Federal Tax Case Research Paper example
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Finance & Accounting
Pages 3 (753 words)
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Name Instructor Course Date Willow Road, Huston TEL: 06782 4367 1st July, 1999 Waterman, Willow Road, Huston, Cambridge shire, Cb31 3rr Dear Mr. Waterman RE: Waterman, Petitioner-Appellant V. Commissioner of Internal Revenue, Respondent-Appellate We refer to the above matter and to the meeting at our offices on 4th June, 1999.


In our opinion, there are three key points of law upon which the Supreme Court will likely decide this case. They are as follows: 1. Time and place When considering taxation on Separation Payment, time and place are relevant. Although regulations seem to cover the issue on taxation of separation payment, those regulations were issued in 1993 and were made retroactive, by the Treasury Department, to 1991. The year as issue in this case was 1992. Therefore, at the time you filed your tax return, there were no regulations covering the issue. The Supreme Court should take the moment the member became deserving of the compensation in question; he must serve the in the Armed Forces. Treasury Regulation 1.112-1(b)(4) confirms this reading of section 112 by stating that Compensation received by a member of the Armed Forces for services rendered while in active service can be excluded under section 112. The Supreme Court therefore has the mandate to invalidate the regulations. 2. Whether to tax Separation payment Separation Payment was excludable under section 112 and therefore cannot be taxed. ...
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