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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.

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business, tax law, tax avoidance