Law reviews are scholarly journals focusing on legal issues, usually edited by students at a particular school. America’s law schools currently crank out hundreds of different reviews, which means there aren’t a lot of topics that haven’t already been covered. (Chief Justice John Roberts once said “Pick up a copy of any law review that you see, and the first article is likely to be, you know, the influence of Immanuel Kant on evidentiary approaches in 18th Century Bulgaria, or something.”) But the Iowa Law Review has just published a new article on a crucial tax topic — and it’s especially appropriate to discuss this week after Halloween. We’re referring, of course, to Arizona State professor Adam Chodorow’s groundbreaking new work, Death and Taxes and Zombies.
“The United States stands on the precipice of a financial disaster, and Congress has done nothing but bicker. Of course, I refer to the coming day when the undead walk the earth, feasting upon the living. A zombie apocalypse will create an urgent need for significant government revenues to protect the living, while at the same time rendering a large portion of the taxpaying public dead or undead. The government’s failure to anticipate or plan for this eventuality could cripple its ability to respond effectively, putting us all at risk. This essay fills a glaring gap in the academic literature by examining how the estate and income tax laws apply to the undead.”
Don’t laugh. This is 25 pages of lively prose, with 124 scholarly footnotes citing authoritative sources like Harry Potter and the Sorceror’s Stone, the noted gourmand Hannibal Lecter, and even “Slimer” from Ghostbusters. Chodorow isn’t afraid to ask the scary questions that the rest of us shy away from:
• At what point does a zombie become a “decedent” for estate tax purposes? Currently, the legal definition of “death” varies from state to state, with some basing it on heart function and others on brain function. This means that zombies may not actually be “dead” in some states. Does someone who dies stay legally dead after being reanimated as a zombie?
• Could it ever make sense to die for tax reasons, then come back when income or assets will be taxed at a lower rate? If so, would the IRS attack those deaths as sham arrangements?
• Does someone remain married for tax purposes if they or their spouse become zombified?
• What about vampires? They’re typically wealthy and sophisticated, which makes estate planning a must. And they live for centuries, which makes tax-deferred vehicles like IRAs and cash-value life insurance even more valuable.
• Finally, what about ghosts? Do phantoms owe tax on phantom income?
As you can see, there’s a lot more to taxes and zombies than meets the eye. Chodorow urges Congress to create tax laws for them now, before members become zombies themselves.
Fortunately, the secret to navigating taxes in a land of walking dead is the same as navigating taxes now — it’s planning. And speaking of acting now, before it turns too late, 2013 is quickly coming to an end. December 31 may not bring a zombie apocalypse, but it will drive a stake in the heart of some of your best planning strategies. So call us for the plan you need, before it’s really too late!
Peter J Tarantino CPA
Tarantino & Company, CPAs
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