Abstract

http://ssrn.com/abstract=1781269
 


 



The Fabricated Unwind Doctrine: The True Meaning of Penn v. Robertson


John Prebble


Victoria University of Wellington; Monash University; Institut für Österreichisches und Internationales Steuerrecht, Wirtschaftsuniversität Wien

Chye-Ching Huang


University of Auckland

2011

Hastings Business Law Journal, Vol. 7, No. 1, 2011
Victoria University of Wellington Legal Research Paper No. 17/2011

Abstract:     
When taxpayers discover that their transactions have unwanted tax consequences, they routinely rely on the unwind doctrine found in Internal Revenue Service Revenue Rulings 80-58. Nowadays, “unwinding” has become a “common if not ubiquitous feature of tax practice.” This article finds that the unwind doctrine has no firm basis in case law. Instead, the unwind doctrine is an Internal Revenue Service (IRS) fabrication based on the IRS’s misinterpretation of the case Penn v. Robertson 115 F2d 167 (4th Cir 1940). If the authors are correct one result may be that recipients of TARP-funded bonuses who gave the money back in the face of public opprobrium may (a) be taxable on the bonuses and (b) be unable to set the repayment off against taxable receipts in calculating their taxable income.

Number of Pages in PDF File: 52

Keywords: income tax, tax law refrom, unwind doctrine, unwanted tax consequences, rescission doctrine

JEL Classification: K34

Accepted Paper Series


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Date posted: March 8, 2011 ; Last revised: September 2, 2011

Suggested Citation

Prebble, John and Huang, Chye-Ching, The Fabricated Unwind Doctrine: The True Meaning of Penn v. Robertson (2011). Hastings Business Law Journal, Vol. 7, No. 1, 2011; Victoria University of Wellington Legal Research Paper No. 17/2011. Available at SSRN: http://ssrn.com/abstract=1781269

Contact Information

John Prebble (Contact Author)
Victoria University of Wellington ( email )
PO Box 600
Wellington, 6140
New Zealand
+64 4 463 6311 (Phone)
Papers Indexed at HOME PAGE (Fax)
HOME PAGE: http://www.victoria.ac.nz/law/staff/prebble-scholarly.aspx

Monash University
Victoria 3084
Australia

Monash University Business and Economics Logo

Institut für Österreichisches und Internationales Steuerrecht, Wirtschaftsuniversität Wien ( email )
Welthandelsplatz 1
Vienna, Wien 1020
Austria

Chye-Ching Huang
University of Auckland ( email )
Private Bag 92019
Auckland
New Zealand
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