Congress should Address Tax Avoidance Head-on: The Internal Revenue Code Needs a Gaar (General Anti-Avoidance Rule‪)‬

Major tax reform invariably includes the closing of certain "loopholes" perceived as allowing taxpayers to reduce their federal income tax burden inappropriately. Many of these so-called "loopholes" have been expressly created by Congress (e.g., deferral for corporations operating abroad through subsidiaries), and need specific legislative attention if they are to be changed. Other "loopholes" are actually found in provisions that were enacted for one particular purpose or circumstance, but have subsequently been applied by taxpayers for another purpose or circumstance that produces meaningful but unintended tax benefits. This paper seeks to determine the most effective way to deal with such situations in the context of tax reform. I. THE ROLE OF JUDICIAL DOCTRINES IN INTERPRETING THE TAX LAWS