# Appendix — BERKOWITZ V. UNITED STATES (No. 73-1175)

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_0919%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1973

## Text

-

ACKNOWLEDGMENTS

ONE’S INDEBTEDNESSES in the writing of any
book are inevitably far greater than mere words can properly
acknowledge. That is especially true when the book deals with a
subject as complex. as this one, where the layman’s struggle for
mere understanding of the subject, not to mention technical accu-
.tacy, often leaves him in prostrate dependence at the feet of the
experts, °

None have borne that dependence more stoically, helpfully
and uncomplainingly than Drs. Benjamim Okner, Emil Sunley, Jr.,
and Joseph Pechman, all close Sprtys
Heceeican cet
e Ra Ba ants

» Pe

ba *Gug
us

finial fi

One and Two: » pp. 187, 192.
lootnote) 95% ownership of four-fifths of overseas assets: Mus
wre, Table 7, p. 199.
= of choosing world-wide method of calculation: IRC Sec.
a).
Estimated
International Tax Aff:

F
i

BREE RF

3338 8

88

/

46

Pro; Sec. 309 of H.R. 11058,
by wef Ap ey Callforsiae 117 CR H9212, Oct. 5,
1971.

lammond Organ Co.: Hammond Organ Western Export Corp.,

(Footnote) Fortune
ution” escape hatch: Fortune, Feb. 1969, p. 96.
into and

Arrangement “ ps”
Sec. 963 (c) (2); Regs. 1.963 1(a) (1).
969 i: to curb use of fictional depletion allowance: IRC
Fi plaints ’ Post,
July 4,-1972; also “Daily Executives’ Report” of Bureau of Na-

After-the-fact adjustment [rote siiccation: Toeamny
let, “Dist: A Handboot! lor Exporters,” Jan. 24, 1972, p. 25.

and in 1972 Officials were on the circuit, “sell-
ing” the DISC t0 buloes noon, “pm
with “tax shelter” who an 8% commission for

Prediction of concentration of DISC benefits: 117 CR $5377
@aily), Apr. 22, 1971.

Wall Street Journal labels DISC a “gimmick”: Editorial, Sept. 30,
Shopng company profits entirely “untainted”: IRC Sec. 955
Shipping companies exempt from U.S. taxes plying Ameri-
Findneial wera tan Os “Tax oh: Foreign Flag

saga : a

Shipping Company,” Prentice-Hall Report No. 9, July 6,

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—
Notes and Sources 463
Page
289 Incrone Of five companies’ share from 51.3% to 57.3%: Sunley,
289 (Footnote) Senator Barkley’s complaint: 90 CR 1950 (1944).

290 Timber losses fully deductible: IRC Sec. 1231(b) (2). The same
“one-way street” provision applies to coal and iron ore royalties

as well.
291 SomPined effects of timber preferences on taxes, rates of return:
292 ‘Timber valuation For of see
Polson Logging Co., 12 TCM 664 (1953); Cascade Co. v.

1963 court on depletion jor water: Marvin Shurbet v. US.,

1969 Tax Court on underground steam: Wall Street Journal,

6, 1969, quoted in Russkay and Osserman, p. 123. See A. E.
52 TC 700; Rowan, 28 TCM 797. “

539.
re “just as good a claim”: 11811-2 (1951).
of Sand and Gravel Association: 1954 SFC

Kay and .
Sen. George on “chicken amendment”: 97 CR 12336-7 (1951).
Capital gains for coal royalties: Revenue Act of 1951, Sec. 325; S.

8 & S888 8 Ss B82 8 Be yess B ee ge
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312

312
313

313-14
314 -

314

314
315
315
315

315

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ing (see above), p. 124.
ag IRS attorneys convinced in 1961: Acting IRS Commis-

letter

arding
after full study of the [judicial] decisions
deduction f. -

tax for proper
tion of the law. Antitrust Hearing (see above), p. 124, ;

(Footnote) Examples of IRS litigation on smaller questions: on
elm disease damage—see Appleman v. US., 338 F.2d 729 (1964) ;
aa Denton v. Bingler, 63-2 USTC, para. 9731 |
IRS directive to publish all of “general interest”: Letter
from IRS Commissioner Dunlap 28, 1952, cited at Rulings
Compendium, p. 72-117. wi

Only 480 rulings published a year: Rulings Compendium, pp. 72-118.
attorneys: George B. mana, Bowens G. Krane
Compendium, pp. 138-40.

; reporting services that summarize
unpublished rulings: “Shop Taik” in the Journal of Taxation and
“Tidbits” in Tax Management.

Enactment of Freedom
required

—

' 466 THE RAPE OF THE TAXPAYER

Estate tax rates unchanged; personal exemption and income tax
rates changed since 1941: Pechman, Federal Tax Peticy, Tables

Theodore Roosevelt

Roosevelt (Memorial Edition), pp. 504-5.

reer tht Roosevelt on “lnherlied economic power”: H. Rep. 1681,
74-1, Part 2, p. 643 (1935). .

Herbert Hoover on “thawing frozen capital”: 3 Memoirs 35-6.

and Garrard 8. Wirston:
People’s ee p. 119; 1925 National Tax Association
133,944 estate tax returns filed; 30% of wealth excluded: Prelit
nary SOI, Estate Tax Returns, 1969, p. 32, cols. 1, 2.
Eisenstein characterization: 1955 JCER 838.
? deduction:

Tr. 119, 351-84.

Treasury on “smaller estates”: Tr. 111, cited at Westfall, p. 995.
Treasury 1957-59 survey of generation-skipping: Tr. 117, Table 9.
Trust company president in 1957: Fortune, Nov. 1957, p. 238.

eaggy SEE ERS S BER RE OE EE

total tax of about million—$14 million less than he otherwise
would have paid. | :
332 Journal of Accountancy example: Mr. A, his lifetime, gives

Treasury findings on lifetime gifts v. bequests: Tr. 115, Table 7.
Case of Oliver Johnson: Estate of Oliver Johnson v. Commissioner,

000 gift-tax exemption: H. Rep.
+ P. 29; S. Rep. 665, 72-1, p. 41 (1931).
‘ein estimate: 195° JCER 812; see also 94 CR 7908

a

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proposal by yy Daily) J 9, 1972
I: i ( » Jan. 19, .
the Younger: Schultz, The Taxation of Inheritance (1926),

na

‘ohn Stuart Mill: Mill, Princi Political , Book 2,
I - iples of Economy,

Nora Payne Hill: Nora © > Hill v. Commissioner, 13 TC 291
(1949) ; 181 F.2d 906 (

67% “tax” on welfare is: 30% “tax” on food-stamp users:
“Why Is Welfare So Hard « orm?” by Henry Aaron (prelim-

se$8 #888 88282 88 & fa # g 8

THE RAPE OF THE TAXPAYER

“4,
Income tax “can’t provide a shirt for the naked”: Groves, Federal

Tax Treatment of the Family (Brookings Institution, 1963), p. 115

(preliminary manuscript). ~
$13 billion cost of nontaxation of government benefit payments:
Pechman-Okner, A-3, col. 6.

(Footnote) British

mist, Apr. 6, 1953, p. 71.

“Tax expenditures” for housing six times direct outlays: See note
re p. 144, above.

Home ownership up 50% since 1940: Richard Goode, “Imputed
Rent of Owner-Occupied Dwellings Under the Income Tax”

Economic Research), p. 169n.

Value of pavenel datuetions, 2000-28 WE eee
analy propel jue entak os pmmal ater 1963
1969 cutback in interest deductions: IRC 163(4).

Cat Lovers, hey 9 Association, Genealogical Society as ap-

tax-deductible gifts: IRS
_ Organizations, Dec. 31, 1970, pp. 28, 315, 242, respectively.
deduction in 1942:

—

Notes and Sources 469
Page
369 Two oilmen who zero to
eae. income) and B ($2,271,723 income). 109 CR 24399-
371 posal to make fallout shelter expenses deductible: H.R. 104,
88-1 (1963).
371 1972 Presidential credits
tion: Nixon: Washington Post, Oct. 26, 1972; McGovern: “Aid to
of Children in Parochial Fide Public Schools,”
Statement in Chicago, Ill., Sept. 19, 1972.

c t.
374 Roche: GM Proxy Statement, Apr. 13, 1972.
374 Seas Seep meio oan Sarde 1969 SFC Report, p. 333.
; :

all applicants for Social Security order to curb fraudulent
acquisition of cards by illegal immigrants snd welfare cheaters,”
quoted Sen. as follows: “We would only require finger-
prints in ‘high * cases, like a person who was over 30 and still
doesn’t have a card. If we ask

gerprints on file, but I don’t think we should require it at age 6.”
376 Sen. Long on welfare recipients’ “filthy” neighborhoods: Washing-

u
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376

See note re p. 346, above.
380 General Motors’
H6713 (Daily), July 19, 1972.

>

f-billion-dollar profit: 118 CR

20. Why the Wealthy Few Win Out over the Un-Rich Many

o a bac meng Fog Potions rgd yyhoed
exemption: » Pp. 22, 3

million taxable returns filed in 1970. r
381 SEO Rene, benchited {rom 50% sop rate on salary income: 1969

381 Only 1 in 10 got any capital gains: 1970 SOI (Preliminary), p.
9 million retu Fition

7:

THE RAPB UF THE TAXPAYER

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Hlareey jemily generosity. to, Democratic Perey Spee eer pL

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Contributions from the oil industry: Alexander (see above), p. 184;
Congressional Quarterly, Sept. 18, 1970, p. 2292; Washington Post,
Jan. 31, 1971, p. A25.

Richard Harris in The New Yorker: Aug. 7, 1971, pp. 52-3.
Sen. Long speech re “monetary bread cast upon the water”:
Quoted in Harris New Yorker account (see above), p. 53.

V. O. French on flexibility of seniority system re Finance Com
mittee membership: French, p.

Secrecy Congressional tax-writing committees: French, 33.
Secrecy of Contreae sections of the Insernal Revenue Code: IRC

ee ¥ $8 8 8 BF eee eee 8 E

Superlawyers, p. 309.
21. What Should Be Done About Our Tax System?

sé 8
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than $3,000 a year: 1970 SOI (Pre-
013,966 taxable returns filed in

1970
Gen-

4714

no-loophole system: Pechman-

divided by Table 8, col. 1.

2 and 1 are

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(S. 1039) introduced by Sen. George McGovern,
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414-16 Plan for Federal financing of election campaigns: This plan is

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414
417

THE RAPE OF THE TAXPAYER

, 516 (1895).

‘ Quoted in Scripps-Howard news-
307.
: Pollack v.

eet ee
pon tapers een
seh Pout re "waning
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Trust Co., 157 US. 4

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THE RAPE OF THE TAXPAYER

474

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Committee of $ingle Taxpayers
( x2

“community property” laws, 123, 328
“community property” states, 123,

328
(of Con-
gress) , 391-2

conference committees
Connally, John B., 149, 224, 226
i . 309, 312

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THE RAPE OF THE TAXPAYER

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THE RAPE OF THE TAXPAYER

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THE RAPE OF THE TAXPAYER

480

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pi Pasoncia OF THE TAXPAYER

482

_—
Index

gr oe (antitrust)
of, 310, 311

Truman, Pres. Harry S., 124, 328
Tung, C. K.,

§ , 287-8
US. Steel, 18, 209, 252, 253, 311,
313, 373

Fy
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mafest
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4 th

's of, 346;
ra discouragement

ABOUT THE AUTHOR

Puitip M. Stern is a Phi Beta Kappa grad-
uate of Harvard with varied experience in government,

r
ia ECONOMICS
Z

& How you helped pay for a $14 million

tax saving for Lockheed, via a
special tax law passed just for
Lockheed.

_ ¥ How ITT paid $139 million in taxes
i to foreign governments — but just
$5 million to our own government.

* How auto heiress Mrs. Horace
Dodge could have an income of
$5 million, and not even have to
file a tax return.

* How an oil and gas operator sold at
least $50 million worth of oil over
a twelve-year period, at times had
an annual income of more than
$5,500,000, and yet paid no income
tax for the entire twelve years.

* How loopholes cost you and all the
other taxpayers $77 billion every
year, or $367 for every man,
woman and child in America.

_. %*® How tax rates could be cut nearly in
2 half — by getting rid of the
loopholes.

Oe Mgt eS NO ay ge Sant 5S

a PAO PBS.
ee \ “ss

am

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385608_0919%3A2. Public record. Not legal advice.