Taxation-Federal Commons^™

Section 183 Of The Internal Revenue Code: The Need For Statutory Reform, Joseph H. Marxer

Indiana Law Journal

No abstract provided.

Distinguishing Between Capital Expenditures And Ordinary Business Expenses: A Proposal For A Universal Standard, Steven J. Greene

University of Michigan Journal of Law Reform

It is apparent from an examination of the various court decisions that there is no single, common standard used to distinguish between capital expenditures and ordinary business expenses. The courts are not completely to blame for this situation, however, because the Internal Revenue Code provides little guidance on the capital/ordinary distinction. This Note proposes an amendment to the Tax Code that would provide courts with a universal standard to apply in differentiating between the two types of expenditures and that best reflects the general purpose of the Code in matching income with its related expenses. Part I analyzes the historical …

Does Charity Begin At Home? The Tax Status Of A Payment To An Individual As A Charitable Deduction, Michigan Law Review

Michigan Law Review

In White v. United States, the United States Court of Appeals for the Tenth Circuit reversed a district court decision and held that the taxpayers could deduct expenses they paid directly to their dependent son to support his missionary activities away from home. In Brinley v. Commissioner, the Tax Court sitting in Texas refused to follow the Tenth Circuit in White, and held that while the missionary son was entitled to deduct his personal expenses, the parents could not deduct their payment of the son's expenses.

This Note supports the result in Brinley and argues that the …

Federal Tax Lien—Forced Sale Of The Homestead Interest Of A Non-Delinquent Spouse, Allen C. Dobson

University of Arkansas at Little Rock Law Review

No abstract provided.

Serving Two Masters: Commercial Hues And Tax Exempt Organizations, Lawrence Zelenak

Seattle University Law Review

This article will describe the statutory and regulatory framework of section 501(c)(3), examine how the test has been applied, criticize the test, and suggest a test more in keeping with the language and the spirit of section 501(c)(3). The proposed test is this: If the questioned activity directly accomplishes an exempt purpose of the organization, and if all profits from the activity are used in a manner consistent with the organization's exempt purposes, 6 then the organization should be granted exempt status, whether or not the organization's activities are imbued with a "commercial hue."

Tax Treatment Of Prepublication Expenses Of Authors And Publishers, Michigan Law Review

Michigan Law Review

This Note analyzes the tax treatment of prepublication costs. Part I presents the analytic framework of the business expense/ capital expenditure distinction and searches for practical, income- reflecting criteria that achieve theoretically correct results. Part II covers the historic treatment of prepublication expenditures, concluding that neither the courts nor the Internal Revenue Service (IRS) have been consistent in their approach and that both have largely ignored the income-reflecting goals outlined in Part I. Part III applies the income-reflecting approach in order to develop a principled method of examining the tax consequences of various prepublication expenses.

The Supreme Court's Misconstruction Of A Procedural Statute--A Critique Of The Court's Decision In Badaracco, Douglas A. Kahn

Michigan Law Review

Before addressing the lessons to be derived from Badaracco, it is necessary to make good on the author's claim that it can be demonstrated to the satisfaction of a reasonably skeptical reader that the Court's decision was patently wrong and resulted from a poor technique of statutory construction. This is a heavy burden, especially since the decision was reached by an overwhelming majority of the Court and since two courts of appeals and at least one student law review note reached the same result. The reader must judge whether the author succeeds in satisfying it. This Article will first …

Deducting The Cost Of Smoking Cessation Programs Under Internal Revenue Code Section 213, Michigan Law Review

Michigan Law Review

This Note argues that enrollment fees for a smoking cessation program should be classified as deductible medical expenses. Part I defends this conclusion without questioning the accepted interpretation of section 213(e). Recent medical evidence indicates that the nicotine addiction that cessation program patients seek to break is itself a disease. And even prior to the onset of more serious health consequences, sustained cigarette smoking significantly impairs the functioning of the lungs and heart. Under this analysis, enrollment fees should be deductible as expenses for the treatment of an existing disease or defect, and as "amounts paid . . . for …

Tax Treatment Of Previously Expensed Assets In Corporate Liquidations, Michigan Law Review

Michigan Law Review

This Note argues that although the Tennessee-Carolina majority adopts overbroad language and ignores established tax principles, a more careful refinement of its theory will yield the same proper result, without, in most situations, departing from accepted principles. The proper inquiry must focus first on whether the corporation has received any benefit, and then on whether that gain should be exempted by the nonrecognition provisions of section 336, or on any other basis. Part I of this Note examines these questions from a theoretical perspective, and concludes that expensed assets remaining at the time of liquidation give rise to corporate income, …

I.R.C. Section 71: Breaking Up Is Hard To Do, John A. Lynch Jr.

Duquesne Law Review

The author believes that applying the provisions of the Internal Revenue Code governing the tax treatment of payments made incident to separation and divorce has become complicated and unpredictable. In this article, Professor Lynch examines how I.R.C. sections 71 and 215 have developed, given congressional intent, with respect to the definition of an obligation of support, the differentiation between a support obligation and a property interest, and the periodic payment requirement. He concludes with suggestions aimed at simplifying the law with respect to these payments.

Accrual Of Gambling Debts Under Internal Revenue Code Section 451, Michigan Law Review

Michigan Law Review

This Note examines whether an accrual-basis taxpayer must include a legally unenforceable claim in taxable income when it is executed or satisfied. Section I of the Note interprets the "all events test" to require measurement of the likelihood of payment of a debt at the time it is executed: If payment is sufficiently certain, the debt must be accrued. The section concludes that the casinos must include the outstanding markers as income in the year of their execution, and cannot postpone their inclusion until the debts are repaid. Section II argues that accrual-method taxpayers are entitled to use a "bad …

The Decline And Fall Of Taxable Income, Glenn E. Coven

Michigan Law Review

After first exploring the intellectual climate that has facilitated the congressional disregard of taxable income, this Article will examine three areas in which taxable income is no longer the exclusive mechanism for allocating the burden of taxation. That examination will outline the undesirable consequences of the decline of taxable income, and demonstrate that Congress need not have disregarded taxable income to secure the desired pattern of taxation. Because the use of multiple rate schedules constitutes the most significant deviation from the concept of taxable income in terms of the number of taxpayers that it affects and the popular resentment against …

Home Office Deductions: May A Taxpayer Have More Than One Principal Place Of Business?, Michigan Law Review

Michigan Law Review

This Note argues that the Tax Court's more liberal interpretation is correct because it more nearly reflects Congress's intent. Part I seeks a basis for preferring one of the competing interpretations in the text of section 280A and in the section's legislative history, but finds none. Looking, of necessity, to the purposes that Congress sought to advance with section 280A, Part II argues that those purposes do not demand a restrictive reading of "principal place of business." Such a reading, moreover, would undermine fundamental and longstanding congressional tax policies. In the absence of a more explicit statement of congressional intent, …

Of No Interest: Truth, Substance, And Bargain Borrowing, Joseph W. Jacobs

Florida State University Law Review

No abstract provided.

Book Reviews, Lawrence M. Friedman, Allaire U. Karzon

Vanderbilt Law Review

The Politics of Justice: Lower Federal Judicial Selection and the Second Party System - Book Author: Kermit L. Hall; Book Reviewed by Lawrence M. Friedman

In The Politics of Justice, Kermit L. Hall, a history professor at Wayne State University, takes a look at the way Presidents from Jackson through Buchanan picked judges for the federal district courts and for the territories. There were 240 such appointments during the period studied...

There is something of a literature on the selection process,"although Hall's book does fill a rather glaring hole. The tale Hall tells rings true if we ignore a few …

The Continuing Saga Of Prepaid Feed Expense: The Fat Lady Has Not Sung, James D. Wright, Nancy E. Wright

Florida State University Law Review

No abstract provided.

Section 302(C)(2): Opportunities And Pitfalls, Michael A. Jones

Florida State University Law Review

No abstract provided.

I.R.C. § 302(B)(1): Dividend Equivalency After United States V. Davis, Ronald L. Nelson

Florida State University Law Review

No abstract provided.

The Haitian Vacation: The Applicability Of Sham Doctrine To Year-End Divorces, Michigan Law Review

Michigan Law Review

This Note examines the propriety of applying the sham doctrine to tax-motivated divorces. Section I outlines the evolution of the sham doctrine from its exposition in Gregory v. Helvering through its expression in two different tests for commercial transactions. Section II then studies the relationship between state divorce law and the marital status provisions of the Internal Revenue Code to demonstrate the clear congressional preference for incorporating state law by reference rather than creating an independent federal law of marriage. It also examines the history of the 1969 Tax Reform Act in a vain effort to discern a congressional desire …

Taxation Of Foreign-Earned Income In Kind: Henry Taxpayer Goes To Japan, Carole Silver Adler

Indiana Law Journal

No abstract provided.

Capital Gains And Losses: A Primer (Part Two), Thomas J. Gallagher, Jr.

Florida State University Law Review

No abstract provided.

Capital Gains And Losses: A Primer (Part One), Thomas J. Gallagher, Jr.

Florida State University Law Review

No abstract provided.

An Approach To Income Tax Simplification, Fred W. Peel

University of Arkansas at Little Rock Law Review

No abstract provided.

Hill Farrer & Burrill, 67 T.C. 411 (1976), David Brian Mursten

Florida State University Law Review

Profit Sharing- NEW DEFINITION OF A PARTNERSHIP "PROFITS INTEREST" DISQUALIFIES AN OTHERWISE QUALIFIED PROFIT SHARING PLAN.

Carter's Projected "Zero-Based" Review Of The Internal Revenue Code: Is Our Tax Code To Be "Born Again"?, L. Hart Wright

Michigan Law Review

The evolution of today's Internal Revenue Code, which began with the mere embryo that Congress created in 1913, has absorbed over the ensuing sixty-four years more creative energy on the part of more co-authors than any other law in history. Despite this unstinted expenditure of "blood, sweat, and tears," the resulting document--were it possessed of human senses--would recognize that, for a foreseeable period, its life will be anything but serene. The plight in which it would find itself could even be compared to that early morning scene observed one hundred years ago by General Custer, when hostile forces were massed …

The Tax Consequences Of Inter Vivos Charitable Contributions After December 31, 1969 Under Section 170, Olin R. Melchionna Jr.

University of Richmond Law Review

To give and live to give again has always been the American way. Traditionally, Americans contribute to those charitable institutions and associations which effectuate their benevolent, philanthropic desires. Many individuals believe the funding of charitable institutions should be primarily by direct contributions from the private sector as opposed to federal and state government subsidies. This view is supported by the federal income, I gift and estate tax deductions.

The Judicial Public Policy Doctrine In Tax Litigation, Michigan Law Review

Michigan Law Review

This Note evaluates the merits of Revenue Ruling 74-323. First, it asserts that, while not arbitrary, the Service's resolution of the preemption issue was not mandated by the language of amended section 162 or by the relevant legislative history. Second, it maintains that it is both appropriate and procedurally feasible to apply the judicial public policy doctrine to violations of federal civil rights laws that impose no fine, imprisonment, loss of license, or other criminal penalty. The denial of a deduction in this situation would extend the public policy doctrine beyond both section 162(c)(2) and the judicial doctrine as it …

The Real Estate Investment Trust: State Tax, Tort, And Contract Liabilities Of The Trust, Trustee, And Shareholder, Michigan Law Review

Michigan Law Review

This Comment will attempt to alert potential investors in and trustees of REITs to the full extent of the liabilities that they could suffer for contract debts incurred in the name of the trust and torts committed by trust personnel. Since state tax considerations also play a significant role in investment decisions, the manner in which each state taxes the REIT and its shareholders on income derived from property and business in that state will also be investigated. Finally, a rational path out of the morass created by current state law will be articulated in order to prompt renewed discussion …

Deferred Compensation Arrangements Under Section 83 Of The Internal Revenue Code: Is Restricted Property Still A Viable Means Of Compensation?, Michigan Law Review

Michigan Law Review

When faced with the problem of compensating key executives, employers have tended to avoid the exclusive use of current cash compensation, since this would result in an immediate and substantial income tax to highly paid employees. Deferred compensation plans have been utilized in order to maximize tax benefits for employees, such as deferred recognition of income and capital gains treatment. Although such plans are structured to meet the needs of the particular employer and employee, several forms of deferred compensation are common. Among these are qualified and unqualified pension, profit-sharing, and stock bonus plans; qualified, restricted, and employee stock purchase …

Section 367: An Enigma, Julie W. Weston

Washington Law Review

Section 367 of the Internal Revenue Code of 1954 was enacted in its original form in 1932 in order to close what Congress considered to be a serious tax loophole available to domestic corporations and individuals carrying on business through the use of foreign corporations or contemplating the use of foreign corporations to realize large gains without paying taxes. The loophole resulted from the operation of the nonrecognition provisions of the Code dealing with the organization and reorganization of corporations. By using these provisions, individuals and corporations—both foreign and domestic—could transfer greatly appreciated property and unrealized profits on a tax-free …