Tax Law

3 Key excerpts on "Tax Law"

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  eBook - ePub

  Tax Law Design and Drafting, Volume 1

  • Victor Thuronyi(Author)
  • 1996(Publication Date)
  • INTERNATIONAL MONETARY FUND

    (Publisher)

  The often broad way in which U.S. tax courts interpret the Tax Law should be contrasted with the very close style of legal drafting used in the Internal Revenue Code, which prima facie obliges the courts to make decisions on very narrow rules. In spite of this, U.S. courts stick to their judicial doctrines, probably because of the common law tradition of legal analysis, where interpreting facts and rules with common sense plays an important role.

  I. Antiabuse Legislation

  Closely connected with the problems of interpretation of Tax Laws are statutory measures introduced to provide general rules for the application of tax legislation in situations where taxpayers structure transactions in a peculiar legal form so as to obtain a tax benefit unintended by the Tax Law. Tax Laws being general prescriptions, it is inevitable that the legislator cannot foresee all situations in a rapidly changing world, thereby leaving gaps and loopholes in any Tax Law.137 Also, in many cases, the Tax Law allows the taxpayer a choice between different legal alternatives to reach factual objectives that are identical or very similar, but with different tax consequences. Depending on the legal choice made by the taxpayer, the same factual objective will result in a lower or higher tax burden. The two basically related questions raised here for the application and interpretation of the Tax Law are (1) what are the respective roles of the legislator and the courts in filling the gaps and loopholes, and (2) should the Tax Law attach different tax consequences to different legal situations that result in the same or a very similar factual situation?

  The answer to these two questions may be clearer if the so-called antiabuse legislation is considered in the wider context of tax evasion and tax avoidance. In practically all developed tax systems, a distinction is made between tax evasion and tax avoidance. Tax evasion or tax fraud138

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  eBook - ePub

  The Tools & Techniques of Income Tax Planning, 7th Edition

  • Stephan Leimberg, Michael S. Jackson, Jay Katz, John J Scroggin, Robert S Keebler(Authors)
  • 2020(Publication Date)
  • The National Underwriter Company

    (Publisher)

  SOURCES OF INCOME Tax Law FUNDAMENTALS

  CHAPTER 1

  Clearly anyone who has prepared a tax return or dealt with tax issues realizes that the federal income Tax Laws can be hard to comprehend and difficult to apply. The sheer number of tax provisions and their complexity can be somewhat daunting. Even the IRS, the nation’s tax collection agency, acknowledges that “for anyone not familiar with the inner workings of tax administration, the array of IRS guidance may seem, well, a little puzzling at first glance.”1 Since Albert Einstein expressed his concern that Tax Laws were among the most complex of all human tasks, this statement by the IRS could be one of the great understatements of all time!

  Yet, all tax professionals as well as financial planners must have a good general working knowledge of the Tax Laws in order to effectively assist clients. This chapter identifies the sources of federal Tax Law, the relative importance of each federal Tax Law source, and how to identify a source by its citation.

  Obviously, federal Tax Law begins with the Internal Revenue Code (Code), a codification of tax statutes enacted by Congress. As discussed later in the chapter, the IRS and the Treasury Department promulgate regulations interpreting the Code providing guidance to taxpayers who are required to comply with the Tax Law. Regulations generally have the force of law. Disputes between the IRS and taxpayers are often litigated. Although the binding effect of judicial decisions varies with the level of the court, judicial interpretation of Tax Law is often impactful. Finally, on a less formal basis, the IRS issues revenue ruling, revenue procedures and other pronouncements that provide additional guidance for taxpayers. Although this type of guidance lacks the force and effect of law, it provides useful help to taxpayers.

  Additionally, legislative history and tax publications are also helpful secondary authorities that offer explanations and interpretations of the Tax Law. Although these sources are not binding, they are helpful tools to assist the taxpayer.

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  eBook - ePub

  Taxation by Political Inertia

  Financing the Growth of Government in Britain

  • Richard Rose, Terence Karran(Authors)
  • 2018(Publication Date)
  • Routledge

    (Publisher)

  Given a choice between acting according to a political or fiscal logic, politicians have no difficulty in following their political instincts and accepting the inertia of established taxes, whatever the logical arguments for making other decisions. If the political circumstances make inaction intolerable (Rose, 1972), then any policy – logical or contradictory – may appear acceptable to end an intolerable situation. If fiscal, social and other arguments imply major political benefits from a positive change in taxation, then action may follow. But this does not detract from the essential point, that the rationale must be political. As Richard Neustadt once remarked: ‘No President can have an economic policy; all his policies must be political.’

  Many Laws

  Laws, like taxes, are plural not singular. Just as a summary statistic of total tax revenue masks the variety of activities involved in collecting particular taxes, so a reference to Tax Law or the statutory basis of taxation makes tax legislation appear simpler than it is.

  Many Laws for Each Tax

  A tax is not normally calculated solely according to a single Act of Parliament; every tax is usually subject to conditions scattered among dozens of different laws. The official Index to the Statutes lists forty-six different Acts of Parliament affecting income and corporation taxes; thirty-four Acts for national insurance; and twenty-nine Acts for rates in England and Wales. Even taxes that raise relatively little money can be the subject of much legislation; 147 different Acts of Parliament affect the calculation of stamp duties, and eighty-six Acts concern death duties (Table 4. 1 ).

  In order to come to grips with tax legislation, one must survey hundreds of Acts of Parliament. A one-volume reference book for Tax Lawyers and accountants, Butterworths UK Tax Guide 1984–85

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