50 years ago in The Tax Adviser.

Here are some highlights from the October 1970 issue.

Tax shelters and the Tax Reform Act

In recent years, there has been increasing concern that taxpayers with the necessary financial resources have been able to minimize the effect of our progressive tax rate structure by taking advantage of various tax shelters permitted by the Code. Utilization of these shelters has created substantial variations in the effective rates of tax imposed on economic income and resulted in unfairness in the allocation of the tax burden among taxpayers. The Tax Reform Act of 1969 was enacted to eliminate many abuses and advantages determined to be unacceptable by Congress.

--Solon F. O'Neal Jr., CPA, "A Minimum Tax on Tax Shelters," p. 604. O'Neal was a partner of Ernst & Ernst in Tampa.

History of self-dealing transactions

Prior to 1950, Sec. 501(c)(3) organizations had to engage in rather substantial adverse transactions to have their exempt status challenged. The basis for any IRS challenge was that the organization was not operating "exclusively" for the charitable or other purposes stated in the exemption provision.... Thus, exemption was sustained although assistance was furnished to needy relatives, old family servants, and employees of the donor's corporation; or a donor was allowed to reserve small annuities to his relatives out of income which would be exempted through the use of a charitable organization. [footnotes omitted]

--William J. Lehrfeld, Esq., "Private Foundations and Tax Reform...