Cases on Federal Taxation

FEDERAL TAXATION

JOSEPH HENRY BEALE

ROYALL PROFESSOR OF LAW IN

HARVARD UNIVERSITY

AND

ROSWELL MAGILL

ASSOCIATE PROFESSOR OF LAW IN

COLUMBIA UNIVERSITY

NEW YORK
PRENTICE - HALL, INC.

1926

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PREFACE

Although the subject of taxation has only recently been recognized by law schools as having attained sufficient importance to justify separate study, tax questions have been for some years paramount in importance in the determination by business men of the most efficient legal devices to be used in effecting their ends. The recent focusing of interest upon tax problems has resulted in a fairly comprehensive interpretation by judicial decision of the provisions of the various tax laws, particularly, perhaps, of the successive federal revenue acts. Many questions, of course, are still unsettled, and new ones are added with changes in the statutes.

Experience in teaching courses in federal taxation other. wise than by casebooks has convinced us that even so statutory a subject can be properly taught only by the use of cases. The recurrent federal statutes have been based on certain principles which are as capable of deductive development as the principles of the common law. For this reason, the changes likely to be made from time to time in the statutes do not to any considerable extent affect many of the principles contained in the cases. At the same time, the fact that the acts are administered by departmental organizations makes the study of the law and its administration valuable in affording an insight into modern administrative law.

The present casebook is an attempt to collect, particularly for the use of students of law and business, materials for the study of the interpretation and administration of the more important federal tax laws. Since cases are almost uniformly first presented to the Treasury Department for rulings, it appears desirable to acquaint the student with the applicable regulations embodying the official interpretation of the acts. For this reason, considerable excerpts from the regulations have been inserted. The cases have been selected, so far as possible, to cover the more important questions of interpretation which have been presented to courts, particularly those which have a present application.

Since the subject of taxation in general is covered by a separate casebook by Mr. Beale, the cases in this collection have been limited to those dealing with the provisions of the federal revenue acts. Part I, on the income tax, is the work of Mr. Magill; Parts II, III, and IV, on the estate, gift, and capital stock taxes, are the work of Mr. Beale.

J. H. BEALE
Roswell Magill