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From: slack@wxlvax.UUCP (Tom Slack)
Newsgroups: net.taxes
Subject: Re: Marriage penalty
Message-ID: <405@wxlvax.UUCP>
Date: Wed, 20-Feb-85 14:32:18 EST
Article-I.D.: wxlvax.405
Posted: Wed Feb 20 14:32:18 1985
Date-Received: Tue, 26-Feb-85 05:36:41 EST
References: <285@calmasd.UUCP> <2297@mit-hermes.ARPA> <428@lsuc.UUCP>
Organization: ITT-ATC SRD, Shelton Ct.
Lines: 23

> In article <2297@mit-hermes.ARPA> jpexg@mit-hermes.ARPA (John Purbrick) writes:
> ||	The couple who got divorced each year ended up losing their case; there
> ||is a law that any transaction clearly intended primarily to reduce taxes is 
> ||necessarily invalid.
> 
> I'm not sure there's such a "law" (in the sense of a section of the
> Internal Revenue Code); I believe it's a principle of interpretation
> of the Code which the American courts use.
> 
> In Canada, by contrast, the technical wording of the statute
> is what controls the law. A recent Supreme Court of Canada
> decision upheld the principle that, within certain limits,
> it's quite acceptable to take steps or enter into transactions
> whose sole purpose is the minimization of tax.
> (Of course, this is always subject to specific anti-avoidance
> provisions, of which the Income Tax Act has many.)

Also, I have recently read of a case where the court ruled that
it was the right (even the obligation) of the individual to try
and pay as little tax as possible within the law.  And because
of this it is difficult for the IRS to impose stiff penaulties
for minor infractions unless they can prove intent to defraud.
Tom Slack