Tax Law Commons^™

Depreciation Of Intangibles: An Area Of The Tax Law In Need Of Change, Allen Walburn

San Diego Law Review

Under tax law in 1993, depreciation of many purchased intangibles was denied on the theory that they have an unlimited, or at least indeterminate life. However, many taxpayers challenged this theory on the ground that intangibles are subject to wear and tear like any other asset. This Comment argues that the imprecise factual nature of this issue has led to unnecessary complexity and uncertainty, a great burden on the courts, and unfair treatment of taxpayers. The Comment analyzes justifications for the depreciation of goodwill and other intangibles in the nature of goodwill. It examines possible solutions to these problems with …

Common Misconceptions: The Function And Framework Of "Trade Or Business Within The United States", Nancy H. Kaufman

Vanderbilt Journal of Transnational Law

In this Article, Professor Kaufman examines the administrative and jurisdictional functions of the Internal Revenue Code's term "trade or business within the United States" in the taxation of foreign persons' income and the existing framework established for the term's interpretation. The author contends that the courts, by relying on two common misconceptions of the term, have made the term's application unpredictable. The author further believes that defining the term according to its functions would serve United States tax policy and economic interests. This definition would focus primarily on facts indicating an ongoing commitment to participation the United States economy. The …

Economic Actors In The Work Of Madame Justice Wilson, Maureen Maloney

Dalhousie Law Journal

One cannot discuss corporate or tax law, or indeed any law for that matter, in a value vacuum. How we interpret, analyse and assess factual situations and the legal analysis of them will differ depending upon our individual, and occasionally, collective or societal perspectives. In the economic sphere, a great deal depends upon one's world view of the primary economic actors in our society - corporations; and the main economic laws - the tax laws. At the outset I should state that a major reason for my disagreement with some of Justice Wilson's decisions is due to the fact that, …

When Fungible Portfolio Assets Meet: A Problem Of Tax Recognition, Alan L. Feld

Faculty Scholarship

A pervasive principle in calculating income for Federal tax purposes defers consideration of gain or loss in an investment asset until a recognition event occurs. An investor can watch the value of an investment in common stock rise over a considerable period of time without incurring any tax liability. Similarly, if the value declines, the investor does not take the loss into account. When the investor terminates the investment, the tax computation takes the net accumulated gain or loss into account at that time.

Discussion and controversy concerning this deferral principle, referred to as the realization or recognition requirement,^{1 …}

Case Digest, Law Review Staff

Vanderbilt Journal of Transnational Law

United States Tax Principles Govern Determination of Accumulated Profits Under Foreign Tax Credit Section of Internal Revenue Code, United States v. Goodyear Tire & Rubber Co. 110 S. Ct. 1172 (1990).

Tax Injunction Act Bars Foreign Parent of Subsidiary Doing Business in California from Raising Foreign Commerce Objections to Tax Board's Formula Franchise Tax Board of California v. Alcan Aluminum Ltd. 110 S. Ct. 661 (1990).

Correspondence Bank Account with United States Trust Company Held Insufficient Contact with United States to Establish Subject Matter Jurisdiction under the FSIA--International Housing Ltd. v. Rafidain Bank Iraq, 893 F.2d 8(2d Cir. 1989).

Successful …

1988 Amendment To 26 U.S.C. Section 7430: Expanding Taxpayers' Rights To Recover Costs In Tax Controversies, Debra A. Chini

Vanderbilt Law Review

Bureaucratic mistakes at the Internal Revenue Service (IRS) forced Barbara and David Kaufman to seek a court-ordered injunction prohibiting the IRS from collecting a 14,380 dollar tax assessment for 1980. Even though the Kaufmans had notified the IRS office in Chicago of their new Maine address, the IRS mistakenly mailed the preliminary notice of deficiency to the Kaufmans' prior Illinois address. In addition, the Service mailed the statutory notice of deficiency to another couple also named Barbara and David Kaufman.' Because the Kaufmans never received notice of the proposed deficiency, they did not have an opportunity to contest the tax …

Behind Closed Doors: How The Rich Won Control Of Canada's Tax System... And Ended Up Richer, Faye Woodman

Dalhousie Law Journal

Linda McQuaig is not an expert. Therein lies an important strength of her book on the Canadian tax system, Behind Closed Doors: How The Rich Won Control of Canada's Tax System ... And Ended Up Richer. Because she is not an expert she has not relied on an insider's knowledge of technical points and jargon and neither has she gotten caught up in a particular disciplines's specialist concerns. Rather, as a good journalist, she has provided a lucid critique of the tax system which will be of interest to anyone concerned with how the tax system is or how it …

Back To The Future: A Time For Rethinking The Test For Resident Alien Status Under The Income Tax Laws, David Williams, Ii

Vanderbilt Journal of Transnational Law

If the sole object of our tax law is certainty, then the quest for a bright-line, mechanical test would appear to be justified. Fairness, however, is an equally important objective. If fairness is sacrificed in our rush to formulate a bright-line test, then the law is not fully successful. The trade-off between certainty and fairness attains particular significance for non-United States citizens earning income in this country. Under United States tax laws, these individuals may be taxed as either resident aliens or nonresident aliens. This classification can be crucial because the resident alien is taxed on his worldwide income; the …

An Aggregate Approach To Indirect Exchanges Of Partnership Interests: Reconciling Section 1031 And Subchapter K, Karen C. Burke

UF Law Faculty Publications

This article examines indirect exchanges of partnership interests in light of the distinctive continuity-of-investment principles of section 1031 and Subchapter K of the Internal Revenue Code. Part II of the article focuses on the failure of judicial responses and alternative approaches prior to the 1984 Act to prevent the potential abuses of direct exchanges of partnership interests. Part III examines section 1031(a)(2)(D) against the background of two recent decisions by the United States Court of Appeals for the Ninth Circuit concerning successive tax-free exchanges. Part IV focuses on planning techniques involving like-kind exchanges coupled with partnership contributions and distributions. Part …

Case Digest, Law Review Staff

Vanderbilt Journal of Transnational Law

GOOD FAITH EXCEPTION TO THE EXCLUSIONARY RULE EXTENDS TO FOREIGN CRIMINAL INVESTIGATIONS WHERE UNITED STATES NARCOTICS AUTHORITIES REASONABLY RELIED ON FOREIGN LAW ENFORCEMENT OFFICERS' REPRESENTATIONS THAT SEARCH COMPLIED WITH THE FOREIGN COUNTRY'S LAW--United States v. Peter-son, 812 F.2d 486 (9th Cir. 1987).

ASSETS OF A WHOLLY-OWNED FOREIGN INSTRUMENTALITY ARE NOT SUBJECT TO ATTACHMENT TO SATISFY JUDGMENT AGAINST A FOREIGN STATE UNLESS PLAINTIFF OVERCOMES PRESUMPTION OF INDEPENDENT STATUS--Hercaire Int'l, Inc. v. Argentina, 821 F.2d 559(11th Cir. 1987).

UNITED STATES DISTRICT COURT HAS SUBJECT MATTER JURISDICTION OVER MEXICAN CONSULAR OFFICIALS FOR THEIR ALLEGED ATTEMPTS TO SUPPRESS CRITICAL DEMONSTRATIONS OUTSIDE MEXICAN CONSULATE IN …

Case Digest, Law Review Staff

Vanderbilt Journal of Transnational Law

Neither Private Refugee Assistance Agency Nor its Members have Standing to Contest U.S. Interdiction of Foreign Vessels on High Seas Carrying Undocumented Aliens Haitian Refugee Center v. Gracey, No. 85-5258, slip op. (D.C. Cir. Jan. 9, 1987).

Separation of Citizen Children from Illegal Alien Parents Should be Considered when Determining Extreme Hardship Deportation Proceedings -Cerillo-Perez v. INS, 55 U.S.L.W.2457 (9th Cir. 1987).

California State Court's Exercise of Personal Jurisdiction over Japanese Manufacturer to Indemnify Taiwanese Company is Unreasonable and Unfair in Violation of Due Process. Asahi Metal Industry Co. v. Superior Court of California, 107 S. Ct.1026 (1987).

Nondiscriminatory Ad …

Looking A Gift-Horse In The Mouth: Some Observations And Suggestions For Improving Internal Revenue Code Section 1244, Henry F. Johnson, Mark W. Cochran

Faculty Articles

Most investors who contemplate a new business venture concentrate on the positive financial aspects of the business. Few investors realize that a thorough tax plan for a prospective business must also account for the contingency of failure. Since the failure of a business venture will, in some way, result in a taxable event, the conscientious corporate planner must devise a strategy that will utilize the losses incurred in order to achieve the most advantageous tax result. Internal Revenue Code section 1244 is not new, not particularly complex, and not fraught with misfortune for taxpayers failing to meet its provisions. This …

Books Received, Law Review Staff

Vanderbilt Journal of Transnational Law

Books Received

The Human Rights of Aliens in Contemporary International Law By Richard B. Lillich Dover, New Hampshire: Manchester University Press, 1985. Pp. xii, 126. $38.00

Banking on the Act of State By Carsten Thomas Ebenroth Universitdtsverlag Konstanz Gmbh: 1985. Pp. 101.DM66,80.

The Iran-United States Claims Tribunal, 1981-1983 Edited by Richard B. Lillich Charlottesville, Virginia: The University Press of Virginia, 1985. Pp. viii, 156. $25.00

Emerging Standards of International Trade and Investment Edited by Seymour J. Rubin and Gary Clyde Hufbauer Totowa, New Jersey: Rowman & Allanheld, 1984. Pp. ix,196

The World of International Tax Planning By Milton Grundy New …

Retroactivity Revisited, Michael J. Graetz

Faculty Scholarship

In three prior articles, I considered transitional problems of changes the tax law. My general analysis and its specific application to the adoption of a consumption tax were criticized last year in this journal by Avishai Shachar. By taking liabilities explicitly into account in considering tax transition rules, Shachar extended the fundamental principles generated by my theory of legal transitions. Shachar, however, misunderstood or mischaracterized much of my earlier work.

In this comment, I respond briefly to Shachar's criticisms. In Part I, I set out the context and conclusions of my general theory and suggest that Shachar agrees with its …

Tax Reform During President Reagan’S First Four Years: A Selective Bibliography, Michael G. Chiorazzi

Articles

No abstract provided.

Irish Tax Law And The Foreign Investor, Conor Crowley, Paul Mcgowan

Vanderbilt Journal of Transnational Law

For over twenty-five years, successive Irish Governments have actively sought and encouraged foreign investment in Ireland. With the exception of the insurance industry, Irish statutes grant foreigners the same rights as citizens of Ireland to establish whatever type of business they desire. A minimum native Irish interest in any business is required only for the issue or transfer of shares to, or the establishment of, a business branch operation by nonresidents. Although these transactions require Exchange Control approval, that approval is usually a formality for investments expected to bring an economic benefit to Ireland.

United States Investment In Ireland, Eugene P. Fanning

Vanderbilt Journal of Transnational Law

This Article will examine in general the structure of the Irish Government relating to foreign investment, and describe the role of the government agencies that provide incentives for foreign direct investments. The Article will focus on the negotiation process between those government agencies and foreign investors, and examine the typical investment contract entered into by United States investors. The Article will also describe some important aspects of the typical forms of direct investment in Ireland: manufacturing, service industry, and joint venture investments. This Article will examine the concept of tax-advantaged lending in Ireland, Ireland's foreign exchange control regulations, and its …

State Taxation Of Foreign Source Income Through Worldwide Combined Reporting, Thomas C. Pearson

Vanderbilt Journal of Transnational Law

The primary alternative to worldwide combined reporting is the method used by the United States Government--the arm's length method of taxing foreign source income. Following the explanation of the arm's length method, this Note will outline briefly the due process and commerce clause limitations on a state's jurisdiction to tax and will describe the methods states have chosen to apportion the business income of a unitary business in order to comply with the commerce clause. The impact of worldwide combined reporting depends upon the apportionment formula adopted by the state and the state's definition of the terms "unitary business" and …

To Praise The Estate Tax, Not To Bury It, Michael J. Graetz

Faculty Scholarship

For several decades, total revenues raised by estate and gift taxes have roughly equaled those raised by excise taxes on alcohol and tobacco. Yet no law journal has ever asked me to write on alcohol or tobacco excise taxes. The law firms of America do not routinely have divisions devoted to excise tax planning. We do not hear of the suffering of widows and orphans (or even of farmers and small businesses) because of alcohol and tobacco taxes. Philosophers and economists do not routinely debate the merits of such taxes. Perhaps most significantly, increases in such excise taxes do not …

Case Digest, Law Review Staff

Vanderbilt Journal of Transnational Law

EMPLOYEE WHO SPENDS "SOME PORTION OF WORK TIME IN MARITIME ACTIVITIES" IS AN "EMPLOYEE" COVERED BY THE LONGSHOREMEN'S AND WORKERS' COMPENSATION ACT-Schwabenland v.Sanger Boats, 683 F.2d 309 (9th Cir. 1982)

UNITED STATES CARRIAGE OF GOODS BY SEA ACT EXEMPTS DEFENDANT FROM LIABILITY FOR SHIP DAMAGE INCURRED WHILE DISCHARGING CARGO--Seven Seas Transportation Ltd. v. Pacifico Union Marina Corp. [1982] 2 Lloyd's L.R. 465

IMMIGRATION AND NATURALIZATION SERVICE DISTRICT DIRECTOR IS ENTITLED TO BROAD DISCRETION IN WEIGHING CRITERIA FOR PAROLE DETERMINATION OF UNADMITTED ALIENS--Bertrand v. Sava,684 F.2d 204 (2d Cir. 1982)

THE RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT DOES NOT APPLY TO …

Legal Issues Relating To The Canadian National Energy Program, Jean-Paul Lacasse

Vanderbilt Journal of Transnational Law

Since its unveiling on October 28, 1980, Canada's National Energy Program has been commented upon abundantly in government circles, newspaper articles, trade magazines, and financial industry seminars, drawing both oil industry and foreign reactions. It has received less notice in scholarly publications, however, perhaps because it is a complex and continuously changing program that did not become effective until legislation was enacted. The purpose of this Article is to sketch a broad picture of the National Energy Program (NEP) while focusing on its Canadianization aspects, the new oil and gas taxation situation, and the Program's various transnational law implications. As …

Case Digest, Law Review Staff

Vanderbilt Journal of Transnational Law

APPLICATION OF UNITED STATES LAW TO A FOREIGN SEAMAN'S SUIT DEPENDS UPON THE SUBSTANTIALITY OF THE FOREIGN DEFENDANT'S CONTACTS WITH THE UNITED STATES--Szumlicz v. Norwegian America Line, Inc., 698 F.2d 1192 (11th Cir. 1983).

RECOVERY PURSUANT TO THE FISHERMEN'S PROTECTIVE ACT FOR LOSSES RESULTING FROM SEIZURE OF VESSLS FISHING IN DISPUTED WATERS Is NOT LIMITED TO CITIZENS AND RESIDENT ALIENS OF THE UNITED STATES-CrUZ V. Zapata Ocean Resources, Inc., 695 F.2d 428 (9th Cir. 1982).

UNITED STATES SUPPORT OF CANADIAN SEARCH OF UNITED STATES VESSEL ON THE HIGH SEAS DID NOT VIOLATE DEFENDANT'S FOURTH AMENDMENT RIGHTS--United States v. Hensel, 699 …

Books Received, Law Review Staff

Vanderbilt Journal of Transnational Law

Casebook on Carriage by Sea.

By E.R. Hardy Ivamy

London: Lloyd's of London Press, 1982. Pp. xxxix, 203. £11.50.

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Casebook on Shipping Law

By E.R. Hardy Ivamy

London: Lloyd's of London Press, 1982. Pp. xxx, 205. £11.50.

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Regional Development Agencies in Europe

Edited by Douglas Yuill

Hampshire, England: Gower, 1982. Pp. vii, 449.$44.50.

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United States Trade Policy Legislation: A Canadian View

By Rodney de C. Grey

Montreal: The Institute for Research on Public Policy, 1982. Pp. xvii, 130. $7.95.

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Transfer of Technology: U.S. Multinationals and Eastern Europe

By Marilyn L. Liebrenz

New York: Praeger Publishers, 1982. …

United States Employment Taxation Of German Nationals Working In The United States, John L. Gornall, Jr., Kevin Conboy

Vanderbilt Journal of Transnational Law

This Article begins with a discussion of the general application of FICA, SECA, and FUTA to nonresident aliens. Knowledge of the ordinary United States employment taxation scheme is necessary for an understanding of how the totalization agreement works.

The second part of this Article explains how totalization agreements between the United States and certain foreign countries--including the Federal Republic of Germany--have altered the United States employment taxation of nonresident aliens. These agreements generally provide the following: (1) the foreign worker and employer may pay taxes and receive benefits from either the home country or the temporary host country, but in …

The 1982 Minimum Tax Amendments As A First Step In The Transition To A "Flat-Rate" Tax, Michael J. Graetz

Faculty Scholarship

The massive body of tax legislation enacted in the first two years of the Reagan Administration offers little guidance for predicting the future direction of United States tax policy. Dramatically different Congressional coalitions – each led by the President – passed by very narrow margins the nation's largest tax reduction (the Economic Recovery Tax Act of 1981) and then the next year enacted the largest peacetime tax increase (the Tax Equity and Fiscal Responsibility Act of 1982). In each case, short-term political and fiscal concerns dominated the debates. The 1981 legislation reduced taxes in an effort to stimulate economic activity …

Fair Market Value In The Tax Law: Replacement Value Or Liquidation Value, Daniel S. Goldberg

Faculty Scholarship

No abstract provided.

Books Received, Journal Staff

Vanderbilt Journal of Transnational Law

Books Received

Utilization of Outer Space and International Law

Gijsbertha C.M. Reijnen.

Amsterdam and New York: Elsevier Scientific Publishing Company, 1981. Pp. 179, $69.75.

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International Estate Planning

William H. Newton, III.

Colorado Springs: Shepard's/McGraw-Hill Company, 1981. Pp. 614.

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International Tax Avoidance and Evasion, Colloquy of the Council of Europe, Strasbourg, 1980

Publication 31, Publications of the International Bureau of Fiscal Documentation Amsterdam: International Bureau of Fiscal Documentation, 1981. Pp.184, Dfl. 65.00.

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Fiscal Reform in Bolivia: Final Report on the Bolivian Mission on Tax Reform Richard A. Musgrave

Cambridge: Harvard Law School International Tax Program, 1981. Pp. 593, …

Dubious Interpretative Rules For Construing Federal Taxing Statutes, Richard A. Westin

Law Faculty Scholarly Articles

Knowing even a substantial portion of the Internal Revenue Code of 1954 is a major achievement. Divining how the courts might react to a complex tax transaction is also terribly difficult, but for this ability lawyers are often well-rewarded on earth. The tools of this esoteric trade include a mass of interpretative rules of a most uncertain nature, as sophisticated tax advisors are well aware. This article discusses the application and limits of a litany of the interpretative rules. The rules are frequently applicable outside the tax field, but the following study is confined to their application to tax decisions. …

Tax Certiorari Proceedings And The Present Real Property Tax System In New York City, Mark A. Willis

Fordham Urban Law Journal

This article examines the way the tax system in New York City contrasts sharply with the New York state uniform tax system that requires all real property to be assessed at full market value and within a single jurisdiction, taxed at the same statutory rate. The author finds that properties in the city are assessed at differing percentages of market value, resulting in wide differences in effective tax rates, particularly between residential and non-residential properties. The author posits that a switch by the city to a uniform tax system would result in major reallocation of the tax burden among the …

New York's Tax And Debt Limits And Classified Property Tax Assessments: Time For A Constitutional Amendment?, Alan J. Weiss

Fordham Urban Law Journal

This Comment addresses the proposed changes in 1981 to New York's Real Property Tax Law, which would change the law that states all property must be assessed for taxation at its full value. The author posits that this change may have the unintended effect on the manner in which local government borrowing and taxing powers are restricted by the state constitution, thus possibly substantially reducing the amount of revenue local governments may obtain by borrowing and taxing. It first analyzes the effect of a modification of the assessment standard on New York's constitutional borrowing and taxing restrictions, which were adopted …