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Designing Nonrecognition Rules Under The Internal Revenue Code, Fred B. Brown
Designing Nonrecognition Rules Under The Internal Revenue Code, Fred B. Brown
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Nonrecognition rules are a prominent feature of the income tax laws and are a source of considerable complexity and tax planning. Included among the nonrecognition rules contained in the Internal Revenue Code are provisions applying to like kind exchanges, corporate formations, corporate reorganizations, parent-subsidiary liquidations, and partnership formations and distributions. The policies that arguably support the nonrecognition rules include the familiar trio of tax policy concerns—efficiency, equity, and tax administration. None of these policies, however, provide a strong basis for most of the nonrecognition rules as currently formulated. The efficiency case generally lacks evidentiary support. The equity case is complicated …