Articles

Testimony

Testimony of Stefan F. Tucker on Behalf of the Section of Taxation, American Bar Association, Before the Subcommittee on Oversight of the U.S. House of Representatives on the Subject of Revenue Provisions in the President's FY2000 Budget, March 10, 1999

The Section appreciates the opportunity to appear before the Committee today to discuss certain proposals contained in President Clinton's budget for Fiscal Year 2000. Our testimony today will not include comments on each and every proposal in the President's budget. We do anticipate, however, that additional individual comments on various proposals will be submitted in the near future. ...

Testimony of Stefan F. Tucker, Chair, Section of Taxation, Before the ABA Commission on Multidisciplinary Practice, Los Angeles, California, February 4, 1999

Thank you for the invitation and opportunity to appear before you today in my capacity as Chair of the American Bar Association Tax Section. As you may be aware, the Tax Section is one of the largest Sections of the ABA, with about 20,000 members. Our Mission Statement identifies the Tax Section as "the national representative of the legal profession with regard to the tax system." ...

Notes

Portion of Settlement in Personal Injury Case Allocated to Taxable Prejudgment Interest: Rozpad v. Commissioner

In Rozpad v. Commissioner, the First Circuit held that when a settlement in a personal injury case, entered into following a judgment in the case, contains no allocation of damages and prejudgment interest, the Service may allocate a portion of the settlement to interest. The ratio between damages and interest in the prior (although not final) judgment is the proper basis for the Service's allocation. ...

QTIP Election Valid Where the Will Allowed Reduction in the Surviving Spouse's Interest: Estate of Rinaldi v. Commissioner

In Estate of Rinaldi v. United States, the Court of Federal Claims held that the provision in a will allowing the decedent's son to purchase stock from a trust at below fair market value violated section 2056(b)(7)(B)(ii)(I) and (II), and therefore prevented the trust from qualifying for a qualified terminable interest property ("QTIP") marital deduction under section 2056(b)(7). ...

State Law Disclaimer Did Not Prevent the Attachment of Federal Tax Liens to Inherited Property: Drye Family 1995 Trust v. United States

In Drye Family 1995 Trust v. United States, the Eighth Circuit held that an individual's disclaimer of an inheritance for state law purposes did not prevent the attachment of pre-existing federal tax liens to the inheritance under section 6321. There has been some controversy over the effect of disclaimers on federal tax liens, as the Second, Fifth, and Ninth Circuits...

Section 104 Does Not Apply to Disability Payments Made Pursuant to Labor Agreements: Wallace v. United States

In Wallace v. United States, the Seventh Circuit held that disability payments made pursuant to a labor contract are not excludable from gross income under section 104(a)(1) because they were not received under a workmen's compensation act. The court rejected the taxpayer's argument that the state workmen's compensation board's decision to credit the employer for the payments changed them into workmen's compensation. ...

Inventory Shrinkage Estimates Are Not Prohibited by Treasury Regulation Section 1.471-2(d): Wal-Mart Stores v. Commissioner and Dayton Hudson v. Commissioner

In Wal-Mart Stores v. Commissioner, the Eighth Circuit upheld the Tax Court's holding that the Code did not prohibit the use of unverified inventory shrinkage in inventory accounting, if the method of accounting was sound. The court rejected in principle the Service's view that Regulation section 1.471-2(d) required verification by a physical count. ...

Errata