Hester Prynne, Lydia Bennet, and Section 306 Stock: The Concept of Tainting in the American Novel, the British Novel, and the Internal Revenue Code
Stephen B. Cohen
Georgetown University Law Center
Green Bag 2d, Vol. 5, P. 5, 2001
Did Nathaniel Hawthorne's novel, The Scarlet Letter, inspire Section 306 of the Internal Revenue Code? This code provision adopts a peculiarly Hawthorne-like solution to a tax avoidance scheme known as the "preferred stock bailout." Section 306 taints the stock used in the scheme as "Section 306 stock." Special rules then govern all subsequent dispositions of the tainted stock. With its concept of a taint that can dog a stock from acquisition to disposition, Section 306 might have been designed by a novelist rather than a tax technician.
Number of Pages in PDF File: 14Accepted Paper Series
Date posted: October 31, 2001
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