Taxation-Federal Commons^™

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.

Child Care, Work, And The Federal Income Tax, Brian Wolfman

Georgetown Law Faculty Publications and Other Works

This article explores the federal income tax treatment of employment-related child care expenses. It takes both a theoretical and historical approach, examining the various ways in which the Code has dealt with child care in relation to conventional tax notions and values at play in the community at large.

Part II outlines the history of the Code's various childcare provisions. It is a critical analysis whose purpose is to decide whether any of the provisions, which have existed, can be explained by a particular tax theory.

Part III asks whether employment-related childcare expenses can be characterized as "business" or "personal" …

Deducting The Cost Of Smoking Cessation Programs Under Internal Revenue Code Section 213, Michigan Law Review

Michigan Law Review

This Note argues that enrollment fees for a smoking cessation program should be classified as deductible medical expenses. Part I defends this conclusion without questioning the accepted interpretation of section 213(e). Recent medical evidence indicates that the nicotine addiction that cessation program patients seek to break is itself a disease. And even prior to the onset of more serious health consequences, sustained cigarette smoking significantly impairs the functioning of the lungs and heart. Under this analysis, enrollment fees should be deductible as expenses for the treatment of an existing disease or defect, and as "amounts paid . . . for …

Tax Treatment Of Previously Expensed Assets In Corporate Liquidations, Michigan Law Review

Michigan Law Review

This Note argues that although the Tennessee-Carolina majority adopts overbroad language and ignores established tax principles, a more careful refinement of its theory will yield the same proper result, without, in most situations, departing from accepted principles. The proper inquiry must focus first on whether the corporation has received any benefit, and then on whether that gain should be exempted by the nonrecognition provisions of section 336, or on any other basis. Part I of this Note examines these questions from a theoretical perspective, and concludes that expensed assets remaining at the time of liquidation give rise to corporate income, …

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—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 …

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, …

Distributions In Kind And The Dividends Paid Deduction--Conflict In The Circuits, Dwight Drake

Articles

The dividends paid deduction provided for in section 561 of the Internal Revenue Code is of vital importance to any corporation that is subject to the accumulated earnings tax or the personal holding company tax. Either of these taxes, if applicable, is imposed in addition to the federal income taxes otherwise payable by the corporation.

Since the accumulated earnings tax is substantial and the personal holding company tax is downright confiscatory, a corporation must do whatever is necessary legally to avoid paying these additional taxes. A corporation subject to either of the taxes generally can avoid them only by taking …

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 …

The Employee's Home Office Deduction: The Problem Of Duplicate Facilities, Michigan Law Review

Michigan Law Review

The Internal Revenue Code expressly and impliedly allows taxpayers to deduct many business-related expenses that also fill personal needs. However, the deductibility of home office expenses under the general provision for business expenses, section 162 of the Code, has been a frequent subject of litigation. Section 162 requires that the employee establish that the expenses were "ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business." Since it is well established that working for an employer is carrying on a trade or business within the statute, in order to secure a deduction …

Civil Rights--Segregation--Federal Income Tax: Exemptions And Deductions--The Validity Of Tax Benefits To Private Segregated Schools, Michigan Law Review

Michigan Law Review

In granting the preliminary injunction, the district court found that plaintiffs were asserting a substantial constitutional claim and had a reasonable possibility of success. Balancing the equities of the parties, the court decided that the possibility of significant adverse effect on the Commissioner and schools awaiting tax benefits was not great and was in any event far outweighed by the harm which could result from a denial of the requested relief pendente lite. Thus, the court found that the threat of irreparable injury justified the issuance of a preliminary injunction. The propriety of the court's decision to grant a preliminary …

Personal Vs. Business Expenses: A Comment On Professor Klein's Approach, William D. Popkin

Articles by Maurer Faculty

No abstract provided.

Income Tax--Recovered Property Previously Deducted Included In Gross Income In Year Of Recovery--Alice Phelan Sullivan Corp. V. United States, Michigan Law Review

Michigan Law Review

In 1989 and 1940 the corporate taxpayer claimed as charitable deductions the value of two parcels of realty which it had donated to a charitable organization subject to the condition that they be used solely for religious or educational purposes. Having decided not to use the gifts in the manner specified, the donee reconveyed them to the taxpayer in 1957. The taxpayer failed to reflect this recovery in its gross income for that year. The Commissioner of Internal Revenue, however, determined that under section 111 of the 1954 Internal Revenue Code (Code) the taxpayer's gross income reported in its 1957 …

Tax Practitioners Forum, Michigan Law Review

Michigan Law Review

A Review of TAX PRACTITIONERS FORUM

The Treatment For Federal Income Tax Purposes Of Errors In The Deduction Of Other Taxes, Robert C. Brown

Articles by Maurer Faculty

No abstract provided.

The Time For Taking Deductions For Losses And Bad Debts For Income Tax Purposes, Robert C. Brown

Articles by Maurer Faculty

No abstract provided.

Reduction Of Tax Exemptions By Reason Of Receipt Of Tax-Exempt Income, Robert C. Brown

Articles by Maurer Faculty

No abstract provided.