The fact that the taxpayer surrenders the winnings to the state does not give rise to an assignment of income
because the taxpayer is not directing the payment of the winnings to another person.
The conflict between [section] 1041 and the assignment of income
doctrine was addressed in the Ninth Circuit Court of Appeals case of Kochansky v.
Fifty-one chapters are organized into sections covering gross income, items excluded from gross income, personal deductions, businesses, investment activities, timing methodologies, income characterization, non-recognition provisions, assignment of income
, select tax topics, and litigation and research.
Because the regulation refers to the assignment of income
, instead of relying upon the court order, a custodial parent may prefer to irrevocably assign his or her right to the child support payment stream to a self-settled trust.
Banaitis distorts foundational principles, known as assignment of income
law, which help identify the person who must report income for federal tax purposes.
Thus, the IRS should consider issuing updated guidance along the lines of Notice 2001-69, (12a) which essentially suspended the principles of constructive receipt and assignment of income
following September 11 to permit charitable donations of annual leave.
The IRS increased their reported income by $4,722,484--the appreciation in the warrants--under the assignment of income
deduction debate; tax shelters; the origins of GAAP; the assignment of income
doctrine; and, judicial doctrines combating tax avoidance.
2002-22 specifically states that the assignment of income
doctrine [see Lucas v.
It is a fundamental concept in tax law that there is realization of income to the person who has the right to receive it or the power to dispose of it, and payment directly to an exempt organization, at the direction of the person whose individual personal services earned it, constitutes an assignment of income
that is disregarded for Federal income tax purposes.
Examples clarify which items to declare as income, requirements for deducting personal expenses, the cost basis of property sales, and assignment of income
to the proper taxpayer.
The Court of Appeals for the Sixth Circuit concluded that the contingent fee agreement was not an anticipatory assignment of income
because the litigation recovery was not already earned, vested, or even relatively certain to be paid when the contingent fee contract was entered.