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ALITO'S TAX CASES

November 08, 2005

The Supreme Court rarely hears tax cases, so we get all excited when they do. Some cases leave us pulling out our hair for years (INDOPCO, anyone?) and some open gaping loopholes that we scramble to find trucks to drive through (Gitlitz).

Samuel Alito, the new nominee for Justice O'Connor's seat, has been hearing tax cases in the Third Circuit for 15 years. Lee Sheppard of Tax Analysts has read twenty tax cases ruled on by Judge Alito, along with some ERISA and bankruptcy law decisions. Thanks to the miracle of TaxProf, non-subscribers can read Ms. Sheppard's article to get an inkling of how Judge Alito looks at tax cases. Ms. Sheppard's summary:

"Scalito?" In his social views, undoubtedly. But not in his statutory interpretation. Judge Alito gives free rein to legislative history, previous versions of the pertinent statute, colloquy, whatever is available in interpreting statutes. "Giulianito" might be a more accurate sobriquet for this former federal prosecutor. No, he's not flashy or publicity seeking or serially married, but the ex- prosecutor in Judge Alito is always evident. He's a solid technician who picks and chooses his arguments based on where he wants the law to go. Unlike Chief Justice Roberts, he does not let the law lead him.

I recommend the whole article, but one passage struck me as an example of how the law should work. A pair of wives were trying to get out of paying taxes on their joint returns where their husbands had underpaid taxes on their S corporation income:

The wives said that their children committed crimes and did drugs, their parents were ill, and one husband was an alcoholic wife- beater. Judge Alito was sympathetic, but found those tragedies irrelevant. "The income tax laws do not as a general rule provide that those who have experienced unhappiness, tragedy, or abuse at the hands of family members may pay less tax than other people in identical financial circumstances who have experienced happiness, good fortune, and considerate treatment by their families," he wrote.

Tax Analysts subscribers can find the article here, if they so wish.

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