50 years ago in The Tax Adviser

Here are some highlights from the September 1970 issue. Click here to view an interactive timeline of tax and other events from the past 50 years.

Treble damages and tax policy

Underlying [the enactment of Sec. 162(g)], however, is the idea that the tax laws should be used to accomplish socially desirable results in other areas. Thus, it is argued that the tax laws should deny a deduction for treble damages as an additional penalty for violators of the antitrust laws. . . . Certainly, however, the law that is now on the books will serve to increase the cost of at least some antitrust violations, and it behooves those concerned, or who might be concerned, to examine carefully any attempts to broaden this provision.

— John M. Skilling Jr., Esq., "The Increased Price of Antitrust Violations," p. 562. Skilling was a partner of Lee, Toomey & Kent in Washington.

Dependency exemption gross income test

Everyone is familiar with the $600 gross income test for dependency exemptions. Basically, assuming you satisfy the other requirements, you can claim a person as a dependent if he has less than $600 of gross income. . . . However, a taxpayer will often miss out on a dependency exemption because he overlooks the fact that gross income is a word of art. . . . The 1969 Tax Reform Act has made dependency exemptions more valuable. So be on the lookout for "actual income" that is not "gross income" in applying the $600 test. Typical examples include life insurance proceeds, social security payments and municipal bond interest.

— Arthur Gilman, "Tax Clinic: 'Gross Income' Test for Dependency Exemption," p. 579. Gilman was with Hurdman and Cranstoun, Penney & Co. in New York City, which provided the September Tax Clinic.

Value of reviewer book copies

It is not likely that the book Cumulative Bulletin 1970-1, in which [Rev. Rul. 70-330] will be published, will become a best seller if the literary critics have anything to say about it. The Wall Street Journal (July 28, 1970), under the headline, "Book Reviewers Pan a Ruling That Taxes Free Books They Get," reported that the critics turned thumbs down on this literary work of the IRS. One reviewer lamented that, on the basis of retail values, he would have to "book" $30,000 of income in addition to his $12,000 salary.

— Harry Z. Garian, CPA, "Tax Trends: Value of Retained Books Held Income to Reviewer for Newspaper," p. 598. Garian was an editor with The Tax Adviser.

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