‘There Is No Frigate Like A Ebook’: Tax Regulation And Literature

Reading a few books on the floor

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If you graduated from law school within the past five decades, you probably saw on the menu of courses offered during your second or third year a curious seminar with a title like “Law and Literature” or, most likely, exactly that. The version at my school — which I, alas, didn’t take — involved monthly meetings over dinner at the professor’s home. It was hugely popular.

The popularity of law and literature courses suggests that law students have a need to explore the world beyond what is offered in casebooks. And it appears that even highly experienced lawyers have similar needs. As former Supreme Court Justice David H. Souter once explained, each term felt to him like a “sort of annual intellectual lobotomy,” and the solution for him and all Americans was to develop a “habit of mind” that includes reading good books.

I can’t offer you an aperitif like the generous professor who hosted my school’s literary gatherings did. But I can supply a few selections that touch delightfully on taxation (not enough to be billable, unfortunately) and “take us Lands away,” which is what everyone needs at the close of this annus horribilis, no? For maximum good cheer, there are also suggestions for thematic libations.

Moonfleet by J. Meade Falkner

Tax connection? Tax evasion sets the plot in motion in this diverting adventure story. Young John Trenchard discovers that the men in his small village of Moonfleet are smuggling French spirits into the country via the treacherous harbor, thus evading the revenue officers. There’s a search for a long-missing diamond, literal cliffhanging, and constant reminders that “as in life, so in a game of hazard, skill will make something of the worst of throws.”

Pairs well with: It’s typically kind of atrociously sweet, but Beaujolais Nouveau fits the French contraband theme and is easily found in grocery stores this time of year. For the more adventurous — and, really, Why Not? — recreate the “Ararat milk” that Master Ratsey the sexton liked to swill at Elzevir Block’s tavern “to keep out autumn chills.” Ararat is a brand of Armenian brandy that got its start in 1887 and is still sold today, which puts it about 100 years too late to have been in Block’s cupboard, but pretty perfectly matched to the 1898 publication date of Moonfleet. “‘O rare milk of Ararat!’ (said the sexton), ‘it is sweet and strong, and sets the heart at ease.’”

Anything by P.G. Wodehouse

Tax connection? The creator of Jeeves, the best-known valet in English literature, and Bertie Wooster, his aristocratic employer who is “mentally somewhat negligible” but has a heart of gold, was the center of a not particularly amusing Supreme Court case over the amount of taxes he owed to the United States. It’s a standard case in international tax law textbooks illustrating fixed or determinable annual or periodic income.

At the time of the events in Commissioner v. Wodehouse, 337 U.S. 369, Sir Pelham Grenville Wodehouse KBE (known as Plum) was a nonresident alien “not engaged in trade or business within the United States and not having an office or place of business therein,” as Justice Harold Hitz Burton unpoetically described him. Wodehouse had sold some of the U.S. rights to his stories, and his remuneration was paid in advance in a lump sum for each story. His literary agent withheld income tax on them; the IRS asserted a deficiency. Wodehouse argued that he should be able to keep all his earnings for Money in the Bank, among other plummy diversions, on the ground that he hadn’t received a royalty but had sold a property interest in a copyright. He also argued that the single lump sum payments for each story weren’t annual or periodic and thus couldn’t be FDAP.

The Tax Court didn’t buy Wodehouse’s argument (8 T.C. 637 (1947)), and neither did the Supreme Court, which ruled that the payments were royalties for copyrights, and that the words “annual” and “periodical” aren’t so much a limitation as they are “merely generally descriptive.” The Fourth Circuit had ruled in his favor (166 F.2d 986 (4th Cir. 1948)), and there was a circuit split at the time on whether a one-time payment for serialization rights was a sale, which was why the Supreme Court took the case.

Wodehouse had previously groused about the noisome qualities of the U.S. income tax in Vanity Fair in 1915, shortly after filing his first U.S. income tax return after the passage of the 16th Amendment. He explained that “no indoor game ever achieves popularity for two successive years, and the Government must think up something new for next Winter.”

Plum’s legacy in U.S. tax law lives on today. Hawk-eyed connoisseurs of recent Tax Court opinions will note that Tax Court Judge Mark V. Holmes — by all appearances the close relation of poet Oliver Wendell Holmes Sr. — cited Bertie in the joined cases Sapp v. Commissioner and Rajagopalan v. Commissioner, T.C. Memo. 2020-159. The take-away is that if you should ever find your position being compared to Wooster’s opinions on aunts, you’re about to lose.

Pairs well with: If you happen to be reading Wodehouse over Christmastide (that’s the 12 days after Christmas Eve), the appropriate Woosterian quaff is wassail. Bertie says in Right Ho, Jeeves that “something attempted, something done, seemed to me to have earned two-penn’orth of wassail in the smoking-room.” He’s probably referring to brandy, since he explains that he takes his with a “shoosh of some soda-water,” which is his favored concoction, the highball. In any event, Bertie sips the mixture “with carefree enjoyment, rather like Caesar having one in his tent the day he overcame the Nervii.”

But for our purposes, mulled cider is the way to go. If you’re going to bother with baking apples and studding oranges with cloves for wassail, you should also go ahead and cut up all the necessary dried fruit to prepare an English plum pudding (Bertie requested one in The Code of the Woosters as part of his elaborately imagined post-imprisonment meal). Note that the chief attraction of plum pudding isn’t the aesthetics or the taste of the thing (both of which leave much to be desired) but the serving: You douse it in cognac and light it on fire. The flames engulfing your dessert are thematically on point too — Bertie has an uproarious experience with deliberately lit fire in Thank You, Jeeves.

If ease of preparation is paramount — you’ve got a date with Bertie and Jeeves, after all — brandy and soda is Bertie’s nightcap of choice. For authenticity’s sake, it should be done in accordance with Aunt Dahlia’s directions: “What I want is a brandy and soda. Tell Jeeves to make me one. And if he forgets to put in the soda, it will be all right with me.”

2020 connection: Bertie and Jeeves are relics of a long-gone age, but the big questions that great literature helps us answer are eternal:

“There are moments, Jeeves, when one asks oneself, ‘Do trousers matter?’”

“The mood will pass, sir.”

Sage advice in the Age of Zoom, indeed.