World of Taxes
In an effort to improve public engagement and modernize the image of its internal revenue service (also known as the “Servicio de Impuestos Internos”) this South American country known for its desert terrain and mountainous geography has an official revenue service mascot named “Ivo the Chinchilla.”
Chile
In this Rev. Rul. A, a 100% owner of a disregarded entity sells a 50% interest to B, who will become a new member. B's purchase of 50% of A's ownership interest in the LLC is treated as the purchase of a 50% interest in each of the LLC's assets, which are treated as held directly by A for federal tax purposes. Immediately thereafter, A and B are treated as contributing their respective interests in those assets to a partnership in exchange for ownership interests in the partnership
Rev. Rul. 99-5 Situation 1
This President, once was the recipient of a hurled cabbage during one of his campaign speeches, recommended the passage of the sixteenth amendment, which would give Congress the power to collect taxes on income "from whatever source derived," which includes wages, corporate profits, and other gains.
William Howard Taft
This terms describes targeted deviations from a theoretical “base line tax” as opposed to directly allocating and injecting money into the economy.
Tax Subsidiary or Tax Expenditure
This section addresses the capital gain treatment of so-called “applicable partnership interests” – partnership interests received by investment fund managers and other service providers in connection with the performance of services in certain investment-related businesses.
IRC 1061
Once nicknamed the “Iron Lady”, this British stateswoman introduced the tax known as the “Community Charge” or the “Poll Tax” which resulted in mass protests by local Anti-Poll Tax Unions (APTUs) across Scotland and England in the 1990s.
Margaret Thatacher
In this Rev. Rul., X (Acquiror) formed Y (Transitory Merger Sub). In a failed reverse triangular merger, the T (Target) merged into Y, with T shareholders receiving 30% cash and 70% stock of X, followed by a merger of T into X. This Rev. Rul., supplanting the “Kimbell Diamond Doctrine” ruled that this was not a “qualified stock purchase” as described under Section 338(h)(3), and no Section 338 election could be made.
Rev. Rul. 2001-46, Situation 1
This case holding that a stock dividend to shareholders was not taxable, famously (and problematically) stated the income was not taxable until realized. This case was revisited in the 2024 Supreme Court case, Moore v. United States.
Eisner v. Macomber
This principle is closely associated with progressive taxation, that taxpayers with a greater ability to pay should pay more tax at a higher tax rate.
Vertical Equity
This section allows for the nonrecognition of gain or loss on the transfer of securities if the transferor receives identical securities back.
IRC 1058
Named after this flying insect, this form of corporate reorganization enables Canadian corporations to effect a spin-off on a tax-deferred basis under Canadian tax law.
Butterfly
This revenue ruling addresses the manner in which boot is allocated in a section 351 exchange. In that ruling, boot is allocated based on the relative fair market value of the shareholder's contributed assets regardless of whether or not a particular transferred asset has any actual built-in gain.
Rev. Rul. 68-55
Following the enactment of the Sixteenth Amendment, the top income tax rates have fluctuated over time, peaking at 94%. In 1935, Franklin D. Roosevelt enacted an income tax known as the “Soak the Rich Tax” which applied an up to 79% income tax rate on earners with an excess of $5 million of income, a sum so high that only one person was thought to be subject to the tax. Who was this person?
John D. Rockefeller
It’s almost that time of the year again – April 15, 2025 when, as American citizens and permanent residents, we have the privilege to calculate, prepare and file our income tax returns with the IRS. This theoretical principle assumes that we will report our income and pay taxes honestly and accurately, without the need for enforcement actions by the government.
Voluntary Compliance
This subsection provides that tangible personal property of a foreign corporation, which is held under a lease with a term of at least 12 months shall be treated as an asset actually held by such foreign corporation.
IRC 1298(d)
These factories operate in Mexico under a special tax and customs regime, which benefit from exemptions from import duties and the ability to operate without being deemed a "permanent establishment" for tax purposes.
Maquiladoras
In the context of the IRC 355(e) with respect to a prohibited “plan (or series of transactions)” to acquire a 50% interest, this Rev. Rul. stated that publicly announcing a distribution followed by acquisition discussions after the announcement, but prior to the spin-off, will not be considered as part of a prohibited plan.
Rev. Rul. 2005-65
During the era of the Supreme Court which we now refer to as the “Lochner-era”, in a case involving taxes imposed on a taxpayer which exported tobacco from the Philippine Islands, this dissenting Supreme Court Justice once stated that “Taxes are what we pay for civilized society.”
Oliver Wendell Homes, Jr.
No, it’s not a joke – this type of graph illustrates the theoretical relationship between tax rates and the amount of revenue a government collects. It suggests that if tax rates are too low or too high, the government's revenue will be reduced, meaning there is an optimal tax rate that maximizes revenue.
Laffer Curve
This subsection provides an “anti-stuffing” exception which is designed to prevent taxpayers from artificially inflating the value of a loss corporation prior to an ownership change in order to increase the annual limitation on the use of pre-change losses.
IRC 382(l)
This country, whose name is derived from the Italianized version of “Red Sea”, is the second of only two countries in the world that has a “worldwide” tax system on its citizens.
Eritrea
On facts similar to Unilever’s acquisition of National Starch (See INDOPCO v. Commissioner), in what is known as the “dummy structure” the IRS permitted the nonrecognition of gain under Section 351 as part of a larger acquisitive transaction in which the non-selling 14% shareholder of Target avoided a taxable sale, while the 86% selling public effected a taxable sale (thus avoiding the COI problem which would have otherwise arisen).
Rev. Rul. 84-71
In 1796, in one of the first instances of judicial review by the Supreme Court, the Court held that a yearly tax on carriages was not a direct tax and therefore did not violate the apportionment clause of the Constitution. This same case was also cited over 200 years later by Chief Justice Roberts in NFIB v. Sebelius to rule that the “individual mandate” under the Affordable Care Act was not a direct tax.
Hylton v. United States
The step transaction doctrine is considered to apply in differing levels of strength depending on the context (for example, it’s at its strongest in the context of reorganizations) – what are those three levels of strength?
Binding Commitment, Mutual Interdependence and End Result (Intent).
Reflecting the administrative difficulties associated with taxing earnings of certain casino games, this subsection exempts from FDAP the proceeds of the following games – blackjack, baccarat, craps, roulette, and big-6 wheel.
IRC 871(j)