ABSTRACT
Of course, many taxpayers manipulate their affairs to minimize their taxes. The new December 2017 limits on state tax deductions evidence, however, the more endemic nature of the sham problem. Some state government officials have joined the loophole quest on behalf of their citizens. For instance, some states have proposed new state tax credits for ‘voluntary’ contributions to state charities. Treasury Secretary Mnuchin aptly challenged this ‘ridiculous’ attempt to ‘dress up’ non-deductible tax payments as deductible charitable contributions. Despite Mnuchin’s convincing rebuke, state officials carry on with their ongoing avoidance efforts. In addition, similar avoidance schemes permeate many other legal areas such as property law, contract law, family law, and copyright law. While some courts strike down the sham attempts, other courts are less vigilant. Occasionally, some courts even endorse the workaround to achieve a desired goal …
Engler, Mitchell L, Sham on You: Too Good to Be True (January 13, 2020). Cardozo Legal Studies Research Paper No 598, 2020.
First posted 2020-01-15 07:16:42
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