Abstract: The rules and regulations of the Internal Revenue Code, in their attempt to prevent tax avoidance through the unwarranted reduction of corporate earnings and profits, produce unbalanced tax balance sheets and are frequently unfair to the taxpayer. After a brief historical sketch of Code provisions and some of the relevant case law, this article examines in detail certain tax consequences of liquidations of subsidiaries and corporate divisions, illustrating the perverse effects of the present Code. Concurrently the article presents alternatives designed to avoid the Code's anomalies.