Detail A Weapon From The Past   Oleh:  Quinn, Tina Steward ; Flesher, Tonya K. Jenis: Article from Bulletin/Magazine Dalam koleksi: Journal of Accountancy vol. 194 no. 1 (Jul. 2002), page 65-75. Topik: taxes; weapon; past Ketersediaan Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ85.15 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada     Lihat Detail Induk Isi artikel There’s an adage that if a tax - saving idea sounds too good to be true, it probably is. A number of corporations that participated in a Merrill Lynch tax plan discovered this when the ruling in a 67 - year - old case proved to be their downfall. Gregory v. Helvering, 293 U. S. 465 (1935) was a landmark case - the first of its kind to come before the courts on the question of whether a reorganization took place where the taxpayer had no intent to carry on the existing corporate business, only a desire to minimize taxes. Previously, the courts had always applied a literal interpretation of the law when deciding tax cases. In 1935 the Second Circuit Court of Appeals (in an opinion by Judge Learned Hand) rejected the literal interpretation of the lower court, which had ruled in Mrs. Gregory’s favor because she had complied with the letter of the law in seeking to minimize her tax liability. Hand held that the statute presupposed a continuation of business and this intent was absent in Gregory. He ruled that what had occurred was not a reorganization as Congress intended because the taxpayer had not met the law’s unwritten requirements. The business purpose test originated with Gregory. It was the first time a literal interpretation of the tax law did not prevail. The U. S. Supreme Court affirmed the ruling. The High Cost of Tax Shelters Evidence gathered by the IRS, the Treasury Department and others indicates that the government could be at risk of losing $10 billion annually through abusive corporate tax shelters. Source : U. S. Treasury Department, www.treas.gov. Other concepts that evolved from Gregory, in addition to the business purpose test, include continuity of business, the taxpayer’s right to minimize tax liability, substance over form and the step transaction doctrine. The IRS and the courts still apply many of these tests today. What follows is a discussion of three cases in which the courts applied both the doctrine of substance over form and the business purpose test to expose elaborate tax - avoidance schemes as sham transactions. The warning to CPA s and the taxpayers they represent is that the government can still use the simple concepts in Gregory as major weapons against tax shelters. Opini Anda Klik untuk menuliskan opini Anda tentang koleksi ini! Kembali

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