JATA - Winter 1980

Volume 1, No. 2

The Effects of the Supreme Court's Thor Power Tool Decision on the Balance of Tax Accounting Power

W. E. Seago & Jerome S. Horvitz

ATA Summary

While the IRS has broad discretion under Section 446, it is not absolute.  The principles of GAAP have frequently served as standards applied by the Courts.  However, in Thor Power Tool the Supreme Court handed the Commissioner a complete victory with regard to inventory accounting.  The paper analyzes the Thor decision and its implications.

Research Methodology:  The authors use legal research.  No numerical examples are given.  

The Influence of Accounting Rules on Tax Policy Objectives:  An Empirical Investigation

Jerry L. Arnold & Earl C. Keller

ATA Summary

The purpose of the paper is to explore empirically the relationship between the selection of accounting method and the Decision to invest in plant and equipment. The selection of ITC accounting methods by the sample firms and their investment in plant and equipment do not appear to have been related.

Research Methodology:  The study used a split sample design based on flow-through and deferred methods of accounting for ITC.  The basic flexible accelerator theory, which depicts new investment in plant and equipment as a function of changes in present and prior levels of desired capital, was used to develop the regression model.  

Property Distributions of Subchapter S Corporations: Regulation Section 1.373-1(e)(2) Allocations not Always Necessary

Dennis J. Gaffney & Cynthia D. Dailey

ATA Summary

The purpose of the article is to illustrate a number of cases where allocations of current earnings and profits to S Corp. property distributions are not necessary.  The authors make several simplifying assumptions.  The article demonstrates that there are circumstances where a literal application of the Reg. Section 1.1373-1(e) formulas will produce incorrect results.  It then demonstrates that the allocation formulas need not be applied under certain circumstances.

Research Methodology:  Several numerical examples using formulas from the Regs, are given to demonstrate the authors' points.  The paper is practitioner-oriented.  There is no mathematical modeling or statistical analysis.  

The Social Security System:  An Evaluation of Policy Alternatives

Edmund Outslay

ATA Summary

The paper gives an overview of the current provisions of the social security program, the issues involved in an analysis of the current program, and the current research being done in the area of the social security benefit structure.  An analysis of the AICPA tax policy subcommittee's proposals with regard to the current structure of the social security program is presented.

Research Methodology:  The article discusses some of the relevant factors in analysis of the proposals and suggests future areas of research.  No model is formulated, no statistical analysis other than reporting that done in other studies.  

A Simulation Study of Tax Sheltered Retirement Plans

Richard C. Burgess & Silvia A. Madeo

ATA Summary

The purpose of the paper is to provide a decision-making framework for the individual who is eligible to establish a tax sheltered retirement fund.  The study compares future values of the funds after taxes with future values of nonsheltered funds after taxes under various assumptions.  The authors then suggest conditions under which investment of funds in a tax sheltered plan would be recommended. Research Methodology:  The study consists of a simulation comparison holding income available for consumption constant.  The model assumes a rate of inflation and an accompanying increase in marginal rate.  

Piggybacking – A Free Ride with No Takers

John M. Strefeler and Jack P. Suyderhoud

ATA Summary

The article provides a review of the development of Piggybacking (federal administration of state personal income tax laws) and an identification of the issues which may determine its future role in tax administration. Research Methodology:  The article utilizes historical research. No numerical examples, mathematical models, or statistical analyses are presented.

Letter from the President

To ATA Members and Visitors,

The American Taxation Association (ATA) is home to a broad group of members with interests in tax research, policy, practice, and education. We are in a time of transition that includes the ongoing pandemic; both AAA’s and ATA’s Diversity, Equity, and Inclusion initiatives; and the CPA Evolution. I thank our members Kirsten Cook, Diana Falsetta, and Annette Nellen for their service in these endeavors. I also thank Tim Rupert for his service as AAA Director focusing on Segments.

Our last mid-year meeting was virtual and could not have happened without our excellent ATA leadership. Thank you to Jeri Seidman, Mollie Adams, Bridget Stromberg, and their respective committees for their flexibility and tenacity in organizing their portions of the conference...

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Anna Catherine Fowler

In Memoriam,
Anna Catherine Fowler received her BS in accounting from the University of Alabama, after which she practiced for several years as a CPA. After moving to Texas with her husband Jim, she earned her MBA and PhD from the University of Texas at Austin.

She joined the faculty of the business school of the University of Texas in 1977 as the first female tenure track professor hired by the accounting department. She remained at UT until she retired in 2004 as the John Arch White Emeritus Professor in Business.

During Anna’s distinguished academic career, her research and teaching interests focused on estate and gift taxation. She was an active member of the AICPA’s Tax Division and the American Taxation Association, for which she served as 1993-94 president.

In 2002, Anna received the American Taxation Association’s highest honor, the Ray M. Sommerfeld Outstanding Tax Educator Award. She also received the Texas Society of CPA’s Outstanding Educator Award.

Anna and Jim made the most of their retirement years, delighting in travel all over the world. They finally settled in a retirement community in Chapel Hill, North Carolina. Even after Jim’s death in 2019, Anna continued to travel with friends, root for her beloved Alabama football team, and live her life to the fullest. She passed away peacefully on October 19, 2021.

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