TABD U3DB Response #1 and #2

Response 1
The tax planning activities by individuals are well explained. There are instances when people try to use tax planning to reduce taxes payable to the federal government. This is an instance of tax avoidance where individual taxpayers use the loopholes in the law to reduce their tax liability. The various tax planning is clearly elaborated and includes: converting income from one type to another, shifting from one pocket to another or one time to another. These ways reduce individual taxes and could lead to legal restrictions. However, according to substance doctrine, a transaction needs to have a purpose in order to have a purpose in the business.
However, my concern in this discussion is on the ways the government can use to reduce the tax planning by the individuals, as it reduces revenue to the government. Concerning the posting, I would need the clarification on the purpose doctrine.
Response 2
This discussion clearly illustrates the broad restrictions on the taxpayers’ behavior. Some tax policies are made to encourage some transactions that are socially desirable and reduces the tax liabilities. The policies have given rise to restrictions that limit the tax-planning activities. Some judicial doctrine from the tax code has form part of enforceable code under the Internal Revenue Services (IRS). It is also clear that the court ruling gives the doctrine security and permanence. Some of the codified doctrines are economic substance, business purpose, substance over form and assignment income.

The government uses these doctrines to reduce the incidence where individuals use tax planning to reduce tax liability. The four doctrines are clearly explained based on their applicability.
Some of the questions from this posting are for instance what examples of the instances of tax planning are. I would also like clarification on the kind of transactions that has no other purpose other than tax savings.