International Tax Blog

Famous Tax Quotes: From the Brow of Zeus

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quotes are related to Greek mythology: “Royalties do not spring, full-fledged, from a pen or typewriter, like Athena from the brow of Zeus (although many writers wish that they would).” Simenon v. Commr., 44 T.C. 820 (1965) “It is said that Athena sprang full-grown from the brain... Read more →

Famous Tax Quote – Can’t Have Your Cake and Eat It Too

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: [The taxpayer] cannot retain his cake and consume it as well. Eagan v. U.S., 80 F.3d 13 (1st Cir. 1996) Read more →

Famous Tax Quote – Hiding the Pea

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: Our tax system depends upon self assessment and honesty, rather than upon hiding of the pea or forgetful tergiversation. Janis v. Commr., 461 F.3d 1080 (9th Cir. 2006) Read more →

Famous Tax Quote - Expatriation is a Serious Act

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: [E]xpatriation is a serious act that should be undertaken with a full understanding of the consequences. Dacey v. Commr., TC Memo 1992-187. Read more →

Famous Tax Quotes – Morass of United States Tax Laws

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: [T]he morass of the United States tax laws * * * [T]he same words may have different meanings. AMP, Inc. v. U.S., 492 F.Supp. 27 (District Ct. Mid. Dist. Pa. 1979) Read more →

Famous Tax Quotes - Earnings and Profits

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: "[T]he calculation of earnings and profits is not easy or obvious." Welle v. Commr., 140 T.C. __ (2013) Read more →

Famous Tax Quotes - Precedent

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: [T]he age of [certain] holdings [does not] diminish their precedential weight * * * There is simply no merit to the proposition that precedent somehow becomes less binding solely with the passage of time Seggerman Farms v. Commr., 308 F.3d 803 (7th Cir. 2002) Read more →

Famous Tax Quotes - If Rube Goldberg Had Been a Tax Accountant

The following is a quote from the U.S. District Court, D. Massachusetts, regarding a “Structured Trust Advantaged Repackaged Securities” (“STARS”) transaction: [T]he transaction was surpassingly complex and unintuitive; the sort of thing that would have emerged if Rube Goldberg had been a tax accountant. Santander Holdings USA, Inc. v. U.S., 2013-2 U.S.T.C. ¶50,564, (Oct. 17, 2013) Read more →

Famous Tax Quotes - The Form of a Transaction Can Control Tax Consequnces

"[T]he solution of hard tax cases requires something more than the easy generalization that the substance rather than the form of a transaction is determinative of its tax effect. * * * [I]n numerous situations the form by which a transaction is effected does influence or control its tax consequences * * *." Casner v. Commr., 450 F.2d 379 (5th Cir. 1971) Also, "The statute itself exalts form over substance." Chrome Plate, Inc. v. Commr.,... Read more →

Famous Tax Quotes - The IRM Holds No Legal Significance

The following is a quote from the U.S. District Court in Northern California regarding a taxpayer’s reliance on the Internal Revenue Manual: "[T]he IRM holds no legal significance." Hom v. U.S., U.S. District Ct., N. Calif. No. C 13-02243 WHA. Dated: September 30, 2013 The District Court in the Hom case also quotes the Ninth Circuit as follows: "The Internal Revenue Manual does not have the force of law and does not confer rights on... Read more →

Famous Tax Quotes - [Un]Comfortable Degree of Accuracy

The following is a quote from the Tax Court regarding the computation of tax basis of an inherited apartment located in Berlin, Germany: The question, then, is whether * * * we are to deny petitioner any basis * * * because we cannot determine the basis with that comfortable degree of accuracy which is always desirable. We cannot, under proper circumstances, avoid determination of the proper basis for computing a deduction merely because the... Read more →

Famous Tax Quotes - Double Taxation Cannot Always Be Avoided

The following is a quote from the Tax Court regarding the computation of the foreign tax credit limitation: “[Elimination of double taxation is] admittedly the objective of the foreign tax credit. But . . . this objective cannot always be fully achieved.” Perkin-Elmer Corp. v. Commr., 103 T.C. 464 (1994). Read more →

Famous Tax Quotes - "Bureaucrats"

The following is a quote from the Sixth Circuit regarding whether the taxpayer must formally be told "no" by a foreign government bureaucrat: Bureaucrats across the globe have a million ways to convey “No,” without ever having quite to say so. U.S. Padding Corp. v. Commr., 865 F.2d 750 (6th Cir. 1989), aff'g 88 T.C. 177 (1987). Read more →

Famous Tax Quotes - Separate Entity Doctrine

The following is a quote from the U.S. Supreme Court articulating the separate entity doctrine: As a general rule a corporation and its stockholders are deemed separate entities in respect to tax problems. Of course, the rule is subject to the qualification that the separate identity may be disregarded in exceptional situations . . . (Footnotes omitted) New Colonial Ice Company, Inc. v. Helvering, 292 US 435 (1934) Read more →

Accounting Firm "Screw Up"

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: That an accounting firm should so screw up its taxes is the most remarkable feature of the case. (Emphasis in original). Mulcahy, Pauritsch, Salvador & Co., Ltd., v. Commissioner, __ F.3d __ (7th Cir. 2012) Hat tip: Steve Odem Read more →

Same Boat But Another Ocean

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: If 105% of gross receipts * * * does not satisfy the requirement, then 225% is in the same boat but another ocean. PPL Corp. and Subs. v. Commr., ___ F.3d ___ (3d Cir. 2011) Read more →

Transactions Between Related Parties Merit Extra Scrutiny

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: [T]ransactions between related parties merit extra scrutiny. Merck & Co. v. U.S., ___ F.3d ___ (3d Cir. 2011) Read more →

Valuation Is Not an Exact Science

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: The determination of the fair market value of stock depends upon the circumstances in the particular case. However, since valuation is not an exact science, reasonableness must be exercised in making determinations of value. Rev. Rul. 77-245 Read more →

Very definitely . . . probably

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: "The court very definitely indicated that a different conclusion would probably have been reached if the amount retained was clearly in excess of a reasonable amount necessary to liquidate liabilities." Rev. Rul. 57-518 Read more →

Congress Can "label a thing income and tax it"

Continuing our series on Famous Tax Quotes (quotes from court opinions with language that is colorful or that concisely states an important tax principle) today's tax quote is: ". . . [A]lthough the "Congress cannot make a thing income which is not so in fact," it can label a thing income and tax it, so long as it acts within its constitutional authority, which includes not only the Sixteenth Amendment but also Articl 1, Sections... Read more →

Seduced by a Siren Song of Symmetry

Continuing our series on Famous Tax Quotes (quotes from court opinions with language that is colorful or that concisely states an important tax principle) today's tax quote is: ". . . [W]e refuse to be seduced by respondent's siren song of symmetry and our analysis convinces us that the logic does not require us to adopt respondent's postion." Gleason Works v. Commissioner, 58 TC 464 (1972) Read more →

Drawing Lines

Continuing our series on Famous Tax Quotes (quotes from court opinions with language that is colorful or that concisely states an important tax principle), today's tax quote is: Regulation . . . often requires drawing lines. . . . The [Treasury] Department reasonably concluded that its . . . rule would “improve administrability,” . . . and it thereby “has avoided the wasteful litigation and continuing uncertainty that would inevitably accompany any purely case-by-case approach”... Read more →

Too Good To Be True . . .

Continuing our series on Famous Tax Quotes (quotes from court opinions with language that is colorful or that concisely states an important tax principle), today's tax quote is: [A] reasonably prudent person should investigate claims when they are likely “too good to be true.” Neonatology Associates v. Commissioner, 299 F.3d 221 (3rd Cir. 2002) (relating to a taxpayer’s obligation to make a proper investigation or exercise due diligence to verify a transaction’s tax legitimacy in... Read more →

A “Hat Problem”

Continuing our series on Famous Tax Quotes (quotes from court opinions with language that is colorful or that concisely states an important tax principle) today's tax quote is: We agree with respondent that petitioners have a “hat problem”. Between 1982 and 1991, [various individuals] held positions as officers, directors, attorneys in fact, powers of attorney, or trustees in the listed companies . . . The individuals were working in several different capacities concurrently, and it... Read more →

Famous Tax Quote #37 - Is Fido a dog?

Continuing our series on Famous Tax Quotes (quotes from court opinions with language that is colorful or that concisely states an important tax principle) today's tax quote is: For instance, assume an ordinance taxes the keeping of pet dogs. Jo is assessed a tax for keeping Fido, and Jo appeals. The question “Is Fido a dog?” may be factual or it may be legal. If Jo claims only that Fido is a really a cat,... Read more →