UC Law Journal


Justice Roger J. Traynor is best known for his judicial innovations in the fields of conflict of laws, product liability, and civil procedure. However, few would trace Traynor's roots to the field of tax law. In the late 193os, Traynor and Stanley S. Surrey, one of our nation's foremost authorities on federal tax law, worked together to propose a substantial transformation of existing mechanisms for settling tax disputes. At what was a crucial time in the development of tax law, high marginal tax rates intensified the friction between taxpayers and the government, boosted litigation, and multiplied the number of tax controversies. Traynor and Surrey developed a concept of "preventive tax policy" in an effort to prevent such controversies from arising and, where they could not be prevented, to reduce the area in which they occurred.

This Article explores the joint project of these extraordinary men in its historical context and its implementation in Traynor's adjudication of tax disputes. Their proposal marked the evolution of modern tax avoidance at a time when tax acts were becoming quite complex and were followed by frequent tax revisions enacted in response to tax evasion schemes. It offered valuable guidance for reducing the complexity and vagueness inherent in our tax system, and for improving the relationship between taxpayers and the government. Some of today's most important mechanisms for preventing tax avoidance originated in Traynor and Surrey's proposal, such as future closing agreements, private letter rulings, and advanced pricing agreements. Their proposal for a single court of tax appeals continues to be debated.

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