Monday, June 11, 2007
Richard C.E. Beck (New York Law School) has published Treble Damages in National Health Service Corps Contracts, Public Policy, and Hawronsky v. Commissioner, 22 Akron Tax J. 129 (2007). Here is the abstract:
A deduction for treble damages paid for breach of the taxpayer's National Health Service Corps medical service obligation was erroneously denied under Section 162(f) in Hawronsky v. Commissioner', 105 T.C. 94 (1995). Because the taxpayer merely breached his contract and violated no law, Sec. 162(f) was inapplicable. The issue was entirely overlooked in the litigation, as was the fact that imputed interest is compensatory rather than punitive, and therefore deductible. The history and purpose of the public policy doctrine is analyzed and criticized. The penalty policies of the NHSC are also criticized.