Here are highlights from the February 1970 issue. Click here to view an interactive timeline of tax and other events from the past 50 years.
The IRS has conceded that professional associations will generally be treated as corporations for tax purposes. But the Service stated that "obviously, however, the government must reserve the right to conclude differently in any case that reflects special circumstances not present in O'Neill or Kurzner." This hedging, coupled with possible adverse Treasury proposals and recent court developments on other fronts, makes careful planning and evaluation of potential risks a must before forming a professional corporation.
— Arthur F. Shenkin, CPA, "The Professional Corporation," p. 84. Shenkin was a partner with the firm of Stone, Gray and Co. in Denver and served on the AICPA Estate Planning Committee.
The availability of these [computer] programs to extract information directly from magnetic tape or other machine-readable media provides the auditor with a flexible kit of tools to assist him in his examination, and obviates the necessity of searching voluminous printouts. ...
The system we have been experimenting with is one developed by Haskins & Sells and is called the "Auditape System."
In its simplest form, the Auditape System gives the auditor the capability of selecting, manipulating, and printing information from masses of data stored on magnetic tape of punched cards. ...
We plan to continue to use and expand the use of generalized computer programs — whether Auditape or some other type.
— IRS Deputy Commissioner William H. Smith, "Audits, Business Abuses, and Disciplinary Action," p. 94. Smith was the top career civil service official of the IRS and joined the Service as director of its Systems Development Division.
A Sec. 337 road map
Once upon a time, Little Red Riding Hood decided to close up her cottage and go live with Grandma. (In case you haven't guessed, Little Red Riding Hood is a domestic corporation, and Grandma represents her stockholders. Other characters you will meet along Route 337 are, in order of appearance, a Friendly Travel Agent (a not very astute tax adviser), the Big Bad Wolf (a representative of the Internal Revenue Service), and Little Blue Riding Hood (Red Riding Hood's sister corporation).)
— David Binford, CPA, and James L. Houghton, CPA, "To Grandma's House on Route 337," p. 112. Binford and Houghton were partners with Arthur Young & Co. in Wichita, Kan., and Oklahoma City, respectively.