Law Commons^™

Taxing Emotional Injury Recoveries: A Critical Analysis Of Murphy V. Internal Revenue Service, Gregory L. Germain

ExpressO

Does Congress have the power under the United States Constitution to tax compensatory personal injury awards? Several months ago, the D.C. Circuit Court of Appeals said "no" in Murphy v. Internal Revenue Service. The court theorized that Ms. Murphy’s compensatory damages award did not constitute “income,” as understood by the enactors of the 16th Amendment, because the award merely made Ms. Murphy whole rather than increasing her wealth.

This paper disputes virtually every aspect of the Murphy decision. The court made errors from the beginning in analyzing the statutory issues. While the court ultimately reached the correct preliminary conclusion – …

Substance Over Form? Phantom Regulations And The Internal Revenue Code, Amandeep S. Grewal

ExpressO

This paper addresses the appropriate response to tax statutes that call for the issuance of regulations, but that have been ignored by the Secretary. The courts and the IRS have taken the unusual step of treating these statutes as self-executing, notwithstanding the absence of regulations, and have invoked phantom regulations to enforce the statutes. Several commentators have analyzed the Tax Court's and the IRS's approaches, but have focused mostly on cases interpreting delegations found in the Internal Revenue Code. Because those cases themselves are inconsistent, it is not possible to extract a clear rule from analysis of those cases alone. …

The Partnership: Preserving Capital Gains On Real Estate Investments, Charles E. Mcwilliams

ExpressO

This paper considers the use of partnerships as an effective tool for preserving capital gains on real estate investments. For tax purposes, the Internal Revenue Service generally treats a limited liability company as a partnership. This form of organization is widely used for real estate investments, and by taking a few simple precautions an LLC may ensure that any gain on its investments in undeveloped real property will be treated as capital gains. Such treatment may reduce the LLC’s tax costs substantially.

The Fifth Circuit developed a framework that has proven invaluable for analyzing the activity of the LLC to …