Paul L. Caron

Sunday, April 16, 2006

Postlewaite & Rosenzweig on Is It Time to Part With Section 736?

Philip F. Postlewaite (Northwestern) & Adam H. Rosenzweig (Northwestern) have published Anachronisms in Subchapter K of the Internal Revenue Code: Is It Time to Part With Section 736?, 100 Nw. U. L. Rev. 379 (2006).  Here is the abstract:

Time has passed Section 736 by. Rather than serve its initial purpose, Section 736 survives as an anachronism preventing the coherent evolution of the Code. How could a provision such as Section 736, with limited utility, devastating complexity, and confusing (at best) policy implications, remain in the Internal Revenue Code? How has Section 736 survived multiple calls for its repeal? A study of the evolution of Section 736 provides not only the opportunity to scrutinize the tax-making machinery that determines how and why such anachronistic imperfections come to be, but also to ponder how they can be prevented in the future.

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I don't get it. 736 (retired partner payouts) seems to me to be a logical and unexceptional part of Sub K. I drafted agreements with 736 payouts in them and they are not usually problematic. No I am not going to hack my way through the paper.

Posted by: Robert Schwartz | Apr 16, 2006 1:23:10 PM