Tax Law Commons^™

Personal Injury Exclusion: Is The Slashing Of Wrists Necessary?, Donald J. Zahn

Akron Tax Journal

This paper will examine the history of damage award taxation beginning with the earliest income tax statute through the present law. Part II traces the 1918 and 1939 income Tax Code provisions and the court cases interpreting those provisions. Part I addresses the 1954 income Tax Code provisions and the case law which further defines tax aspects of damage awards, and Part IV outlines the 1986 tax reform legislation, the 1989 damage award changes, and recent United States Supreme Court rulings on the taxation of damage awards. Finally, Part V suggests that the courts have turned their backs on traditional …

Square Wheels: U.S. Pass-Through Taxation Of Privately Held Enterprises In A Comparative Law Context, Ann F. Thomas

Articles & Chapters

No abstract provided.

The Return To Corporate Tax Evasion In The Presence Of An Income Tax On Shareholders, Graeme S. Cooper

Akron Tax Journal

The paper will proceed in the following stages: Section II will describe a theoretical model of the incentive structure surrounding corporate tax evasion and the implications that the model suggests for the behavior of corporate managers. Section III will analyze how the personal income tax might change the returns to evasion and how this effect could be expected to influence the behaviour of the corporation's managers. Section IV will describe the principal interaction mechanisms between the corporate tax and personal income tax employed in practice. Section V will analyze the effects of each of the interaction mechanisms described. Section VI …

Property Valuation For Transfer Taxes: Art, Science, Or Arbitrary Decision?, Stephen C. Gara, Craig J. Langstraat

Akron Tax Journal

According to the regulations, the value referred to in the IRC is defined as "fair market value." Fair market value is itself defined as the "price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy nor sell, and both having reasonable knowledge of relevant facts."9 The so-called hypothetical "willing buyer/seller" standard is prevalent throughout the case law dealing with this issue."0 Given the importance of this standard, additional discussion is warranted.

The standard requires an analysis of both sides of the transaction. It is not appropriate to …

Tax Treatment Of Damages Awarded For Age Discrimination, Gerald A. Madek

Akron Tax Journal

Since the inception of anti-discrimination laws, the degree to which victims should be compensated has been a subject of debate. Legislators have always been acutely aware of competing pressures in this area. Civil rights advocates have persistently lobbied for generous compensatory awards for emotional distress, while businesses have lobbied just as persistently against these awards which threaten their ability to do business profitably. The result of these competing pressures has been a set of anti-discrimination statutes offering inconsistent remedies.

Interest Deduction For Individuals: Review And Update, Edward Schnee

Akron Tax Journal

This article will review the current cases and rulings involving business, investment and qualified residence interest. It will point out areas of uncertainty as well as planning opportunities and pitfalls.

Tax Rationality And The Independence Of Irrelevant Alternatives, James P. Spica

Akron Tax Journal

Patricia White recently asked a simple question: What is the value of systemic coherence, or rationality, in tax legislation. This is asked along the way of an errand that does not require its answer, but White supposes, in passing, that the value queried is relative: no doubt systemic coherence is desirable, but it may conflict with other values predicable of a tax system, values it cannot invariably trump. This entails, on the one hand, that normative claims for rationality in this sphere regularly imply assignments of weights, and, on the other hand, that systemic coherence ought to be irresistible whenever …

Exempt Organizations: A Study Of Their Nature And The Applicability Of The Unrelated Business Income Tax, John M. Strefeler, Leslie T. Miller

Akron Tax Journal

With the hope of clarifying a difficult issue, this paper examines the traditional categories of exempt organizations (EOs), rationales for their exempt status, tests for gaining and maintaining their exempt status, standard tests used to impose unrelated business income tax (UBIT), and ways in which the traditional tests and standards are changing. Furthermore, this paper predicts areas of future change, discusses ways in which EOs can immediately strengthen their exempt status to avoid unnecessary UBIT, and suggests principled arguments which can be used to halt additional unwarranted incursions by tax "reformers" and "simplifiers."

The Taxpayer's Third Personality: Comments On Redlark V. Commissioner, William D. Popkin

Indiana Law Journal

No abstract provided.

The Kiddie Tax: A Nuisance Solution To A Nonexistent Problem (Special Tax Symposium), Richard C.E. Beck

Articles & Chapters

No abstract provided.

Distributions From Revocable Trusts And Estate Inclusion, Mark A. Segal

Akron Tax Journal

In this article analysis is made of the tax law and issues concerning the estate tax treatment of distributions made from a revocable trust within three years of death.

Choice Of Business Tax Entity After The 1993 Tax Act, Craig J. Langstraat, K. Dianne Jackson

Akron Tax Journal

The first section of this article presents a discussion of the decision itself, as well as a description of each of the most common types of business forms. The second section provides a summary of the tax classification requirements imposed on certain entities by the Internal Revenue Service (IRS). The third and fourth sections examine the non-tax and tax considerations of the choice of entity decision. A chart is also provided which summarizes the non-tax and tax considerations addressed in the article (see Appendix A).

Income Tax Practice And Certified Public Accountants: The Case For A Status Based Exemption From State Unauthorized Practice Of Law Rules, Matthew A. Melone

Akron Tax Journal

The purpose of this article is to examine the application of unauthorized practice of law restrictions to certified public accountants engaged in income tax practice. Prior to my admission to the bar, I had been a practicing certified public accountant and, like many of my colleagues, did not believe that the scope of my profession's services in tax matters was subject to serious dispute. However, exposure to attorneys, particularly those not in tax practice, has led me to conclude that the bar has not come to any universally agreed upon conclusions about the role that certified public accountants may properly …

How To Reduce The Compliance Burden Of The Earned Income Credit On Low-Income Workers And On The Internal Revenue Service, Jonathan Barry Forman

Oklahoma Law Review

No abstract provided.

Employment Taxes: What Can The Small Businessman Do?, Kirsten Harrington

Akron Tax Journal

This article focuses on two of the employment taxes, FICA and FUTA. Part I surveys the payroll tax regime and the consequences of running afoul of it. Part II considers the recent history of dividend recharacterizations in the S corporation shareholder-employee context. Part III considers what would be "reasonable (minimum) compensation" for a shareholder-employee in an S corporation. Finally, Part IV takes up current, lively developments in the perennial debate between the Service and small business over independent contractor status.

The Innocent Spouse Relief: A Reconciliation Of Conflicting Judicial Interpretations, Donald C. Haley

Akron Tax Journal

This paper reviews the statutory requirements for obtaining the innocent spouse relief, briefly identifies the degree of consensus among the courts in interpreting key provisions of the statute, and then focuses on the major area of conflict in qualifying for relief: the "lack of knowledge" requirement on the part of the alleged innocent spouse. Particular attention is given to the rigid standard utilized by the Tax Court in its interpretation of this critical requirement versus the broader, more flexible standard employed by the U.S. Courts of Appeal for the Eighth and Ninth Circuits. Finally, an analysis of a workable reconciliation …

Bankruptcy Officials Vs. The Internal Revenue Service: The Beat Goes On, Craig J. Langstraat, K. Dianne Jackson

Akron Tax Journal

This author has previously addressed several areas of conflict between bankruptcy officials; i.e., trustees and judges, and the Internal Revenue Service ("IRS"). Due to continued litigation, both in the U.S. Supreme Court and in certain federal courts of appeal, some of these areas will be reevaluated in this article. In addition, new areas of conflict resulting in litigation in various levels of the federal court system will be discussed. Policy and statutory modifications will be suggested to alleviate the growing costly burden of litigation.

S Corporation Shareholders And Entity-Level Indebtedness: Is A Shareholder Ever Allowed To Deduct Losses Against Entity-Level Indebtedness?, Sumner E. Copple Iii

Akron Tax Journal

The owner of a closely-held business does not generally consider the tax implications when it is necessary to obtain financing for his business. A loan is negotiated and the borrowed funds are put to use by the business. However, in the case of a third-party loan to an S corporation,' different tax consequences may greet taxpayers conducting business as an S corporation, depending on the form of the loan transaction. Business owners adopting the S corporation form of doing business may discover that operating losses of the entity cannot be deducted due to the form of loan transactions between their …

International Tax Issues Of The U.S. Pharmaceutical Industry, Jonathan L. Mezrich

Akron Tax Journal

This article will attempt to illustrate the recent tax issues in the pharmaceutical industry, now the "scapegoat" of the nation's health care problems, which have international effects; it will also defend the necessity of research credits and other tax incentives for this recently revived industry. Finally, it will attempt to evaluate the concerns raised by Gerald Mossinghoff of the PMA in his testimony before Congress.

The Excludability Of Damages For Personal Injury After The Supreme Court's Decision In Burke, Ray A. Knight, Lee G. Knight, Wayne Nix

Akron Tax Journal

The scope of the personal injury exclusion under Internal Revenue Code § 104(a)(2) has been significantly broadened since the mid-1980's as the result of numerous court decisions in the areas of reputation and discrimination injuries. In our increasingly litigious society, more tax cases contesting the excludability of damages recoveries are expected. In United States v. Burke, decided May 26, 1992, the Supreme Court resolved an important issue regarding excludability from federal taxation of damages received in discrimination cases. Unfortunately, the case was decided on narrow grounds, which may only add to, rather than reduce, the conflict among the lower …

Professor T.S. Adams (1873-1933) On Federal Taxation: Deja Vu All Over Again, Thomas Earl Geu

Akron Tax Journal

Professor Thomas Sewell ("T.S.") Adams was instnmental in the development of the income tax and one of income tax's greatest proponents. As a result of his efforts, he left much of the income tax as his legacy. Born on December 29, 1873, he was a Professor of Political Economy at Wisconsin. Washington University in St. Louis, Comell, and Yale.

Beyond being a scholar, however, he was pragmatist and was very aware of the practical significance of an efficient and effective tax system. He recognized that the true laboratory of tax theory was the nation's economy, and he actively engaged in …

Indopco, Inc. V. Commissioner: Will The Irs Use A Nebulous Supreme Court Decision To Capitalize On Unsuspecting Taxpayers?, Bryan Mattingly

Kentucky Law Journal

No abstract provided.

Tax Treatment Of Takeover Costs: Supreme Court Responds To Controversy!, Ray A. Knight, Lee G. Knight

Akron Tax Journal

This article reviews the position of the IRS along with the reasoning of the courts - including the Supreme Court's 1992 Indopco, Inc. v. Commissioner decision - concerning the tax treatment of costs incurred in a takeover.

Software Taxation In Ohio, Robert W. Mcgee

Akron Tax Journal

For more than a decade after the first software tax case was decided, computer software was uniformly classified as intangible for the purpose of sales, use, and personal property taxes, and therefore exempt from taxation. Then, in 1983, the decisions began to go in the other direction, classifying software as tangible and therefore subject to taxation. Ohio courts have played an early and continuing role in the debate over software taxation. This article provides a brief overview of software taxation in general, summarizes the role Ohio courts have played, and compares and contrasts the Ohio position on software taxation with …

Tax Data Disclosure Under The Freedom Of Information Act: Evolution, Issues And Analysis, Mark A. Segal

Akron Tax Journal

In this article an examination and analysis is made of the major provisions of the FOIA, of how the FOIA has been applied in the tax area, and of major emerging issues concerning the FOIA. Particular attention is accorded to the common clash of the FOIA's policy of disclosure with I.R.C. § 6103's general rule of confidentiality and nondisclosure of tax return data.

The Service's Latest Attempt To Regulate Hospital-Physician Relationships: A Critical Analysis, Patrick H. Lucas

Akron Tax Journal

The Chief Counsel of the exempt organization division of the Internal Revenue Service concluded in the General Counsel Memorandum that each of these rulings should be revoked for three reasons: (1) The transactions violated the proscription against inurement of an exempt organization's earnings to any private individual; (2) the transactions infringed upon the doctrine that an organization must operate for public rather than private benefit in order to be exempt from the income tax; and (3) the transactions may violate federal law and that such violations are inconsistent with exemption from the income tax. Each of these theories is examined …

The Entertainment Facility Rules Of Section 274 And Corporate-Owned Condominiums, Mary E. Vandenack

Akron Tax Journal

In the past decade Congress has focused a lot of attention on limiting or eliminating deductions for lavish entertainment. An area where deductions have been virtually eliminated is that of "entertainment facilities." This Article examines the disallowance provisions of I.R.C. § 274 concerning entertainment facilities in the context of corporate-owned entertainment facilities.

United States Federal Tax Policy Surrounding The Investment Tax Credit: A Review Of Legislative Intent And Empirical Research Findings Over Thirty Years (1962-1991), Robert E. Rosacker, Richard W. Metcalf

Akron Tax Journal

Congress enacts tax legislation amidst numerous concerns beyond mere revenue raising. Significant congressional tax policy consideration is conferred upon social objectives, equity concerns, administrative matters, and macroeconomic goals. Within the purview of macro-economic goals can be found federal tax policy relating to investments in fixed assets - which assets are depreciable, the allowable depreciation methods, depreciable lives, and the investment tax credit. Federal tax policy concerning the investment tax credit (ITC) is the topic of this article.

The Unrelated Business Income Tax And Its Effects Upon Collegiate Athletics, Frank James Vari

Akron Tax Journal

This article examines the Unrelated Business Income Tax and its application to corporate sponsorship of college football bowl games and other exempt organizations likely to be affected by Technical Advice Memorandum 91-47-007. Thereafter, the article will consider the IRS's proposed examination guidelines of corporate sponsorship income, the public policy concerns regarding such income, and the proposed legislation introduced to address the competing concerns.

Is An Employment-Discrimination Award Taxable?, L. Scott Stafford

Law Faculty Scholarship

No abstract provided.