美国避税的历史演变及发展现状ITD_Korb.pdf

10931017.510931017.510931017.5 SHELTERS, SCHEMES, AND ABUSIVE TRANSACTIONS: WHY TODAY’S THOUGHTFUL U.S. TAX ADVISORS SHOULD TELL THEIR CLIENTS TO “JUST SAY NO” Donald L. Korb Chief Counsel, Internal Revenue Service U.S. Department of the Treasury Washington, D.C. Originally presented at the University of Cambridge Cambridge, England December 14, 2005 1 I. History of Tax Shelters. A. Tax Planning Over the Ages. 1. Tax advisors have been figuring out ways to reduce taxpayers’ tax liability forever. a. In Ancient Rome, farmers of small farms would obtain relief from taxes by transferring their lands to the nearest military chief or large landowner and rid themselves of tax obligations. The peasant farmer was better off. Tied to the land anyway, he could live in the same house, farm the same land, and use the same animals. Only the tax picture had changed; the Roman tax man would now have to deal with the small farmer’s master, who had the wherewithal to handle the Roman tax man. Adams, For Good and Evil: The Impact of Taxes on the Course of Civilization (London and New York: Madison Books, 1994) at pages 113-14. b. During the Middle Ages in Syria, Egypt and other areas of the Islamic world, the land tax could be avoided by newly conquered native populations if they became Moslems—unfortunately for the tax collectors, mass conversions of native populations to Islam drained off a large percentage of their tax revenue. Adams, For Good and Evil: The Impact of Taxes on the Course of Civilization (London and New York: Madison Books, 1994) at page 132. c. In the 1600’s, landlords in Russia developed an interesting tax avoidance scheme. A new landlord would pay off a peasant’s debt 1 As revised to update through 2/15/2007 (thanks to Rebecca Asta, Andrew Keyso and Beverly Katz). 10931017.510931017.510931017.5 2 and refinance the peasant on his own land. Poll taxes were based on a census, which was conducted every five years. Before the census was taken, new serfs would not be taxed since they were not on the census rolls. (The Russian government eventually had to pass a law preventing this practice.) Adams, For Good and Evil: The Impact of Taxes on the Course of Civilization (London and New York: Madison Books, 1994) at page 169. d. In Charleston, South Carolina during the first half of the 19th century, real estate taxes were based not on the value of the house or other structure situated on a lot but on the footage of the portion of the lot directly next to the street. Tax planning led to houses being built on deep lots which were very narrow where they fronted the street. Thus, a typical house built during that time might be 10 foot wide but 80 or even 100 feet deep—many of these houses still exist today. 2. The search for shelter continues. See The Wall Street Journal (“WSJ”) on 10/13/05: The Search for a Safe Tax Shelter. B. Tax Shelters: Legitimate Tax Planning vs. Tax Avoidance. 1. As Judge Learned Hand said in Helvering v. Gregory, 69 F.2d 809, 811 (2nd Cir. 1934), aff’d, 293 U.S. 465 (1935): “We agree with the Board and the taxpayer that a transaction, otherwise within an exception of the tax law, does not lose its immunity, because it is actuated by a desire to avoid, or, if one choose, to evade, taxation. Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” a. Professor Michael Graetz of the Yale Law School says that a tax shelter is “a deal done by very smart people, that absent tax considerations, would be very stupid.“ Additionally, he has often said like pornography, a tax shelter is something that people know when they see it. The term “tax shelter” is difficult to define and whether a tax shelter is “abusive” depends upon who is watching. b. The Taxpayer Relief Act of 1997 defined a “tax shelter” as any partnership, entity, plan or arrangement “if a significant purpose of such partnership, entity, plan or arrangement is the avoidance or evasion of Federal income tax.” See Section 6662(d)(2)(C). c. The Role of Professional Firms in the U.S. Tax Shelter Industry (Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs (2/8/05)) notes on page 1 that while no single standard exists “to determine the line 10931017.510931017.510931017.5 3 between legitimate ‘tax planning’ and ‘abusive tax shelters,’ the latter can be characterized as transactions in which a significant purpose is the avoidance or evasion of Federal, state or local tax in a manner not intended by law.” 2. Tax shelters can be grouped into three broad categories: legitimate tax shelters, gray area tax shelters, and abusive tax shelters. Professors Graetz and Deborah Schenk (of the New York University Law School) define the two categories as follows in (a) and 。