“There isn’t any frigate like a ebook”: tax law and literature

Reading a few books on the floor


If you have graduated from law school in the past five decades, you have likely seen on the menu of courses offered in your sophomore or third year an odd seminar with a title like “Law and Literature” or, most likely, just that. The version at my school – which I unfortunately didn’t take – included monthly dinner meetings at the professor’s house. It was very popular.

The popularity of law and literature courses suggests law students need to explore the world beyond what is offered in case books. And it seems that even very seasoned lawyers have similar needs. As former Supreme Court Justice David H. Souter once stated, any term felt like an “annual intellectual lobotomy” to him, and the solution for him and all Americans was to develop a “mental habit” that includes reading good books.

I cannot offer you an aperitif, as did the generous professor who hosted my school’s literary meetings. But I can provide a couple of choices that affect taxation (unfortunately not enough to be billable) and “take us lands” which everyone needs at the end of this annus horribilis, right? There are also suggestions for themed libations for maximum good humor.

Moonfleet by J. Meade Falkner

Tax connection? Tax evasion starts the action in this distracting adventure story. The young John Trenchard discovers that the men in his small village Moonfleet are smuggling French ghosts into the country via the treacherous harbor and thus avoiding the tax officials. There’s a quest for a long-missing diamond, literal cliffs, and constant reminders that “like in life, in a game of danger, skill will make something of the worst throws.”

Goes well with: It’s usually cruelly cute, but Beaujolais Nouveau fits the French contraband theme and is easy to find in grocery stores this time of year. For the adventurous – and really, why not? – Restore the “Ararat milk” that Master Ratsey the sexton used to drink in the Elzevir Block tavern “to keep the autumn chill out”. Ararat is an Armenian brandy brand that began in 1887 and is still sold today. That makes it about 100 years late to be in Block’s closet, but it is pretty much in tune with Moonfleet’s 1898 release date. ‘O rare milk of Ararat!’ [said the sexton]”It’s sweet and strong and soothes the heart.”

Everything from PG Wodehouse

Tax connection? The creator of Jeeves, the most famous valet in English literature, and Bertie Wooster, his aristocratic employer, who is “a little mentally negligible” but has a heart of gold, were at the center of a not particularly amusing case by the Supreme Court over the height of Taxes he owed the United States. This is a standard case in textbooks of international tax law, in which fixed or determinable annual or periodic income is presented.

At the time of the events in Commissioner v. Wodehouse, 337 US 369, Sir Pelham Grenville Wodehouse KBE (known as Plum) was a non-resident alien who “does not do business in the United States and has no office or place of business in it,” as Judge Harold Hitz Burton unpoetically described him. Wodehouse had sold some of the US rights to his stories, and his compensation was paid upfront in a lump sum for each story. His literary agent withheld their income tax; The IRS alleged a shortcoming. Wodehouse argued that he should be able to keep all of his earnings in the bank for cash, on the grounds, among other things, that he did not receive a license fee but sold an ownership interest in a copyright. He also argued that the individual lump sums for each story are not annual or periodic and therefore could not be FDAP.

The Finance Court did not buy Wodehouse’s argument (8 TC 637 (1947)), nor did the Supreme Court, which ruled that the payments are copyright royalties and that the words “annually” and “periodically” are not much of a limitation as they are “only generally descriptive”. The Fourth Circuit had ruled in its favor (166 F.2d 986 (4th Cir. 1948)), and there was a breakdown of the circuit at this point as to whether a one-time payment for serialization rights was a sale, hence the Supreme Court accepted the case.

Wodehouse had grumbled about the annoying properties of US income tax in Vanity Fair as early as 1915, shortly after filing his first US income tax return after the 16th Amendment was passed. He stated that “no indoor game has ever gained popularity in two consecutive years and the government must come up with something new for next winter.”

Plum’s legacy in US tax law lives on today. Those familiar with the recent Finance Court rulings will find that Finance Court Judge Mark V. Holmes – apparently poet Oliver Wendell Holmes Sr.’s close relationship – cited Bertie in the related Sapp v Commissioner and Rajagopalan v Commissioner cases. TC memo. 2020-159. The takeaway is that if you ever find your position compared to Wooster’s opinions on aunts, you will lose.

Fits well with: If you happen to read Wodehouse about Christmas (that’s the 12 days after Christmas Eve), the Woosterian Quaff Wassail is the right one. Bertie says in Right Ho, Jeeves that “something that was tried, something was done, seemed to have earned me two Penn’orth water nails in the smoking room.” He is likely referring to brandy as he explains that he takes his with a “dash of soda water,” which is his preferred preparation, the highball. In any case, Bertie sips the mixture “with carefree enjoyment, similar to how Caesar has one in his tent on the day he overcame the Nervii”.

But for our purposes, mulled wine is the way to go. If your into baking apples and garnishing oranges with cloves for Wassail, be sure to also cut up any necessary dried fruit to make an English plum pudding (Bertie requested one in the Code of the Woosters as part of his artfully presented food after imprisonment). Note that the main attraction of plum pudding isn’t the aesthetics or the taste of the thing (both leave something to be desired), but the serving: you pour it into cognac and set it on fire. The flames that devour your dessert are also thematically on point – Bertie has an exhilarating experience of deliberately lit fire in Thank You, Jeeves.

When ease of preparation is paramount – after all, you’re out on a date with Bertie and Jeeves – brandy and soda Bertie’s nightcap is the go-to option. For the sake of authenticity, this should be done as instructed by Aunt Dahlia: “What I want is a brandy and soda. Tell Jeeves to make me one. And if he forgets to put the soda in, I’ll be fine. ”

Connection 2020: Bertie and Jeeves are relics of a bygone age, but the big questions that great literature answers us are eternal:

“There are moments, Jeeves, when you ask yourself, ‘Are pants important?'”

“The mood will pass, sir.”

Wise advice in the age of zoom.