The Present Method of Taxing Trust Income: A Criticism and Proposed Revision, 51 Yale Law Journal 1143 (1942)

Abstract

SINCE the inception of the income tax in 1913 the taxation of trust income has been an ever-vexing problem. Under the first income tax law a trust was not treated as a separate taxable entity. The Act levied a tax on the net income of all individuals, but merely required fiduciaries to file "a return of the net income of the person for whom they act, subject to this tax, coming into their custody" and to withhold the normal tax. Because of the lack of a taxable entity against which the tax could be levied, income collected by a trustee and held for the benefit of unborn or unascertained persons escaped the tax.