One of the joys of being a tax lawyer is that you're an expert on something so arcane, so complicated, so disgracefully mysterious that the average person, even the average lawyer, doesn't argue with you about it. I pity my colleagues who teach subjects like Constitutional Law, because everybody and his brother thinks he's an expert in the area. You may be the world's greatest scholar on the First Amendment, Equal Protection, Due Process, or the right to privacy, but you'll get an argument about your views wherever you go. Not so with tax lawyers. People actually quiet down and listen to you, because, though you may not know what you're talking about, they definitely don't know more than you do about it.

This is a sad week for some of us in the tax priesthood, because we're just discovering that Congress has done away with one of the craziest, most screwed up tax code sections ever written (and that's saying a lot), the "collapsible corporation" rules. Although they have a colorful history -- they were designed to shut down aggressive tax planning by such savvy taxpayers as movie legend Pat O'Brien -- these rules haven't played any meaningful role in the tax laws for more than a decade. But they've always remained on the books to puzzle all but the knowing few. The Bush tax cut legislation now does away with them, at least until 2009; even then, I seriously doubt they'll be back.

Before bidding a fond farewell to these rules, I'd like to go over their highlights just one last, tearful time. Folks, let us not forget this immortal sentence:

For purposes of subsection (a)(1), a corporation shall not be considered to be a collapsible corporation with respect to any sale or exchange of stock of the corporation by a shareholder, if, at the time of such sale or exchange, the sum of -- (A) the net unrealized appreciation in subsection (e) assets of the corporation (as defined in paragraph (5)(A)), plus (B) if the shareholder owns more than 5 percent in value of the outstanding stock of the corporation, the net unrealized appreciation in assets of the corporation (other than assets described in subparagraph (A)) which would be subsection (e) assets under clauses (i) and (iii) of paragraph (5)(A) if the shareholder owned more than 20 percent in value of such stock, plus (C) if the shareholder owns more than 20 percent in value of the outstanding stock of the corporation and owns, or at any time during the preceding 3-year period owned, more than 20 percent in value of the outstanding stock of any other corporation more than 70 percent in value of the assets of which are, or were at any time during which such shareholder owned during such 3-year period more than 20 percent in value of the outstanding stock, assets similar or related in service or use to assets comprising more than 70 percent in value of the assets of the corporation, the net unrealized appreciation in assets of the corporation (other than assets described in subparagraph (A)) which would be subsection (e) assets under clauses (i) and (iii) of paragraph (5)(A) if the determination whether the property, in the hands of such shareholder, would be property gain from the sale or exchange of which would under any provision of this chapter be considered in whole or in part as ordinary income, were made -- (i) by treating any sale or exchange by such shareholder of stock in such other corporation within the preceding 3-year period (but only if at the time of such sale or exchange the shareholder owned more than 20 percent in value of the outstanding stock in such other corporation) as a sale or exchange by such shareholder of his proportionate share of the assets of such other corporation, and (ii) by treating any liquidating sale or exchange of property by such other corporation within such 3-year period (but only if at the time of such sale or exchange the shareholder owned more than 20 percent in value of the outstanding stock in such other corporation) as a sale or exchange by such shareholder of his proportionate share of the property sold or exchanged, does not exceed an amount equal to 15 percent of the net worth of the corporation.