Saturday, September 23, 2006
For over 30 years, the University of Florida Graduate Tax Program has been one of the nation's leading programs for the advanced study of tax law. Among the country's 30 graduate tax programs, Florida has by far the largest number of full-time faculty and is the only school to offer three advanced tax degrees:
Graduate tax students assist in the publication of the Florida Tax Review, one of the most prestigious peer-reviewed tax journals in the country. In this 12-part series, TaxProf Blog will profile the Florida Graduate Tax Faculty.
Lawrence Lokken is the Hugh Culverhouse Eminent Scholar in Taxation at Florida:
Somebody once told me that Erwin Griswold, responding to the question, “What is the best undergraduate major for a student intending on going to law school?,” said that he thought mathematics and music were the best backgrounds for law students. His reasons for this belief are lost to me, but I found it very interesting because my undergraduate majors were music and mathematics. Over the years, I have come to the conclusion that the path that took me from music and mathematics to tax law is direct and not very long.
Nonprofit and Philanthropy Law publishes abstracts of draft working papers and accepted articles in the fields of nonprofit law and policy, philanthropy law and policy and related areas of scholarship. Thus, drafts and articles that concern nonprofit corporations, charities, charitable corporations, charitable organizations, charitable donations, charitable foundations, charitable fundraising, charitable solicitation, charitable trusts, philanthropy, private foundations, nongovernmental organizations, tax- exempt organizations, tax-exempt corporations, private clubs, membership clubs and similar topics are appropriate for this journal.
To subscribe to the journal (free for law professors at schools with SSRN site licenes), go here.
Recently two apparent paradoxes have been revealed about an agency permanent establishment (PE) under tax treaties, first that it is possible to avoid an agency PE by exploiting a difference between civil law and common law on agency (often referred to as commissionnaire structures) and secondly that if the agent is rewarded with a market-value fee there will be no profits to attribute to an agency PE. This article demonstrates that these problems have been present since the origin of tax treaties, and that they stem from a form-over-substance approach to PE tests which relegates the independence test in defining PEs to a secondary role, from the use of a different indeterminate independence test in transfer-pricing rules and from the definition of the firm in terms of common ownership. Underlying the problems have been inconsistent views on how value is generated within a firm. The solution is to settle on a workable theory of value, to apply substance over form, and to realise the significance of independence in defining the boundary of the firm. Under current treaty law, the second asserted paradox is not correct if treaties are interpreted in a sensible manner.
Two Tables with Returns with Positive Adjusted Gross Income (AGI): Number of Returns, Shares of AGI and Total Income Tax, and Average Tax Rates, by Selected Ascending and Descending Cumulative Percentiles of Returns Based on Income Size Using the Definition of AGI for Each Year, Tax Years 1986-2004.
Friday, September 22, 2006
The IRS today issued Notice 2006-85, which announced that the Treasury Department and IRS will issue regulations under § 367(b) to address triangular reorganizations under § 368(a) involving foreign corporations. From HP-109:
The notice states responds to comments and requests for guidance regarding certain triangular reorganizations that are designed to avoid U.S. tax, including tax on the repatriation of a subsidiary's earnings. The notice describes the transactions as involving a parent corporation (P) and a subsidiary corporation (S) where S transfers property to P in exchange for stock of P and then uses the P stock as consideration in an exchange to acquire the stock or assets of another corporation in a triangular reorganization. Taxpayers take the position that S's transfer of property to P for P's stock is treated as the purchase of P stock, and not a distribution from S to P, thereby effecting, in most cases, a tax-free transfer of S's earnings to P without U.S. income tax.
The notice provides that the regulations that will be issued will apply only where P or S (or both) is a foreign corporation. Further, the regulations will make adjustments with respect to P and S such that the property transferred from S to P in exchange for P stock will have the effect of a separate distribution of property from S to P. When issued, the regulations will apply to transactions occurring on or after the date the notice was released for publication. The regulations will not, however, apply to a transaction that was completed on or after the date the notice was released for publication, provided the transaction was entered into pursuant to a written agreement which was binding before the publication of the notice and all times thereafter.
- Bloomberg: "Killer B" Corporate Tax Shelter to Be Shut Down by Treasury, by Ryan J. Donmoyer:
The U.S. Treasury Department moved to stop companies from claiming tax benefits from a type of corporate reorganization involving overseas subsidiaries dubbed the ``the Killer B'' transaction by tax lawyers. The department said in a notice today that it will issue regulations that disallow so-called triangular reorganizations that attempt to escape tax when they send foreign earnings to a U.S. parent company....
Willard Taylor, a partner at the law firm Sullivan & Cromwell LLP in New York, said the transaction the Treasury Department says it will ban is ``quite extensively done.'' ``You're dealing with big companies,'' he said, declining to name any specific ones. ``They do these things in big numbers.'' The transaction was dubbed ``the Killer B'' by Tax Notes columnist Lee Sheppard in a 2000 article because the reorganization at the heart of the transaction often involves a ``B'' company with no true earnings or profits, thus making the organization itself a sham with no business purposes other than avoidance of tax.
- Federal Estate Tax Returns Filed for Nonresident Aliens, 2003, 2004, and 2005, by Brian G. Raub
- Foreign-Controlled Domestic Corporations, 2003, by James R. Hobbs
- Sole Proprietorship Returns, 2004, by Kevin Pierce & Michael Parisi
- Statistics of Income Studies of International Income and Taxes, by Lissa Redmiles
- U.S. Possessions Corporation Returns, 2003, by Daniel S. Holik
- Utilization of Special Estate Tax Provisions for Family-Owned Farms and Closely Held Businesses, by Martha Eller Gangi & Brian G. Raub
Education Sector released a report this morning, College Rankings Reformed: The Case for a New Order in Higher Education:
The U.S. News rankings have become the nation's de facto higher education accountability system—evaluating colleges and universities on a common scale and creating strong incentives for institutions to do things that raise their ratings. But the U.S. News ranking system is deeply flawed. Instead of focusing on the fundamental issues of how well colleges and universities educate their students and how well they prepare them to be successful after college, the magazine's rankings are almost entirely a function of three factors: fame, wealth, and exclusivity. They directly or indirectly account for 95 percent of a school's ranking, as Table 1 reveals....
New research and advances in technology in the last several years have led to a host of new metrics and data sources that together offer an unprecedented opportunity to measure how well colleges and universities are preparing their undergraduate students. The new measures provide information about a range of important factors like teaching quality, student learning, graduation rates, and success after college. Many of them are eye-opening, suggesting that existing rankings badly mislead students and parents about the “best” colleges and universities. Some institutions currently mired in the lower reaches of the U.S. News rankings show outstanding results, while some of the exclusive institutions so prized by striving students don't live up to their reputations for excellence. The wealth of valuable new information provides the possibility of replacing existing college rankings with a vastly improved ranking system. This report explains what the new measures can show, how those measures can be combined into new college rankings, and why the new rankings would benefit both students and colleges.
Today's Chronicle of Higher Education has an article about the new rankings, Researcher Proposes Basing College Rankings on Different Criteria, by Eric Hoover
- Patenting of Tax Advice, by Charles F. Wieland III (Buchanan Ingersoll & Rooney, Washington, D.C.)
- Accounting for Income Taxes – Uncertain Tax Positions, by Charles C. Abell (Ernst & Young, Louisville, KY)
- Contingent Liabilities and the Economic Substance Doctrine (Coltec Industries v. United States), by David I. Kempler (Buchanan Ingersoll & Rooney, Washington, D.C.)
All Saints Episcopal Church (Pasadena, CA) has annpunced that it will refuse to comply with the IRS's investigation into the possible revocation of its tax exemption because of an anti-war sermon delivered the Sunday before the 2004 Presidential election. From the All Saints Press Release:
The Vestry of All Saints Church in Pasadena, California, voted unanimously this morning to challenge legally, and in a court of law, the right of the Internal Revenue Service to proceed with either of the two summonses served on the church by the IRS last Friday. The 26-member governing board of All Saints reached its conclusion after much prayer and consultation with its congregation, clergy, and legal counsel. Following the Vestry’s decision, All Saints’ legal counsel, Marc Owens, informed the IRS of the Vestry’s decision in these words, “We believe the only way to challenge the IRS’s actions in this case is through a summons enforcement proceeding in court, and therefore the Church respectfully declines to respond to the summonses. Rev. Bacon will not appear to testify on October 11.”
- L.A. Times: All Saints Episcopal Church Won't Comply With IRS Probe, by Louis Sahagun
- New York Times: I.R.S. Inquiry Into Sermon Is Challenged by Church, by Stephanie Strom
- Wall Street Journal: Calif Church Fights Anti-War Sermon Tax-Case Summons
- Associated Press: Pasadena Church Won't Yield to IRS
Attorneys in the Division Counsel/Associate Chief Counsel, Criminal Tax, serve in over 30 offices located in cities across the country. The 70-plus Criminal Tax attorneys are responsible for advising and counseling the IRS Special Agents in Charge in all areas of the Criminal Tax function, including tax, currency and money laundering crimes and criminal procedure. They also provide legal counsel on investigative matters such as administrative and grand jury investigations, undercover operations, electronic surveillance, search warrants and forfeitures, the referral of cases to the Department of Justice for grand jury investigation, criminal prosecution, and the commencement of forfeitures. Criminal Tax attorneys also coordinate with other offices within the IRS and the Office of Chief Counsel on all matters involving Criminal Tax.
Major Duties: The Office of Chief Counsel, IRS seeks an attorney to fill a position in the Criminal Tax (CT) business unit. 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: $66,426 - $121,346.
Application Deadline: October 2, 2006
For more details, or to apply, see here.
This paper looks at how income tax rates, consumption and public spending respond as venues for tax evasion open or close. The analysis draws on a 16-generation OLG model in which tax rates are determined in a repeated game between voters and a rent-seeking Leviathan government. Key insights are: (1) Effects on any generation alive when change takes place may differ substantially from steady state effects that accrue for generations yet to be born. (2) There is considerable intergenerational diversity in these effects that is not monotonous as we move from young to old. Combined, these results suggest that the political economy of pertinent institutional change may be quite complex.
Thursday, September 21, 2006
The IRS today issued Notice 2006-84, I.R.B. 2006-41, ruling that the U.S. Naval Base at Guantanamo Bay is not located within a restricted country for purposes of the § 911(d)(8)(A) limitation. As a result, U.S. citizens can exclude from their income the compensation they receive for performing services at Gitmo, as well as their housing costs.
Jagadeesh Gokhale (Cato Institute) & Pamela Villarreal (National Center for Policy Analysis) have posted Wealth, Inheritance and the Estate Tax on the National Center for Policy Analysis web site. Here is the abstract:
As Congress continues debate over reduction and possible elimination of the estate tax, a new NCPA study undermines the chief argument made by proponents of the tax? that estate taxation prevents the concentration of wealth in the hands of financial dynasties. The report shows that the contribution of inheritances to the distribution of wealth in the U.S. is surprisingly small.
Barbara Butrica, Richard W. Johnson, Karen E. Smith & C. Eugene Steuerle have posted The Implicit Tax on Work at Older Ages, 59 Nat'l Tax J. 211 (2006), on the Urban Institute web site. Here is the abstract:
This article describes the combined impact of Social Security, Medicare, employee benefits, and the tax system on the financial incentive to work for representative adults age 55 and older. We compute the implicit tax rate on work, broadly defined to include standard income and payroll taxes as well as changes in future Social Security benefits, employer-provided pension benefits, and health benefits associated with an additional year of employment. We measure how work incentives vary by life expectancy, Social Security take-up age, pension plan type and contributions, earnings level, access to employer-sponsored health insurance and retiree health benefits, health status, and marital status. We also examine how selected policy reforms, such as eliminating the payroll tax and the taxation of Social Security benefits, could improve work incentives at older ages.
We previously blogged the impending loss (on Ooctober) of the full federal tax credit for buyers of the Prius, as well as other hybrid vehicles manufactured by Toyota and Lexus, because the company sold more than 60,000 hybrids during the calendar quarter ending June 30, triggering the credit's phaseout. The IRS yesterday announced (IR-2006-145) the scheduled phase-out of the tax credit for each of the hybrid models:
[T]he question is whether this elitism--akin to the scouts who recruited Billy Beane based on his build and athleticism and overlooked his inability to hit a curve ball--results in predictable over and undervaluation of talent, thus creating opportunities for arbitrage in the market for law professors. In their masterful review of Moneyball, 82 Tex. L. Rev. 1483 (2004), Paul Caron & Rafael Gely made a compelling case that appointments committees were indeed employing heuristics, such as school attended and fancy clerkships, that had no bearing scholarly productivity. But they did not lay out a systematic vision for how these lessons could be deployed to build a successful law school or law faculty....
If a law school wants to systematically identify undervalued future scholars, I am available to create the requisite dataset and run the necessary regressions--but I am expensive. What I cannot guaranteed, however, is whether a law school can parlay that talent into any meaningful measure of long term institutional success. A scholarship-first strategy is misguided, whether done through Moneyball/Moneylaw or the usual elitist folk wisdom. Not only does it shortchange students (thus disturbing our restful sleep), there are solid theoretical and empirical reasons to suggest that it just doesn't work.
Work. Hard work! And plenty of it. That is what has made the United States into the world’s foremost economic superpower. But while we Americans value and respect work, we are also concerned about economic justice. We like to see all workers earn a fair day’s pay for a fair day’s work. And we like having a safety net to catch those who cannot compete successfully in our labor markets. America works because of this balance between the desire to reward work and our concerns about economic justice. But according to Jon Forman, America could work even better.
In Making America Work, Forman explains how current government policies influence work and work behavior and makes the case for changing government tax, welfare, Social Security, pension, and labor market policies to encourage work and promote greater economic justice. It is a clear, provocative declaration of principles and a bold prescription for policies that restore and preserve the balance of work rewards and economic justice.
Data tables from the Tax Year 2001 Corporation Source Book Statistics of Income (Publication 1053) are now available in Excel spreadsheets for viewing or downloading from Tax Stats at the IRS.gov Web site. These tables present detailed income statement, balance sheet, tax, and selected items, by industrial sector, and major and minor industrial groups. For each industrial group, the data are further classified by size of total assets. Data are presented for all corporate returns and for those returns with net income. Separate statistics on S corporations are also included by industrial sector and asset size. Data from the Tax Years 2000, 2002, and 2003 Corporation Source Book publications were made available on Tax Stats earlier this year. Tax Stats contains other statistics from corporation income tax returns, as well as statistics from other types of entities (e.g., individuals, exempt organizations, and partnerships).
Wednesday, September 20, 2006
The U.S. Government took in more tax revenue -- $85.8 billion -- last Friday than on any other day in history. The tax gusher is 20% higher than the previous record ($71 billion on September 15, 2005). See:
- Eugene Volokh, Law Reviews, the Internet, and Preventing and Correcting Errors, 116 Yale L.J. Pocket Part 4 (2006)
- Ann Althouse, Let the Law Journal Be the Law Journal and the Blog Be the Blog, 116 Yale L.J. Pocket Part 8 (2006)
- Christopher Bracey, A Blog Supreme?,116 Yale L.J. Pocket Part 13 (2006)
- Jack Balkin, Online Legal Scholarship: The Medium and the Message, 116 Yale L.J. Pocket Part 20 (2006)
- Stephen I. Vladeck, That’s So Six Months Ago: Challenges to Student Scholarship in the Age of Blogging, 116 Yale L.J. Pocket Part 31 (2006)
- Paul L. Caron, The Long Tail of Legal Scholarship, 116 Yale L.J. Pocket Part 38 (2006)
- Rosa Brooks, What the Internet Age Means for Female Scholars, 116 Yale L.J. Pocket Part 46 (2006)
- Brian Leiter, Why Blogs Are Bad for Legal Scholarship, 116 Yale L.J. Pocket Part 53 (2006)
The continuing controversy over 527 organizations has led Congress to impose extensive disclosure requirements on these political organizations and to consider imposing extensive restrictions on their funding as well. The debate about what laws should govern these entities has, however, so far almost completely ignored the fact that such laws raise a complicated institutional choice question.
Kenneth H. Ryesky (CUNY) has published Taxation Unchecked and Unbalanced: The Supreme Court's Denial of Certiorari in Sorrentino, 41 Gonz. L. Rev. 505 (2006). Here is the Introduction:
On October 3, 2005, the United States Supreme Court denied a writ of certiorari in Sorrentino v. United States, letting stand a divided authority among the Federal Circuits regarding the means of proving a timely postmark on a document mailed to the IRS or the Tax Court. Following a discussion of the split authority of the Circuits regarding the I.R.C. § 7502 postmark rule, this article will discuss the Sorrentino case and its broader implications in the context of the Constitutional checks and balances that ought be placed upon the taxation function by the judiciary.
Interesting editorial in today's Wall Street journal: Taxes and Justice:
Prosecutors have been advertising their ballyhooed case against a pack of former KPMG partners as the largest criminal tax-shelter trial in history. They'd better do some scrambling for better evidence, however, or the case could end up becoming one of the biggest flops in Justice Department history.
Last week, a previously undisclosed memo from 2004 suggested that the IRS wasn't sure that the tax shelters at issue in the trial of 18 defendants even needed to be registered with the IRS. This revelation is important because the failure to register the shelters is one of the Justice Department's justifications for charging a conspiracy to defraud the IRS. Separately, we've obtained an internal KPMG memo to Richard Smith, one of the defendants in the case. In that 2003 memo, IRS Acting Chief Counsel Emily Parker is cited as assuring KPMG "that there has been no criminal activity" in KPMG's marketing of the shelters. The defendants have claimed all along that they thought the shelters they were publicly marketing were entirely legal, and memos such as this one will certainly help the argument for "reasonable doubt."
As early as today, the defendants are expected to file for another delay of the trial on the basis of the 2004 IRS memo. Among other things, they will demand that prosecutors make available any other internal government documents that might tend to show that the tax shelters in question were not as fraudulent as the Justice Department claims.
Lawrence A. Zelenak (Duke) presents two papers at the University of Toronto today as part of the James Hausman Tax Law and Policy Workshop Series The workshop will be held in the Solarium (FA2) at 84 Queen's Park.
There is considerable interest in the United States in the possible elimination of the tax return filing requirement for many or all taxpayerseither by the introduction of a “return-free” income tax, or by replacing the income tax with a national retail sales tax or a value-added tax. This paper claims that a return filing requirement has substantial civic virtues which are not widely recognized. A return-based income tax coupled with inexact withholding is an attractive compromise between those who would prefer that taxes be as visible and painful as possible, and those with the opposite preference. In addition, return filing has the potential to serve as an important civic ceremony, recognizing and formalizing the fulfillment of the financial responsibilities of citizenship. For this potential to be realized, however, the income tax rules applicable to most taxpayers must be simplified so that return preparation is not the miserable experience it is for most taxpayers today.
The federal income tax and situation comedies entered popular culture at almost the same moment, during World War II. Over the past six decades, situation comedies have supplied a running commentary on the income tax, with the income tax featuring prominently in at least eighty sitcom episodes. For one hoping to understand popular attitudes to the income tax, and how they may have changed over time sitcoms are indispensable source material. This paper describes all income tax-related sitcom episodes which the author has been able to identify.
The Senate Finance Committee is holding a hearing today on Our Business Tax System: Objectives, Deficiencies, and Options for Reform. The hearing takes place at 10:00 a.m. in 215 Dirksen Senate Office Building. The witnesses scheduled to testify are:
- David Walker (Comptroller General, U.S. Government Accountability Office)
- Robert Carroll (Deputy Assistant Secretary for Tax Analysis, U.S. Treasury Department)
- Charles Rossotti (Senior Advisor, The Carlyle Group)
- Thomas Neubig (National Director, Quantitative Economics & Statistics, Ernst & Young)
- David Bernard (International President, Tax Executives Institute; Vice-President, Kimberly-Clark)
- Jeff Johannesen (Managing Director, RSM McGladrey)
In connection with the hearing, the Joint Committee on Taxation has released Present Law and Background Relating to Selected Business Tax Issues (JCX-41-06):
This document ... provides an overview of present law related to a variety of hearing topics, including choice of business entity, corporate integration, mergers and reorganizations, cost recovery, and international tax systems.
- Letter to IRS Oversight Board Measuring IRS Progress in Meeting Long Term Goals (09/15/06)
- Letter Concerning Reconsideration of Section 409A of the IRC (09/15/06)
- Comments in Response to Notice 2006-68 Regarding Requirement of Partial Payment with Submission of Offers in Compromise
The Treasury Inspector General for Tax Administration has released several tax reports:
- Appropriate Actions Were Taken to Maintain Taxpayers' Level of Service, but Access Is Lower Than That in Prior Years (2006-40-162)
- Untimely Processing of Taxpayer Carryback Loss Claims Resulted in Significant Interest Costs (2006-40-139)
- Fiscal Year 2006 Statutory Review of Disclosure of Collection Activity With Respect to Joint Returns (2006-40-135)
- Individual Income Tax Return Information Was Successfully Posted to the Latest Release of the Customer Account Data Engine (2006-40-134)
- Compliance With Freedom of Information Act Requirements Has Increased (2006-40-129)
- Insufficient Controls Resulted in Significant Delays in Processing Tax-Exempt Bond Payments and Some Unreliable Payment Posting Dates (2006-40-128)
- Oversight and Accuracy of Tax Returns Continue to Be Problems for the Volunteer Income Tax Assistance Program (2006-40-125)
Tuesday, September 19, 2006
This week's Tax Foundation podcast features Nina Olson on Taxpayer Advocacy at the IRS:
The complexity of the federal income tax is legendary, and the IRS has long been feared by U.S. taxpayers. What can Congress and the IRS do to make the annual tax filing process less burdensome for taxpayers? In this podcast, Nina Olson, National Taxpayer Advocate at the IRS, discusses tax complexity, the federal income "tax gap," and the use of private debt collection services by the IRS (17 minutes, 3 seconds).
All Saints Episcopal Church in Pasadena, Calif., is deciding whether to fight an IRS summons for the church's e-mails, meeting minutes and letters. The liberal church is under investigation for allegedly making political statements leading up to the November 2004 presidential election. At stake are its tax-exempt status and possibly some heavy fines.
Scary article in today's Chronicle of Higher Education: Survey Finds Widespread Cheating in M.B.A. Programs, by Katherine Mangan:
More than half of the graduate business students surveyed recently admitted to cheating at least once during the last academic year, according to a report released on Monday. The report, "Academic Dishonesty in Graduate Business Programs: Prevalence, Causes, and Proposed Action," is based on survey responses from 5,331 students at 32 graduate schools in the United States and Canada, and is scheduled for publication this month in Academy of Management Learning & Education. The survey found that 56 percent of graduate business students -- most of whom are pursuing M.B.A.'s -- had cheated, compared with 47 percent of graduate students in nonbusiness programs.
The NYU reception offers alumni, practitioners, academics, and other friends of the ITP a chance to see each other and hear an update on the Program. You are welcome to join us for the reception, even if you are not a registered IFA participant.
The leadership of the Villanova Graduate Tax Program will shift in 2007-08 when Michael Mulroney steps down after 19 years as Director, to be replaced by Leslie M. Book, who in turn will step down as director of the Federal Tax Clinic. As a result, Villanova is seeking to hire a new tax clinic director:
Villanova University School of Law invites applications for a tenure-track faculty position, beginning in the fall 2007, to direct and teach in the Federal Tax Clinic. The Federal Tax Clinic represents low-income taxpayers in disputes with the IRS regarding federal income tax liability before the IRS, the U.S. Tax Court and in federal district courts. Student attorneys evaluate cases and represent clients in a wide range of tax controversies, including cases involving entitlements to credits and deductions based on family status and residence of qualifying children; the availability of collection remedies such as offers in compromise and installment agreements; and innocent spouse relief. In addition to supervising students enrolled in the Clinic and overseeing all the Clinic’s cases, the Director will be responsible for teaching the classroom component of the Clinic. This component provides substantive law and skills training to enrolled students. In addition to the above, the Director will be responsible for ensuring compliance with all requirements under the federally-funded Low Income Taxpayer Clinic program, working with a teaching fellow who assists the Director in the above responsibilities, including summer case coverage, and developing and maintaining relationships with other legal service providers, bar associations and government officials.
Applicants should have at least three years of experience either as a practicing lawyer primarily in the area of tax law or in a U.S. Tax Court clerkship; a strong academic record and/or other indicia of high performance ability; a commitment to work for low income clients; and a strong interest in teaching and scholarship. Applications consisting of a vitae and cover letter should be sent to Professor John Gotanda, Chair, Faculty Appointments Committee. By the fall of 2007, applicants must be members of the Pennsylvania bar or eligible to waive into Pennsylvania.
Jim Maule (Villanova) has posted No Thanks, Uncle Sam, You Can Keep Your Tax Break, 31 Seton Hall Leg. J. ___ (2006), on SSRN. Here is the abstract:
This article examines the question of whether a taxpayer is permitted to forego a deduction or credit for which the taxpayer otherwise qualifies. There are many reasons why taxpayers might choose to ignore a deduction. In some situations, the alternative minimum tax computations cause a deduction to increase, rather than decrease, tax liability. A taxpayer whose non-business deductions exceed income has no use for additional deductions. There are instances when the tax cost of giving up a deduction is less than the tax benefit thereby made available to another taxpayer, or less than a non-tax financial benefit available to another person if the taxpayer does not claim that person as a dependent. Taxpayers may disregard deductions or credits because the benefit of the deduction or credit is less than the anticipated cost of an audit, or because they wish to keep private the information supporting the claim.
Regular readers of this blog know how much I enjoy rankings. So this article by Alex B. Long (Oklahoma City), [Insert Song Lyrics Here]: The Uses and Misuses of Popular Music Lyrics in Legal Writing, caught my eye. Here is the abstract:
Legal writers frequently utilize the lyrics of popular music artists to help advance a particular theme or argument in legal writing. And if the music we listen to says something about us as individuals, then the music we, the legal profession as a whole, write about may something about who we are as a profession. A study of citations to popular artists in law journals reveals that, not surprisingly, Bob Dylan is the most popular artist in legal scholarship. The list of names of the other artists rounding out the Top Ten essentially reads like a Who’s Who of baby boomer favorites. Often, attorneys use the lyrics of popular music in fairly predictable ways in their writing, sometimes with adverse impact on the persuasiveness of the argument they are advancing. However, if one digs deeper, one can find numerous instances in which legal writers incorporate the lyrics of popular music into their writing in more creative ways.
Here are the Top 10 Rock 'n Roll Rankings from page 7 of the article:
Just missing the cut: Pink Floyd (26), Billy Joel (21), and Johnny Cash (21). For blogosphere commentary, see:
Monday, September 18, 2006
Sad tale in today's Chicago Tribune: John Marshall Law School Abuzz Over Dean's Affair:
Robert "Gil" Johnston, the venerable former dean of the university, was sued by his ex-mistress, Virginia Smith, whom he started dating while she was a law student in 1983. Among other claims, she said Johnston beat her, promised to marry her, then, after his wife died, married someone else.
(Hat Tip: Above the Law.)
The University of Minnesota Law School is hosting a symposium on October 27, 2006 on The Future of Tax Shelters:
Tax shelter activity has been widespread for decades. IRS attempts to curtail that activity have met with mixed results. For a time, it seemed that the IRS might have succeeded as never before, as Congress held hearings, the Treasury Department substantially expanded tax shelter disclosure requirements, and the Department of Justice brought criminal prosecutions against several KPMG tax professionals. Recently, however, there has been pushback from the courts, the tax profession, and even Congress. Did the government overreach and target legitimate business activity? Was the KPMG-prompted decline merely a cyclical downturn, to be followed by a return to previous levels of tax shelter activity? What will the future hold for tax shelters?
This conference will bring together top tax scholars and professionals as well as scholars from other disciplines who are thinking about tax shelters from different perspectives to evaluate the present and future of tax shelters.
Keynote Speaker: Pamela Olson (Skadden, Arps, Slate, Meagher & Flom; former Assistant Secretary of the Treasury (Tax Policy))
Papers (to be published in the Virginia Tax Review):
- Tax Investment Strategies, Business Method Patents, and the Firm, by Dan L. Burk (Minnesota) & Brett H. McDonnell (Minnesota)
- Legal Evolution and Gaming the System, by Philip Curry (Simon Fraser University) & Claire A. Hill (Minnesota)
- Tax Shelters: Intentionalism’s Greatest Challenge, by Lawrence M. Solan (Brooklyn)
- In Defense of Tax Shelters, by Leo Katz (Penn)
- Of Lenity, Chevron, and KPMG, by Kristin E. Hickman (Minnesota)
- Options Backdating and Corporate Culture, by Victor Fleischer (Colorado)
- State Tax Shelters and State Taxation of Capital, by Joseph Bankman (Stanford)
Interesting article in today's New York Times: IRS Eyes Religious Groups as More Enter Election Fray, by Laura Goodstein:
With midterm elections less than two months away, Christian conservatives are enlisting churches in eight battleground states to register voters, gather crowds for rallies and distribute voters’ guides comparing the candidates’ stands on issues that conservatives consider “family values.” This election year, however, the religious conservatives are facing resistance from newly invigorated religious liberals and moderates who are creating their own voters’ guides and are organizing events designed to challenge the conservatives’ definition of “values.”
Both religious flanks are looking nervously over their shoulders at the Internal Revenue Service, which this year announced a renewed effort to enforce laws that limit churches and charities from involvement in partisan political campaigns.
Interesting article today on Bloomberg: Estate-Tax Repeal Keeps Charities Silent, Deferring to Donors, by Ryan J. Donmoyer:
When the Jewish Council for Public Affairs, a New York non-profit group, came out against repealing the U.S. estate tax in 2003, James Tisch wasn't happy. Tisch, the Loews Corp. chairman, was also chairman of New York-based United Jewish Communities, which helped fund the public-affairs council. His concern, he says: The group, which might be a loser if the tax is repealed, risked alienating its wealthy donors -- the biggest winners. ``It doesn't look particularly good for charitable organizations to be arguing something that's in conflict with what members of their board want,'' Tisch says.
That's the dilemma facing charities, universities, museums and other organizations that rely on donations as Senate Republicans consider another vote on permanently reducing the tax as early as this week. Most of the organizations are following Tisch's advice, keeping mum on the issue in deference to their most generous patrons: the very wealthy who often serve on their boards.
Brant J. Hellwig (South Carolina) has published The Supreme Court's Casual Use of the Assignment of Income Doctrine, 2006 Ill. L. Rev. 751. Here is the abstract:
In its recent decision in Commissioner v. Banks, 543 U.S. 426 (2005), the Supreme Court weighed in on the tax treatment of contingent attorney’s fees - an issue that had produced a pronounced split among the lower courts and had been the subject of considerable debate within the tax community. In holding that contingent attorney’s fees were properly included in the plaintiff’s gross income, the Court reached the correct, albeit unpopular, result. The Court’s reasoning, however, left much to be desired.
Following up Sunday's detailed post on the summons issued by the IRS in connection with its threatened revocation of the tax exemption of All Saints Episcopal Church (Pasadena, CA) because of an anti-war sermon delivered the Sunday before the 2004 Presidential election: Pastor Ed Bacon gave a fiery sermon on Sunday, Neighbor Love is Never Neutral, in response to the IRS summons.
The front page of today's L.A. Times has a detailed account of the sermon: Pasadena Church May Fight IRS Summons, by Scott Golver & Louis Sahagun:
A liberal Pasadena church facing an IRS investigation over alleged politicking sounded a defiant note Sunday, with its leaders and many congregants saying the probe amounted to an assault on their constitutional rights and that they were inclined to defy the agency's request for documents. "These people are offended," said the Rev. Ed Bacon, rector of All Saints Episcopal Church, after delivering an impassioned sermon about the investigation to a standing-room-only crowd of about 900. "Freedom of speech and freedom of religion have been assaulted by this act of the IRS, and I think my people want to be heard in court."
(Hat Tip: Ellen Aprill.)
Interesting article in the L.A. Times: Partisan Battle Trips Up Popular Tax Benefits, by Joel Havemann:
Just about every lawmaker in Congress favors extending a batch of popular tax benefits approved during President Bush's first years in office and authorized through 2005. But in a case study of the tortuous process that can surround even the most highly regarded proposal on Capitol Hill, extension of the tax benefits appears to face an uphill road as Congress nears adjournment.
Economists: Trends Belie O'Connor's Grutter Prediction that Affirmative Action Will Be Unnecessary in 25 Years
Interesting forthcoming paper in the American Law and Economics Review: Race, Income, and College in 25 Years: Evaluating Justice O’Connor’s Conjecture, by Alan B. Krueger (Princeton), Jesse Rothstein (Princeton) & Sarah Turner (Virginia). Here is the abstract:
In Grutter v. Bollinger, Justice O’Connor conjectured that in 25 years affirmative action in college admissions will be unnecessary. We project the test score distribution of black and white college applicants 25 years from now, focusing on the role of black–white family income gaps. Economic progress alone is unlikely to narrow the achievement gap enough in 25 years to produce today’s racial diversity levels with race-blind admissions. A return to the rapid black–white test score convergence of the 1980s could plausibly cause black representation to approach current levels at moderately selective schools, but not at the most selective schools.
Scott Jaschik reports on the paper in this morning's Inside Higher Ed, Justice O’Connor’s Deadline. He includes this chart:
The Senate Finance Committee has released the following documents in connection with S. 1321, Telephone Excise Tax Repeal and Taxpayer Protection and Assistance Act of 2006:
- Tax Prof Profile: David Hudson
- Dean on Foreign Tax Havens
- Can Faculty Charge Students for Podcasts of Classes?
- Howton & Howton on The Corporate Response to the 2003 Dividend Tax Cut
- Top 5 Tax Paper Downloads
- IRS Requests Documents in Investigation of All Saints Church
- Brennen Posts Tax Articles on SSRN
- Binder on The Disinvestment in Public Higher Education
Sunday, September 17, 2006
1. [296 Downloads] Family Limited Partnership Formation: Dueling Dicta, by Mitchell Gans (Hofstra) & Jonathan G. Blattmachr (Milbank, Tweed, Hadley & McCloy, New York) [blogged here]
4. [82 Downloads] The Federal Income Tax Consequences of the Bobble Supreme Phenomenon, by Leandra Lederman (Indiana) [blogged here]
5. [74 Downloads] The Competence of Nations and International Tax Law, by Eric T. Laity (Oklahoma City) [blogged here]
Here is the latest chapter from the L.A. Times in the IRS's threatened revocation of the tax exemption of All Saints Episcopal Church (Pasadena, CA) because of an anti-war sermon delivered the Sunday before the 2004 Presidential election: IRS Orders All Saints to Yield Documents on '04 Political Races, by Louis Sahagun:
Stepping up its probe of allegedly improper campaigning by churches, the Internal Revenue Service on Friday ordered a liberal Pasadena parish to turn over all the documents and e-mails it produced during the 2004 election year with references to political candidates. All Saints Episcopal Church and its rector, the Rev. Ed Bacon, have until Sept. 29 to present the sermons, newsletters and electronic communications.
For the most recent documents in the case, see:
- IRS Letter to All Saints Church (7/24/06)
- All Saints Letter to IRS (8/17/06)
- IRS Summons to All Saints (9/15/06)
- All Saints Press Release (9/15/06)
(Hat Tip: Ellen Aprill.) For prior TaxProf Blog coverage, see:
- Muntean on IRS vs. All Saints Church (12/31/05)
- All Saints Church's Attorney Claims IRS Violated § 7611 in Investigation into Whether Pastor's Sermon Constituted Illegal Political Campaign Intervention (12/15/05)
- More on IRS's Threatened Revocation of All Saints Church's Tax-Exemption (12/7/05)
- Aprill Proposes Four Safe Harbors for § 501(c)(3) Organizations to Avoid Charges of Improper Political Campaigning (12/1/05)
- Aprill Corrects NY Times Op-Ed on IRS's Challenge to All Saints Church's Tax Exemption (11/24/05)
- National Online Statement of Support of All Saints Church (11/23/05)
- NY Times on IRS's Threatened Revocation of All Saints Church's Tax-Exemption (11/22/05)
- More on IRS's Threatened Revocation of All Saints Church's Tax-Exemption (11/18/05)
- Tobin on Politics and Religion – Bad Bed Fellows? (11/17/05)
- Church Responds to IRS's Threatened Revocation of Its Tax-Exemption (11/14/05)
- More on IRS's Threatened Revocation of Church's Tax-Exempt Status Because of Anti-War Sermon by Pastor (11/12/05)
- Pastor Who Preached Anti-War Sermon Criticizes IRS Attempt to Revoke Church's Exemption (11/9/05)
- Conservatives Join Liberals in Opposing IRS's Threatened Revocation of L.A. Church's Tax Exemption for Anti-War Sermon (11/8/05)
- IRS Threatens to Revoke L.A. Church's Tax Exemption for Anti-War Sermon (11/7/05)
David A. Brennen (Georgia) has posted a number of his tax articles on SSRN:
- A Diversity Theory of Charitable Tax Exemption: Beyond Efficiency, Through Critical Race Theory, Toward Diversity, 4 Pitt. Tax Rev. ___ (2006)
- Federal Taxation (Eleventh Circuit Survey), 54 Mercer L. Rev. 1563 (2003)
- Treasury Regulations and Judicial Deference in the Post-Chevron Era, 13 Ga. St. U. L. Rev. 387 (1997)
- The Proposed Corporate Sponsorship Regulations: Is the Treasury Department Sleeping with the Enemy?, 6 Kan. J. L. & Pub. Pol'y 49 (1996)