John A. Lynch, Jr. (Baltimore) has published Taxation of Below-Market Loans Under Section 7872: This Could be a Lot Simpler!, 21 Akron Tax J. 33 (2006). Here is the Conclusion:
It is difficult to point to an income tax provision enacted in recent years that is as complicated or intrusive as § 7872. The issues that led to its creation still lurk, especially if interest rates rise from the near historical low rates of recent years. But in several significant ways, § 7872 far overshot its mark. Sound tax policy would counsel that it be amended to a more appropriately targeted tool to limit tax avoidance.
