Taxation-Federal Commons^™

I.R.C. Section 71: Breaking Up Is Hard To Do, John A. Lynch Jr.

Duquesne Law Review

The author believes that applying the provisions of the Internal Revenue Code governing the tax treatment of payments made incident to separation and divorce has become complicated and unpredictable. In this article, Professor Lynch examines how I.R.C. sections 71 and 215 have developed, given congressional intent, with respect to the definition of an obligation of support, the differentiation between a support obligation and a property interest, and the periodic payment requirement. He concludes with suggestions aimed at simplifying the law with respect to these payments.

Accrual Of Gambling Debts Under Internal Revenue Code Section 451, Michigan Law Review

Michigan Law Review

This Note examines whether an accrual-basis taxpayer must include a legally unenforceable claim in taxable income when it is executed or satisfied. Section I of the Note interprets the "all events test" to require measurement of the likelihood of payment of a debt at the time it is executed: If payment is sufficiently certain, the debt must be accrued. The section concludes that the casinos must include the outstanding markers as income in the year of their execution, and cannot postpone their inclusion until the debts are repaid. Section II argues that accrual-method taxpayers are entitled to use a "bad …

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, …

Of No Interest: Truth, Substance, And Bargain Borrowing, Joseph W. Jacobs

Florida State University Law Review

No abstract provided.

Stock Redemptions: The Standards For Qualifying As A Purchase Under Section 302(B)., Douglas A. Kahn

Articles

This Article discusses the requirements of section 302(b) for characterizing a stock redemption as a purchase rather than as a dividend equivalent. The focus is primarily on two issues: (1) whether the election authorized by section 302(c)(2) to waive family attribution rules should be available to an entity such as a trust or estate; and (2) the determination of the standards to be applied in resolving whether a redemption is "not essentially equivalent to a dividend" so that section 302(b)(1) is applicable.

Book Reviews, Lawrence M. Friedman, Allaire U. Karzon

Vanderbilt Law Review

The Politics of Justice: Lower Federal Judicial Selection and the Second Party System - Book Author: Kermit L. Hall; Book Reviewed by Lawrence M. Friedman

In The Politics of Justice, Kermit L. Hall, a history professor at Wayne State University, takes a look at the way Presidents from Jackson through Buchanan picked judges for the federal district courts and for the territories. There were 240 such appointments during the period studied...

There is something of a literature on the selection process,"although Hall's book does fill a rather glaring hole. The tale Hall tells rings true if we ignore a few …

The Continuing Saga Of Prepaid Feed Expense: The Fat Lady Has Not Sung, James D. Wright, Nancy E. Wright

Florida State University Law Review

No abstract provided.

Section 302(C)(2): Opportunities And Pitfalls, Michael A. Jones

Florida State University Law Review

No abstract provided.

I.R.C. § 302(B)(1): Dividend Equivalency After United States V. Davis, Ronald L. Nelson

Florida State University Law Review

No abstract provided.

The Haitian Vacation: The Applicability Of Sham Doctrine To Year-End Divorces, Michigan Law Review

Michigan Law Review

This Note examines the propriety of applying the sham doctrine to tax-motivated divorces. Section I outlines the evolution of the sham doctrine from its exposition in Gregory v. Helvering through its expression in two different tests for commercial transactions. Section II then studies the relationship between state divorce law and the marital status provisions of the Internal Revenue Code to demonstrate the clear congressional preference for incorporating state law by reference rather than creating an independent federal law of marriage. It also examines the history of the 1969 Tax Reform Act in a vain effort to discern a congressional desire …

Capital Gains And Losses: A Primer (Part Two), Thomas J. Gallagher, Jr.

Florida State University Law Review

No abstract provided.

Taxation Of Foreign-Earned Income In Kind: Henry Taxpayer Goes To Japan, Carole Silver Adler

Indiana Law Journal

No abstract provided.

Capital Gains And Losses: A Primer (Part One), Thomas J. Gallagher, Jr.

Florida State University Law Review

No abstract provided.

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 …

An Approach To Income Tax Simplification, Fred W. Peel

University of Arkansas at Little Rock Law Review

No abstract provided.

Hill Farrer & Burrill, 67 T.C. 411 (1976), David Brian Mursten

Florida State University Law Review

Profit Sharing- NEW DEFINITION OF A PARTNERSHIP "PROFITS INTEREST" DISQUALIFIES AN OTHERWISE QUALIFIED PROFIT SHARING PLAN.

Reducing Legal Noise: A Comment On Clark, The Morphogenesis Of Subchapter C: An Essay In Statutory Evolution And Reform, William D. Popkin

Articles by Maurer Faculty

No abstract provided.

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 …

Deduction Of Traveling Expenses By The Two-Worker Family -- An Inquiry Into The Role Of The Courts In Interpreting The Federal Tax Law, William D. Popkin

Articles by Maurer Faculty

Professor Popkin urges that courts interpret section 162 of the Internal Revenue Code, which permits a deduction for business expenses, also to permit a two-worker family to deduct that part of their transportation costs and living expenses attributable to a second job. After tracing the current state of the law, he contends that the implicit assumption of the Code-that married taxpayers live together and constitute a single consumption unit-should allow deduction of some commuting costs and living expenses, much as a single taxpayer is allowed a deduction for transportation to and living expenses at a secondary place of business. Last, …

Federal Taxation Of The Assignment Of Life Insurance, Douglas A. Kahn, Lawrence W. Waggoner

Articles

The most litigated estate tax issue concerning life insurance is whether the proceeds should be included in the insured's gross estate. This question usually is governed by section 2042 of the Internal Revenue Code of 1954, the estate tax provision directed specifically at life insurance. While the Tax Reform Act of 1976 wrought enormous changes in many areas of estate taxation, Congress did not change section 2042. Thus the several unresolved questions concerning the interpretation of that section remain unsettled. But the question of the includability of life insurance proceeds in the gross estate of the insured is not always …

The Tax Consequences Of Inter Vivos Charitable Contributions After December 31, 1969 Under Section 170, Olin R. Melchionna Jr.

University of Richmond Law Review

To give and live to give again has always been the American way. Traditionally, Americans contribute to those charitable institutions and associations which effectuate their benevolent, philanthropic desires. Many individuals believe the funding of charitable institutions should be primarily by direct contributions from the private sector as opposed to federal and state government subsidies. This view is supported by the federal income, I gift and estate tax deductions.

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 …

A Definition Of "Liabilities" In Code Sections 357 And 358(D), Douglas A. Kahn, Dale A. Oesterle

Articles

Internal Revenue Code section 351(a) provides that no gain or loss shall be recognized if property is transferred to a corporation solely in exchange for its stock or securities and the transferors control the corporation immediately after the exchange. If, in addition to receiving stock or securities in an exchange that would otherwise qualify for section 351 treatment, a transferor receives other property or money -- "boot" -- any realized gain is recognized up to the amount of the money and the fair market value of the other property received. The transferee corporation's assumption of the transferor's liabilities or its …

The Real Estate Investment Trust: State Tax, Tort, And Contract Liabilities Of The Trust, Trustee, And Shareholder, Michigan Law Review

Michigan Law Review

This Comment will attempt to alert potential investors in and trustees of REITs to the full extent of the liabilities that they could suffer for contract debts incurred in the name of the trust and torts committed by trust personnel. Since state tax considerations also play a significant role in investment decisions, the manner in which each state taxes the REIT and its shareholders on income derived from property and business in that state will also be investigated. Finally, a rational path out of the morass created by current state law will be articulated in order to prompt renewed discussion …

Deferred Compensation Arrangements Under Section 83 Of The Internal Revenue Code: Is Restricted Property Still A Viable Means Of Compensation?, Michigan Law Review

Michigan Law Review

When faced with the problem of compensating key executives, employers have tended to avoid the exclusive use of current cash compensation, since this would result in an immediate and substantial income tax to highly paid employees. Deferred compensation plans have been utilized in order to maximize tax benefits for employees, such as deferred recognition of income and capital gains treatment. Although such plans are structured to meet the needs of the particular employer and employee, several forms of deferred compensation are common. Among these are qualified and unqualified pension, profit-sharing, and stock bonus plans; qualified, restricted, and employee stock purchase …

Section 367: An Enigma, Julie W. Weston

Washington Law Review

Section 367 of the Internal Revenue Code of 1954 was enacted in its original form in 1932 in order to close what Congress considered to be a serious tax loophole available to domestic corporations and individuals carrying on business through the use of foreign corporations or contemplating the use of foreign corporations to realize large gains without paying taxes. The loophole resulted from the operation of the nonrecognition provisions of the Code dealing with the organization and reorganization of corporations. By using these provisions, individuals and corporations—both foreign and domestic—could transfer greatly appreciated property and unrealized profits on a tax-free …

Recent Legislation

University of Richmond Law Review

This is a list of the recent legislation from 1970.

The Tax Benefit Rule, Claim Of Right Restorations, And Annual Accounting: A Cure For The Inconsistencies, John G. Corlew

Vanderbilt Law Review

The Internal Revenue Code is premised on an annual accounting concept which requires the taxpayer to count up his transactions at the end of the year and remit to the Government taxes based on the occurrences of that particular year. In theory this requires disregarding the factors of prior or subsequent taxable years, despite the irrelation to events of the tax year in question. In most instances, annual accounting poses no special problem. When applied to certain items whose tax impact transcends more than a single taxable year,however, inconsistencies and inequities may result. Two instances in which inconsistent tax treatment …

Taxation-Federal Tax Liens--Priority Of Senior Federal Lien Over Local Tax Lien In Mortgage Foreclosure, Samuel J. Mckim Iii

Michigan Law Review

Plaintiff, a first mortgagee, instituted a foreclosure proceeding joining the mortgagors, a second mortgagee, several judgment creditors, and the United States Government. The Government's lien had been recorded subsequently to the first mortgage but had attached prior to the accrual of various local real estate taxes. Plaintiff's motion for summary judgment, that the premises be sold free of the United States lien but subject to all local real property taxes, was granted. After reversal on appeal, the court again granted summary judgment and effected the same distribution, this time by directing that all local real property taxes be paid as …