Taxes and Business Decisions
Richard P. Mandel
It is not possible to fully describe the federal taxation system in the space of one book chapter. It may not even be realistic to attempt to describe federal taxation in a full volume. After all, a purchaser of the Internal Revenue Code can expect to carry home multiple volumes consisting of thousands of pages, ranging from Section 1 through Section 9833, if one includes the estate and gift tax and administrative provisions. And this does not even begin to address the myriad Regulations, Revenue Rulings, Revenue Procedures, Technical Advice Memoranda, Private Letter Rulings, court decisions, and other sources of federal tax law that have proliferated over the better part of the twentieth century and the early twenty-first century.
Fortunately, most people who enroll in a federal tax course during their progression toward an MBA have no intention of becoming professional tax advisers. An effective tax course, therefore, rather than attempting to impart encyclopedic knowledge of the tax code, instead presents taxation as another strategic management tool, available to managers or entrepreneurs in their quest to reach business goals in a more efficient and cost-effective manner. After completing such a course, the businessperson should always be conscious that failure to consider tax consequences when structuring a transaction may result in needless tax expense.
It is thus the purpose of this chapter to illustrate the necessity ...