Home      Professor John Potts

Welcome!

About Family Taxation

____Family Taxation picks up where Individual Taxation leaves off. Individual Taxation covers the idea of income and how it is taxed in situations that assume knowledge of who the taxpayer is. Situations that raise the issue of who the taxpayer is, or choice of taxpayer issues, are the subject of Family Taxation. Taxpayer efforts to have others pay the tax, usually at a lower rate, have been varied and creative, and sometimes succcessful. These efforts are usually in the family context. Trusts have often been used, and income taxation of trusts is covered briefly.

____You will be called on randomly to answer questions. _You are expected to have thoughtfully familiarized yourself thoroughly with the materials. _Class attendance and diligent preparation are essential for success in this class, as they are in the practice of law.

____If you would like to talk to me, feel free to catch me or stop by my office. _I will accommodate you on the spot if possible. _Sometimes, something pressing occupies my time._But anything that prevents me from meeting with you is only more urgent, not more important. _There are times when I work in the library or at home. _If you have any trouble at all catching me, send me an email suggesting a time to meet that is convenient for you. _I will probably be available anytime you wish as long as I am not in class.

____Often, students send questions by email. _Feel free to do so. _I'll answer them if I can.

john.potts@valpo.edu

Required Reading

____Klein & Stark, Eds., Selected Sections Federal Income Tax Code and Regulations, Revised ....

____Specific cases, code and regulations sections listed below.

Class attendance

____A one credit course meets once per week. _If you miss a class, you are missing a week of classes.

____If you must miss a class, please notify me by email as soon as you reasonably can before the class. _I will attempt to have the class videotaped for you. _If you cannot let me know until after the class, we'll figure something out, but it won't work as well.

____Most of you attend class very well. _If that is you, you need not click the following link.

More on class attendance

Final exam

____There will be a final exam lasting 1 1/2 (one and one-half) hours at the end of the semester. It is likely to be primarily or exclusively multiple choice. You may bring to the exam the following written materials and no other:

- the Internal Revenue Code and Regulations, any edition, and any writing or other marks thereon, no matter who did the writing or made the marks;

- your own notes, no matter from what source made. For term "your own notes" means notes you authored. It does not include other notes you own.

Class schedule

____Wednesday, 2:40-3:30 P.M., Tabor Classroom.

_1. _Wednesday, August 25

Introduction

_2. _Wednesday, September 1

RIA online tax research training, upstairs law library computer lab

_3. _Wednesday, September 8

Tax research, topical law reporters, in Tabor

_4. _Wednesday, September 15

Administrative discussion. Explanation of materials.

Basic course paradigm

Code Sections 1, 11

Foundational cases

Irwin v. Gavit, 268 U.S. 161 (1925)

All cases may be found in the law library or accessed online using RIA, Lexis, or Westlaw.

While individual cases should be analyzed carefully, the trick in case analysis is to read cases together.

Law may be considered applied philosophy, which is not meant to imply that it is always good philosphy.

The paradigm of our subject drives taxpayer efforts and legal responses. But the area must have one or more theoretical underpinnings. Grasping them is our undertaking.

Any abstraction will be rendered concrete as we go.

What is the appropriate taxpaying unit? Is it the family? What attitude toward the family is reflected in tax law?

Is culture driving law? Or is law driving culture?

_5. _Wednesday, September 22

Lucas v. Earl, 281 U.S. 111 (1930)

In addition to the law library and online sources, some cases, such as Lucas v. Earl, may be found in your Individual Tax casebook, depending on when and from whom you took Individual Tax: Klein, Bankman & Shaviro, p. 575; Gunn & Ward, p. 435.

Poe v. Seaborn, 282 U.S. 101 (1930)

Available in law library, online (via RIA, Lexis, and Westlaw), and in your Individual Tax casebook, depending on when and from whom you took Individual Tax: Klein, Bankman & Shaviro, p. 577; Gunn & Ward, p. 437.

Discussion of community property v. separate property marital property regimes and tax law.

Corliss v. Bowers, 281 U.S. 376 (1930)

Law library, RIA, Lexis, and Westlaw

Burnet v. Wells, 289 U.S. 670 (1933)

Law library, RIA, Lexis, and Westlaw

_6. _Wednesday, September 29

Re-visit Corliss v. Bowers, 281 U.S. 376 (1930)

Re-visit Burnet v. Wells, 289 U.S. 670 (1933)

Blair v. Com'r., 300 U.S. 5 (1337)

Law library, RIA, Lexis, Westlaw. Gunn & Ward, p. 455.

Harrison v. Shaffner, 312 U.S. 579 (1941)

Law library, RIA, Lexis, Westlaw

Helvering v. Horst, 311 U.S 112 (1940)

Law library, RIA, Lexis, Westlaw. Gunn & Ward, p.457.

Helvering v. Eubank, 311 U.S. 122 (1940)

Law library, RIA, Lexis, Westlaw. Gunn & Ward, p. 465.

_7. _Wednesday, October 6

Family tax policy

J. Potts, Current Tax Policy Issues, 33 V.U Law Rev. 813 (1999), in VU Law Review previously handed out

R. McIntyre & M. McIntyre, Fixing the "Marriage Penalty" Problem, 33 V.U. Law Rev. 907 (1999)

_8. _Wednesday, October 13

Material in my email of October 10 to you, concerning RIA update on Working Families Tax Relief Act of 2004. (Marriage penalty.)

Druker v. Commissioner., 697 F.2d 46 (2d Cir. 1982). (Make sure you get the F.2d case. I found that RIA turned up only the lower court case in response to "Druker v. Comissioner", but that if I only requested "Druker", then I could find the case.) (Concerns constitutionality of marriage penalty.)

Related party code provisions

IRC Section 267(a)-(d) (deductions from transactions between related taxpayers)

IRC Section 482 (allocation of income among related taxpayers)

_9. _Wednesday, October 20

Exam is planned to be closed book (including closed note). _If you wish, we can discuss the possibility of allowing code & regs, and notes at exam.

IRC Section 73 (earned income of a child)

IRC Section 83 (assignment of earned income)

IRC Section 1(g) (unearned income of a child - "kiddie tax")

IRC Section 151(d)(2) (but review all of Section 151). (Personal exemption and deduction for dependents.) (Note "Caution" preceding section.)

Trust taxation

Grantor trusts
IRC Sections 671-678

10. _Wednesday, October 27

Grantor trusts (continued)
IRC Sections 671-678

Review, to have in mind, Sections 671-673. Discussion will begin with Section 674.

Simple and Complex Trusts
IRC Section 641-667

11. _Wednesday, November 3

Simple and Complex Trusts (continued)
IRC Section 641-667

12. _Wednesday, November 10

Brief closing comments on complex trusts

Business arrangements

Tinkoff v. Com'r, 120 F. 2d 564 (1941)

Schneer v. Com'r., 97 T.C. 643 (1991)

Nicholls, North, Buse Co. v. Com'r., 56 T.C. 1225 (1971)

13. _Wednesday, November 17

Sargent v. Com'r., 929 F.2d 1252 (1991)

Leavell v. Com'r., 104 T.C. 140 (1995)

no additional material

14. _Wednesday, December 1

Review

Exam

1 1/2 hours

Permitted materials

Code & Regulations (any version, any edition, including notes you made therein and any notes already there when you acquired the code & regulations) (more detail near top of syllabus)

Your personal notes (made from any source) (more detail near top of syllabus)