The Foy case was a great taxpayer victory involving one of the most complex areas of tax law, known as the assignment of income doctrine to tax professionals.
Tulsa, OK (PRWEB) October 27, 2014
The 30 year anniversary of January 14, 1985, is coming up soon. This is the date the United States Tax Court issued its official, reported, landmark opinion in the combined cases known as James E. Foy and Nancy L. Foy v. Commissioner, Expansion Enterprises, Inc. v. Commissioner, 84 T.C. 50, (Jan. 14, 1985), in which Clifford N. Ribner was the sole attorney representing the prevailing taxpayers.
In that opinion, the US Tax Court officially demolished two legal positions which the IRS had been arguing for many years applied in the case of a sale of contract rights (a franchise agreement in the Foy case) back to the other contracting party (the franchisor in Foy) with payments for such rights to be made to the seller over a number of years.
The IRS positions in such cases which the United States Tax Court rejected in that case were (1) that the entire contractual selling price should be taxed as ordinary income — at that time subject to rates as high as 70% — and not as a capital gain, taxable at that time no higher than 20%; and (2) that all such taxes should be imposed in the year of sale and not as payments were received by the selling taxpayer – even if that selling party received no payments at all in the year of sale, and even though the payments to be received were not secured – so that they might never ultimately be received in fact.
The Tax Court ruling in that case resulted in Mr. Ribner’s clients – and all, later, similarly-situated taxpayers – being able to report their gain from the sale as capital gain, and to do so proportionately as payments were received instead of in the year of sale.
The Foy case was a great taxpayer victory involving one of the most complex areas of tax law, known as the assignment of income doctrine to tax professionals. Mr. Ribner achieved this victory alone, without any assistance from anyone other than his secretaries.
About Clifford N. Ribner
Clifford N. Ribner is a tax litigation attorney with a practice which includes representing individuals, businesses, estates and trusts and non-profits against all American taxing authorities, including Federal (IRS), Oklahoma (OTC), New York (NYSDTF) and those of all other states. Bar Memberships include New York, Oklahoma, U.S. Supreme Court, U.S. Tax Court, and U.S. Circuit Courts of Appeals for the 10th and 4th Circuits. Ribner has been AV Preeminent Rated (highest possible peer-reviewed rating) by Martindale-Hubbell since 1985. Ribner’s education includes NYU Law School: J.D. (1977) and Lasker Scholar LL.M. (in Taxation)(1978) and Cornell University: A.B. Magna Cum Laude (1973). Ribner has over 36 years experience in complex tax law and litigation, including multiple jury trials and appeals with No C.I.D.-Target or other client ever indicted.
Reference: James E. Foy and Nancy L. Foy v. Commissioner, Expansion Enterprises, Inc. v. Commissioner, U.S. Tax Court, CCH Dec. 41,823, T.C. No. 41,823, 84 T.C. No. 50, 84 T.C. No. 4, (Jan. 14, 1985)