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I. Introduction
The Internal Revenue Code is notoriously complex.1 Sometimes its complexity is attributed to its size,2 or to its graduated rate schedule,3 or to the many exceptions to general rules that permeate the statute.4 But part of its complexity is due to its structure, which in turn is due in part to the Code's many interlinked sections,5 to the "dependencies"6 among the various sections of the Code. This Article analyzes a particular type of dependency in the Code, what it terms the problem of "definitional scope," and uses the problem of definitional scope as a case study to argue for the benefit of formalizing proposed legislation, that is, translating legislation into logical symbols that reveal how Code provisions interact.
The Code is rife with explicit cross-references, and almost all of those are internal cross-references-references within the Code to other sections of the Code.7 Approximately 97% of citations in the Code are to sections within the Code, rendering the Code "almost entirely self-contained."8 For example:
No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control (as defined in section 368(c)) of the corporation.9
This statute, 351(a), explicitly "calls" 368(c). But other dependencies arise not from explicit cross-reference, but from definitions. Definitions, like explicit cross-reference, "call" other portions of the Code, but they do so implicitly. Consider, for example, this reference in 302:
This paragraph shall not apply to any redemption made pursuant to a plan the purpose or effect of which is a series of redemptions resulting in a distribution which (in the aggregate) is not substantially disproportionate with respect to the shareholder.10
The phrase "substantially disproportionate" in 302 is defined earlier in the same section,11 and thus "calls" earlier language.
Cross-references and definitions need not be distinct-a Code section can cross-reference a definition, as in "property (as defined in section 317(a))," which appears in 301.12 But the definition need not be explicitly cross-referenced to apply. it is these nonexplicitly cross-referenced definitions that this Article studies. in particular, the Article studies examples of problems of definitional scope: when the Code uses...