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"WE HAVE A THOUSAND STRATAGEMS FOR STOPPING TAX EVASION"

October 11, 2005

Paul Caron's TaxProf Blog rarely has a bad day, but today is unusually good.

He pulls a rambling but insightful Lee Sheppard piece from behind the Tax Analysts firewall. After talking about handbags and Kate Moss for awhile, Ms. Sheppard provides the concise summary of the Tribune Co. case that I wish I had done:

When the dust cleared, Times Mirror had $1.375 billion in cash in an LLC that it solely managed. Voting control of Matthew Bender was separated from economic growth, so that while the vote remained with seller Times Mirror, the growth potential went to purchaser Reed Elsevier. The merger of the subsidiary into Matthew Bender was supposed to qualify as a tax-free statutory merger under code sections 368(a)(1)(A) and (a)(2)(E) provided the tax administrator ignored the surrounding circumstances, chief among them that pile of cash that ended up in Times Mirror's control.

As a bonus, the good Dr. Caron shares with us the glorious theme song of the Chinese equivalent of the IRS. Imagine the inspiration this provides to the Chinese tax agents:

A historic mission is on our shoulders:
To collect wealth for the Four Modernizations of the State,
To promote the flourishing of the economy.
We do not fear difficulties or dangers,
We go throughout all the towns and villages;
We do not fear difficulties or dangers,
We go throughout all the towns and villages.

The national emblem is on my cap
And the motherland is in my heart.
We are glorious tax workers.

A sacred responsibility is on our shoulders:
To struggle for the administration of taxes according to law,
To stand at our post in order to see that policies are strictly followed.
We have a thousand stratagems
For stopping tax evasion;
We have a thousand stratagems
For stopping tax evasion.

The national emblem is on my cap
And the motherland is in my heart.
We are glorious tax workers.