Law Commons^™

Federal Regulation Of Retirement Plans: The Quest For Parity, William J. Chadwick, David S. Foster

Vanderbilt Law Review

An analysis of the regulatory scheme behind the varied treatment of retirement plans reveals that many of the distinctions made are not justifiable. For example, an incorporated, one-man law firm with net income of $125,000 can make a deductible contribution to a money-purchase pension plan of $25,000. If the lawyer conducted his practice as a sole proprietorship, however, his annual deductible contribution would be limited to $7,500. The form in which the lawyer conducts his business determines the tax burden that he must assume in providing for his retirement. Thus, retirement parity remains unachieved, even after a comprehenisve revision of …

Judicial Reform At The Lowest Level: A Model Statute For Small Claims Courts, Robert H. Brownlee, Charles L. Lewis, Gregory J. Moonie, William H. Pickering, Paul C. Deemer, Iii Special Projects Editor

Vanderbilt Law Review

The purpose of this Special Project is to analyze the development of procedures for adjudicating small claims, with particular emphasis on the State of Tennessee, and to suggest statutory revisions that may be of value in improving the quality of justice at the lowest level of the judicial system. The Project study commences with an historical survey of the origins of small claims theory and the various court attempts to apply the theory that have been made in the United States during the last half-century. The result of this analysis will be a characterization of a model small claims court.The …

Preferential Economic Treatment For Women: Some Constitutional And Practical Implications Of Kahn V. Shevin, Margaret E. Clark

Vanderbilt Law Review

The apparent willingness on the part of three members of the Supreme Court to sustain legislation granting economic benefits to a selected subgroup of women, while failing to deal with the similar racially suspect classification issue in Defunis, is simultaneously puzzling and disturbing. The key to the result reached in Kahn may be the size of the benefit involved, or the fact that a state tax statute was involved;"' yet the underlying principles in the two cases are logically indistinguishable and the differing approaches taken by certain members of the Court in the two cases are difficult to reconcile...

Thus, …

Recent Cases, Linda A. Bunsey, David M. Thompson, Charles K. Campbell, Jr., Keith B. Simmons, Thomas C. Hundley

Vanderbilt Law Review

If the instant case, rather than Northway, is to become the accepted rule in the area of discounting, consumers and state lenders will be protected while the national bank-lenders will be burdened only slightly, if at all. National banks located in states that permit state lenders to discount loans at the maximum rate, with-out regard to the actual yield, will not be affected. National banks located in states that permit state lenders to discount only to the extent that the actual yield is within the statutory maximum will need to change their practices merely by charging the statutory rate only …

Recent Cases, Stephen K. Rush, Joseph A. Latham, Jr.

Vanderbilt Law Review

Conflicts of Law--Federal Preemption--Aviation Law

Appellant-defendants, the United States' and a national airline whose plane had been involved in a mid-air collision while under radar direction from the FAA, agreed to a settlement of the resulting actions for wrongful death that had been initiated in various federal district courts and consolidated in the Southern District of Indiana. Appellants then sought indemnity and contribution by cross-claim and third-party complaints against appellee-defendants, the owners of the other plane involved in the collision and the estate of its student pilot. The appellees contended that since no right to indemnity and contribution existed under …

An Examination Of Some Considerations Relating To The Adoption And Use Of The Last-In, First-Out (Lifo) Inventory Accounting Method, Mark F. Dalton

Vanderbilt Law Review

LIFO is a special statutory election available to taxpayers in lieu of the normal methods by which inventory identification and valuation is accomplished under section 471 of the Internal Revenue Code of 1954. The applicable Code section, section 472, and the regulations thereunder are highly technical provisions containing many pitfalls for the unsuspecting. Furthermore, a LIFO election for tax purposes affects a company's financial reports to shareholders and creditors, and raises business considerations that must not be overlooked. In addition, special interpretive problem areas and deficiencies present in the statute should give pause to taxpayers contemplating a switch to LIFO. …

Registration And Exemption From Registration Of Employee Compensation Plans Under The Federal Securities Laws, Dean L. Overman

Vanderbilt Law Review

This article is a basic summary of the rather complex federal securities laws concerning the registration of employee compensation plans. It centers around certain provisions of the Securities Act of 1933, the Securities and Exchange Act of 1934 and the Investment Company Act of 1940. The article initially discusses the necessity of registering the following four types of employee compensation plans: (1) pension, profit-sharing, stock bonus and similar plans; (2) employee stock purchase plans; (3) stock option plans; and (4) phantom stock plans. It then considers certain exemptions for these plans and the means available to employees to effect a …

Title Vii Seniority Remedies In A Time Of Economic Downturn, Donald R. Stacy

Vanderbilt Law Review

This article will attempt to clarify the application of rules against employment discrimination in a period of rising unemployment by first examining the nature of the seniority system and then explaining the theory and mechanism of the conventional remedy. Next a review of recent problems that have tested that remedy will be undertaken, with special attention devoted to the peculiar problems incident to layoffs. Lastly, the article will consider the means by which an employer can minimize the liability that may result from the discriminatory impact of seniority systems.

Municipal Bonds And The Federal Securities Laws: The Results Of Forty Years Of Indirect Regulation, Bruce N. Hawthorne

Vanderbilt Law Review

Recent abuses occurring in the municipal bond markets have threatened investor confidence and caused Congress to reevaluate its original decision to exempt these securities from the Securities Act of 1933 and the Securities Exchange Act of 1934. This Note will analyze in some depth the securities regulation aspects of the municipal securities markets. First, because an understanding of the unique nature of municipal securities and their markets is essential, a description will be made of the characteristics of municipal bonds and municipal bond purchasers, the participants in the municipal securities industry, and the new issue and trading markets for municipal …

Licensee Estoppel And Royalty Payments After Lear: Inconsistencies Within The Lower Courts Circumvent Lear Rationale, Henry P. Doggrell

Vanderbilt Law Review

Article I of the Constitution' expressly provides Congress with the authority to grant inventors exclusive rights to their discoveries for limited periods to promote the development of new ideas and innovations. By according the inventor-patentee the seventeen-year right either to exclude all others from making, using, or selling his invention or to contract for its limited use in the form of assignments or licenses, Congress has attempted to provide the initiative and incentive necessary to encourage the continued progress of science and the arts.' Moreover, statutory safeguards, which presume the validity of the patent until a contesting party establishes its …

Recent Cases, Richard C. Stark, Gerard T. Nebel, Craig V. Gabbert, Jr., Mary E. Mann

Vanderbilt Law Review

Recent Cases

Administrative Law--Federal Trade Commission Act--Restitution Held Improper in Section Five Cease and Desist Order

Richard C. Stark

Congress enacted section five'° of the Federal Trade Commission Act in 1914 to supplement" the antitrust provisions of the Sherman Act.'" The section declared unfair methods of competition illegal and placed the power to define and prohibit unfair methods in the hands of an independent regulatory commission, the FTC.' In conferring this power, Congress intended this body of experts to educate and guide the business community toward the goal of securing higher standards of business conduct.

Sherman Act, antitrust

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Constitutional …

Tax Problems Associated With The Incorporation Of A Partnership: Revenue Ruling 70-239h, Peter Olsen

Vanderbilt Law Review

The publication of Revenue Ruling 70-239 creates concern with respect to the possible impact of the very broad language of the Ruling in areas not specifically covered. This concern relates to the availability of an ordinary loss deduction under section 1244; various personal holding company and "subchapter S" problems; the impact on section 357(c) and section 1239; the effect on basis computations and the control requirement of section 351; and holding period considerations under section 1223. This article will attempt to examine Revenue Ruling 70-239 with a view to (1) evaluating the accuracy of the conclusion that all three corporation …

Enterprise Coverage Under The Fair Labor Standards Act: An Assessment Of The First Generation, Mack A. Player

Vanderbilt Law Review

Some thirteen years have passed since Congress created the concept of "enterprise coverage," a concept unique to social legislation. With the appearance of two recent Supreme Court decisions'and the passage of the Fair Labor Standards Act Amendments of 1974 most of the crucial coverage issues arising under the Fair Labor Standards Act have now been resolved. It is appropriate therefore to review the coverage provisions of this unique and complicated statute, with particular emphasis upon the aspects of "enterprise coverage."

Narcotics Offenders And The Internal Revenue Code: Sheathing The Section 6851 Sword, John M. Fite

Vanderbilt Law Review

This Note first will analyze the Internal Revenue Code provisions supporting the current crackdown by the IRS on suspected narcotics dealers. Secondly, it will examine the split in the federal circuit courts of appeal on the issues of the availability of Tax Court review of an assessment made pursuant to a section 6851 termination of a taxable year and the availability of equitable or statutory protections to prevent the seizure and sale of property belonging to the taxpayer. Lastly, a discussion of the propriety of such conduct by the IRS and its constitutionality in light of recent Supreme Court decisions …

The Fairness Myth, Victor M. Earle, Iii

Vanderbilt Law Review

Any type of fairness doctrine for liability, no matter how superficially if not seductively appealing, would effectively destroy the guarantee of professionalism that the securities law and the ac-counting profession have for so long sought to instill in financial reporting. Without the assurance that accountants are consistently applying those principles that- find general acceptance within the accounting profession, the accountant's opinion will mean nothing to a shareholder, investor, or creditor, unless by some magic he can personally observe the particular "fairness" bias of the individual accountant who performed the audit.51 Instead of enhancing the stature of the accountant's opinion and …

We Often Paint Fakes, Abraham J. Brilof

Vanderbilt Law Review

To begin, the profession has disseminated the message far and wide that its members are the high priests responsible for the interpretation and application of a very special body of knowledge known as "generally accepted accounting principles" usually referred to as "GAAP." On analysis one quickly discerns that no such defined body of principles exists. Some commentators maintain, in fact,that not a single accounting precept is deserving of the designation"principle" and these exegetics urge that the critical phrase be changed to read "generally accepted accounting standards," hence" GAAS." Others, reflecting on the evils perpetrated in the name of GAAP and/or …

Current Problems Of Accountants'responsibilities To Third Parties, T. J. Fiflis

Vanderbilt Law Review

When the auditor begins the audit program, he will record in "working papers" his work and findings. Each page will be dated and initialed by all persons who dealt with it. The papers should be indexed and bound and retained for some years. They should also be comprehensible as they are intended for use by others as well as for later use.

A trial balance is usually the first working paper. Other standard working papers are data from the corporate charter, by-laws,and minutes and analyses of accounts, prescribed by the audit program. One of the last working papers will be …

Accounting Standards In The United States And The United Kingdom: Their Nature, Causes And Consequences, George J. Benston

Vanderbilt Law Review

The purpose of this article is to account for the existence of differing accounting standards in the United States and the United Kingdom despite a common language, common practice and a fundamentally common political and economic base in the two countries. What factors explain the fact that, while accounting standards in the United States are codified and explicit, they remain on the whole uncodified and implicit in Great Britain? From which system does the investor more likely benefit? The first section of this paper begins with descriptions of auditing and reporting standards in each country. The factors which influence the …

The Establishment Of Generally Accepted Accounting Principles And Generally Accepted Auditing Standards, James F. Strother

Vanderbilt Law Review

This article will discuss accounting principles and auditing standards and the respective roles played in their development and regulation by the Securities and Exchange Commission, the organized accounting profession and other public and private agencies. Accounting principles and auditing standards comprise two fundamentally different and distinct bodies of convention and practice. Generally accepted accounting principles and generally accepted auditing standards are those principles and standards which for a number of reasons have come to be accepted and applied by issuers, accountants, and auditors. Combined with the procedures and techniques attending their observation and application, generally accepted accounting principles and auditing …

Sec Enforcement And Professional Accountants: Philosophy, Objectives And Approach, John C. Burton

Vanderbilt Law Review

The Commission's enforcement program in regard to professional accountants is one of the means by which it seeks to improve the quality and reliability of financial reporting in the United States. Effective utilization of this program can achieve an increasing quality of professional performance and the implementation on an industry-wide basis of improved quality control procedures, thereby assuring the vitality of auditing standards and public confidence in the profession as a whole. These objectives are being achieved through a selective, albeit vigorous, application of enforcement powers and the continued use of flexible and innovative approaches by the SEC. While the …

Recent Cases, Gregg N. Gimsley

Vanderbilt Law Review

The instant decision is of major importance because it clearly defines a more liberal standard for aiding and abetting under section 10(b), reads a requirement of due care by accountants into section 17(a), and serves as an additional warning to the accounting profession of its expanding responsibilities in the field of securities regulation. By establishing negligence, duty to disclose, and causal connection, rather than actual knowledge, substantial assistance,and reliance, as the major elements of aiding and abetting a violation of Rule 10b-5, the Seventh Circuit has given this cause of action the broadest interpretation to date. Nothing precluded this interpretation …

Truth In Financial Statements: An Introduction, Douglas W. Hawes

Vanderbilt Law Review

When used in relation to a periodical, the word "symposium"refers to "a collection of opinions on a subject." The word derives from the Greek "sympinein," to drink together, and originally was applied to a drinking party in which conversation and intellectual entertainment played a vital part. To our "party" we have invited a distinguished group of authors representing in some cases widely differing points of view. They have contributed articles dealing with various aspects of these problems of financial reporting and auditing. We leave to you, the reader, and to those engaged in the continuing debate the final judgment on …

The Taxation Of Interest -- Free Loans, James T. O'Hare

Vanderbilt Law Review

The dramatic rise in interest rates in the United States in the past few years has given added significance to the uncertain tax consequences of interest-free loans made between family members, between corporations and shareholders, and between affiliated corporations. Such loans can create a variety of tax problems depending on the relationship of the parties. An interest-free loan from one family member to another may constitute a gift equal in value to the use of the money loaned or even to the amount of the entire principal. A corporation that makes an interest-free loan to one of its shareholders not …

Abstention: The Supreme Court And Allocation Of Judicial Power, Randall P. Bezanson

Vanderbilt Law Review

In an era of continually expanding federal judicial power, the Supreme Court has fashioned and employed several devices designed to delegate certain classes of federal question litigation to the state court systems. Among these devices are the doctrines of abstention, comity, and exhaustion of state remedies. Implementation of these doctrines has enabled the Supreme Court to maintain state judicial presence in federal question litigation and retain at least the appearance of a manageable federalized judicial structure. This article will attempt to analyze the function of the abstention doctrines as judicially-created tempering devices. Following a brief discussion of the factors that …

Recent Developments, James D. Holland

Vanderbilt Law Review

The power to parole prisoners derives from the legislative power to define crimes and set penalties for offenses, and has been delegated by Congress and state legislatures to the federal and state parole boards.' Recent litigation of inmates' post-conviction rights in federal and state correctional systems has focused increasingly on the broad discretionary power that parole boards exercise by performing their statutory mandate... The recent development of a flexible concept of due process,' however, has permitted a finer balancing of governmental and individual interests than the prior requirement of a "full panoply" of procedural safeguards, or none at all, and …

The Tennessee Rule Against Perpetuities: A Proposal For Statutory Reform, C. Dent Bostick

Vanderbilt Law Review

For several decades, there has been agitation for reform of the common-law Rule Against Perpetuities. For the most part, the reformers have urged that improvements in the Rule and the manner of its application be accomplished through legislative enactment.' Only a few jurisdictions have opted for reform by the judiciary. Thus far, there has been no legislative reform of the Rule in Tennessee; the appellate courts of the state continue to apply the Rule inits common-law form with all the confusing rubrics attached to it by centuries of development. The condition of Tennessee's law on the subject contrasts sharply with …

The Original Issue Discount Deduction In Bonds-For-Noncash Property Exchanges, Charles L. Almond

Vanderbilt Law Review

The first codification of the United States Internal Revenue laws gave a corporation a deduction from income of "[a]ll interest paid or accrued within the taxable year on its indebtedness. ...This same language is presently in force in the Internal Revenue Code of 1954. The statutory language authorizing the interest deduction has never dealt explicitly with the deductibility of discount arising upon a corporation's original issuance of bonds. Treasury Regulations promulgated pursuant to the interest deduction sections, however, have recognized continually that the statutory language embodies a deduction for original issue discount. 'The latest pre-1969 regulation, which limits itself to …

Recent Cases, Michael D. Kelly, Robert D. Tuke

Vanderbilt Law Review

Antitrust Law--Clayton Act--Statistics of Market Concentration and Increased Market Share are Insufficient to Show Violation of Section 7 When Other Factors Mandate a Conclusion that Competition will not be Substantially Lessened by the Contested Acquisition --

Preservation of a large number of marginal competitors does not necessarily result in the optimum level of competition, and size per se is not illegal' and should not be equated with anticompetitive effect. Seemingly, the competitive objectives of antimerger law have been infused with a theory characterized by socio-political feelings of hostility towards large, integrated corporations contrasted with friendliness toward small, independent business units …

The Legal Status Of A National Bank's Automatic Stock Investment Service Under Sections 16 & 21 Of The Glass-Steagall Act Of 1933, H. Lee Barfield

Vanderbilt Law Review

For many years, commercial banks bought and sold common stock while acting in an agency capacity for their customers. Frequently, these transactions were made while the bank was acting as trustee or as custodian for its beneficiaries or principals. Generally,the banks did not advertise this service extensively, but limited promotional activities to prior bank customers. In 1973, a dramatic change began as several commercial banks, notably Security Pacific National Bank of Los Angeles and Chase Manhattan of New York,began to promote this service vigorously in advertising addressed to the general public through the various media. Threatened by the increased competition …

Recent Developments, Mark J. Mathiesen

Vanderbilt Law Review

Under the existing statute Congress has attempted by legislation to encourage the development of HMOs as a viable alternative for the health-care consumer. As is often the casein the political world of Congress, the fanfare accompanying a legislative response has obscured the deficiencies of the answer. This act with its limited appropriations, restricted preemption language,and failure to support profit-making HMOs constitutes an experimental approach to the HMO concept, and therefore, only illusionary support for its development.