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Tax Stories: An In-Depth Look at Ten Leading Federal Income Tax Cases.

Article Excerpt
TAX STORIES: AN IN-DEPTH LOOK AT TEN LEADING FEDERAL INCOME TAX CASES. Edited by Paul L. Caron. New York: Foundation Press. 2003. Pp. 375. $18.95.

"Those who do not learn from history are doomed to repeat it"

--George Santayana

"History repeats itself: The first time as tragedy, the second as farce"

--Karl Marx

The teaching of law is usually rather ahistorical. Teachers commonly focus on current doctrine and policy debates, discarding on the "garbage pile of history" any law that has been repealed or superseded. And yet, much of law teaching is still based on reading cases. And cases are by definition historical artifacts--they arise from a specific time and place, and reflect a frequently long-gone historical context. Thus, it is hard to imagine a modern law course completely devoid of history, even if the history gets short shrift. A constitutional law course, for example, will likely include some discussion of Marbury v. Madison, (1) but it is unlikely that the teacher will have time to discuss the historical origins of the case in the conflict between Federalists and Jeffersonians at any length.

Tax Stories, edited by Paul L. Caron, (2) is intended to be the first of a series that will remedy this lack of historical data. Each volume in the series will discuss approximately ten leading cases that are typically covered in major law school courses, and is intended to discuss them in depth and in great historical detail (pp. 1-3). Through this process, which the editor dubs "archaeology," students will learn in detail the background to some of the most important cases they discuss in class. The current volume on tax is scheduled to be followed in 2003 by volumes on constitutional law, property, and torts, with others to follow. (3)

This effort represents an admirable attempt to provide students with more in-depth information than they can typically obtain in the course of a classroom discussion focused on current doctrine. The tax volume is well executed; the chapters were written by some of this country's leading tax academics, and they are a pleasure to read. And yet, one is left with a certain feeling of dissatisfaction, because many of the chapters ultimately contain much more discussion of current doctrine than historical background. (4) It is as if an overwhelming pull toward the present exerted its force on some of the authors, who are, after all, tax professors and (mostly) not historians by training. (5) But the focus on current doctrine, while understandable, means that the book misses some of the opportunity to add value beyond what is found in, for example, Chirelstein's classic tax manual for students. (6)

This Review is divided into three parts. Part I surveys the chapters of Tax Stories and evaluates their contribution to classroom learning. Part II takes a more critical approach, focusing on some missed opportunities. Part III tries to extend the discussion more broadly into an evaluation of the proper role of history in teaching tax (and perhaps other legal areas as well).

I. TAX STORIES

Tax Stories covers ten Supreme Court tax cases: Commissioner v. Glenshaw Glass (definition of income); (7) Eisner v. Macomber (realization); (8) United States v. Kirby Lumber (cancellation of indebtedness); (9) Unites States v. Davis (property transfers upon divorce); (10) Welch v. Helvering (ordinary and necessary business expenses); (11) INDOPCO v. Commissioner (capitalization); (12) Crane v. Commissioner (inclusion of debt in basis); (13) Schlude v. Commissioner (distinction between tax and book accounting); (14) Lucas v. Earl (assignment of income); (15) and Knetsch v. United States (tax arbitrage). (16) All of these cases are familiar to any student who has taken the basic tax course, and they are well chosen in terms of their importance to understanding our current tax law. (17)

For each case, the same order is followed: First, the author discusses the background to the decision; then he or she describes the case and its prior proceedings before reaching the Supreme Court; then the author discusses the Supreme Court proceedings, including the petition for certiorari, the briefs, and the Supreme Court's opinion(s); then he or she describes the immediate impact of the decision; and finally the author discusses the continuing importance of the decision today. (18) The result is a thorough examination of the case and its ramifications, which can definitely enhance the knowledge and understanding of students.

It may be asked whether it is worthwhile for students to spend significant time (the chapters are between twenty and forty pages each) to examine a single decision. And yet, examining such important cases in depth can yield significant insights. For example, it is hard to understand modern tax shelters without studying Crane, and Knetsch is a key to understanding the judicial response. (19)

As "stories," some of the cases are more interesting than others. It is hard to tell much of a story about corporate cases like Kirby Lumber or INDOPCO, although in the former case Deborah Schenk does try to bring John Henry Kirby to...

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