Continental Parlor 8 Hilton San Francisco and Towers Ballroom Level
Section on Taxation Deborah A. Geier, Cleveland State University, Chair
Reflections on the 1999 ALI Reporters' Study on the Taxation of Private Business Enterprises
Moderator:
Deborah A. Geier, Cleveland State University
Speakers:
Laura E. Cunningham, Yeshiva University Alan Gunn, Notre Dame Law School Susan Pace Hamill, The University of Alabama George Kuo-Ming Yin, University of Virginia
It has now been more than a year since the American Law Institute published the study written by Professors David Shakow (Pennsylvania) and George Yin (Virginia on the Taxation of Private Business Enterprises. With the revolution in business enterprise form that accompanied the widespread adoption of the Limited Liability Company and the introduction for Federal income tax purposes of the so-called check-the-box regulations, the time was ripe for a thoughtful reconsideration of whether or how the tripartite approach to taxation under Subchapters C, S, and K of the Internal Revenue Code"fit" the new business enterprise world.
As ALI Director Emeritus, Geoffrey Hazard, Jr., wrote in the Foreword:
[T]he characteristics of an enterprise, whether partnership or corporation, can be modified—manipulated—in various ways so that economically a partnership is much like a corporation and vice versa. Taxpayers have been encouraged to modify the governing terms of their enterprises in search of favorable tax treatment. In response, the provisions of the income tax law recurrently have been modified and elaborated to try to control the effects of the variations on the resulting tax obligations and, at the same time, to make the treatment as partnership or corporation more elective. The result is a highly complex and occasionally dysfunctional body of tax rules.
The central questions addressed in this Study are whether it is possible to do away with the dichotomy between partnership and corporation and instead employ a more uniform approach that is less complex for taxpayers yet still adequately protects in the interests of the fisc. The Reporters have provided an illuminating exploration of these issues. However, working out a new approach that was serviceable and acceptable proved very difficult… It was … concluded that the analysis and conclusions [of the Study] were of such value that they should be published as a Reporters' Study, thus to invite further reflection on these difficult issues.
The members of the AALS Tax Section are well-suited to offer the kind of "further reflection" envisioned with the publication of the Study. This panel presentation provides one opportunity to engage in a thoughtful dialogue regarding the Reporters' ideas. Professor Yin will provide an overview and context to the Reporters' Study, and Professors Cunningham, Gunn, and Hamill will discuss some of their views on the Reporters' work.