‘Taxes are what we pay for civilized society…”1 While lawyers, like the rest of Americans, are obliged to pay their share of taxes, there is, of course, nothing improper about attempting to legally minimize tax liability,2 and many law firms utilize creative means to reduce the tax burden of their partners and members.
Recently, two decisions have clarified the parameters for acceptable methods for tax avoidance. One case was decided by the U.S. Tax Court: Renkemeyer, Campbell & Weaver, LLP v. C.I.R,3 and the other by the Supreme Judicial Court of Maine: Luker v. State Assessor.4 The recent cases are discussed in this column.
‘Renkemeyer’
