Respect to His Proposal To Contract Out Work

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Professions--Canon Twenty of the Canons of Professional Ethics Interpreted To Ban Statements to News Media

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Taxation--Corporate Income Taxation--Merger …

Abstracts Of Recent Cases, Ralph Judy Bean Jr.

West Virginia Law Review

No abstract provided.

Unexpected Disqualification Of Reorganizations Under The Internal Revenue Code By The Inadvertent Transfer Of Boot, Alden H. Smith, Jr.

Vanderbilt Law Review

It is common today to read of corporations "merging" or of one corporation "buying out" another. Many of these transactions will be "reorganizations" under section 368(a) of the Internal Revenue Code. Section 368 is the current congressional resolution of two conflicting policies of tax law. On the one hand, it is desirable to promote the free mobility of capital in order that it be used in the most economical manner. On the other hand, there is the desire to prevent shareholders from using corporate reorganizations as a means of avoiding income taxes. The most common of shareholder schemes are those …

Multiple Corporations Under The Revenue Act Of 1964, James T. O'Hare

Vanderbilt Law Review

It is a maxim of taxation that where graduated tax rates are imposed on the income of a legal entity, tax avoidance in the form of income splitting will be attempted. This has proven true in the case of individuals' and trusts, and has more recently become true of corporations. For over a decade the law governing the tax status of affiliated corporations has been developing. The Revenue Act of 1964 introduces several important changes in the federal income tax treatment of multiple corporations. The purpose of this note is to examine the tax status of multiple corporations both before …

Decedents' Estates, Trusts And Future Interest -- 1964 Tennessee Survey, Herman L. Trautman

Vanderbilt Law Review

Validity of Instrument Which Only Appoints Fiduciary--Is an instrument which makes no testamentary gift, but only designates or appoints the personal representative to administer the estate and provides certain special powers of fiduciary administration entitled to probate as a valid will? While it has been said that there need be no dispositive gift of property to entitle a testamentary writing to probate as a will,' there seems to have been no definite court decision in Tennessee so holding until the recent case of Delaney v. First Peoples Bank of Johnson City. In that case a writing properly executed with the …

College Education As A Legal Necessary, R. Douglas Wrightsel

Vanderbilt Law Review

This note seeks to determine whether a college education is a legal necessary, or perhaps it would be better to say for what purposes it may be necessary. Then we shall consider what consequences may flow from calling it a necessary, and how intelligent legal planning can achieve the most favorable consequences. Controversy over whether a college education is a necessary has centered primarily in two areas. The first major area is the divorce situation in which the court is petitioned to include in the support decree a sum for the college education of the child. The second area involves …

Distributions By Charitable Organizations: Their Effect On Tax Exempt Status And Deductibility Of Donations Received, Thomas H. Belknap

Vanderbilt Law Review

The number and importance of tax exempt organizations has steadily grown in the past decade to the point where there were over 45,000 as of the beginning of 1963, as compared with 12,000 at the end of 1952. "Unquestionably, the economic life of our nation has be-come so intertwined with foundations that unless something is done about them, they will hold a dominant position in every phase of American life." This, according to the Patman Report, is because"multi-million-dollar foundations have replaced the trusts which were broken up during the Theodore Roosevelt administration." Both the Patman Report and the increased activity …

Net Operating Loss Sustained By Taxpayer Prior To Marriage Cannot Be Applied Subsequently Against Spouse's Income- Calvin V. United States, Michigan Law Review

Michigan Law Review

Prior to marriage, plaintiff-wife sustained net operating losses which she was entitled to carry over under section 172 of the Internal Revenue Code. For the year 1959, the plaintiffs filed a joint return in which they applied the wife's net operating loss carryover deduction to both of their incomes. The Commissioner allowed the loss carryover to be applied to the wife's but not to the husband's income. In a suit for refund of taxes withheld from the husband's wages, held, judgment for defendant. If a husband and wife elect to file a joint return, net operating losses sustained by …

Retention Of Control Over Stock Constitutes "Ownership" Under Section 1239 Of The Internal Revenue Code-Harry Trotz, Michigan Law Review

Michigan Law Review

Petitioner set up a corporation, retaining seventy-nine per cent of the stock and -distributing the remainder to a third party. The third party borrowed from petitioner, pledging his stock as security and executing an option agreement under which the petitioner could recover the stock at any time. Subsequently, the newly organized corporation purchased all the depreciable assets of petitioner's proprietorship at a price in excess of their adjusted basis; petitioner reported the difference as a capital gain. The Commissioner declared a deficiency, relying on section 1239 of the Internal Revenue Code, which treats as ordinary income the gain recognized from …

The Report Of The President's Cabinet Committee On Private Pension Plan Regulation: An Appraisal, Thomas B. Ridgley

Michigan Law Review

The growth of private employee pension plans in the American economy is astonishing. From 1953 to the end of 1964, the accumulation of assets of private pension funds has grown from 16.9 billion dollars to 75 billion dollars, with a projected accumulation of 225 billion dollars by 1980. At present, private retirement plans cover approximately 25 million workers, which is one-half of all employees in private non-farm establishments. Moreover, unions increasingly stress both the creation of pension plans where none exist and increased benefits from current plans. Thus, during the recent United Auto Workers negotiations the union sought and received …

Case And Ruling Comments On The 1964 Federal Tax Cases And Rulings, William P. Oberndorfer

William & Mary Law Review

No abstract provided.

Election Of Tax Free Intercorporate Dividends Under The Revenue Act Of 1964, Sheldon S. Cohen

William & Mary Law Review

No abstract provided.

Abstracts Of Recent Cases, Frank Cuomo Jr.

West Virginia Law Review

No abstract provided.

A Comparison Of The Tax Consequences Of A Sale Of Good Will With A Covenant Not To Compete, William Walter Smith

West Virginia Law Review

No abstract provided.

The Solely-For-Voting-Stock Requirement In "B" Reorganizations Satisfied By Cash Payments For Fractional Shares-Mills V. Commissioner, Michigan Law Review

Michigan Law Review

The Internal Revenue Code requires recognition of gains or losses realized upon a sale or exchange of property. An exception to this general rule is found in section 354(a)(1), the basic nonrecognition provision for stock-for-stock reorganizations. This section provides that a stockholder need not recognize gains or losses "if stock or securities in a corporation a party to a reorganization are, in pursuance of the plan of reorganization, exchanged solely for stock or securities in such corporation or in another corporation a party to the reorganization." However, before section 354 can be reached, the exchange must satisfy one of the …

Marital Deduction Formula Clauses In Estate Planning-Estate And Income Tax Considerations, Alan N. Polasky

Michigan Law Review

Once upon a time, and not so very long ago, a child was born, much to the delight of its lawyer-parents. As children will, it brought much joy and only occasional moments of dismay and concern during its early, formative years. But one day it entered the terrible teens, and at age sixteen it became, like many teen-agers, baffling, confusing, and frustrating, giving rise to frenzied attempts to cope with and control the complexities of its behavior. Its name? The Federal Estate Tax Marital Deduction.

Commissioner May Examine Taxpayer's Records For Years Barred By Statute Of Limitations Without Proving Reasonable Suspicion Of Fraud--United States V. Powell, Michigan Law Review

Michigan Law Review

The Commissioner of Internal Revenue has power to summon witnesses and to examine records in order to ascertain the correctness of a taxpayer's return. If a summons is not obeyed or if the records sought are not produced, the Commissioner may seek enforcement by applying to the proper federal district court. Although the Commissioner's investigative powers are broad, they are not unlimited. In the absence of fraud, he must act within the confines of a three-year statute of limitations. In addition, the Code makes it abundantly clear that taxpayers may not be subjected to unnecessary examinations or investigations and that …