Hester Prynne, Lydia Bennet, and Section 306 Stock: The Concept of Tainting in the American Novel, the British Novel, and the Internal Revenue Code

Did Nathaniel Hawthorne\u27s novel, The Scarlet Letter, inspire Section 306 of the Internal Revenue Code? This code provision adopts a peculiarly Hawthorne-like solution to a tax avoidance scheme known as the preferred stock bailout. Section 306 taints the stock used in the scheme as Section 306 stock. Special rules then govern all subsequent dispositions of the tainted stock. With its concept of a taint that can dog a stock from acquisition to disposition, Section 306 might have been designed by a novelist rather than a tax technician

Misassigning Income: The Supreme Court and Attorneys\u27 Fees

This past term\u27s Supreme Court decision in Commissioner v. Banks and Commissioner v. Banaitis distorts foundational principles, known as assignment of income law, which help identify the person who must report income for federal tax purposes. The Court holds that assignment of income principles require a plaintiff to report as income the portion of a recovery paid to the plaintiffs attorney as a contingent fee. As a result, the plaintiff is taxed at excessively high rates, which may in some cases equal or exceed a confiscatory 100%. Taxing the plaintiff on the attorney-fee portion of a recovery also undermines the objective of federal fee-shifting statutes, which is to enable a prevailing plaintiff to act as a private attorney general by employing an attorney without cost. Although recent legislation changes the result in the future for specified categories of litigation, including a wide variety of civil rights and employment claims, there remain significant classes of cases, including nonphysical torts, physical torts with punitive damages, and environmental statutes with fee-shifting provisions, to which this recent legislation does not apply and in which plaintiffs will continue to be taxed unfairly under the Court\u27s decision

Ramanujan Graphs in Polynomial Time

The recent work by Marcus, Spielman and Srivastava proves the existence of bipartite Ramanujan (multi)graphs of all degrees and all sizes. However, that paper did not provide a polynomial time algorithm to actually compute such graphs. Here, we provide a polynomial time algorithm to compute certain expected characteristic polynomials related to this construction. This leads to a deterministic polynomial time algorithm to compute bipartite Ramanujan (multi)graphs of all degrees and all sizes

Words, Words, Words!!! Teaching the Language of Tax

The basic course in federal income tax is usually a challenge for both teacher and student because so many different and difficult things are being taught at once: a prolix and opaque statute; complex financial transactions; and economic, political, and social analysis of the effects of the tax law. In addition, I believe that a teacher of tax must be a teacher of language, focusing explicitly and self-consciously on the ambiguous, imprecise, and confusing words that are embedded in tax law and discourse and that constitute a significant obstacle for students taking the basic course in federal income taxation

Thurgood Marshall: Tax Lawyer

During his twenty-four years on the Supreme Court, Justice Thurgood Marshall wrote better opinions on the law of federal income taxation than any of his fellow Justices. This is, of course, a subjective appraisal which others may dispute. Nevertheless, from two decades of teaching federal income taxation, I am convinced of the quality of Marshall\u27s work

Conditioning U.S. Security Assistance on Human Rights Practices

In the United States, with its government of separated powers and functions, it is the executive branch, and in particular the Department of State, that bears responsibility for implementing legislation on foreign relations. The success of implementation will depend on political decisions, involving competing national interests, as well as on institutional and personal considerations of I he officials concerned. Inevitably, there is a gap between legislation and execution, especially when the Executive is not wholly sympathetic to the law. The gap may even devour legislated policies as the Executive refuses to take Care that the Laws be faithfully executed, and bureaucratic and personal considerations distort judgments, exploit the generality and uncertainty of language, and lead to abuse of discretion. A notable instance of this problem has been executive implementation of legislation on international human rights

Building a Commercial Practice

Commercial real estate law practice includes but is not limited to everything from new construction to complex exchanges, from strip shopping centers with a few stores to modern regional shopping centers, from the small two or three unit office building to the large downtown and suburban office/residential condo developments, and the sale of any type of business property. While it appears there is room for thousands of attorneys to handle the major transactions described above, this is generally not the case. It is well known that the commercial real estate bar in most large metropolitan areas is a rather select group. Is there a place in this group for the young lawyer

Apportioning Basis: Partial Sales, Bargain Sales and the Realization Principle

The Internal Revenue Code generally taxes appreciation in the value of property only on realization, defined to mean when property is sold or exchanged. In measuring gain on a sale or exchange, an allowance must be made for the return of capital, referred to as basis. Basis offsets the amount realized-that is, the price received for property-in order to calculate taxable gain