The Resource The case for a "super-matching" rule

The case for a "super-matching" rule

The case for a "super-matching" rule
The case for a "super-matching" rule
Current proposals for tax reform generally tend to focus - as they should - on important considerations such as tax rates, equity, simplification, international competitiveness, and deficit reduction. Most tax reform proposals seek to simplify the tax law by expanding the tax base and eliminating tax expenditures and other special rules that add complexity. The tax law, however, necessarily will continue to have numerous, detailed rules, which will be a source of continuing complexity. Moreover, as illustrated in this article, beyond the complexity that arises from the need to understand and apply numerous detailed rules, a substantial amount of complexity (and unfairness) in the administration of the tax law is attributable to the mismatches that arise from the interface between these rules, many of which were promulgated to address specific concerns without any consideration of how the interface between these rules should be navigated. Thus, as part of any tax reform or simplification effort, it would appear to be highly desirable to consider whether it is feasible for Congress or Treasury to enunciate a "super-matching" rule - or a series of such rules tailored for different contexts - that would provide general guidance to taxpayers and the Service as to when and how to address the gaps and conflicts in existing law that give rise to mismatch problems and how to interpret the interplay between different substantive rules. In addition, consideration might be given as to whether and how the matching principle should be taken into account more prominently and consciously in crafting legislative and regulatory rules. Preliminary to considering the feasibility and possible terms of a super-matching rule (or rules), this article first provides, in Part II, a more precise definition of "matching" and "mismatches," as well as an overview of the matching concept, and explores the degree to which this concept is already reflected in the tax law. Part III describes in greater detail how the matching concept is reflected in a variety of areas, as well as mismatch problems that arise. Apart from identifying cases that merit relief, an objective of this review is to endeavour, in Part IV, to derive lessons as to the sources of mismatch problems and the efficacy of approaches that have been adopted to achieve matching. Part IV also recommends specific changes in several areas that would likely have a significant beneficial impact on mitigating mismatches. Finally, this article discusses in Part V considerations that are relevant to evaluating the feasibility and possible terms of a supermatching rule, makes recommendations in Part VI as to the possible scope and terms of such a rule, and provides some concluding comments in Part VII
Citation source
In: Tax law review. - New York. - Vol. 65 (2012),
Reich, Y.Z
Geographic coverage
North America
Language note
  • hedging transaction
  • international tax law
  • source of income
  • Subpart F income
  • foreign tax credit
  • group treatment
  • partnership
  • deductions
  • tax shelter
The case for a "super-matching" rule

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