This Volume sets out to make a close examination of principles of income, deductibility and tax accounting under the Income Tax Assessment Act 1936. It may be said to be concerned primarily with what might be called general income tax law developed by the courts around the words “income”, “losses and outgoings”, “derived” and “incurred”. It seeks to express principles as an integrated system. Where judicial decisions have departed from these principles, a need for reconsideration of the decisions is asserted. The security of the income tax against avoidance—the non-payment of tax where the policy of the law would require it—is dependent on the integrity of its principles. Where they can be discerned, the policies of the law are identified and evaluated.

At the same time the Volume deals with all specific provisions of the Assessment Act concerned with income, deductibility and tax accounting, save those that relate to special industries such as mining. It considers the interpretation of those provisions and their relationship with the general tax law. In the result the Volume is a treatise on the law which may be useful to students and in which the tax adviser may find a means of entry to the examination of the law bearing on a tax problem.

The Volume does not attempt a close examination of provisions concerned with the treatment of income moving through intermediaries. Consideration is however given to the correlations of the trust and partnership provisions and the provisions in regard to company distributions, with the general provisions in regard to income deductibility and tax accounting. The function of the trust and partnership provisions is explained in appropriate contexts and there is an account of the taxation of company distributions.

A detailed treatment of the income tax law in regard to income moving through intermediaries is proposed in a further volume in joint authorship with colleagues. At longer range we also have in mind other volumes that will deal with international aspects of the income tax, with the income taxation of special industries and with tax procedure.

The Volume is the outcome of research in and teaching of income tax law over a long period during which I have accumulated debts to many people for ideas and insights about the analytical structure of the income tax law and its policies. My debts are owed to many students, members of the legal and accounting professions and colleagues. My experience as a member of the Asprey Committee left me greatly indebted to his Honour Mr Justice Asprey, to David Butt, Sir Peter Lloyd and Kenneth Wood, and to Alan Boxer, the Committee’s Chief Economist. I must express my thanks to their Honours Sir Nigel Bowen, Chief Judge of the Federal Court, Mr Justice Fox of the same Court, Mr Justice Mahoney of the New South Wales Court of Appeal, and to Neville Challoner. They gave the lectures in a series on income tax at Sydney Law School that began the activities of the Committee for Post Graduate Studies in the Department of Law. They have been followed by many others who have given great service to the School by lecturing in the programmes of lectures arranged by the Committee. I express my thanks to them for their contributions to professional legal education and to my own.

I am very much in the debt of Ash Wheatcroft, the pioneer of legal scholarship in tax in the United Kingdom, who inspired my interest in tax law as a field of legal scholarship. And I am equally in the debt of Willard Pedrick, a leading United States tax lawyer who has earned himself a special place in the affections of Australian lawyers. Among my colleagues over the years I owe special debts to Gerald Kenneally, Graham Hill, Tom Magney and Richard Vann. Gerald and I began the teaching of income tax law in the Master of Laws curriculum. Tom Magney took over for a number of years the teaching of the course in international tax, and that task has now fallen to Richard Vann, a leader in the new generation of tax lawyers.

I acknowledge with gratitude the work of Jennifer Littman, my secretary, who has assumed a vital role in the administration of the Law School’s tax programme. She typed the whole of the manuscript of the Volume from my own, barely legible, handwriting. She prepared the table of cases. My thanks are also due to Michael Christie who, as research assistant, made valuable contributions in research and critique and corrected many imperfections.

I acknowledge the assistance of the Australian Research Grants Scheme which provided funds that made possible the appointment of a research assistant. And I acknowledge the opportunities for research and writing provided by my University.

 

R. W. PARSONS