The Story of Crane V. Commissioner

Abstract

This paper presents the story of Crane v. Commissioner, 331 U.S. 1 (1947), the case described by Prof. Bittker as having "laid the foundation stone of most tax shelters." Drawing upon newspaper stories, briefs, unpublished judicial opinions and memoranda, and other sources, it describes what was really involved in the case, the government's and the taxpayer's litigation strategies, the decision-making processes of the courts, and the case's impact on the development of the tax law. The paper will be published as a chapter in a book to be entitled Tax Stories: An In-Depth Look at Ten Leading Federal Income Tax Cases (Foundation Press). Additional financial support for the project has been provided by the American Tax Policy Institute.