Sec. 170(e)(1) limits charitable contribution deductions
No area of the Code was devastated more by the Tax Reform Act of 1969 than the provisions dealing with charity — from the viewpoint of the donee-charitable organizations (especially private foundations) and the donors. . . . No longer will it be possible to avoid the tax on the unrealized appreciation in the value of the property . . . by donating the property to a charity. Under prior law . . . [it] was possible for an individual to realize more dollars by donating certain ordinary income (such as inventory) or short-term capital gain property to charity than by selling the property and paying the tax.
— Leonard A. Rapoport, CPA, "Charitable Contributions Under the Tax Reform Act of 1969," p. 162. Rapoport was a partner with Alexander Grant & Co. in St. Paul, Minn., and was a member of the AICPA Council.
Economic effects of the tax system
As we are all aware, the present income tax law is replete with differential provisions which have the effect of imposing differing effective rates of tax on a given amount of income, depending on the source of the income, the way in which it is used, or the circumstance of the taxpayer. Some of these provisions are in the tax law because of misapprehensions by tax policymakers about the nature of income. More of them were included as a deliberate effort to promote certain types of activity. The recent tax reform effort has involved taking a hard look at many of these tax differentials in an effort to determine whether the objectives of these incentives still command the same policy priorities as when they were initially introduced.
— Norman B. Ture, "The Tax System as an Economic Force," p. 173. Ture was with the Planning Research Corp. in Washington, D.C., and an adjunct professor of economics at George Washington University.
Dearth of accounting graduates
U.S. Office of Education statistics for 1967-1968, for example, reveal a total of 636,863 bachelor's degrees granted in all fields. Of these, only 80,440 (12.6%) were degrees in some field of business and of this number only 18,000 (2.8%) were accounting majors. Each year the nation's accounting firms compete with business, industry, and government for these relatively few accounting majors. The outlook for the future indicates an increase in the demand for accounting majors by the total labor market and a growth in the recruitment needs of the IRS far greater than any projected increase in the supply of graduate accountants.
— Singleton B. Wolfe, "Working With the IRS," p. 198. Wolfe was IRS national audit director.