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Divorce and the Assignment of Income Doctrine
One who is entitled to receive income, including interest or compensation for services, but assigns the income to another before it becomes due, will be taxed on it just as though he or she had actually received it and then paid it over to the assignee. This concept is known as the assignment of income doctrine. Harrison v. Schaffner, 312 U.S. 579, 580, 61 S.Ct. 759, 760-61, 85 L.Ed. 1055 (1941). Decisions have been based on the principle that the power to dispose of income is the equivalent of ownership of it and that the exercise of the power to procure its payment to another is contemplated by the Internal Revenue Code provisions taxing income derived from any source whatever. The United States Supreme Court explained the doctrine in Harrison v. Schaffner: “One vested with the right to receive income does not escape the tax by any kind of anticipatory arrangement, however skillfully devised, by which he procures payment of it to another, since, by the exercise of his power to command the income, he enjoys the benefit of the income on which the tax is laid.”
In Harrison, Justice Holmes metaphorically discussed the doctrine in terms of “fruits” and “trees” as the distinction between income and the income-producing asset. The rule is that fruits may not, for tax purposes, be attributed “to a different tree from that on which they grew.” Lucas v. Earl, 281 U.S. 111, 115, 50 S.Ct. 241, 74 L.Ed. 731 (1930).
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.