Professional Associations and Federal Income Taxation: Some Questions and Comments

Abstract

In the years 1942-1948, the community property system wus adopted by state legislatures in Oregon, Nebraska, Michigan, and Pennsylvania and was a candidate for adoption in New York and several other eastern states. Community property moved eastward in those days as irresistably as Rocky Mountain spotted fever, not because the League of Women Voters wanted it or even because it was the rediscovered heritage of Anglo-American law of which the British had been brutally deprived by the Norman Conquest, as a great scholar urged in his brief in Fernandez v. Wiener. Not at all. The appeal of community property to states that hud never enjoyed the civilizing mission of a Spanish occupation emanated, simply and solely, from the fact that it permitted husband and wife to split their income in computing their federal income tax. As the community property system spread, pressure mounted to throw open the privilege of income-splitting to all married couples regardless of their state's system of property law. As soon as Congress responded by enacting the joint return provisions of the Revenue Act of 1948, however, the "new" community property states lost their taste for Spanish law and repealed their statutes.