TITLE EXAMINATIONS IN MICHIGAN AS AFFECTED BY THE GENERAL FEDERAL TAX LIEN

There are three federal tax liens which serve to haunt the average title examiner. The first of these is pitched at the wholesale level; it is a shotgun type lien applicable to all federal taxes and is now provided for by section 3670 of the Internal Revenue Code. The second and third are not nearly so sweeping. One is confined to the federal estate tax, being provided for by section 827 of the code, while the other reinforces the federal gift tax and is the product of section 1009 of the code. The discussion which follows deals only with the first, the most general, of the three liens, and then only insofar as it affects the examination of titles in Michigan. The present inquiry is circumscribed by this geographical limitation only because Michigan stands almost alone in failing to come to an agreement with the federal authorities as to the requirements which should be satisfied before such a lien will be valid as against good faith purchasers. Accordingly, title examiners of this state who encounter this lien face problems which are not shared by practitioners in other states

A Tax Formula to Restore the Historical Effects of the antitrust Treble Damage Provisions (An Open Letter to the Senate Antitrust and Monopoly Committee)

Following the well-publicized criminal conviction of a major segment of our electrical equipment industry for conspiring to fix and maintain prices, terms, and conditions of sales made to both private industry and the government, almost 2,000 private antitrust treble damage suits were brought against those convicted. In July, 1964, when at least 1,500 of these suits were still pending, the Commissioner of Internal Revenue publicly announced that amounts paid or incurred by the defendants in those actions to private plaintiffs, either pursuant to judgment or by way of settlement, together with legal expenses pertaining thereto, were deductible as ordinary and necessary business expenses under section 162(a) of the Code. In his ruling, the Commissioner construed the treble damage provision to be nothing more than a formula seized upon by Congress to assure plaintiffs of complete recovery for all injury suffered, not as a means of meting out punishment qua punishment to wrongdoers. Amounts paid in response to civil damage suits brought by the United States, however, were ruled not deductible. Although bearing a resemblance to restitution, these amounts, because paid over to the public\u27s own representative, were deemed more closely akin to another class of payments-namely, fines or penalties-which the Supreme Court specifically had held to be nondeductible

Personal, Living or Family Matters and the Value Added Tax

No tax is ever implemented in a manner which is perfectly responsive to the logical implications of its basic purpose. VAT is no exception. Those who foster this tax basically intend that ultimate tax incidence be suffered only by individuals and then only in the degree to which they dip into society\u27s pool of consumer-type goods and services. But their implementing legislation is always designed to fall short of reaching all consumer-type goods and services. Ullman\u27s proposed Tax Restructuring Act of 1979 would have been no exception. Under it, a substantial proportion of all such benefits actually would have been excluded

Federal Tax Administration and the Small Taxpayer

The actual or supposed complexity of substantive federal tax law has generated two unresolved administrative by-products of peculiar importance in the case of small taxpayers. In each of these circumstances the Internal Revenue Service (and in one, the Congress) has tended to default on its programmatic responsibility to facilitate payment by small taxpayers of no less and no more than they owe under the tax law. For too long and to too large an extent, these taxpayers, although completely bewildered and devoid of self-confidence in the conduct of their tax affairs, have had to fend for themselves, both at return time, and later-at the point of an audit-in dealing with personnel of the Internal Revenue Service (IRS or Service). In the first instance, concerning a small taxpayer\u27s dilemma at return time, the principal adverse consequence is suffered by the tax system itself (or by all other taxpayers viewed in aggregate), and the cumulative prejudice has now reached alarming proportions. In the second instance, of the relatively few small taxpayers audited after having filed returns, only the individual small taxpayer actually undergoing audit is likely to suffer prejudice from his dilemma. Both circumstances warrant remedial action

REALIZATION OF INCOME THROUGH CANCELLATIONS, MODIFICATIONS, AND BARGAIN PURCHASES OF INDEBTEDNESS: II

Introductory note. That some matters relating to the particular consideration received by a debtor on incurring an obligation would affect the applicability of the Kirby case to a saving derived by him from a subsequent cancellation or other bargain discharge was one of the first propositions settled by the Supreme Court. For the Kirby case itself justified the earlier immunity which had been granted the apparently solvent Kerbaugh-Empire Company on the ground that the funds which the latter had borrowed were lost in the venture for which its loan had been procured

Internal Revenue Service Conflict Resolution Procedures

Based on the introduction to Professor Wright\u27s new work: Needed Changes in Internal Revenue Service Conflict Resolution Procedures, published by the American Bar Foundation, which provided funds to assist the study. Within the Internal Revenue Service, disputable income tax questions may be resolved at any one of several administrative levels. Each such tier differs from the others in terms of authority. In aggregate, however, they are expected to resolve issues efficiently, conveniently to both government and taxpayers, with justice in each case, uniformity among cases, and with a minimal burden being imposed on the judiciary

TITLE EXAMINATIONS AS AFFECTED BY THE FEDERAL GIFT AND ESTATE TAX LIENS

The Treasury Department may look to either of two security devices to protect its rights with respect to federal gift and estate taxes. The most sweeping of these devices-the general federal tax lien, a discussion of which appeared in the last issue of this Review, has been complemented in the case of each of these taxes by special liens, presumably designed to meet what apparently were considered peculiar needs. It is with the impact of these special liens on the work of title examiners that this article is concerned

You, the Law, and the Changing Future

Speech given by UM professor on Senior Day for December graduating class, December 11, 197

REALIZATION OF INCOME THROUGH CANCELLATIONS, MODIFICATIONS, AND BARGAIN PURCHASES OF INDEBTEDNESS: I

Treasury regulations bearing on the tax consequence of a cancellation, modification, or bargain purchase of one\u27s outstanding indebtedness date back to those issued in connection with the Revenue Act of 1918. Thirteen years elapsed after their issuance before the Supreme Court in 1931 finally approved, at least with respect to the bargain purchase with which it was concerned, the principal which the regulations incorporated, namely, that the savings effected by such debtors could, as a constitutional as well as a statutory matter, involve the realization of taxable income. Competing interpretations of that decision, the government insisting on a sweeping application of its philosophy while debtors quite naturally argued that it should be confined pretty much to its facts, forced the courts, principally the lower ones, to inquire into the significance of each of the major aspects of those situations where some kind of gain is derived by a debtor from an adjustment or bargain discharge of his indebtedness

Luke K. Cooperrider

A Tribute to Luke K. Cooperride