Tax Law Commons^™

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 …

Commentary: Does The United States Need An Alternative Tax Base?, James W. Childs

Akron Tax Journal

This article looks at the alternative tax systems of France, Italy, Greece, Switzerland, and Yugoslavia and compares that to the system in the United States. It uses this comparison to discuss whether an alternative tax base is necessary in the United States.

Tax Ideals In The Real World: A Comment On Professor Strnad's Approach To Tax Fairness, William D. Popkin

Indiana Law Journal

No abstract provided.

United States Taxation Of Its Citizens Abroad: Incentive Or Equity, Renee J. Sobel

Vanderbilt Law Review

The United States, unlike many sovereignties, has exercised worldwide income tax jurisdiction over its individual citizens since the inception of the income tax. Since 1926, however, United States citizens working abroad have received special treatment in the taxation of their foreign earned income. By the use of a tax credit, direct double taxation has been avoided. In addition, various exclusions and deductions have been permitted. Such tax preferences have been justified on the grounds that they promote tax equity and that they serve as incentives to encourage Americans to work overseas.

This Article considers whether the special treatment of United …

Internal Revenue Code Section 7701(B): A More Certain Definition Of Resident, Rolf E. Kroll

Penn State International Law Review (1982 - 2011)

The purpose of this Note is four-fold. First, it seeks to articulate the central concepts underlying taxation of nonresidents and residents. In so doing, the discussion endeavors to show the importance of section 7701(b) of the Internal Revenue Code. Second, it attempts to cancas the case law and pertinent regulations and rulings and highlight the ambiguities therein. Third, the discussion will address the essential features of section 7701(b) and illustrate Congress' new approach to the problem of determining resident status for aliens. Finally, the policy implications of 7701(b) are examined and suggestions for further improvement are made.

Marriage Neutrality: An Old Idea Comes Of Age, Douglas K. Chapman

West Virginia Law Review

No abstract provided.

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

Articles

When a taxpayer files an honest' federal income tax return for a taxable year, section 6501(a) of the Internal Revenue Code2 limits the period of time during which the Government can assess a tax for that year to a three-year period commencing with the date that the return was filed. The three-year limitations period is extended for an additional three years by section 6501(e)(1)(A) if the taxpayer's return omits properly includible gross income in an amount in excess of twenty-five percent of the gross income that was reported. If a taxpayer fails to file a return for a taxable year …

Disparate Tax Treatment Of Different Types Of Business Organizations: Where Should We Go From Here?, Douglas A. Kahn

Articles

If several persons wish to join together in a common enterprise in order to pool their capital or labor or some of each, they may choose among a variety of available organizational structures that will serve that purpose. The most common entity forms are partnerships (including joint ventures), corporations, and trusts. While, in its typical structure, each of those entity forms has its own distinct characteristics, the structure of such organizations often is modified by agreement so as to adopt attributes of another type of entity. Because of this, the substantive distinction between entity types is blurred.

Federal Income Tax Developments: 1983, Merlin G. Briner, Richard J. Kovach

Akron Tax Journal

This article surveys substantive federal income tax developments in 1983, including relevant Supreme Court cases, deductions, legislative and treasury regulations, and income recognition and related topics.

Subchapter S As A Vehicle In Real Estate And Oil & Gas, Lorence L. Bravenec

Akron Tax Journal

This article discusses several significant problem areas faced in real estate and oil & gas activities under the new rules for S corporations enacted by the Subchapter S Revision Act of 1982 (hereinafter the "1982 Act"),' as modified by the Tax Reform Act of 1984 (hereinafter the "1984 Act"). The 1982 Act brought the taxation of S corporations and shareholders more in line with the partnership model, thus making the law conform more to the expectations of the parties. At the same time, the 1982 Act removed many of the serious pitfalls and the sought after planning devices under the …

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 …

Dissenting Opinions By Supreme Court Justices In Federal Income Tax Controversies, Walter J. Blum

Michigan Law Review

What is to be learned from this review of the various analyses offered in dissenting tax opinions over the past five terms of the Supreme Court? When the Court has decisively interpreted narrow or technical language in the statute, dissenters all too often indulge in lengthy analyses that can only serve to create further confusion. Only when the Court focuses on a judicially made rule or an issue with constitutional implications is a broader dissent appropriate. If dissenters generally adhered to the guidelines set forth at the outset of this Article the tax world would, I believe, be at least …

Death Of A Partner: Pre And Post-Mortem Planning, Jerome Hesch

Akron Tax Journal

There are several alternative techniques which can be employed to alleviate the income tax problems associated with the death of a partner. The sophisticated tax advisor will understand, however, that some of the suggested techniques may not be practical for all situations. The purpose of this article is to describe these planning techniques and to guide the tax advisor as to which technique is appropriate for his client.

Fairness In Rate Cuts In The Individual Income Tax, Alan L. Feld

Faculty Scholarship

The Economic Recovery Tax Act of 1981 (the 1981 Act) made significant changes in federal income, estate, and gift taxation, touching virtually every taxpayer.¹ The centerpiece of the 1981 Act consisted of rate reductions in the individual income tax.² These reductions, said to average 23%, served a number of different but related objectives. First, those in favor of the tax cuts posited that all taxpayers would benefit from equitable, across-the-board reductions in an excessive and growing tax burden.³ Related to this objective was an anticipated reduction in the size of the federal government, because less tax money …

The Deep Structure Of Capital Gains, William D. Popkin

Articles by Maurer Faculty

The capital gains preference has been viewed as a means by which taxpayers are spared being taxed fully in a single year for income earned over a number of previous years. This Article argues that the tax preference for capital gains was intended to provide economic incentives by encouraging transferability, risk, and investment, not to achieve equity by a crude form of income averaging. This Article critically evaluates judicial doctrine in light of these economic policies and concludes that courts have not effectively bridged the gap between policy and the statutory language and structure. The author explains how the tax …

International Tax Evasion And Tax Fraud: Typical Schemes And The Legal Issues Raised By Their Detection And Prosecution, Hugh Spall

University of Miami Inter-American Law Review

No abstract provided.

The Bad Blood Factor And 302 Redemptions: A Retrospective Examination And Analysis, Joseph J. Miller

West Virginia Law Review

No abstract provided.

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, …

Accelerated Depreciation Revisited—A Reply To Professor Blum, Douglas A. Kahn

Articles

Professor Blum's comment addresses the proper or neutral tax treatment to be accorded three of the items discussed in my recent article on accelerated depreciation - namely, annuities, prepaid expenses, and exhaustible assets. Blum disputes my analysis in all three cases. While Blum's article is eminently readable, I do not believe that it refutes my earlier work to any extent. In this reply to Professor Blum, I will deal separately with each of the three items he examines. First, however, it is useful to consider the meaning of the term "tax neutrality" and to set forth my views as to …

Artists, Art Collectors And Income Tax, Alan L. Feld

Faculty Scholarship

The federal income tax law treats artists and art collectors differently. Similar transactions concerning artworks produce disparate income tax results, depending on whether they involve the artist or the collector. On balance, these results seem to favor the collector over the artist. But notwithstanding the dismay of some artists and their advocates, the differences in result flow, in the main, from the differences in the source of the taxpayer's investment in the work.

The collector buys the work with after-tax income. Any gain is properly treated as an investment return and is eligible for capital gain benefits.' The collector, however, …

Accelerated Depreciation—Tax Expenditure Or Proper Allowance For Measuring Net Income?, Douglas A. Kahn

Articles

Since the 1950s, it has become fashionable to attack various provisions of the Internal Revenue Code by calling them "subsidies" rather than "proper" means of measuring taxable income. These "subsidies" through Code provisions have come to be referred to as "tax expenditures," a term coined by Professor Stanley Surrey in a speech he made as Assistant Secretary of the Treasury for Tax Policy on November 15, 1967. In that speech, Professor Surrey stated that our tax system often deliberately departs "from accepted concepts of net income," so that by granting exemptions, deductions, and credits that are not appropriate to an …

The Artist's Tax Dilemma, Wendy J. Gordon

Scholarship Chronologically

An artist's first job is to create. Somewhere down the line, most artists find they have a second job, which is to sell. Many artists resist involvement in the second task (with mixed results), yet beyond it the artist encounters a duty even more dreaded: to pay taxes.

The Case For An Income Tax, Alan Gunn

Journal Articles

Recent studies by the US Treasury Department and the Meade Committee in Britain have one thing in common. They recommend a progressive tax on personal consumption as an alternative to the income tax and discuss of the practical problems of substituting consumption for income as the tax base. These studies suggest that replacing the income tax with an expenditure tax is now being considered a serious possibility. Advocates for the expenditure tax base their arguments on considerations of equity, administrative convenience and economic efficiency. The article examines the merits of these arguments, with a focus on four important non-economic issues …

Tax Avoidance, Alan Gunn

Michigan Law Review

This Article attempts an almost purely negative criticism. I contend that efforts to explain the results of tax cases not involving penalties by reference to "tax avoidance" are never satisfactory, whether the reference is meant to describe a taxpayer's state of mind or to justify a tax rule by invoking some "need to prevent tax avoidance." Because many tax problems are commonly discussed in terms of "tax avoidance" in one of these senses, and in order to avoid the impression that my arguments would leave the tax law in shambles, I shall suggest some alternative ways of dealing with these …

Wright V. Commissioner, 62 T.C. 377 (1974), Aff'd, 543 F.2d 593 (7th Cir. 1976), Ruth L. Gokel

Florida State University Law Review

Income Tax- PROPERTY SETTLEMENT IN DIVORCE- AN UNSETTLED AREA OF SETTLED LAW.

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 Case For Highly Graduated Rates In State Income Taxes, Robert I. Keller

Faculty Scholarship

No abstract provided.

Reflections On The Tax Reform Act Of 1976, Stanley S. Surrey

Cleveland State Law Review

What should be said in concluding these reflections on the 1976 Tax Reform Act? Overall the verdict must be on the plus side. The Act does achieve reforms in a number of areas and the serious setbacks are relatively few. The credit goes to the reform groups on the Tax Committees and in the Congress, the Budget Committees and the Congressional Budget Office, the Joint Committee Staff, the few public interest groups, the dogged efforts of a few tax reform-minded Representatives and Senators, and in ways not really fully fathomable, to the efforts, differently pursued, of Chairman Ullman and Chairman …

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 …