DOCSLIB.ORG

Equitable Recoupment: Revisiting an Old and Inconsistent Remedy

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Equitable Recoupment: Revisiting an Old and Inconsistent Remedy Fordham Law Review Volume 65 Issue 2 Article 11 1996 Equitable Recoupment: Revisiting an Old and Inconsistent Remedy Camilla E. Watson Follow this and additional works at: https://ir.lawnet.fordham.edu/flr Part of the Law Commons Recommended Citation Camilla E. Watson, Equitable Recoupment: Revisiting an Old and Inconsistent Remedy , 65 Fordham L. Rev. 691 (1996). Available at: https://ir.lawnet.fordham.edu/flr/vol65/iss2/11 This Article is brought to you for free and open access by FLASH: The Fordham Law Archive of Scholarship and History. It has been accepted for inclusion in Fordham Law Review by an authorized editor of FLASH: The Fordham Law Archive of Scholarship and History. For more information, please contact [email protected]. Equitable Recoupment: Revisiting an Old and Inconsistent Remedy Cover Page Footnote Associate Professor, University of Georgia School of Law. I wish to thank Brookes Billman, Walter Hellerstein, Margaret V. Sachs, and Alan Watson for their helpful comments on an earlier draft of this Article. I also wish to thank Patricia Bryant and David Gunderson for their research assistance. This article is available in Fordham Law Review: https://ir.lawnet.fordham.edu/flr/vol65/iss2/11 EQUITABLE RECOUPMENT: REVISITING AN OLD AND INCONSISTENT REMEDY Camilla E. Watson* TABLE OF CONTENTS INTRODUCTION ................................................. 692 I. RELATED EQUITABLE REMEDIES AND THEIR USE IN FEDERAL TAX LITIGATION ............................. 699 A. Estoppel and Quasi-Estoppel........................ 700 B. Equitable Tolling .................................... 708 C. Election ............................................. 708 D. Duty of Consistency................................. 710 II. RECOUPMENT AND SETOFF ............................. 713 A . Setoff ............................................... 714 B. The Equitable Recoupment Decisions of the Supreme Court ...................................... 717 1. Bull v. United States ............................ 717 a. The Nature of the Remedy .................. 719 b. Bull Contrasted With Lewis ................. 721 2. Stone v. W hite .................................. 722 a. The Balance of Equities..................... 723 1) Public Policy ............................ 724 2) The Actions of the Party Seeking Recoupment ............................ 724 3) The Actions of the Opposing Party: Are There Factors for or Against the Use of Recoupment? .... 725 b. Elements Applied in Stone .................. 725 3. McEachern v. Rose ............................. 726 4. Rothensies v. Electric Storage Battery Co ........ 731 III. SUBSEQUENT CASES AND THE RESULTING ELEMENTS .. 734 A. Single Transaction................................... 735 1. Ford v. United States ............................ 736 2. Wilmington Trust Co. v. United States ........... 739 B. Single Taxpayer or Identity of Interest ............... 743 C. Two Different Taxes ................................. 744 IV. EQUITABLE RECOUPMENT UNDER PROPOSED NEW ELEMENTS .............................................. 747 A. Is There an Adequate Legal Remedy? ............... 748 * Associate Professor, University of Georgia School of Law. I wish to thank Brookes Billman, Walter Hellerstein, Margaret V. Sachs, and Alan Watson for their helpful comments on an earlier draft of this Article. I also wish to thank Patricia Bryant and David Gunderson for their research assistance. 692 FORDHAM LAW REVIEW [Vol. 65 B. Is There an Inconsistent Theory of Taxation, as a Matter of Law, by the Opposing Party on a Single Transaction Producinga Double Tax, or a Double Benefit, on the Same Dollars?....................... 753 1. Inconsistency ................................... 753 2. Single Transaction .............................. 754 3. Identity of Interest .............................. 758 C. Does a Consideration of the Equities Favor the Application of Recoupment? ........................ 758 1. Unjust Enrichment ............................. 761 2. Is There a Defense to the Application of the Rem edy? ....... ................................ 763 a. Laches ...................................... 763 b. Unclean Hands ............................. 765 V. THE USE OF RECOUPMENT BY THE GOVERNMENT ...... 766 VI. PROCEDURAL AND JURISDICTIONAL PROBLEMS ......... 771 A. Equitable Recoupment as a Defense ................. 773 B. The Tax Court and Equity Jurisdiction.............. 775 C. Administrative Claims and Settlements .............. 781 VII. RECENT CASES AND COMMENTS: CONTINUING CONFUSION ............................................. 782 A. Hall v. United States ............................... 782 B. Fairley v. United States ............................. 784 CONCLUSION ................................................... 786 "It will not do to decide the same question one way between one set of litigants and the opposite way between another."' INTRODUCTION The federal tax system operates in a paradoxical way. On the one hand, it functions as a system of voluntary compliance,' but, on the other hand, it is based on statutory rules, many of which are so complex and intricate that they are comprehensible only to a tax ex- pert.3 Because of this paradox and the important role of the system in 1. Benjamin N. Cardozo, The Nature of the Judicial Process 33 (1921), quoted in Estate of Carter v. Commissioner, 453 F.2d 61, 64 (2d Cir. 1971). 2. Although this is the popular belief, there are contrary views. See, e.g., Kenneth L. Harris, On Requiring the Correction of Error Under the Federal Tax Law, 42 Tax Law. 515, 515 (1989) (arguing that the system is actually one of coercion because of the legal obligations to file and to pay, and because of the system of penalties that serve as a backup to these obligations); Tom Herman, Tax Report: A Special Sum- mary and Forecastof Federaland State Tax Developments, Wall St. J., June 29, 1994, at Al (quoting statement of IRS Chief Margaret Milner Richardson who referred to a sarcastic letter she received because she frequently refers to the tax system as "volun- tary": "He told me I must be from Mars if I really believe the U.S. has a voluntary tax system"). 3. See 26 U.S.C. §§ 1-9722 (1994) [hereinafter I.R.C.]. 1996] EQUITABLE RECOUPMENT 693 the functioning of the federal government, it is crucial that the public perceive the system to be fair.4 Thus, general principles are incorpo- rated into the statutory scheme that are designed to promote fairness while the system is preserved as an all-important source of revenue. One example of such a principle is the statute of limitations.5 The statute bars both the government and the taxpayer from asserting a6 claim against the other after the expiration of a specified time period. The policy behind such a time bar is not only fairness but also admin- istrative efficiency. From the government's perspective, the statute of limitations af- fords a final determination of revenue available for a particular period without threat of a refund claim by the taxpayer. From the taxpayers' perspective, the statute eliminates the duty to maintain records indefi- 4. See generally M.H. Hoeflich, Of Reason, Gamesmanship, and Taxes: A Juris- prudentialand Games TheoreticalApproach to the Problem of Voluntary Compliance, 2 Am. J. Tax Pol'y 9, 11-12 (1983) (arguing that tax reform is necessary not just to increase revenues, but "to deal with the widespread perception amongst the public that... the wealthy are able to avoid their fair share of the tax burden"). 5. See generally Charles W. Davis, Playing Safe with Statutes of Limitations, 16 N.Y.U. Ann. Inst. Fed. Tax'n 453 (1958) (discussing the application of the statute of limitations in federal tax cases). The statute may run in favor of either the taxpayer or the government. Although it is designed to be a neutral final settlement, in the public interest, the statute is generally construed strictly in favor of the government. Id. at 453; accord Badaracco v. Commissioner, 464 U.S. 386, 398 (1984) ("[W]hen courts construe a statute of limitations, [they] 'must receive a strict construction in favor of the Government.' (quoting E.I. DuPont de Nemours & Co. v. Davis, 264 U.S. 456, 462 (1924))); see also Bowers v. New York & Albany lighterage Co., 273 U.S. 346. 350 (1927) ("[T]he public interest should not be prejudiced by the default or negli- gence of public officers."). 6. The general statutory period for assessment is three years from the later of the due date of the return or the date the return is filed. I.R.C. § 6501(a)-(b) (1994). The statutory period for filing a claim for refund or credit of an overpayment is the later of three years from the date the return is filed or two years from the date of payment. I.R.C. § 6511(a) (1994); see also Commissioner v. Lundy, 116 S. Ct. 647, 657 (1996) (holding that two-year period applies if taxpayer receives a notice of deficiency and has not yet filed a return); Richards v. Commissioner, 37 F.3d 587, 590-91 & n.7 (10th Cir. 1994) (discussing jurisdictional distinctions between the Tax Court and the Fed- eral District Court of initially filing a return within three years after payment), cert. denied, 116 S. Ct. 813 (1996); Nunziato v. United States, No. Civ. 95-30205, 1996 VL 437538, at *2 (D. Mass. May 7, 1996) (distinguishing the two-year and three-year stat- utory periods). Under some circumstances, however, the normal statutory period may be extended. See eg., I.R.C. § 6501(e)(1)(A) (1994) (providing six-year period for omission of sub- stantial item of income);
Load more

Recommended publications
  • Basic Income Tax, Second Edition © William P
    Basic Income Tax, Second Edition © William P. Kratzke This work is licensed under a Creative Commons-ShareAlike 4.0 International License Original source: The Center for Computer-Assisted Legal Instruction (CALI) http://www.cali.org/books/basic-income-tax-second-edition Contents Basic Income Tax, Second Edition ................................................................................1 About the Author .....................................................................................................................1 Notices .......................................................................................................................................1 About CALI eLangdell Press.....................................................................................................2 Preface ......................................................................................................................................3 Chapter 1 The Government Raises Money: Introduction to Some Basic Concepts of Taxes and Taxing Income .........................................................................................4 1.1 Introduction to Some Basic Concepts..............................................................................4 The Ramsey Principle ......................................................................................................6 1.2 Taxing Income.....................................................................................................................8 Multiple-Choice ................................................................................................................9
    [Show full text]
  • Preface (PDF Download)
    Preface Ensure student success with the Focus Casebook Series. THE FOCUS APPROACH In a law office, when a new associate attorney is being asked to assist a supervis- ing attorney with a legal matter in which the associate has no prior experience, it is common for the supervising attorney to provide the associate with a recently closed case file involving the same legal issues so that the associate can see and learn from the closed file to assist more effectively with the new matter. This exper- iential approach is at the heart of the Focus Casebook Series. Additional hands-on features, such as Real Life Applications, Applying the Concepts, and Federal Income Taxation in Practice provide more opportunities for critical analysis and application of concepts covered in the chapters. Professors can assign problem-solving questions as well as exercises on drafting documents and preparing appropriate filings. CONTENT SNAPSHOT This casebook focuses on clear communication of federal income tax fundamen- tals. On completion of the course, students will have not only the comprehensive substantive knowledge base needed for advanced study in the federal tax arena, but also a healthy degree of familiarity with various tax-related resources. The student will emerge with the ability to perform well in a clinical or practice setting. ■ Chapter 1 is introductory and includes basic background with respect to the constitutional authority to tax income and the roles of Congress, the Treasury Department, and the Internal Revenue Service. The chapter also covers standard tax legislation procedure and key sources of tax law and guidance. ■ Chapter 2 addresses the concept of realization and the current definition of “income.” It also introduces foundational tax terminology (e.g., basis, realiza- tion, recognition, etc.) and the fundamentals of the tax computation process.
    [Show full text]
  • Realization, Recognition, Reconciliation, Rationality and the Structure of the Federal Income Tax System
    Michigan Law Review Volume 88 Issue 7 1990 Realization, Recognition, Reconciliation, Rationality and the Structure of the Federal Income Tax System Patricia D. White University of Michigan Law School Follow this and additional works at: https://repository.law.umich.edu/mlr Part of the Taxation-Federal Commons, and the Tax Law Commons Recommended Citation Patricia D. White, Realization, Recognition, Reconciliation, Rationality and the Structure of the Federal Income Tax System, 88 MICH. L. REV. 2034 (1990). Available at: https://repository.law.umich.edu/mlr/vol88/iss7/3 This Article is brought to you for free and open access by the Michigan Law Review at University of Michigan Law School Scholarship Repository. It has been accepted for inclusion in Michigan Law Review by an authorized editor of University of Michigan Law School Scholarship Repository. For more information, please contact [email protected]. REALIZATION, RECOGNITION, RECONCILIATION, RATIONALITY AND THE STRUCTURE OF THE FEDERAL INCOME TAX SYSTEM Patricia D. White* TABLE OF CONTENTS I. THE BASIC STRUCTURE OF ANY TAX SYSTEM •••••••••• 2040 A. The Role of Realization. 2044 B. The Role of Reconciliation . 2053 II. THE DESCRIPTIVE POWER OF RECONCILIATION • • • • • • • • 2057 A. The Claim of Right Doctrine. 2057 B. The Tax Benefit Rule. 2060 C. Recapture Provisions . 2064 III. THE NORMATIVE ROLE OF RECONCILIATION .•••••••••• 2071 A. Simple Bo"owing . 2072 B. Purchase Money Mortgages, Footnote 37, and the Issue in Tufts ..................................... 2075 1. The Implications of Coherence . 2075 2. A Significant Cost of Coherence. 2088 IV. POSTSCRIPT TO PARTS II AND III: WHEN To RECONCILE • • • • • . • • • • • • • • • • • • • • • • • . • • • • • • • • • • • • • • • • • • • • 2093 CONCLUSION • • • • • • • • • • • • • • • • . • • • • • . • • • • • . • • • • • • • . • • • • • • • • • • 2095 Federal income tax reform is much talked about these days.
    [Show full text]
  • Executive Pay Clawbacks and Their Taxation
    Boston University School of Law Scholarly Commons at Boston University School of Law Faculty Scholarship 2021 Executive Pay Clawbacks and Their Taxation David Walker Boston Univeristy School of Law Follow this and additional works at: https://scholarship.law.bu.edu/faculty_scholarship Part of the Business Organizations Law Commons, and the Tax Law Commons Recommended Citation David Walker, Executive Pay Clawbacks and Their Taxation, No. 21-01 Boston University School of Law, Law and Economics Research Paper (2021). Available at: https://scholarship.law.bu.edu/faculty_scholarship/1051 This Article is brought to you for free and open access by Scholarly Commons at Boston University School of Law. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Scholarly Commons at Boston University School of Law. For more information, please contact [email protected]. EXECUTIVE PAY CLAWBACKS AND THEIR TAXATION Boston University School of Law Law & Economics Series Paper No. 21-01 2021* David I. Walker Boston University School of Law *Forthcoming, 24 Fla. Tax Rev. (2021) Electronic copy available at: https://ssrn.com/abstract=3773046 EXECUTIVE PAY CLAWBACKS AND THEIR TAXATION FORTHCOMING, 24 FLA. TAX REV. (2021) DAVID I. WALKER* ABSTRACT Executive pay clawback provisions require executives to repay previously received compensation under certain circumstances, such as a downward adjustment to the financial results upon which their incentive pay was predicated. The use of these provisions is on the rise, and the SEC
    [Show full text]
  • Publication 538, Accounting Periods and Methods
    Userid: CPM Schema: tipx Leadpct: 100% Pt. size: 10 Draft Ok to Print AH XSL/XML Fileid: … ons/P538/201901/A/XML/Cycle04/source (Init. & Date) _______ Page 1 of 21 15:46 - 28-Feb-2019 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Department of the Treasury Contents Internal Revenue Service Future Developments ....................... 1 Publication 538 Introduction .............................. 1 (Rev. January 2019) Photographs of Missing Children .............. 2 Cat. No. 15068G Accounting Periods ........................ 2 Calendar Year .......................... 2 Fiscal Year ............................. 3 Accounting Short Tax Year .......................... 3 Improper Tax Year ....................... 4 Periods and Change in Tax Year ...................... 4 Individuals ............................. 4 Partnerships, S Corporations, and Personal Methods Service Corporations (PSCs) .............. 5 Corporations (Other Than S Corporations and PSCs) .............................. 7 Accounting Methods ....................... 8 Cash Method ........................... 8 Accrual Method ........................ 10 Inventories ............................ 13 Change in Accounting Method .............. 18 How To Get Tax Help ...................... 19 Future Developments For the latest information about developments related to Pub. 538, such as legislation enacted after it was published, go to IRS.gov/Pub538. What’s New Small business taxpayers. Effective for tax years beginning
    [Show full text]
  • Tax Planning with Life Insurance William L
    College of William & Mary Law School William & Mary Law School Scholarship Repository William & Mary Annual Tax Conference Conferences, Events, and Lectures 1987 Tax Planning with Life Insurance William L. Haas Repository Citation Haas, William L., "Tax Planning with Life Insurance" (1987). William & Mary Annual Tax Conference. 574. https://scholarship.law.wm.edu/tax/574 Copyright c 1987 by the authors. This article is brought to you by the William & Mary Law School Scholarship Repository. https://scholarship.law.wm.edu/tax 1986 TAX REFORM - THE AFTERMATH WEALTH TRANSFER TAX PLANNING WITH LIFE INSURANCE By: William L. Haas Tax and Investment Group 33 Bedford Street Lexington, MA 02173 617 861-9720 The Tax Reform Act of 1986 maintains the importance of insurance for risk protection and it enhances it's value for savings, investment, and tax purposes. 1. Tax reform as it relates to the insurance company and product had been significantly addressed by TEFRA in 1982 and DEFRA in 1984. The industry was able to escape the most threatening reform proposals suggested for 1986 legislation. a. The most important proposal threatening the industry was to impose a tax on inside build up of cash values. This proposal was defeated. But changes in the area are still anticipated. b. The most threatening proposal which was enacted was probably the limitation on interest deduction for financing insurance. 2. The 1986 legislation adversely affected products which directly or indirectly competed in markets where the insurance product is now anitipated to make major inroads. a. Traditional tax shelters offering current deductions appear a thing of the passt.
    [Show full text]
  • The Fabricated Unwind Doctrine: the True Meaning of Penn V. Robertson John Prebble
    Hastings Business Law Journal Volume 7 Article 9 Number 1 Winter 2011 Winter 2011 The fabricated Unwind Doctrine: the True Meaning of Penn v. Robertson John Prebble Chye-Ching Huang Follow this and additional works at: https://repository.uchastings.edu/ hastings_business_law_journal Part of the Business Organizations Law Commons Recommended Citation John Prebble and Chye-Ching Huang, The fabricated Unwind Doctrine: the True Meaning of Penn v. Robertson, 7 Hastings Bus. L.J. 117 (2011). Available at: https://repository.uchastings.edu/hastings_business_law_journal/vol7/iss1/9 This Article is brought to you for free and open access by the Law Journals at UC Hastings Scholarship Repository. It has been accepted for inclusion in Hastings Business Law Journal by an authorized editor of UC Hastings Scholarship Repository. For more information, please contact [email protected]. THE FABRICATED UNWIND DOCTRINE: THE TRUE MEANING OF PENN V ROBERTSONt John Prebble*and Chye-Ching Huang** I. INTRODUCTION AND OVERVIEW Taxpayers routinely rely on the unwind doctrine found in Internal Revenue Service Revenue Ruling 80-58' when they discover that their transactions have unwanted tax consequences. Nowadays, "unwinding" has become a "common if not ubiquitous feature of tax practice."2 This article finds that the unwind doctrine has no firm basis in case law. Instead, the unwind doctrine is an Internal Revenue Service (IRS) fabrication based on the IRS' misinterpretation of the case Penn v. Robertson. Also referred to as the "rescission doctrine,"4 a tax "do-over,"5 or a "tax mulligan,"' the effect of the unwind doctrine is that if you change your mind about a transaction, you can avoid its income tax consequences by returning to the economic status quo ante, so long as you do so by the end t The authors gratefully acknowledge colleagues and correspondents who commented generously on earlier drafts and who responded to questions.
    [Show full text]
  • Constructive Receipt of Income Neil Harl Iowa State University, [email protected]
    Volume 8 | Number 2 Article 1 1-17-1996 Constructive Receipt of Income Neil Harl Iowa State University, [email protected] Follow this and additional works at: http://lib.dr.iastate.edu/aglawdigest Part of the Agricultural and Resource Economics Commons, Agricultural Economics Commons, Agriculture Law Commons, and the Public Economics Commons Recommended Citation Harl, Neil (1996) "Constructive Receipt of Income," Agricultural Law Digest: Vol. 8 : No. 2 , Article 1. Available at: http://lib.dr.iastate.edu/aglawdigest/vol8/iss2/1 This Article is brought to you for free and open access by the Journals at Iowa State University Digital Repository. It has been accepted for inclusion in Agricultural Law Digest by an authorized editor of Iowa State University Digital Repository. For more information, please contact [email protected]. Agricultural Law Digest An Agricultural Law Press Publication Volume 8, No. 2 January 17, 1997 Editor: Robert P. Achenbach, Jr. Contributing Editor Dr. Neil E. Harl, Esq. ISSN 1051-2780 CONSTRUCTIVE RECEIPT OF INCOME — by Neil E. Harl* The doctrine of constructive receipt of income is taxpayer’s attorney requested that the checks be reissued to repeatedly litigated in large part because there is no bright reflect payment in the later year. The ruling held that the line test for when the concept applies.1 Yet the doctrine is amounts were not deemed constructively received in the immensely important to farmers and ranchers on the cash earlier year. The ruling noted that the mere fact that a check method of accounting.2 is issued in one year and received in another does not make the check taxable in the year issued.
    [Show full text]
  • Fall 2018 • Vol
    Texas Tax Lawyer A Tax Journal Fall 2018 • Vol. 46 • No. 1 www.texastaxsection.org TABLE OF CONTENTS FROM OUR LEADER: • The Chair's Message Catherine C. Scheid, Law Offices of Catherine C. Scheid SPECIAL ATTENTION • Apply to the 2019-2020 Leadership Academy • Congratulations to Judge Elizabeth Ann Copeland! ARTICLES: • Business Consolidations: Special Considerations under the Texas Unemployment Compensation Act Scott C. Thompson, Haynes and Boone, LLP • Estate planning subsequent to the enactment of tax reform Audrey Young, RSM US LLP Rebecca Warren, RSM US LLP Carol Warley, RSM US LLP • Divorce and Tax Randall B. Wilhite, Fullenweider Wilhite, P.C. • Recent Developments in Federal Income Taxation: “Recent Developments are just like ancient history, except they happened less long ago” First Wednesday Tax Update, August 1, 2018 Bruce A. McGovern, Professor of Law and Director, Tax Clinic, South Texas College of Law Houston • Recent Developments in Federal Income Taxation: “Recent Developments are just like ancient history, except they happened less long ago” First Wednesday Tax Update, September 5, 2018 1 Bruce A. McGovern, Professor of Law and Director, Tax Clinic, South Texas College of Law Houston • Recent Developments in Federal Income Taxation: “Recent Developments are just like ancient history, except they happened less long ago” First Wednesday Tax Update, October 3, 2018 Bruce A. McGovern, Professor of Law and Director, Tax Clinic, South Texas College of Law Houston PRACTITIONER’S CORNER: • Tax Reform: Now What? Eric Solomon, Ernst
    [Show full text]
  • Us Preimmigration Tax Planning
    US PREIMMIGRATION TAX PLANNING - 12th Annual International Estate Planning Institute March 10, 2016 SUMMER AYERS LEPREE, ESQ. Summer A. LePree, Esq., Partner, Bilzin Sumberg Baena Price & Axelrod, LLP, 1450 Brickell Avenue, Suite 2300, Miami, FL 33137. Telephone: 305-350-7274. E-mail address: [email protected] Summer Ayers LePree is a Partner in Bilzin Sumberg's Tax Group, where she focuses her practice on international taxation. She has extensive experience advising clients on international restructurings, treaty planning techniques, and other international and domestic corporate and partnership tax matters, as well as significant experience with international tax planning and structuring for high net worth private clients, including pre-immigration planning, expatriation, and US income and transfer tax aspects of foreign trusts and estates. Summer has represented clients before the Unites States Tax Court, the Internal Revenue Service, and the United States Treasury. Summer is a frequent speaker and author on various topics in international tax law. She also lectures regularly for the New York University Summer Institute in International Taxation and Federal Tax Institute and sits on panels for various industry organizations, including the American Bar Association and the International Bar Association. Summer was selected by the Daily Business Review for the esteemed 2015 "On the Rise" award, an honor that only 40 South Florida Lawyers under the age of 40 were selected to receive. In addition, Summer was recognized in the 2016 edition of Best Lawyers in America, in the field of Tax Law. She also currently serves as the Vice Chairperson of the United States Activities of Foreigners and Tax Treaties Committee.
    [Show full text]
  • Recent Federal Income Tax Developments Ira B
    College of William & Mary Law School William & Mary Law School Scholarship Repository William & Mary Annual Tax Conference Conferences, Events, and Lectures 1999 Recent Federal Income Tax Developments Ira B. Shepard Repository Citation Shepard, Ira B., "Recent Federal Income Tax Developments" (1999). William & Mary Annual Tax Conference. 374. https://scholarship.law.wm.edu/tax/374 Copyright c 1999 by the authors. This article is brought to you by the William & Mary Law School Scholarship Repository. https://scholarship.law.wm.edu/tax RECENT FEDERAL INCOME TAX DEVELOPMENTS By Ira B. Shepard Professor of Law University of Houston Law Center Houston, Texas 77204 Tele: 713-743-2246 Fax: 713-743-2131 e-mail: ishepardpuh.edu Tennessee Tax Institute December 2, 1999 1. ACCOUNTING A. Accounting Methods 1. TAM 9848001 (7/16/98). Dentist custom-ordered crowns, bridges and dentures from independent laboratories for individual patients. Therefore, he does purchase and sell merchandise inventory. The TAM stated that neither a small year-end inventory nor custom-ordering was sufficient to prevent the accrual method from being required. Nevertheless, the dentist was not required to maintain inventories because the production, purchase or sale of merchandise was not a significant income- producing factor under Reg. § 1.471-1. 2. Updated procedures for taxpayers to obtain automatic consent to change accounting methods. Rev. Proc. 98-60, 1998-51 I.R.B. 16 (12/10/98), clarifying, modifying, amplifyin and superseding Rev. Proc. 97-37, 1997-2 C.B. 455. Updates the procedures by which a taxpayer may obtain automatic consent to change the methods of accounting set forth in the procedure.
    [Show full text]
  • Internal Revenue Service National Office Technical Advice Memorandum
    INTERNAL REVENUE SERVICE NATIONAL OFFICE TECHNICAL ADVICE MEMORANDUM April 13, 2005 Third Party Communication: None Date of Communication: Not Applicable Index (UIL) No.: 61.09-01 CASE-MIS No.: TAM-165634-04 Number: 200632015 Release Date: 8/11/2006 ------------------------- ------------------ ---------------------------------------- Taxpayer's Name: ----------------------------------------------- Taxpayer's Address: -------------------------- --------------------------------- Taxpayer's Identification No ---------------- Year(s) Involved: --------------- Date of Conference: ------------------- LEGEND: Parent = ----------------------------------------------------- Taxpayer = ------------------------------------------------------------------------------------------ --------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------ Sub 1 = ------------------------------------------ B = ----------------------------- Utility 1 = ------------------------------ Utility 2 = ------------------------------- Utility 3 = -------------------------------- Utility 4 = ----------------------------------. Agency = ---------------------------------------------------------------- State X = ------------- State Y = --------------- City Z = ----------------- W = ---------------------------------------------------------------------------- R Account = -------------------------------------- TAM-165634-04 2
    [Show full text]