This course deals with the fundamental principles of the income tax applied to both individual and corporate taxpayers. The subject matter can be divided into five broad categories: identification and computation of gross income; business and personal deductions; identification of the proper taxpayer with respect to income and deductions; determination of the proper years for including items in income or claiming deductions; and capital gains taxation. On a second level, throughout the course great attention is devoted to the legal process: the interrelationship and relative weight of statutes – the Internal Revenue Code – Regulations promulgated by the Department of the Treasury, and case law.
Although most of the material in the course is presented in the context of transactional problems, throughout the course emphasis is laid on consistent themes and policies to which the legislative, regulatory, and judicial authorities look for the answer to questions in income taxation.
The federal income tax touches almost every transaction in which a lawyer can be involved on behalf of a client, from a divorce action to the sale of a business. A basic understanding of the impact of federal taxes is essential for every lawyer. The course provides that basic understanding and is designed for all students. Those students who have any expectations of being involved in a practice entailing clients with business interests should also take the courses in Taxation of Business Enterprises.