- 47 -
case-by-case basis. As Justice Douglas spoke for the Court in
Helvering v. Clifford, 309 U.S. 331, 338 (1940), responding to
the taxpayer’s argument that the then current statutory revocable
trust rules did not by their terms apply to the short-term trust
arrangement under review:
The failure of Congress to adopt any such rule of thumb
for that type of trust must be taken to do no more than
leave to the triers of facts the initial determination
of whether or not on the facts of each case the grantor
remains the owner for purposes of � 22(a). [Emphasis
supplied.]
What Justices Stone and Douglas said in Horst and Clifford
provides two reminders: First, the Supreme Court regards the
trial courts, including the Tax Court, as the proper arbiters of
the assignment of income doctrine; it’s the trial court’s job to
decide whether a taxpayer, who made an intrafamily or related
party transfer or other transfer of rights to future income or of
income producing property, retained sufficient control over what
was transferred to justify taxing the transferor on the income,
rather than the transferee. Second, the assignment of income
doctrine is judge-made law, not a rule of statutory
interpretation of the more recently enacted itemized deduction
and AMT provisions. Contrary to the claims of the majority and a
18(...continued)
ABA/AICPA/TEI/release on 10 ways to simplify the tax code
(including repealing AMT and phasing out phaseouts) Doc. 2000-
5573 Highlights & Documents (Feb. 28, 2000).
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