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Wednesday, November 30, 2005

Tax Treatment of Home Purchase Programs Offered by Employers to Relocating Employees

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The IRS today issued Rev. Rul. 2005-74, which addresses the tax treatment of costs an employer incurs in connection with three different home purchase programs offered by the employer to employees who are being relocated. 

 

November 30, 2005 in IRS News | Permalink | Comments (0) | TrackBack (0)

IRS Warns of E-mail Tax Refund Scam

Irs_logo_158The IRS today issued a consumer alert (IR-2005-136) about an Internet scam in which consumers receive an e-mail informing them of a tax refund. The e-mail, which claims to be from the IRS, directs the consumer to a link that requests personal information, such as Social Security number and credit card information. This scheme is an attempt to trick the e-mail recipients into disclosing their personal and financial data. The practice is called “phishing” for information.

For the actual email, see here.  For press reports, see:

November 30, 2005 in IRS News | Permalink | Comments (0) | TrackBack (0)

IRS Provides Guidance on Giving Katrina Victims Easier Access to Retirement Savings

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The Treasury Department and IRS today issued Notice 2005-92, which provides guidance on the application of two provisions of the Katrina Emergency Tax Relief Act of 2005 (KETRA) for Hurricane Katrina victims and employer-sponsored retirement plans and IRAs.  From IR-2005-137:

Under one provision of KETRA, individuals who live in one of the four states affected by Hurricane Katrina and who suffered an economic loss as a result of that hurricane receive favorable tax treatment with respect to distributions from eligible retirement plans that are qualified Hurricane Katrina distributions, called "Katrina distributions." A Katrina distribution is not subject to the 10% additional tax applicable to early distributions from a retirement plan (25% in the case of a Simple IRA), is generally includible in income over a 3-year period, and -- to the extent the distribution is eligible for tax-free rollover treatment and is contributed to an eligible retirement plan (recontributed) within a 3-year period -- will not be includible in income at all.

Another provision of KETRA increases the allowable plan loan amount from an employer-sponsored retirement plan and provides for a suspension of payments for plan loans outstanding on or after August 25, 2005 that are made to Katrina victims.

November 30, 2005 in IRS News | Permalink | Comments (0) | TrackBack (0)

Blum on The Flat Tax: A Panacea for Privacy Concerns?

Blum_1Cynthia W. Blum (Rutgers-Newark) has published The Flat Tax:  A Panacea for Privacy Concerns?, 54 Am. U. L. Rev. 1241 (2005).  Here is the Introduction:

Americans prize privacy, particularly from government intrusion, and our Constitution provides fundamental privacy protections....Notwithstanding these Constitutional protections, Congress has found it necessary to authorize the IRS to use mandatory measures to collect a comprehensive body of personal financial information about each American, in order to ensure compliance with the federal income tax. Increasingly, the IRS stores this information in digital form and frequently shares it with other agencies of the federal government and the states. Some commentators view this collection of information by the IRS as an unacceptable invasion of privacy; they urge that privacy be restored to Americans by replacing the income tax with a "flat tax," a form of consumption tax. They emphasize that, under the flat tax, most taxpayers would be required to file only a postcard-sized return, in contrast to the extensive reporting required on the current Form 1040.

President Bush has recently announced his intention to pursue tax reform in his second term and has appointed an advisory panel to examine various options, including adoption of the flat tax. This Article seeks to contribute to the upcoming debate by examining whether the issue of privacy should provide a strong argument in favor of replacing the income tax with a flat tax.

Part I will briefly describe the flat tax, and Part II will consider what changes in IRS information-gathering would occur if a flat tax is adopted. The most salient change is that, under a flat tax, the IRS would no longer routinely collect information about dividends, interest, and capital gains received by taxpayers. Part III will examine whether the IRS's current collection and use of this category of information is, in fact, as dangerous and harmful as flat tax advocates contend. This Part also will examine whether the flat tax would avoid any harms found to occur under the income tax. Next this Part will analyze the difficulties that other government agencies and units would face if the IRS no longer collected and shared this information. In conclusion, this Article notes that dividends, interest, and capital gains are highly concentrated among wealthy taxpayers, so that any improvements in privacy resulting from adoption of the flat tax would be unevenly distributed among Americans. It also concludes that the privacy of Americans would be better served by retention of the income tax and renewed efforts to protect against misuse of the information that the IRS collects.

November 30, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Recalling That Email Sent in Haste

Excellent article on law.com yesterday:  Best Option for E-Mail Recall and Other Tips.  Here's the catchy opening:

Sometimes the "Send" button is our worst enemy. How many times have you composed an e-mail in haste or anger and fired it off only to realize two seconds later that you sincerely regret what you wrote?

November 30, 2005 in News | Permalink | Comments (0) | TrackBack (0)

IRS Office of Chief Counsel (P&A) Seeks Attorney in Washington, D.C.

Irs_logo_148 The IRS's Office of Chief Counsel is seeking to fill an attorney position in the Procedure & Administration (P&A) business unit in Washington, D.C.:

With the Internal Revenue Service as its client and 1500 attorneys on staff, the Office of Chief Counsel is the preeminent employer for tax attorneys in the country. Our attorneys are valued assets and the legal experience provided in Chief Counsel is unlike any other. Chief Counsel attorneys provide top quality legal advice and representation to the IRS in the administration of the nation's tax laws.

The Associate Chief Counsel, Procedure & Administration located in Washington, DC, comprises approximately 120 attorneys who work in three primary areas: Administrative Provisions and Judicial Practice; Collection, Bankruptcy and Summonses; and Disclosure and Privacy Law. P&A attorneys handle a broad range of issues and work assignments that are fundamental to efficient tax administration, as well as advising the Chief Counsel and the IRS in all facets of judicial and tax administrative practice. P&A attorneys handle published guidance, advice and litigation related to a number of subject: reporting and paying taxes; assessing and collecting taxes (including interest and penalties); abating, crediting, or refunding over-assessments or overpayments of tax; filing information returns; bankruptcy; summonses and information gathering; federal tax liens and levies; damage claims; attorney fees; disclosure, privacy and Freedom of Information Act issues; and judicial practice and judicial doctrines. Additionally, P&A attorneys have the opportunity to argue motions before the Tax Court.

Major Duties: The Office of Chief Counsel, IRS serves as independent counsel to the IRS Commissioner and furnishes legal advice and representation nationwide on matters related to the administration and enforcement of internal revenue laws.

Salary: $62,866 - $114,882.

Application Deadline:  December 2, 2005.

For more information and to apply, see here.

November 30, 2005 in IRS News | Permalink | Comments (0) | TrackBack (0)

William & Mary Wins 2005 Deloitte Tax Case Study National Competition

Deloitte_logo Student teams WIlliam & Mary won both the graduate and undergraduate divisions at the fourth annual Deloitte Tax Case Study National Competition, held in Orlando, FL.  From the Deloitte press release:

The Williamsburg, Virginia college prevailed over a field of 12 student teams from universities and colleges across the country to become the first school ever to sweep first-place honors in both divisions at the Deloitte Tax Case Study....The first-place finishes earned William & Mary awards totaling $28,000, including a $1,000 scholarship for each student and $10,000 per team for the school.

For the second straight year, the University of Denver and Brigham Young University captured second-place honors at the graduate and undergraduate level, respectively. The second-place teams were awarded $500 per student and $5,000 for their school. Also participating as national finalists and receiving awards of $250 per student and $2,500 per school were: graduate teams from the University of Central Florida, University of Kansas, Utah State University and University of Washington and undergraduate teams from Boston College, University of Denver, University of Northern Colorado and the University of Wisconsin-Madison.

November 30, 2005 in Law School | Permalink | Comments (0) | TrackBack (0)

Oregon Refuses to Pay Legal Fees of Law Prof Threatened with Lawsuit Over Law Review Article

Weiner_1Interesting story in this morning's Inside Higher Ed: Twisting in the Wind.

Merle Weiner (Oregon) published Strengthening Article 20, 38 U.S.F. L. Rev. 701 (2004), which argues that Article 20 of the Hague Convention on the Civil Aspects of International Child Abduction should be strengthened to offer more protection for domestic violence victims who flee transnationally with their children as part of their effort to escape from domestic violence.  The article made two brief references to a court dispute in one such case and one of the parties to that dispute threatened to sue.

Inside Higher Ed reports that Oregon refused to pay the legal fees of Prof. Weiner in defending against the threatened lawsuit:

Weiner found out this year that even if the university expects her to publish, she was on her own when she faced a threatened suit over one of her articles, even though the university never contested the quality of the article and even though she had obtained legal opinions that she would prevail in court — if only someone had agreed to pay the bills necessary to fight....

When no one would commit to paying the anticipated legal bills, the journal that published Weiner — also unable to pay for a defense — removed from its electronic archive the reference that led to the threatened lawsuit. While the University of Oregon’s lawyer had urged her to have the journal do just that as a way of avoiding a suit, Weiner opposed this action as giving in to a threat and denying her the right to publish her work in full.

She said that the incident has hurt her ability to do her work on domestic violence and raises issues for any scholar who may publish on works that might lead someone to want to sue them. “Any time any alleged batterer wants to threaten suit, I’m going to have to defend myself, no matter how unmeritorious the suit is,” Weiner said. “If my institution wants me to be doing my job, they need to be standing behind me.”

“I never imagined in my wildest dreams that my university would leave me hanging, that any of this would have transpired,” she said. As both Oregon and San Francisco wavered on defending her, she wanted an outside expert to verify that she would win in court. Rodney A. Smolla, dean of the law school at the University of Richmond, reviewed all the materials and provided an analysis that Weiner had a strong defense. He also wrote in his analysis that the case raised academic freedom issues and urged those involved to consider that when deciding how to proceed.

The University of Oregon, however, viewed the matter in a different way. In a statement released by the university, it said that — as was “customary” — Weiner had agreed to indemnify the University of San Francisco against actions arising from the article. While the university was happy to advise Weiner on the case, it did not feel any obligation to defend her, the statement said.

November 30, 2005 in Law School | Permalink | Comments (1) | TrackBack (0)

LexisNexis Publishes First Book in Graduate Tax Series

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On behalf of LexisNexis and the Graduate Tax Series Board of Editors (Ellen Aprill (Loyola-L.A.), Elliott Manning (Miami), Philip Postlewaite (Northwestern) & David Richardson (Florida)), I am delighted to announced the publication of the first book in our Series, Civil Tax Procedure, by David Richardson (Florida), Jerome Borison (Denver), and Steve Johnson (UNLV).

The Graduate Tax Series is the first series of course materials designed for use in tax LL.M. programs. Like all books in the Series, Civil Tax Procedure was designed from the ground-up with the needs of graduate tax faculty and students in mind:

  • More focus on Internal Revenue Code and regulations, less on case law
  • Analysis of complex, practice-oriented problems of increasing sophistication
  • Teacher’s manual with solutions to problems and other guidance
  • Web site with real-time digital supplementation for faculty (PowerPoint slides and discussion forum with authors) and students (full text of all cases and rulings)
  • On-line access to the comprehensive and current Code and regulations, designed to complement the book

Other books in the Series will be available for adoption in 2006 and 2007.  The next two books in the Series will be published soon:

  • Federal Tax Accounting, by Michael Lang (Chapman), Elliot Manning (Miami) & Steven Willis (Florida)
  • Employee Benefits Law, by Kathryn Kennedy (John Marshall) & Paul Shultz (Director, Employee Plans Rulings & Agreement, IRS)

Other forthcoming books in the Series are:

  • Bankruptcy Taxation, by Frances Hill (Miami) & William Lyons (Nebraska)
  • Federal Taxation of Property Transactions, by Elliott Manning (Miami) & David Cameron (Northwestern)
  • Partnership Taxation, by Paul Carman (Chapman & Cutler), Charles Fassler (Greenebaum, Doll & McDonald), Richard Lipton (Baker & McKenzie) & Walter Schwidetzky (Baltimore)
  • Tax Practice Ethics, by Linda Galler (Hofstra) & Michael Lang (Chapman)
  • U.S. International Taxation, by Philip Postlewaite (Northwestern), Samuel Donaldson (Washington) & Allison Christians (Wisconsin)

Other information:

November 30, 2005 in Book Club, Law School, Scholarship, Teaching | Permalink | Comments (0) | TrackBack (0)

Dellinger on Circular 230 in Estate & Gift Tax Practice

Tax_analysts_164Kip Dellinger (Kallman & Co., Los Angeles) has published Circular 230, Estate & Gift Tax Practice:  The Common Sense Approach, 109 Tax Notes 1197 (Nov. 28, 2005), also available on the Tax Analysts web site as Doc 2005-23244, 2005 TNT 228-17. Here is the Conclusion:

Representatives of the OPR have repeatedly admonished tax practitioners to use common sense in evaluating, vetting, applying, and implementing the written advice-covered opinion provisions of Circular 230. There seems to be no reason not to take them at their word. And by doing so, tax professionals may find themselves able to define -- or least become participants in defining -- the scope and, therefore, the reach of the written advice standards to tax practice and to define whether advice that is subject to the standards falls with the category of a covered opinion under Circular 230, Section 10.35 or whether it is "other written advice" governed by the provisions of Circular 230, Section 10.37.

There is surely no reason for tax professionals to engage in as much hand wringing over the covered opinion standards as has been the case. It certainly does not benefit the tax profession, and the end users of our services should expect and receive more from us. Ultimately, we should run the risk associated with attempting to fairly define the scope and reach of the covered opinion standards within reasonable parameters of common sense and trust that OPR will be true to its word. We owe it to our clients to see that not only we, but also the Internal Revenue Service gets this right.

November 30, 2005 in Scholarship, Tax Analysts | Permalink | Comments (0) | TrackBack (0)

Buckles on Publicly Solicited Surplus Charitable Donations Raised for a Designated Charitable Purpose

Ssrn_51 JohnnybucklesJohnny Rex Buckles (Houston) has posted When Charitable Gifts Soar above Twin Towers: A Federal Income Tax Solution to the Problem of Publicly Solicited Surplus Donations Raised for a Designated Charitable Purpose, 71 Fordham L. Rev. 1827 (2003), on SSRN.  Here is the abstract:

Following the events of September 11, charitable donees received an unprecedented level of donations made in response to appeals for funds to aid the victims of the terrorist attacks against the United States. Some charities received more money than they believed necessary for accomplishing the charitable purpose for which gifts were restricted. Although the charitable response to September 11 is an extreme case, the receipt by charities of surplus funds arising from public solicitations for gifts for a designated charitable purpose is not uncommon. The legal implications of such surplus funds are many. The doctrine of cy pres applies awkwardly to surplus gifts raised through mass solicitations, and the doctrine is further complicated by federal income tax laws governing charitable gifts and charitable organizations. Existing law leaves many questions unanswered. Contemporary proposals to reform the doctrine of cy pres are inadequate. This Article advances an original solution to the problem of publicly solicited surplus funds restricted for a designated purpose. The author proposes an amendment to federal statutory law which would promote the disclosure of important information by charitable donees to donors and facilitate extra-judicial resolution of the problem of disposing of surplus, restricted gifts to charity.

November 30, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Chodorow on Judge Posner's Tax Decisions

ChidirowAdam Chodorow (Arizona State) has published Economic Analysis in Judicial Decision Making - An Assessment Based on Judge Posner's Tax Decisions, 25 Va. Tax Rev. 67 (2005).  Here is the abstract:

In recent years, many of the most vocal proponents of law and economics have been appointed to the bench, including Richard Posner, Guido Calabresi, and Frank Easterbrook. They have been strong advocates of the judicial use of economic analysis as a tool to help decide cases. This paper explores the ways in which Judge Posner has used economic analysis in his tax decisions, with the goal of identifying the ways in which he has used such analysis and then assessing its effectiveness.

I focus on Judge Posner's tax jurisprudence for three reasons. First, he is a leading proponent of the law and economics approach. Second, he has authored over 60 opinions in tax cases. Finally, few question the appropriateness of applying economic reasoning to tax questions. Accordingly, these cases provide a rich and substantial body of material with which to work. In highlighting and evaluating the ways in which Judge Posner has used economic analysis to decide tax cases, I hope to provide insights and guidance on the strengths and limitations of this approach to others who may be urged or tempted to follow suit.

November 30, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 29, 2005

Showing Movie Clips in Class

For those of you who like to spice up your classes with movie clips:  here's an interesting article on how to do it.  (Hat Tip:  Robert Ambrogi.)

November 29, 2005 in Law School, Teaching | Permalink | Comments (0) | TrackBack (0)

Congress to Slash Taxes for Songwriters

Interesting article in today's Wall Street Journal:  Music to Songwriters' Ears: Lower Taxes; Country Artists' Group Presses Lawmakers to Slash the Levy on Lyricists, by Brody Mullins:

Country music is cool these days -- and now Congress may make it more profitable for the people behind the lyrics. A bipartisan group of lawmakers, prodded by members of the country-music industry, added a provision to pending tax legislation that would lower taxes for writers of all kinds of songs. The lawmakers propose to change a section of U.S. tax law -- written before singer Garth Brooks was born -- that would tax songwriters' handiwork as capital gains rather than ordinary income as under current law. ...

At issue for the songwriters is a 1950s-vintage tax provision that requires makers of creative works -- such as painters, novelists and songwriters -- to pay regular income taxes on sales of their work. Since songwriters tend to be self-employed, they wind up paying up to 35% in income taxes on the sales and more in self-employment taxes, rather than the lower 15% capital-gains tax rate paid by those who sell capital assets such as stocks.

November 29, 2005 in Congressional News, News, Political News | Permalink | Comments (1) | TrackBack (0)

The NLJ 250

The National Law Journal has released its annual NLJ 250 -- a ranking of the nation's 250 largest law firms.  The Top 10 firms are:

  1. Baker & McKenzie (Chicago) (3309 lawyers)
  2. DLA Piper Rudnick Gray Cary (Chicago) (3159 lawyers)
  3. Jones Day (Washington, D.C.) (2297 lawyers)
  4. White & Case (New York) (1983 lawyers)
  5. Latham & Watkins (New York) (1840 lawyers)
  6. Skadden, Arps, Slate, Meagher & Flom (New York) (1790 lawyers)
  7. Sidley Austin Brown & Wood (Chicago) (1584 lawyers)
  8. Greenberg Traurig (Miami) (1482 lawyers)
  9. Mayer, Brown, Rowe & Maw (Chicago) (1292 lawyers)
  10. Morgan, Lewis & Bockius (Philadelphia) (1281)

See:

November 29, 2005 in News | Permalink | Comments (0) | TrackBack (0)

Crane on Liabilities and the Need to Keep the Income Tax Base Closed

Cranech_1Charlotte Crane (Northwestern) has published Liabilities and the Need to Keep the Income Tax Base Closed, 25 Va. Tax Rev. 31 (2005). Here is the Conclusion:

In the last few decades, the tax law has developed a far more sophisticated awareness of the need to time properly items of income and expense. Included in these developments have been acceptance of the idea that alterations in the treatment of one taxpayer (for instance, the acceleration of income from prepayments or the deferral of deductions for anticipated costs) may be appropriate in order to adjust for an inability to treat properly another taxpayer (who, for instance, we suspect will be able to accelerate deductions or avoid income.) These approaches, manifested especially in sections 404 and 461, have been understood to be necessary in order to "keep the tax base closed," that is, to make sure that the earnings on every fund are included in the tax base.

Continue reading

November 29, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

IRS Office of Chief Counsel (SB/SE) Seeks Attorney in Chicago Office

Irs_logo_148 The IRS's Office of Chief Counsel is seeking to fill an attorney position in the Small Business/Self-Employed (SB/SE) Division in Chicago:

SB/SE is the largest Chief Counsel division, with 440 attorneys assigned to 49 field offices. These attorneys generally work directly with IRS field agents, providing legal advice on tax cases involving individuals and small businesses, and on all cases involving collection and bankruptcy issues. When these cases go to trial, SB/SE attorneys are usually the IRS litigators, with direct responsibility for identifying the desired legal theories, developing the trial strategies, and representing the IRS in court.

Major Duties: This position is located in the Division Counsel, Small Business/Self- Employed (SB/SE). SBSE attorneys typically spend most of their time handling Tax Court and bankruptcy cases. Over 95 percent of the 20,000 Tax Court cases filed last year were assigned to SB/SE attorneys. In most field offices, bankruptcy cases are assigned to attorneys who are designated Special Assistant United States Attorneys. Attorneys may also be assigned to assist the Department of Justice in the handling of collection, refund and other cases in the U.S. District Courts. Through client support and litigation, SB/SE attorneys have an opportunity to further their knowledge of tax law and to develop expertise on a wide variety of complex technical, procedural, and tax issues.

Salary: $64,903 - $118,566.

Application Deadline:  December 8, 2005.

For more information and to apply, see here.

November 29, 2005 in IRS News | Permalink | Comments (0) | TrackBack (0)

Hemingway on Course Management Systems for Legal Education

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Heminwaynew Joan MacLeod Hemingway (Tennessee) has posted Caught in (or on) the Web: A Review of Course Management Systems for Legal Education on SSRN.  Here is the abstract:

Like other teaching innovations, course management software has been somewhat slow to take hold in legal education. Yet, as law teachers, we cannot deny that our current students are children of a technological age that centers on electronic communication. Although there is a lack of empirical evidence strongly supporting the pedagogic case for the use of technology in law teaching, some of us in the law academy have ventured forth with the use of teaching technologies on the theory that the current demographics of the law student population demand our interaction with students on this basis.

Course management systems are an easy way to bridge the technological gap between law teachers and law students without forcing law teachers to irrevocably alter the material they teach and the way in which they teach it. In that spirit, this article describes the way in which I have implemented Web-based course management in my law school course offerings and sets forth my perspectives on that experience. The article adds to existing literature by offering primary experiential observations that should be useful to others in law teaching - especially those who may not be familiar with course management systems.

November 29, 2005 in Scholarship, Teaching | Permalink | Comments (0) | TrackBack (0)

Call for Tax Papers: First Annual Conference on Empirical Legal Studies

The inaugural Empirical Legal Studies Conference to be held at the University of Texas School of Law on October 27-28, 2006 has issued a call for papers in a variety of fields, including tax.  The Conference is jointly organized by Cornell (Theodore Eisenberg & Michael Heise), NYU (Jennifer Arlen & Geoffrey Miller),  and Texas (Bernard Black).

Conference Objectives: The conference's goals are: (i) to encourage and develop empirical and experimental scholarship on legal issues by providing scholars with an opportunity to present and discuss their work with an interdisciplinary group of scholars; and (ii) to stimulate ongoing conversations among scholars in law, economics, political science, finance, psychology, sociology, and other disciplines about research in this area. The conference’s audience will include paper presenters, commentators, and other attendees, and will include many of the nation’s leading empirical legal scholars. The goal is productive discourse on both particular papers and appropriate methodologies.

For a list of committed participants, see here.  Submissions are due by June 30,2006.

November 29, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

McMahon on Recognition of Gain by a Partnership Issuing an Equity Interest for Services

Tax_analysts_logo_48 Mcmahon_2Martin J. McMahon, Jr. (Florida) has published Recognition of Gain by a Partnership Issuing an Equity Interest for Services:  The Proposed Regulations Get It Wrong, 109 Tax Notes 1161 (Nov. 28, 2005), also available on the Tax Analysts web site as Doc 2005-23275, 2005 TNT 228-18.  Here is the abstract:

This special report discusses one aspect of the proposed regulations dealing with the exchange of a partnership interest for services. The proposed regulations would provide complete nonrecognition of gain or loss to the partnership issuing a partnership interest for services, while allowing a deduction for the full fair market value of the partnership interest granted to the service partner. This special report explains that the proposed regulations are wrong in that regard. In light of the legislative history and statutory structure, § 721 simply cannot be read to provide nonrecognition to a partnership that admits a service- provider partner with a capital account that is transferred in exchange for services. Either the transaction must be a recognition event or the partnership's deduction (or capitalized amount) must be limited to a pro rata portion of the partnership's aggregate basis for its assets.

November 29, 2005 in Scholarship, Tax Analysts | Permalink | Comments (0) | TrackBack (0)

Hickman Debuts in Blogosphere with Post Questioning Use of PowerPoint in Tax Class

HickmankA hearty blogosphere welcome to Kristin Hickman (Minnesota), who is guest blogging on PrawfsBlawg.  Her maiden post recounts her use of PowerPoint for the first time this semester in teaching Tax I.  She is stinting in her praise of PowerPoint:

On the one hand, the PowerPoint is easier to read than my handwriting, and it's great for spelling out three-part tests and working through the frequent mathematical computations that crop up in tax courses.

She has a much longer list of PowerPoint criticisms:

On the other hand, note taking seems to me to be a dying art among students, yet is a very valuable (if not essential) skill for junior attorneys; and using PowerPoint seems to make it easier for students to get by without learning how to take good notes. Moreover, PowerPoint seemed to me to suck all the life out of my class by removing much of the sponteneity as we adhered to the PowerPoint script.

I have shamelessly flogged before my recent article, Taking Back the Law School Classroom: Using Technology to Foster Active Student Learning, 54 J. Legal Educ. 551 (2004), which explains how I use technology to combat classroom somnolence.

November 29, 2005 in About This Blog, Law School, Tax Profs, Teaching | Permalink | Comments (2) | TrackBack (0)

Not Your Run-of-the-Mill Pro Se Taxpayer

Tax_court_10The Tax Court yesterday released Hightower v. Commissioner, T.C. Memo. 2005-274, an unremarkable case ezcept that the taxpayer -- Glenn Hightower -- represented himself in an unsuccessful attempt to avoid tax on the sale of his S Corp shares for $41.5 million.  The ever-understated Joe Kristan notes:

This seems like deep water for a non-lawyer to swim in. But Mr. Hightower, while out almost $8 million in taxes, at least isn't out the legal fees.

November 29, 2005 in New Cases | Permalink | Comments (0) | TrackBack (0)

CBO Releases Corporate Income Tax Rates: International Comparisons

Cbo_4_1The Congressional Budget Office yesterday released Corporate Income Tax Rates: International Comparisons (60 pages).  From the Preface:

Corporate income taxes can distort the allocation of productive resources both within the United States and across countries. This Congressional Budget Office (CBO) paper—prepared at the request of the Chairman of the House Committee on Ways and Means—examines the ways in which the corporate tax can distort economic behavior and shift resources among alternative uses in ways that reduce overall well-being in the United States. The analysis compares statutory and marginal corporate income tax rates between 1982 and 2003 across a broad range of countries.

November 29, 2005 in Gov't Reports | Permalink | Comments (0) | TrackBack (0)

Monday, November 28, 2005

Rep. Cunningham Pleads Guilty to Tax Evasion, Resigns Congressional Seat

Doj_5The Department of Justice announced yesterday that Congressman Randall “Duke” Cunningham (R-CA) pleaded guilty to conspiring to commit bribery, honest services fraud, and tax evasion pursuant to a plea agreement in U.S. District Court in San Diego  Later yesterday morning, Cunningham resigned his congressional seat:

In the tax evasion count, he admitted filing a 2004 tax return claiming an income of $121,079 when his actual gross income for that year was $1.2 million.

U.S. Attorney Carol Lam, whose office is prosecuting the case, said in a news conference that the facts Cunningham admitted in his plea agreement show "this was a crime of unprecedented magnitude and extraordinary audacity." Cunningham, an eight-term Republican congressman, had been under scrutiny for months for his ties to defense contractors and their officials.

Federal officials launched investigations after The San Diego Union-Tribune and Copley News Service reported in June that a defense contractor who won tens of millions of dollars in Pentagon contracts had taken a $700,000 loss after purchasing Cunningham's Del Mar-area house....Cunningham sold the house for $1.675 million in November 2003, but the buyer, defense contractor Mitchell Wade, never moved in and almost immediately put it back on the market. Wade sold it 261 days later for $975,000. The congressman, who sat on the House defense appropriations subcommittee, used the proceeds of the sale to buy a $2.55 million house in Rancho Santa Fe, which he has since put up for sale.

Lam said the bribes from defense contractors totalled $2.4 million and included:

  • Buying the Del Mar-area home at an inflated price;
  • Paying for the capital gains tax on that sale;
  • Buying and maintaining the yacht in Washington D.C. on which Cunningham lived;
  • Paying for a graduation party for Cunningham's daughter;
  • Buying a Rolls Royce, antique furniture and jewelry, and picking up travel and hotel expenses for Cunningham and his wife;
  • Making a $500,000 mortgage payoff for the house in Rancho Santa Fe

For further details:

November 28, 2005 in Congressional News, News, Political News | Permalink | Comments (0) | TrackBack (0)

Joint Tax Committee Releases Revenue Estimate of Senate Tax Bill

Buckles on Deducting Earmarked Contributions to Charity

Ssrn_51 JohnnybucklesJohnny Rex Buckles (Houston) has posted The Case of the Taxpaying Good Samaritan: Deducting Earmarked Transfers to Charity under Federal Income Tax Law, Theory, and Policy, 70 Fordham L. Rev. 1283 (2002), on SSRN.  Here is the abstract:

Taxpayers have often sought to designate by name the specific individuals ('secondary beneficiaries') whom the taxpayers desire to benefit ultimately from their contributions to charitable organizations. Under current case law and the administrative rulings of the IRS, a taxpayer who makes such an "earmarked" transfer to charity is in many cases denied a charitable contribution deduction for such a transfer under § 170. In this article, Professor Buckles first discusses the deductibility of non-earmarked transfers to charitable donees under current law, and then explores and analyzes the deductibility of transfers to charity which are in some manner earmarked for the benefit of a secondary beneficiary, upon the initiative of either the taxpayer or the charitable transferee. The article then surveys existing scholarship addressing the justification of the charitable contribution deduction under income tax theory, pervasive norms of tax policy, and broader policy objectives. Similarly, existing theories supporting the exemption of charitable organizations from federal income taxation are briefly discussed. These sections form the necessary background for the final major section of the paper, in which Professor Buckles critically examines the normative question of whether, and to what extent, earmarked contributions to charity should be deductible. The article discusses both the relevance of several factors that existing authorities have cited in determining the deductibility of earmarked transfers to charity, and how a deduction for such transfers fares under several norms and other guiding principles. The article concludes with Professor Buckles' proposed framework for determining when an earmarked contribution should be deductible. In general, a taxpayer should be entitled to deduct any earmarked transfer to a charitable organization which both receives delivery of the transferred money or property and accepts the contribution in its own right (rather than as an agent or as a trustee of a private trust). Two exceptions to this proposed rule exist. First, no deduction should be allowed for any earmarked transfer pursuant to which the taxpayer or a member of her household is designated by the taxpayer as the secondary beneficiary. Secondly, a taxpayer should receive no charitable contribution deduction for any transfer to a charity operating as a commercial nonprofit, if such transfer secures market-priced goods and services for consumption by the secondary beneficiary. An exception to this exception should exist if it is established that, absent the earmarked transfer, the charitable transferee nonetheless would have provided such good or service to the secondary beneficiary without charge because of the secondary beneficiary's inability to pay for the good or service.

November 28, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Colombo Quoted in Cleveland Plain Dealer

Jcolombo_1John Colombo (Illinois) was quoted in yesterday's Cleveland Plain Dealer on a recent ruling by the Ohio Tax Commission revoking a property tax exemption for a portion of the Cleveland Clinic.  See:

   

November 28, 2005 in Tax Profs | Permalink | Comments (0) | TrackBack (0)

IRS Chief Counsel (SB/SE) Seeks Attorney in New York City Office

Irs_logo_148 The IRS's Office of Chief Counsel is seeking to fill an attorney position in the Small Business/Self-Employed (SB/SE) Division in New York City:

SB/SE is the largest Chief Counsel division, with 440 attorneys assigned to 49 field offices. These attorneys generally work directly with IRS field agents, providing legal advice on tax cases involving individuals and small businesses, and on all cases involving collection and bankruptcy issues. When these cases go to trial, SB/SE attorneys are usually the IRS litigators, with direct responsibility for identifying the desired legal theories, developing the trial strategies, and representing the IRS in court.

Major Duties: This position is located in the Division Counsel, Small Business/Self- Employed (SB/SE). SBSE attorneys typically spend most of their time handling Tax Court and bankruptcy cases. Over 95 percent of the 20,000 Tax Court cases filed last year were assigned to SB/SE attorneys. In most field offices, bankruptcy cases are assigned to attorneys who are designated Special Assistant United States Attorneys. Attorneys may also be assigned to assist the Department of Justice in the handling of collection, refund and other cases in the U.S. District Courts. Through client support and litigation, SB/SE attorneys have an opportunity to further their knowledge of tax law and to develop expertise on a wide variety of complex technical, procedural, and tax issues.

Salary: $65,602 - $119,844.

Application Deadline:  December 7, 2005.

For more information and to apply, see here.

November 28, 2005 in IRS News | Permalink | Comments (0) | TrackBack (0)

Washington Estate Tax Developments

Washington_state_dorFollowing the Washington Supreme Court's invalidation of the state's estate tax in Estate of Hemphill v. Washington State Department of Revenue 153 Wn.2d 544, 105 P.3d 391 (Feb. 3, 2005) (blogged here), the state legislature enacted a new estate tax effective May 17, 2005, applicable to Washington decedents with property in excess of $1.5 million (for decedents who die between May 17 and Dec. 31, 2005), or property in excess of $2 million (for decedents who die in 2006 and thereafter).  The rate ranges from 10%-19%.  For details, see:

Critics of the new estate tax plan a ballot initiative in 2006 to repeal the tax.

November 28, 2005 in News | Permalink | Comments (0) | TrackBack (0)

IRS Attorney Directory by Code Section & Subject Matter

Tax_analysts_logo_34 Irs_logo_45The monthly update of the 118-page directory of attorneys in the IRS Chief Counsel's Office, arranged by Internal Revenue Code Section and Subject Matter, for November 2005, is available on the Tax Analysts' web site.      

 

November 28, 2005 in IRS News, Tax Analysts | Permalink | Comments (0) | TrackBack (0)

Sullivan on Is France Moving Closer to Tax Reform?

Sullivan Tax_analysts_logo_31 Martin A. Sullivan (Contributing Editor, Tax Analysts) has published Is France Moving Closer to Tax Reform?, 109 Tax Notes 1128 (Nov. 28, 2005), also available on the Tax Analysts web site as Doc 2005-23765, 2005 TNT 227-1. The article examines the political scene in France and the prospects for significant tax reform. 

   

November 28, 2005 in Scholarship, Tax Analysts | Permalink | Comments (0) | TrackBack (0)

Seto on The Tax Advantages of Gay Marriage

Ssrn_logo_66

Setobw Theodore S. Seto (Loyola-L.A.) has posted The Assumption of Selfishness in the Internal Revenue Code: Reflections on the Unintended Tax Advantages of Gay Marriage on SSRN.  Here is the abstract:

The Code contains numerous special rules applicable to the income taxation of persons related by marriage, birth, or adoption. The collective importance of these related-party provisions to the income tax system is hard to overstate. This paper suggests a new approach to their analysis. Its thesis is simple: the rules of the Code depend, in significant part, on the assumption that taxpayers are self-interested. In general, we are unwilling to transfer property or rights to income to others simply to avoid tax. Where this assumption proves or is likely to prove incorrect, the Code makes adjustments to its otherwise applicable rules. Sometimes such adjustments facilitate transfers between interpersonally committed individuals. More commonly, they shut down avoidance techniques. Some of these latter adjustments apply whenever the assumption of selfishness fails, regardless of the formal relationship between the parties. Most, however, apply only in the context of a specified formal relationship - marriage, parent/child, or owner/business.

The paper tests the utility of this thesis by comparing the income tax treatment of heterosexual married couples with that of gay couples in committed long-term relationships - which I refer to as married and spouses solely for ease of reference. It is clear that gay couples are not married for tax purposes, nor are they spouses within the meaning of the Code. Gay marriage by itself never invokes any related-party rules - taxpayer-favorable or anti-abusive. Part I explores problems created by the fact that spouses, whether heterosexual or gay, commonly share income, expenses, assets, and liabilities. Part II explores problems created by less complete failures of the assumption of selfishness in the broader intra-family context - parents, children, siblings, and more remote relations. None of the anti-abuse rules enacted to deal with either set of problems applies to gay spouses. As a result, gay couples should be able to arrange their affairs so as to pay federal income tax at significantly lower effective rates, on average, than identically situated heterosexual married couples.

Part III addresses the question of solutions. Ultimately, the paper concludes that the only way to ensure that gay couples will be taxed no more favorably than heterosexual married couples is to list gay marriage as one of the proxy relationships that automatically invokes pertinent anti-abuse rules - in other words, to treat gay marriage as marriage for federal income tax purposes. Even this by itself, however, will not be enough. A formal spousal relationship must be made available to gays, and it must be attractive enough to induce gay couples to undertake it voluntarily - just as heterosexual couples marry despite the tax costs. In the absence of an attractive formal status that then invokes related-party anti-abuse rules, well-advised gay couples are, and will continue to be, permitted to pay systematically lower federal income taxes than heterosexual married couples - a result unlikely to be acceptable to a majority of Americans in the long run.

November 28, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Swain & Hellerstein on The Political Economy of the Streamlined Sales and Use Tax Agreement

Ntj_logo_1John A. Swain (Arizona) & Walter Hellerstein (Georgia) have published The Political Economy of the Streamlined Sales and Use Tax Agreement, 58 National Tax Journal 605-19 (Sept. 2005). Here is the abstract:

This paper has four major objectives. The first is to describe and discuss the antecedents to the streamlining movement. The second is to describe and discuss the Streamlined Sales Tax Project (SSTP) and the agreement that the SSTP produced (the Streamlined Sales and Use Tax Agreement or SSUTA). The third is to examine how political and economic forces have shaped, and continue to shape, the streamlining movement. The fourth isto explore briefly whether streamlining, or the lessons learned from streamlining, might serve as a platform or template for more fundamental sales tax reform. It should be cautioned that the SSTP is still a work in progress. Nevertheless, because of the enormous potential significance of the SSTP, we welcome the opportunity to undertake a general — if somewhat tentative — exploration of the political economy of streamlining.

November 28, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Sunday, November 27, 2005

Blumkin & Margalioth on The Limits of Redistributive Taxation: Establishing a Case for Equity-Informed Legal Rules

BlumkinMargo Tomer Blumkin (Ben-Gurion University, Department of Economics) & Yoram Margalioth (Tel Aviv University Law School) have published On the Limits of Redistributive Taxation: Establishing a Case for Equity-Informed Legal Rules, 25 Va. Tax Rev. 1 (2005).  Here is the Introduction:

That "redistribution is accomplished more efficiently through the income tax system than through the use of legal rules" seems to be the prevailing norm in the law and economics literature, which finds it "appropriate for economic analysis of legal rules to focus on efficiency and to ignore the distribution of income in offering normative judgments." Considerations other than efficiency are usually discussed in this literature only in the context of the broader question of what criteria ought to guide social decision-making, implying that "distributive justice is a subject unto itself."

This paper questions the prevailing norm regarding the means of redistribution, namely, the "division of labor" between legal rules and the tax and transfer system. Should redistribution be carried out only through the tax and transfer system, or should redistributive legal rules play a role as well? We extend the framework used in earlier literature on the issue, incorporating new considerations that should be taken into account regarding redistribution. We show that redistributive legal rules may be justified, providing examples that lie at the core of contemporary public discourse.

Continue reading

November 27, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Weekend_roundupThursday:

Friday:

Saturday:

Sunday:

November 27, 2005 in Weekend Roundup | Permalink | Comments (0) | TrackBack (0)

Top 5 Tax Paper Downloads

SSRN LogoThere is a lot of movement in this week's list of the Top 5 Recent Tax Paper Downloads on SSRN, with new papers debuting at #4 and #5:         

1.  [252 Downloads]  The Ethics of Tax Evasion: A Survey of International Business Academics, by Robert W. McGee (Barry University, Andreas School of Business) [blogged here]

2  [161 Downloads]  Anatomy of a Disaster Under the Internal Revenue Code, by Francine J. Lipman (Chapman) [blogged here]

3.  [131 Downloads]  The Three Goals of Taxation, by Reuven Avi-Yonah (Michigan) [blogged here]

4.  [87 Downloads]  An Evaluation of Federal Tax Policy Based on Judeo-Christian Ethics, by Susan Pace Hamill (Alabama) [blogged here]

5.  [79 Downloads]  The Problem of Tax Law Uncertainty and the Role of Tax Insurance, by Kyle D. Logue (Michigan) [blogged here]

November 27, 2005 in Top 5 Downloads | Permalink | Comments (0) | TrackBack (0)

Death of Kingsbury Browne

I am sorry to bring you news of the death of Kingsbury Browne at age 82.  He was a prominent Boston tax lawyer at the former Hill & Barlow law firm, an influential conservationist who inspired the founding of the Land Trust Alliance, and an adjunct faculty member at Boston University, Northeastern, and Suffolk law schools.  For further details, see:

The family requests that in lieu of flowers, donations be made in his honor to the Land Trust Alliance.

November 27, 2005 in Obituaries | Permalink | Comments (0) | TrackBack (0)

Beale on What Should Congress Do About the AMT?

Seago & Barkhi on The § 338(h)(10) Election

Tax_analysts_205 W. Eugene Seago (Virginia Tech University, Pamplin College of Business) & Reza Barkhi (Virginia Tech University, Pamplin College of Business) have published In the Process of Preventing Triple Taxation of a Subsidiary's Income, Congress Created a Great Indoor Game, 109 Tax Notes 1081 (Nov. 21, 2005), also available on the Tax Analysts web site as Doc 2005-22788, 2005 TNT 224-39.  Here is the abstract:

Seago and Barkhi analyze the § 338(h)(10) election to treat a parent's sale of a subsidiary as a sale of the subsidiary's assets. Because the buyer and the parent must enter into the election, the buyer is able to share in the relief from the triple taxation of the subsidiary's income that accrued while the parent owned the subsidiary. Further, by permitting the parent to make the election, instead of a joint election with the buyer, the parent could capture all of the relief from the triple taxation of the subsidiary's appreciation in value. The joint election enhances the tax benefits of the election, at the cost of government revenues, while reducing the parent's share of those benefits.

November 27, 2005 in Scholarship | Permalink | Comments (1) | TrackBack (0)

Joint Economic Committee Releases Report on Tax Distribution Analysis and Shares of Taxes Paid

Us_capitol_9 The Joint Economic Committee has released Tax Distribution Analysis and Shares of Taxes Paid--Updated Analysis.  Here is the abstract:

IRS data for 2003, the most recent available, show that the top half of taxpayers ranked by income ontinue to pay over 96% of Federal individual income taxes while the bottom half accounts for just less than 3.5%. The data show the highly progressive nature of the Federal income tax.

November 27, 2005 in Gov't Reports | Permalink | Comments (1) | TrackBack (2)

Wagner & Facer on Interstate Tax Coordination: Lessons from the International Fuel Tax Agreement

Ntj_logo_1Dwight Denison (NYU, Robert F. Wagner Graduate School of Public Service) & Rex L. Facer II (BYU, George W. Romney Institute of Public Management) have published Interstate Tax Coordination: Lessons from the International Fuel Tax Agreement, 58 National Tax Journal 591-603 (Sept. 2005). Here is the abstract:

A growing concern over lost sales tax revenue on remote sales transacted through the Internet has motivated many states to explore cooperative tax agreements for sales and use taxes. With the support of the National Governors Association (NGA) and the National Conference of State Legislatures (NCSL), an ambitious and controversial project known as the streamlined sales tax project (SSTP) has emerged to propose principles for sales tax coordination. While SSTP is currently center stage in tax cooperative agreements, another cooperative agreement, the International Fuel Tax Agreement (IFTA), was initiated over 20 years ago. The agreement has evolved significantly through the years and currently the 48 contiguousU.S. states and 10 Canadian provinces have signed the agreement. The purpose of this paper is to describe the history, background, and incentives that have led to IFTA's success. We show how the combination of improved tax administration and lower transaction costs play a critical role in thesuccess of IFTA. Last, we identify lessons from IFTA that have relevance for other tax coordination agreements.

November 27, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Saturday, November 26, 2005

IRS Office of Chief Counsel (SB/SE) Seeks Attorney in San Diego Office

Irs_logo_148 The IRS's Office of Chief Counsel is seeking to fill an attorney position in the Small Business/Self-Employed (SB/SE) Division in San Diego:

SB/SE is the largest Chief Counsel division, with 440 attorneys assigned to 49 field offices. These attorneys generally work directly with IRS field agents, providing legal advice on tax cases involving individuals and small businesses, and on all cases involving collection and bankruptcy issues. When these cases go to trial, SB/SE attorneys are usually the IRS litigators, with direct responsibility for identifying the desired legal theories, developing the trial strategies, and representing the IRS in court.

Major Duties: This position is located in the Division Counsel, Small Business/Self- Employed (SB/SE). SBSE attorneys typically spend most of their time handling Tax Court and bankruptcy cases. Over 95 percent of the 20,000 Tax Court cases filed last year were assigned to SB/SE attorneys. In most field offices, bankruptcy cases are assigned to attorneys who are designated Special Assistant United States Attorneys. Attorneys may also be assigned to assist the Department of Justice in the handling of collection, refund and other cases in the U.S. District Courts. Through client support and litigation, SB/SE attorneys have an opportunity to further their knowledge of tax law and to develop expertise on a wide variety of complex technical, procedural, and tax issues.

Salary: $63,807 - $120,498.

Application Deadline:  December 14, 2005.

For more information and to apply, see here.

November 26, 2005 in IRS News | Permalink | Comments (0) | TrackBack (0)

Tax Prof Profile, New Professor Edition: The Wrap-Up

We have completed our series of profiles of folks starting their careers as tax professors at American law schools this fall:

Each Saturday, TaxProf Blog shines the spotlight on one of the 700+ tax professors in America's law schools. We hope to help bring the many individual stories of scholarly achievements, teaching innovations, public service, and career moves within the tax professorate to the attention of the broader tax community. Please email me suggestions for future Tax Prof Profiles. For prior Tax Prof Profiles, see here.

November 26, 2005 in Tax Prof Spotlight | Permalink | Comments (0) | TrackBack (0)

NY Times: Differences in House and Senate Tax Bills Reveal Deep Philosophical Divide

Interesting article in today's New York Times:  Republicans Are Deeply Split Over How to Apportion New Tax Cuts, by Edmund L. Andrews:

Republicans of all stripes want to cut taxes, but rarely have they been in so much disarray about whose to cut.

If House Republicans and President Bush have their way, more than half of tax reductions over the next five years will go to the top 1% of households, those with average incomes of $1.1 million. House leaders are pushing a $63-billion tax-cutting package that would extend President Bush's tax cut on stock dividends, protect oil companies from a windfall profits tax and shield people caught using illegal tax shelters.

The Republican-controlled Senate, by contrast, has passed a bill that would cut taxes by $59 billion but ignore Mr. Bush's top priority, and that contains two other provisions that have provoked his wrath. The Senate bill omits an extension of Mr. Bush's tax cuts for stock dividends and capital gains, which are to expire at the end of 2008. Instead, almost half of the bill is devoted to shielding middle-income and upper-income families from the alternative minimum tax. The Senate bill has also proposed two revenue-raising measures that Mr. Bush has threatened to veto: a one-year, $5-billion tax on major oil companies and a provision that would make it easier to impose steep penalties on people caught using illegal tax shelters.

The impact of the two bills would be wildly different. According to calculations by the Tax Policy Center, a nonpartisan research group, about 51% of the tax cuts in the House bill would go to the top 1% of income earners. The Senate bill favors upper-income families, but not nearly as much: only about 12% of the benefits would go to the top 1% of earners.

November 26, 2005 in Congressional News | Permalink | Comments (0) | TrackBack (1)

Tax Foundation: U.S. Corporate Tax Rate Is Highest Among OECD Countries

Tax_foundation_11 The Tax Foundation on has released a new study, The U.S. Corporate Income Tax System: Once a World Leader, Now A Millstone Around the Neck of American Business, by Chris Atkins & Scott A. Hodge.  Here's the description from Tax Policy Blog:

The United States has the highest overall corporate income tax rate (39.3% combined federal and sub-federal) among all countries in the Organization for Economic Cooperation and Development (OECD) (see table below). Japan (39.0%) and Germany (38.9%) have the second and third highest corporate income tax rates. The nation with the lowest corporate income tax rate in the OECD is Ireland (12.5%).

Corporatetaxoecd

[click to enlarge]

 

 

 

   

 

November 26, 2005 in Think Tank Reports | Permalink | Comments (0) | TrackBack (0)

Nominations for Best Law Blog Due Today

MastheadToday is the final day for nominations for the 2005 Weblog Award for Best Law Blog. For more information, see here.

November 26, 2005 in News | Permalink | Comments (0) | TrackBack (0)

Miller on A Progressive System of Mark-to-Market Taxation

Miller_d Tax_analysts_204 David S. Miller (Cadwalader, Wickersham & Taft, New York) has published A Progressive System of Mark-to-Market Taxation, 109 Tax Notes 1047 (Nov. 21, 2005), also available on the Tax Analysts web site as Doc 2005-22691, 2005 TNT 224-38.  Here is the abstract:

On November 1, the President's Advisory Panel on Federal Tax Reform released its recommendations. As expected, the panel recommended a repeal of the alternative minimum tax. However, to offset the lost revenue, the panel proposed to eliminate the deduction for state and local taxes, and limit the deductions for home mortgage interest and charitable contributions. Already, Democrats and Republicans alike have declared the panel's proposed offsets unenactable....

This article offers an alternative that would repeal the AMT, better achieve the president's objectives, and preserve the deductions for state and local taxes, home mortgage interest, and charitable contributions. It proposes "progressive" mark-to- market taxation as a component of fundamental tax reform.

Under the proposal, all public companies, all private companies with $50 million or more of net assets, and all individuals and married couples with $1.6 million of adjusted gross income or $5 million of publicly traded property -- representing the top 0.1% of highest-earning and wealthiest individuals -- would be required to mark to market their publicly traded property and derivatives. Mark-to-market gains of corporations would be subject to tax at the current marginal rate of 35%. Mark-to-market losses of corporations would be fully deductible against ordinary income or capital gain. Mark-to-market gains (and qualified dividends) of individuals would be subject to tax at the long-term capital gains rate of 15%, and their interest and other ordinary income would remain subject to tax at the ordinary income rate of 35%. Individuals' mark-to-market losses would be fully deductible to the extent of prior mark-to-market gains, could then be used to offset capital gains, and then mark-to-market losses could offset 43% (15%/35%) of ordinary income or could be carried forward indefinitely.

By a conservative (but back-of-the-envelope) estimate, the proposal would generate between $490 billion and $750 billion of new revenue over a 10-year horizon. The revenue generated by the proposal would be applied to repeal the AMT. A progressive system of mark-to-market taxation would achieve all of the president's objectives for fundamental tax reform. It would help repeal the AMT but would adversely affect fewer than 400,000 households. It would not increase rates, deny deductions, or impose new taxes. Therefore, it would not violate the president's "no new taxes" pledge. Also, it would help achieve the president's goal of progressivity, it would allow significant simplification, and it would prevent nearly all tax shelters for mark-to-market property.

November 26, 2005 in Scholarship, Tax Analysts | Permalink | Comments (0) | TrackBack (0)

Tax History Project: Andrew Mellon's Unsuccessful Attempt to Repeal Estate Taxes

Thp_logo_1 The Tax History Project, a public service initiative of Tax Analysts, has posted seven new papers on its web site.  We have blogged one of these papers each day this week, concluding with today's paper:

Andrew Mellon's Unsuccessful Attempt to Repeal Estate Taxes, by M. Susan Murnane (Ph.D. Candidate (American History), Case Western Reserve University):

On June 7, 2001, President George W. Bush signed into law the Economic Growth and Tax Reconciliation Act of 2001, a $1.35 trillion tax cut spread out over 10 years. The act gradually reduced federal estate tax rates and increased the estate tax exemption until 2010, when it repealed the federal estate tax for one year only. The temporary repeal of the estate tax culminated a long campaign on the part of dedicated activists, who viewed it as a first step toward permanent repeal of the federal estate tax. The last time anyone seriously attempted to repeal the federal estate tax occurred toward the end of the series of tax cuts in the 1920s spearheaded by Treasury Secretary Andrew W. Mellon. Between 1925 and 1928, Mellon attempted unsuccessfully to secure repeal of federal estate taxes. In proposing repeal, Mellon changed Treasury Department policy on estate taxes more than a year into the income tax reform program to reduce marginal taxes on high incomes, popularly known as the Mellon plan for scientific taxation. This article tells the story of the old fight over the federal estate tax, in the hope of illuminating the current one.

November 26, 2005 in Scholarship, Tax Analysts | Permalink | TrackBack (0)

Hildreth, Murray & Sjoquist on Interstate Tax Uniformity and the Multistate Tax Commission

Ntj_logo_1W. Bartley Hildreth (Wichita State University, Hugo Wall School of Urban & Public Affairs), Matthew N. Murray (University of Tennessee, Department of Economics) & David L. Sjoquist (Georgia State University, Andrew Young School of Policy Studies) have published Interstate Tax Uniformity and the Multistate Tax Commission, 58 National Tax Journal 575-89 (Sept. 2005). Here is the abstract:

Concerns over nonconformity of state tax systems mounted through the 20th century as the multistate presence of businesses expanded. Fearing federal intervention and the loss of state tax sovereignty, the Multistate Tax Commission (MTC) was established in 1967 to help promote uniformity in state taxation. This paper examines the role of the MTC in securing greater uniformity of state corporate income taxes. We discuss the activities ofthe MTC, the prospect for securing voluntary interstate cooperation, the degree of uniformity achieved by the MTC and alternative mechanisms for achieving greater harmony in state taxation.

November 26, 2005 in Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, November 25, 2005

IRS Office of Chief Counsel (SB/SE) Seeks Attorney in Laguna Niguel, CA Office

Irs_logo_148 The IRS's Office of Chief Counsel is seeking to fill an attorney position in the Small Business/Self-Employed (SB/SE) Division in Laguna Niguel, CA:

SB/SE is the largest Chief Counsel division, with 440 attorneys assigned to 49 field offices. These attorneys generally work directly with IRS field agents, providing legal advice on tax cases involving individuals and small businesses, and on all cases involving collection and bankruptcy issues. When these cases go to trial, SB/SE attorneys are usually the IRS litigators, with direct responsibility for identifying the desired legal theories, developing the trial strategies, and representing the IRS in court.

Major Duties: This position is located in the Division Counsel, Small Business/Self- Employed (SB/SE). SBSE attorneys typically spend most of their time handling Tax Court and bankruptcy cases. Over 95 percent of the 20,000 Tax Court cases filed last year were assigned to SB/SE attorneys. In most field offices, bankruptcy cases are assigned to attorneys who are designated Special Assistant United States Attorneys. Attorneys may also be assigned to assist the Department of Justice in the handling of collection, refund and other cases in the U.S. District Courts. Through client support and litigation, SB/SE attorneys have an opportunity to further their knowledge of tax law and to develop expertise on a wide variety of complex technical, procedural, and tax issues.

Salary: $63,807 - $120,498.

Application Deadline:  December 14, 2005.

For more information and to apply, see here.

November 25, 2005 in IRS News | Permalink | Comments (0) | TrackBack (0)