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Learned Hand's Contribution to the Law of Tax Avoidance, 77 Yale Law Journal 440 (1968)


The extent to which taxpayers are free to minimize their tax obligations

by choosing one legal form rather than another as the vehicle for a

transaction or relationship has preoccupied lawyers and administrators

since the inception of the federal income tax. There is a common

awareness among practitioners that different legal procedures will

often lead to different tax consequences, although in economic terms

the end results are essentially the same. In selecting the form in which

a proposed business transaction shall be cast, therefore, it is said to

be vital for the tax planner to consider and evaluate "all of the possible

routes to his client's destination," and the ability to generate

a multiplicity of formal alternatives, however sterile the exercise in

any other context, is usually thought to be the true mark of a creative

tax adviser. But one hastens to add that the planning job does not

end there. The Internal Revenue Service does not regard itself in

every case as bound by the taxpayer's choice of form, so that a plan

which is "jigsaw cut" to the letter of the law may nevertheless be challenged

by the government for one reason or another. Hence the ability

to perceive alternatives in great number can sometimes be a dangerous

intelligence unless it is combined with a power to forecast the likely

reaction of the Service and the courts to each of the alternatives in view.

Date of Authorship for this Version


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