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Famous Tax Quote #33 - A melody is more than the notes

2010-09-20

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Continuing our series on Famous Tax Quotes (quotes from court opinions with language that is colorful or that concisely states an important tax principle) today's tax quote is:

Taxpayers generally are fond of quoting Judge Learned Hand’s statement that “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” It is sometimes forgotten, however, that it was in that very case that Judge Hand’s opinion for this court held that a series of transactions which suited the verbal definition of corporate reorganization in the Revenue Act of 1928 nevertheless did not meet the statutory requirements because the transactions lacked a business purpose and the words of the Act made it evident that the aim of Congress was to approve only reorganizations having such a purpose.  As Judge Hand said with reference to the tax statute there involved, “the meaning of a sentence may be more than that of the separate words, as a melody is more than the notes, and no degree of particularity can ever obviate recourse to the setting in which all appear, and which all collectively create.”

Garlock v. Commissioner, 489 F.2d 197 (2d Cir. 1973).

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