Assaf Likhovski, "The Duke and the Lady: Helvering v. Gregory and the History of Tax Avoidance Adjudication", 25 Cardozo Law Review 953 (2004).


Tax avoidance is one of the major problems that every tax system faces. Courts play an important role in fighting tax avoidance, but the scope of judicial intervention in tax avoidance schemes varies. Certain courts and judges adopt a more passive and formalist attitude to tax avoidance while other courts pursue a more active, substantive approach. What factors influence judicial attitudes to tax avoidance? The article seeks to answer this question by examining the history of one specific landmark case, Helvering v. Gregory, decided by Judge Learned Hand in 1934.

The article examines the legal, cultural and political factors that influenced Hand's decision. It argues that one major factor that led Judge Hand to decide the way he did was the immediate political context in which the case was decided: In the months and weeks prior to the decision, tax avoidance by the rich had become a major political issue and public opinion was captivated by scandalous revelations about the tax avoidance schemes of a group of leading industrialists and bankers, chief among whom was Andrew Mellon, former Secretary of the Treasury. Using the story of Gregory as a case-study, the article shows that only a comprehensive historical approach which takes account of internal doctrinal developments as well as the influence of culture and politics can explain the history of tax avoidance adjudication.


Legal History, Theory and Process

Date of this Version

March 2008