11 TAXES AND BUSINESS DECISIONS. Richard P. Mandel. It is not possible to fully describe the federal taxation system in the space of one book chapter. It may not even be realistic to attempt to describe federal taxation in a full volume. After all, a purchaser of the Internal Revenue Code (the Code) can expect to carry home at least two volumes consisting of more than 6,000 pages, ranging from Section 1 through Section 9,722, if one includes the estate and gift tax and administrative provisions. . | TAXES AND 11 BUSINESS DECISIONS Richard P. Mandel It is not possible to fully describe the federal taxation system in the space of one book chapter. It may not even be realistic to attempt to describe federal taxation in a full volume. After all a purchaser of the Internal Revenue Code the Code can expect to carry home at least two volumes consisting of more than 6 000 pages ranging from Section 1 through Section 9 722 if one includes the estate and gift tax and administrative provisions. And this does not even begin to address the myriad Regulations Revenue Rulings Revenue Procedures Technical Advice Memoranda private letter rulings court decisions and other sources of federal tax law that have proliferated over the better part of the twentieth century. Fortunately most people who enroll in a federal tax course during their progression toward an MBA have no intention of becoming professional tax advisers. An effective tax course therefore rather than attempting to impart encyclopedic knowledge of the Code instead presents taxation as another strategic management tool available to the manager or entrepreneur in his or her quest to reach business goals in a more efficient and cost-effective manner. After completing such a course the businessperson should always be conscious that failure to consider tax consequences when structuring a transaction may result in needless tax expense. It is thus the purpose of this chapter to illustrate the necessity of taking taxation into account when structuring most business transactions and of consulting tax professionals early in the process not just when it is time to file the return. This purpose will be attempted by describing various problems and opportunities encountered by a fictitious business owner as he progresses from 314 Taxes and Business Decisions 315 early successes through the acquisition of a related business to intergenera-tional succession problems. THE BUSINESS We first encounter our sample business when it has
