Monday, August 29, 2011
Jay A. Soled
(Rutgers Business School) & Mitchell Gans
(Hofstra), Related Parties and the Need to Bridge the Gap Between the Income Tax and Transfer Tax Systems
. 62 Ala. L. Rev. 405 (2011):
Related parties can readily manipulate transactions in ways that unfairly reduce their tax burdens relative to unrelated taxpayers. In the income tax arena, Congress has instituted numerous legislative measures to safeguard the tax base from related-taxpayer manipulations; yet, the same developed system of related-party safeguards does not extend to protect the transfer tax base. This analysis points out that this disparity has had a corrosive effect on the integrity of the transfer tax system. Indeed, insofar as the treatment of related parties is concerned, Congress should employ the same level of scrutiny and circumspection in the realm of transfer taxes as it does in the income tax. Reform of the transfer tax system is accordingly in order.