November 30, 2006
Is the Internal Revenue Code Unconstitutionally Vague?
Interesting item in today's Best of the Web feature on the Wall Street Journal's Opinion Journal:
"A federal judge struck down President Bush's authority to designate groups as terrorists, saying his post-Sept. 11 executive order was unconstitutionally vague, according to a ruling released Tuesday," the Associated Press reports:
In 2004, [Judge] Collins ruled that portions of the Patriot Act were too vague and, even after Congress amended the act in 2005, she ruled the provisions remained too vague to be understood by a person of average intelligence and were therefore unconstitutional.
So laws are unconstitutional if "a person of average intelligence" can't understand them? Someone ought to get the Internal Revenue Code before this judge.
(Hat Tip: Scott Schumacher.)
IRS Abandons Outsourcing Plans
- Information Week: IRS Deep-Sixes Outsourcing Plans As Tax Season Approaches
- Washington Post: As IRS Scales Back Outsourcing, Union Remains Skeptical
Hong-Barco on IRS Tax Liens on Consumer Credit Reports
Phillip C. Hong-Barco (J.D. 2006, Pittsburgh) has published How the Fair Credit Reporting Act Fails to Protect: The Case of IRS Tax Liens on Consumer Credit Reports, 3 Pitt. Tax Rev. ___ (2006).
Yu on A Proposed Allocation of DNI to the Separate Shares of a Trust or Estate
Michael T. Yu (California-Western) has published A Proposed Allocation of Distributable Net Income to the Separate Shares of a Trust or Estate, 3 Pitt. Tax Rev. ___ (2006). Here is the abstract:
This article proposes an allocation of distributable net income (DNI) to the separate shares of a trust or estate to replace the regulations' existing allocation, which produces the following inequities. First, by excluding tax-exempt interest from the allocation of DNI to the separate shares of trust or estate, the regulations artificially decrease the taxable income of the trust or estate and artificially increase the taxable income of the separate shares of the trust or estate. Second, by allocating the DNI attributable to income in respect of a decedent (IRD) pro rata to the separate shares that could potentially be funded with such IRD, the regulations produce two inequities: (1) a distribution of IRD other than to a separate share artificially decreases the non-separate share recipient of IRD's taxable income and artificially increases the separate shares' taxable income, and (2) an express distribution of IRD or a non-pro rata distribution of principal artificially decreases the taxable income of any recipient of either such distribution and artificially increases the taxable income of any person who is not such a recipient. This article's proposed allocation prevents the foregoing inequities and should replace the existing allocation in the regulations.
Colinvaux on Regulation of Political Organizations and the Red Herring of Tax Exempt Status
Roger Colinvaux (Legislation Counsel, Joint Committee on Taxation ) has published Regulation of Political Organizations and the Red Herring of Tax Exempt Status, 59 Nat'l Tax J. 509 (2006). Here is the abstract:
Congressional codification of section 527 in 1975 largely reflected the IRS's treatment of political organizations at the time, including that contribution income was not taxable income, and did not provide a significant tax subsidy. In 2000, Congress amended section 527 to impose reporting obligations and, simultaneously, made section 527 voluntary, thus reviving pre–1975 law. The lack of a significant subsidy undermines the effectiveness of imposing burdens on section 527 organizations where there is a choice of tax treatment. The lack of a significant subsidy also raises the constitutionalbar to imposing any burdens on section 527 organizations.
Hoffer on IRS Should Be Bound By Duty of Consistency
Stephanie Hoffer (Northwestern) has published Hobgoblin of Little Minds No More: Justice Requires an IRS Duty of Consistency, 2006 Utah L. Rev. 317. Here is the Conclusion:
The arguments for application of a broader duty of consistency to the Service outweigh the arguments against it. In addition, there is at least some modicum of judicial support for the idea. Finally, our history and sense of justice demand it. Courts should require the Service to give similar treatment to similarly situated taxpayers and should accept written rulings as evidence of disparate treatment. Whether a taxpayer is similarly situated to others should depend on facts relevant to the operation of the statute or statutes in question. In addition, courts should acknowledge that taxpayers under significant hardship are not similarly situated to those who are not. Doing so will allow the Service to consider equity in cases where it is necessary. In addition, if a broader duty of consistency is to comport with Supreme Court jurisprudence, the Service must be afforded an opportunity to correct its mistakes. To ensure that those corrections are fair to taxpayers, the Service should make them in the most transparent way possible. Therefore, courts should adopt the rule in Conway Import Co., which would permit taxpayers to use written rulings as evidence of disparate treatment until the Service publishes its change of position in writing.
By adopting the positions above, courts would not only afford taxpayers fair treatment, they would also decrease transaction costs and increase efficiency by making tax results more reliable. For decades, agency rhetoric and court dicta have supported a consistency requirement while actual decisions have suppressed such a result. Applying a broad-based duty of consistency to the Service is not a new idea, but it is one whose time has come. Ample precedent exists for imposition of the duty, and justice demands it.
Ackerman & Auten on Floors, Ceilings, and Opening the Door for a Non–Itemizer Deduction
Deena Ackerman & Gerald Auten (Office of Tax Analysis, Treasury Department) have published Floors, Ceilings, and Opening the Door for a Non–Itemizer Deduction, 59 Nat'l Tax J. 509 (2006). Here is the abstract:
Proposals to reform the tax treatment of charitable contributions would extend the charitable deduction to non–itemizers and impose a floor under the charitable deduction of all taxpayers. This paper uses PSID and IRS data along with common measures of tax sensitivity to explore the likely impact of two alternative floors combined with a non–itemizer deduction on charitable contributions and on the tax efficiency of the charitable deduction. In general we find that a non–itemizer deduction combined with a relatively modest floor would increase the efficiency of the charitable deduction and lead to modest increases in total contributions.
IRS Issues Fact Sheet on Depreciation
The IRS has issued a new Fact Sheet on Depreciation (FS-2006-27):
The IRS encourages taxpayers to understand the rules surrounding depreciation before attempting to deduct business-related depreciation expenses. Overstated adjustments, deductions, exemptions and credits comprise up to $30 billion per year in unpaid taxes, according to IRS estimates. In order to educate taxpayers regarding their filing obligations, this fact sheet, the sixth in a series, explains the general rules for depreciating assets.
Delahunty Visiting Appointment Stirs Controversy at Minnesota
Inside Higher Ed reports (Appointment Roils a Law School) that a scheduled visit by Robert Delahunty (St. Thomas) at Minnesota has generated controversy over his role in the Bush Administration's torture memo. Delahunty's initial appointment at St. Thomas also generated some controversy (Will "Justifying Torture" Be On The Final Exam? St. Thomas's New Law School Hire).
Update: For much more, see:
November 29, 2006
Toyota Seeks Restoration of Tax Credit as Hybrid Sales Plummet
The AP reports today that Toyota hybrid sales have plummeted since the loss of the full $3,600 tax credit on October 1 and that the company is pushing for the restoration of the credit:
Toyota North American President Jim Press urged Congress Wednesday to extend federal tax credits for hybrid vehicles and accelerate its buying of hybrids and alternative fleet vehicles to help address energy concerns. A 2005 federal energy bill provided up to $3,600 in tax credits to U.S. consumers who buy hybrids, but Toyota Motor Corp. this summer hit the legal production limit -- 60,000 vehicles -- that are eligible for the full tax credit. Toyota officials said the automaker's U.S. hybrid sales in October dropped to its lowest levels since March, attributing the decline in demand in part to the reduced tax credits. The automaker also shifted production of some hybrids from Japan to the U.S.
Prior TaxProf Blog coverage:
- Toyota & Lexus Hybrid Buyers Lose Full Tax Credit on October 1 (8/12/06)
- Toyota & Lexus Hybrid Buyers Lose Full Tax Credit on October 1 (9/21/06)
Death of Arthur Gould
I am sorry to bring you news of the death of Arthur I. Gould, a prominent Washington, D.C. tax lawyer:
- Dykema Gossett (1994-2006)
- Mayer, Brown & Platt (1987-1994)
- Winston & Strawn (1963-1987)
- Trial Attorney, United States Department of Justice, Tax Division (1956-1962)
From the Washington Post obituary:
Mr. Gould served as lead tax lawyer on a number of transactions, including Beatrice Foods Company's acquisition of Esmark Corp., the acquisition of Beatrice by KKR and the spinoff of the Fisher-Price toy division by Quaker Oats Co. He published regularly, served on numerous legal advisory committees and taught at tax institutes and law schools.
Rosenbloom Lectures on International Tax Arbitrage Today at UConn
H. David Rosenbloom (Director, NYU International Tax Program; Partner, Caplin & Drysdale) is presenting a lecture on International Tax Arbitrage today at Connecticut as part of its International Tax Lecture Series. The lecture is from 3:30 p.m.- 5:30 p.m. in the William R. Davis Courtroom in Starr Hall.
Furman on Tax Incentives & Health Care
This paper analyzes proposals to remedy tax–induced distortions in health care by using new tax incentives and retaining all of the existing distortionary tax incentives. In the process of remedying some distortions, this approach magnifies others—most notably increasing the total tax preference for health care. The paper considers two examples—the Bush administration’s FY 2007 budget proposal and a plan by Cogan, Hubbard and Kessler (2005)—and shows that both could result in higher health spending and reduced welfare. Finally, the paper discusses the circumstances in which tax incentives could be warranted to remedy market failures in health insurance.
Tax Court Releases Comments on, and Postpones Effective Date of, Proposed Change to Rule 173(b) to Require IRS to File Answers in Small Tax Cases
The Tax Court yesterday issued this press release:
On September 12, 2006, Chief Judge John O. Colvin announced a proposed amendment to Rule 173(b), Tax Court Rules of Practice and Procedure, requiring the filing of answers by the Commissioner of Internal Revenue in all small tax cases [blogged here]. Chief Judge Colvin invited comments relating to that proposal and announced that, absent further notice, the proposed amendment would be effective as to small tax cases in which the petition was filed after November 27, 2006.
Chief Judge Colvin announced today that written comments to the proposed amendment have been received. The comments are attached to this press release and are available at the Tax Court’s Web site, Chief Judge Colvin also announced that, in order to permit the Court to evaluate the comments and to provide the Commissioner of Internal Revenue additional time in which to prepare for the possible implementation of the proposed amendment, the effective date of the proposed amendment will be extended until further notice by the Court.
The comments are from:
- The Cardozo Law School Tax Clinic (2 pages)
- Treasury Department's Office of Chief Counsel (6 pages)
- ABA Tax Section (2 pages)
- Dennis & Associates, CPAs (2 pages)
Webcast of The Future of Tax Shelters Conference at Minnesota
The webcast of the October 27, 2006 Conference on The Future of Tax Shelters at the University of Minnesota Law School is now available:
- Paper: State Tax Shelters and State Taxation of Capital, by Joseph Bankman (Stanford)
- Commentary: Kirk Stark (UCLA)
- Paper: Tax Investment Strategies, Business Method Patents, and the Firm, by Dan L. Burk (Minnesota) & Brett H. McDonnell (Minnesota)
- Commentary: Brant Hellwig (South Carolina)
- Paper: Legal Evolution and Gaming the System, by Philip Curry (Simon Fraser University)
- Commentary: David Weisbach (Chicago)
- Commentary: The Consistency of Inconsistency, by Terrance Chorvat (George Mason)
- Paper: Compaq Redux: Implicit Taxes and the Question of Pre-Tax Profit, by Michael Knoll (Penn)
- Commentary: Robert J. Peroni (Texas)
- Paper: Of Lenity, Chevron, and KPMG, by Kristin E. Hickman (Minnesota)
- Commentary: Tax Shelters: Intentionalism’s Greatest Challenge, by Lawrence M. Solan (Brooklyn)
Aprill Submits Comments on Definition of Essential Government Function
Please accept these comments on forthcoming proposed regulations (REG-11878-06) regarding the requirement of an “essential governmental function” under section 7871(c) and the limitation of that term under section 7871(e) to functions that are “customarily performed by State and local governments with general taxing powers” as conditions on the authority of tribal governments to issue tax-exempt bonds.
Antos on Is There a Right Way to Promote Health Insurance Through the Tax System?
Joseph R. Antos (American Enterprise Institute) has published Is There a Right Way to Promote Health Insurance Through the Tax System?, 59 Nat'l Tax J. 477 (2006). Here is the abstract:
The exclusion of employer contributions to health premiums has skewed the development of the insurance market, resulting in generous coverage for higher–income workers but leaving millions of others uninsured and facing rapidly rising health costs. The paper considers four recent reform proposals: capping the exclusion, tax credits for insurance, tax incentives for high–deductible insurance and health savings accounts, and fulltax deductibility of out–of–pocket spending. Such proposals could promote greater efficiency and equity in the health market, but insurance market reforms are also needed to minimize potential disruption to employer risk pools.
Anderson on Real Estate Taxes and Fees: Impacts on Urban Land and Housing Development in China
John E. Anderson (University of Nebraska, Department of Economics) has posted Real Estate Taxes and Fees: Impacts on Urban Land and Housing Development in China on SSRN. Here is the abstract:
Real estate taxes and fees affect land markets and housing development patterns in significant ways affecting the timing of real estate development, spatial patterns of land development, and the capital intensity of development. This paper examines the economic impacts of real estate taxes and fees in a dynamic framework, with special application to proposed reforms in China. Impacts identified are also relevant for real estate tax and fee reforms more generally in developing countries whose institutional real estate regimes are in transition.
NLJ: Are Today's Associates Slackers?
Interesting op-ed in this week's National Law Journal: Reflections on Generation Y in Law School, by William Chamberlain:
Law firm colleagues complain that the latest crop of new associates (and summer associates) doesn't want to work as hard as they did, that today's law students and new lawyers expect things to be handed to them or to be done for them. To these naysayers, new associates don't take initiative; they seem unwilling to make the sacrifices that success in the legal field demands.
November 28, 2006
Tax Profs: Are You an "Alpha Wolf" or a "Clicker Trainer"?
Melissa Waters (Washington & Lee) has a wonderful post, dividing the law professor world into two groups:
- Alpha Wolves, the old guard who strike "terror into the hearts of generation after generation of first-year students with ... old-school, Socratic-style teaching."
- Clicker Trainers, the new guard who cheerlead and "reward even the smallest, most hesitant attempt to think creatively, I never criticize students who get the wrong answer, even to the most obvious question. And I usually ignore most bad behavior."
WSJ Tax Articles
There are a number of interesting tax stories in the Wall Street Journal:
- Minding the Gap: IRS Looks Closer At Profit Disparity; Data on Big Differences in Income Reported to Investors, Tax Agency Get Scrutiny in Shelter Crackdown, by Jesse Drucker: "Publicly traded companies reduced their U.S. taxable income by at least $34.8 billion in 2004 through potentially abusive tax transactions without taking a similar hit on profits reported to shareholders, new IRS data show. The vagaries of accounting rules and tax laws allow public companies to keep two sets of books: one for shareholders and another for the IRS. Not surprisingly, companies tend to report higher profits to investors than to the tax man. For 2004, the IRS started requiring companies to give it more detail about the reasons behind that gap. Companies that year reported roughly 40% higher profits to Wall Street -- known as book income -- than to tax authorities. The IRS also asked companies to reveal what portion of the difference between taxable income and profits reported to shareholders was attributed to deals the IRS defines as having some hallmarks of questionable tax shelters, known as 'reportable transactions.'"
- The Thorny Question About Tax Increases Concerns Economic Risks Over the Long Term, by Greg Ip: "Would higher taxes cripple the U.S. economic expansion? That's what the Bush administration is warning, with the Democrats set to control Congress. But, in fact, such a tax increase probably wouldn't do much short-term harm, many economists say, because the Federal Reserve could offset the chilling effect on consumer spending with lower interest rates. A much trickier question is whether raising taxes would do long-term damage, and that would depend on which taxes were raised and how bond markets responded."
- Charitable Explanation, by Arthur C. Brooks: "Why does Giving America behave so differently from Non-Giving America? The answer, contrary to what you might be thinking, is not income; America's working poor give away at least as large a percentage of their incomes as the rich, and a lot more than the middle class. The charity gap is driven not by economics but by values."
NY Times: 2004 Income Below 2000 Level
Interesting article in today's New York Times: ’04 Income in U.S. Was Below 2000 Level, by David Cay Johnston:
The tax cuts contributed to a big decline in individual income tax receipts, which fell at a rate 14 times that of the drop in incomes. In 2004 individual income tax receipts were 21.6 percent smaller than in 2000 — and indeed smaller than they were in 1997, the new I.R.S. report shows. The government collected $831.8 billion in individual income taxes in 2004, down from $980.4 billion in 2000 and $848.6 billion in 1997....
Analysis of the I.R.S. data by The New York Times found that average reported incomes fell or were virtually flat at the end of the period at every level of income except for the poorest 26 million taxpayers, the bottom fifth. Those impoverished taxpayers made less than $11,166 each in 2004 and had an average income of $5,743, up $135 or 2.4 percent, from the year 2000....
The top one-tenth of 1 percent, about 130,500 taxpayers, reported their average income fell almost 17 percent, to just under $4.9 million each in 2004. Because of the tax cuts after-tax incomes fell by a significantly smaller amount, 12.1 percent. Still, those very top households, which include about 300,000 Americans, reported significantly more pretax income combined than the poorest 120 million Americans earned in 2004, the data show. This was a sharp change from 1979, the oldest year examined by the I.R.S., when the thin slice at the top received about one-third of the total income of the big group at the bottom.
AP: Bush Touts Estonia's Flat Tax
Interesting AP story today: Bush Touts Estonia's Flat Income Tax:
President Bush says the United States should have a simpler tax system. Apparently he has found one he likes -- Estonia's. In a brief stop in the Baltic nation on Tuesday, Bush managed to tout Estonia's flat income-tax three times.
- ''They've got a tax system here that is transparent, open and simple,'' Bush said in Tallinn after getting a look at how Estonian citizens can file their taxes online.
- In a toast about an hour later to Estonian President Toomas Hendrik Ilves, Bush said, ''I am amazed to be in a country that has been able to effect a flat tax in such a positive way.''
- And before fielding reporters' questions with Ilves, Bush again praised Estonia's approach to taxation. ''I appreciate the fact that you got a flat tax, you got a tax system that's transparent and simple,'' he said.
(Hat Tip: Sarah Lawsky.)
Health Savings Accounts: Implications for Health Spending
Katherine Baicker (School of Public Affairs, UCLA), William H. Dow (School of Public health, UC-Berkeley) & Jonathan Wolfson have published Health Savings Accounts: Implications for Health Spending, 59 Nat'l Tax J. 463 (2006). Here is the abstract:
Enrollment in Health Savings Accounts (HSAs) and the high deductible health insurance plans that go with them is increasing rapidly. The accounts benefit from favorable tax status, and President Bush has proposed further expanding tax incentives that favor HSAs. The goal of these policies is to encourage more efficient use of health care resources by improving consumer incentives. This could result in lower health expenditures and lower health insurance premiums. Much has been written in the popular press about HSAs recently, but unfortunately many have incorrectly interpretedthe underlying economics. This paper clarifies the incentive and spending effects of HSAs both conceptually and through simulation modeling. Wefind that switching an average risk pool from a traditional Preferred Provider Organization plan to a typical HSA plan would decrease their spending by five percent.
WSJ: Donor-Advised Charitable Funds Explode in Popularity
Interesting article in today's Wall Street Journal: New Options for Donating to Charities; Donor-Advised Funds Cut Fees and Expand Investment Menus; Giving Away Hedge-Fund Shares, by Eleanor Laise
Donor-advised funds -- the popular charitable-giving vehicles -- are slashing fees and expanding the range of donations they'll accept. Strong investment returns and a growing interest in philanthropy have boosted gifts to many donor-advised funds this year, and the funds are maneuvering to capture as much of the windfall as possible. They're also starting to offer more-exotic investment options, such as hedge funds, and giving donors the ability to have their own independent investment adviser manage the money.
Caron on Are Scholars Better Bloggers?
I have posted Are Scholars Better Bloggers?, 84 Wash. U. L. Rev. ___ (2007), my Introduction to the Symposium on Bloggership: How Blogs Are Transforming Legal Scholarship held at Harvard Law School on April 28, 2006, on SSRN Here is the abstract:
These are the opening remarks I delivered at the Symposium on Bloggership: How Blogs Are Transforming Legal Scholarship at Harvard Law School on April 28, 2006. Part One describes how my work on TaxProf Blog and the Law Professor Blog Network led me to organize this Symposium. Part Two takes inspiration from Jim Lindgren's work, Are Scholars Better Teachers?, to ask, using our twenty-three panelists as guinea pigs, Are Scholars Better Bloggers? The data indicate that our participants include some of the most heavily-cited and heavily-downloaded legal scholars who edit many of the most heavily-trafficked law blogs. Although the data do not do not conclusively answer the question raised, they demonstrate that we have assembled an impressive array of scholar-bloggers in the first conference on the impact of blogs on legal scholarship.
Part Three provides an overview of the symposium papers and commentary, organized around four themes: (1) Law Blogs as Legal Scholarship (papers by Doug Berman, Orin Kerr, Kate Litvak, and Larry Solum; commentary by Jim Lindgren and Ellen Podgor); (2) The Role of the Law Professor Blogger (papers by Gail Heriot, Gordon Smith, and Eugene Volokh; commentary by Randy Barnett and Michael Froomkin); (3) Blogs, First Amendment Law, and Co-Blogging Law (papers by Glenn Reynolds and Eric Goldman; commentary by Dan Solove and Betsy Malloy); and (4) The Many Faces of Law Professor Blogs (papers by Ann Althouse, Christine Hurt & Tung Yin, and Larry Ribstein; commentary by Howard Bashman and Paul Butler). Paul Butler perhaps best captured the spirit of the Symposium with this clarion call: “Blogs are walking up to legal scholarship and slapping it in the face. Blogs say to legal scholarship: ‘How dare you! Evolve or Die!' . . . I feel like I am part of a movement that could change the world.”
For prior TaxProf Blog coverage of the symposium, see:
Brooks Presents Should High-Income Countries Protect the Tax Incentives of Low-Income Countries? Today at Toronto
Kim Brooks (University of British Columbia) presents Recognizing the Incentive Programs of Other States: Should High-Income Countries Feel Obligated to Protect the Tax Incentives of Low-Income Countries? at the University of Toronto today as part of the James Hausman Tax Law and Policy Workshop Series. Here is the abstract:
Tax treaties are used to prevent double taxation, facilitate trade between two nations, and allocate the resulting tax revenue between them. In preventing double taxation, most tax treaties allocate the jurisdiction to tax to the source country, or to the residence country, or to both. Where both the source and residence countries are both permitted to subject a particular type of income to tax, a tax credit granted unilaterally by the residence country generally relieves the taxpayer of double taxation. Where both the source and residence country are granted the jurisdiction to impose income tax under a tax treaty on a particular type of income, it is impossible for the source country to provide a tax incentive to encourage investment. If the source country forfeits its right to tax the income, the residence country simply collects more tax. Unlike countries like the United States, Canada has entered into numerous treaties with developing countries that offer those countries "tax sparing". The tax sparing provision of a tax treaty effectively requires the residence country to grant a foreign tax credit for the taxes that would have been paid in the source jurisdiction, had the source jurisdiction actually imposed a tax at source. In other words, tax sparing provisions allow the source country to provide a tax incentive to promote a particular type of activity within its borders without the residence jurisdiction simply collecting the forfeited source tax. This paper explores whether Canada should continue to grant tax sparing provisions to developing countries.
Public Opinion and the Push to Repeal the Estate Tax
Mayling Birney (Ph.D. Candidate, Yale), Michael J. Graetz (Yale) & Ian Shapiro (Yale) have published Public Opinion and the Push to Repeal the Estate Tax, 59 Nat'l Tax J. 439 (2006). Here is the abstract:
We examine the recent battle for federal estate tax repeal in order better to understand the role of public opinion in enacting legislation, particularly regarding low salience issues. Our analyses of the polling data show how the contours of public opinion were strategically used in the policy debate. When the issue was framed as a matter of fairness, misperceptions of self–interest and principled beliefs about fairness combined to yield apparently overwhelming support for repeal. However, when it was instead framed as a matter of priority, majorities supported estate tax reform options overrepeal. Interest groups used the findings about public opinion in coalition–building and campaigns that changed the public image of repeal from extreme to mainstream. In sum, public opinion polls supporting repeal provided "running room" for politicians to vote for repeal.
Anderson on Tax Bribes in Transition Countries
Tax bribes are a very real part of the tax culture in transition countries. Economic transition, fiscal reforms, and efforts to strengthen tax administration are changing the tax cultures of transition countries, however. This paper examines firm-level survey data on the frequency of firms being required to pay bribes to tax officials in transition countries in both 1999 and 2002. The purpose of this analysis is to identify elements of the tax culture of these countries that affect the likelihood of tax bribery. Empirical models of the likelihood of tax bribes being paid by firms are estimated and reported, with policy implications drawn for improvements in tax culture.
SOI Releases 2003 Exempt Orgs UBIT Data
Seven tables presenting statistics for Tax Year 2003 from Forms 990-T, Exempt Organization Business Income Tax Returns, are now available. The tables include statistics for the number of returns, gross unrelated business income, deductions, unrelated business taxable income, and total tax of these organizations. The statistics are classified by Internal Revenue Code section, size of gross unrelated business income, size of unrelated business taxable income or deficit, primary unrelated business activity, and type of entity.
WSJ Features Law School Innovation Blog
This new blog, launched in late October, is the brainchild of Ohio State University law professor Douglas A. Berman and, as its name suggests, is devoted to the topic of law-school innovators. Among the topics discussed thus far: innovative course offerings at law schools, the changes made to Harvard's first-year curriculum, and the relationship between law-school innovation and school rankings by U.S. News & World Report. This blog is still in its early days and has yet to form a devoted following, but given its author's blogging credentials -- he also writes the well-regarded Sentencing Law and Policy blog on capital sentencing -- it can be expected to take off soon.
November 27, 2006
Zelenak on Taxing Endowment
Redistribution in favor of those with bad brute luck is attractive on both utilitarian and liberal egalitarian grounds. This has caused some to conclude that an endowment tax, defined as a tax on potential earnings, would be an appealing -- perhaps even an ideal -- tax base, if only measurement problems could be overcome and talent slavery could be avoided. It is somewhat surprising, however, that potential earnings has been so readily accepted as an adequate measure of brute luck or endowment, when people's luck differs in so many ways not captured by the measurement of potential earnings. It does not follow, however, from the inadequacy of potential earnings as a full measure of endowment, that a stand-alone income tax is the best that can be done by way of redistributing with respect to differences in brute luck. Various steps in an endowment tax direction -- including insurance nondiscrimination rules, taxation of "social privilege," and even taxation on the basis of SAT scores -- may be both feasible and desirable complements to income taxation. If the endowment tax discussion can break free of the assumption that the ultimate measure of endowment is potential earnings, endowment tax thinking may have -- and may deserve to have -- considerable influence on tax-and-transfer policy.
Larry blogged about this subject on TaxProf Blog back in July 2005.
Public Ignorance and Estate Tax Repeal: The Effect of Partisan Differences and Survey Incentives
Yanna Krupnikov (Ph.D. Candidate, Michigan), Adam Seth Levine (Ph.D. Candidate, Michigan), Arthur Lupia (Professor of Political Science, Michigan), & Markus Prior (Professor of Politics and Public Affairs, Princeton) have published Public Ignorance and Estate Tax Repeal: The Effect of Partisan Differences and Survey Incentives, 59 Nat'l Tax J. 425 (2006). Here is the abstract:
We re–examine whether the broad support for repeal of the estate tax is a result of citizen ignorance. We find that increasing information about the estate tax or politics in general has very different effects on Republicans and Democrats. While high– and low–information Republicans support estate tax repeal, Democratic support is higher among those who know less. However, most highly informed people in both parties support repeal. We also show that standard surveys overestimate the extent of misinformation about the estate tax. Therefore, "ignorance" is not a compelling explanationof why so many people support estate tax repeal.
NLJ: Law Firms Are Recruiting at More Schools
Interesting article in this week's National Law Journal: Law Firms Digging Deeper on Campus; Diversity, Economy Drive Recruiting, by Leigh Jones:
As law firms sought to bolster and diversify their summer associate programs during the fall recruiting season this year, some of them ventured beyond the list of law schools they usually visit or dug deeper into class ranks to find the help they needed. ...
With legal business strong and law school applications declining, the competition for qualified students-especially those who are minorities-prompted some fine-tuning of law firms' recruiting strategies this year. ... Several law schools reported that this year they had visits from firms that had bypassed their campuses in years past.
Bishop on The Role of Fiduciary Duties in FLPs
Carter G. Bishop (Suffolk) has posted The Ebb and Flow of the Federal Tax Role of Fiduciary Duties in Family Limited Partnerships: From Byrum to Bongard, 35 Cap. U. L. Rev. 1 (2006), on SSRN. Here is the abstract:
The fiduciary duty impact theory developed by the United States Supreme Court in its 1972 Byrum opinion has been one of the most important and controversial developments in estate taxation involving transfers to family controlled entities. In 2003, the Tax Court Strangi III opinion sent shock waves throughout the estate planning community when it became the first case to reject the family limited partnership estate planning technique by expanding the reach of § 2036. The expansion was largely achieved by rejecting the 1972 Byrum fiduciary duty impact theory that had been utilized, with IRS sanction, to negate the application of § 2036. Faced with mounting failures on other theories, the Service reversed course and turned to § 2036 with an attempt to factually distinguish Byrum. In many ways, Strangi III presented government friendly facts.
Albert Strangi made a deathbed transfer of 97% of his personal and investment assets to a family limited partnership formed and managed by his son-in-law under a power of attorney. In this highly charged set of facts, the constraining fiduciary duty feature of Byrum was not well served. There was no transfer of an operating business with a substantial unrelated minority ownership interest to add substance and real meaning to the fiduciary duties. No matter how strenuously argued, fiduciary duties owed in a friendly family limited partnership are simply too rarely enforced to add meaning. Unfortunately, armed with its Strangi III victory, the Service ramped up the Byrum-slayer theory and applied it to totally different facts in Bongard and was rewarded with an unwarranted victory. Unlike the deathbed investment asset transfers in Strangi III, the Bongard transfers were by a healthy businessman of his ownership in a successful operating business with a very substantial cadre of unrelated Japanese corporations.
In this Article, Professor Bishop analyzes the origins and legacy of the theory to challenge conventional Bongard-styled wisdom. Professor Bishop chronicles the statutory development of § 2036 and the fiduciary duty impact theory to demonstrate that the theory arose to deal with specific instances of control over property transferred to family members rather than transfers to a family entity controlled by the transferor. For this reason, the theory was not initially utilized to attack transfers to controlled entities. The theory's recent deployment arose because of the failure of other theories and not because of its logical force. As a result Bongard and its likely progeny are aberrations and not a proper basis for extending the theory to contravene a valid and existing Supreme Court Byrum opinion. As in 1976 when it enacted § 2036(b) to negate Byrum in the context of transfers of voting stock while retaining the vote, Congress and not the Courts must remedy the alleged estate tax abuse in the form of family limited partnerships.
WSJ: A Prenup for Donors
Interesting article in the Wall Street Journal: A Prenup for Donors; Burned Nonprofits Try to Make It Harder to Renege on Gifts, by Sally Beatty & Vauhini Vara:
After a spate of damaging incidents in which donors backed out of high-profile gifts, many colleges, cultural centers and other nonprofits are making it tougher for philanthropists to renege on pledges. A number of institutions, including the San Francisco Symphony, are asking donors to sign legally binding gift agreements rather than rely on the looser arrangements some used in the past. Others, such as New York University, are keeping better tabs on pledges, sending frequent reminders or calling givers to keep better track of money coming in. Some are investigating the finances of potential givers to ascertain their ability to complete pledges.
Ten Year-End Tax-Savings Tips
Interesting article in yesterday's Boston Globe: 10 Ways to Cut Your Taxes and Avoid Traps Before the End of the Year, by Leonard Wiener:
- Think Local
- Energy Boost
- Updating Investments
- Driving Green
- Saving for Retirement
- Managing Deductions
- Kiddie Tax
- No Area Codes Needed
- Waiting for Congress
- No Excuses
IRS Publishes List of Attorneys and Accountants Suspended from Tax Practice
The IRS has issued Announcement 2006-94, 2006-48 IRB 1017, a list of attorneys, accountants, and enrolled agents suspended, disbarred, or resinged from practice before the IRS in these categories:
- Consent Suspensions From Practice Before the IRS
- Expedited Suspensions From Practice Before the IRS
- Suspensions From Practice Before the IRS After Notice and an Opportunity for a Proceeding
- Consent Disbarments From Practice Before the IRS
- Disbarments From Practice Before the IRS After Notice and an Opportunity for a Proceeding
- Censure Issued by Consent
- Resignations of Enrolled Agents
Bartels on A Tale of Two Tax Cuts, a Wage Squeeze, and a Tax Credit
Larry M. Bartels (Woodrow Wilson School of Public and International Affairs, Princeton) has published A Tale of Two Tax Cuts, a Wage Squeeze, and a Tax Credit, 59 Nat'l Tax J. 403 (2006). Here is the abstract:
Major developments in tax policy seem less affected by public preferences than by the ideological convictions of partisan elites. The Bush administration’s massive tax cuts attracted broad but quite superficial and seemingly confused public support. The estate tax flourished for decades despite considerable public antipathy, but was phased out within five months after Republicans captured the presidency and Congress in 2001. Meanwhile, the public has strongly and consistently favored increases in the minimum wage, but its real value has declined by 40 percent since 1968, while the Earned Income Tax Credit, which has much more tenuous public support, has expanded dramatically.
Analysis of the President's Tax Reform Panel Recommendation to Convert the Mortgage Interest Deduction to a Tax Credit
John E. Anderson (University of Nebraska, Department of Economics), Andrew Hanson (Syracuse University, Department of Economics) & Jeffery P. Clemens (Harvard University, Department of Economics) have posted Tax Reform and Incentives to Encourage Owner-Occupied Housing: Analysis of the President's Tax Reform Panel Recommendation to Convert the Mortgage Interest Deduction to a Tax Credit on SSRN. Here is the abstract:
Public policy designed to encourage home ownership has operated primarily through the federal income tax system in the United States. With multiple incentives for home-ownership, the income tax system is the main tool by which the federal government encourages families to become home-owners and accumulate wealth in the form of real estate. Recent policy debate over reform of the tax system has questioned whether a mainstay of this system, the mortgage interest deduction (MID), is the best way to accomplish the stated objective. Last year the President's Advisory Panel on Federal Tax Reform recommended converting the MID into a 15% tax credit subject to regional caps related to median house prices, touching off a vigorous public debate on the importance of the MID. The purpose of this paper is to examine economic implications of that recommendation. We model how switching from the MID to a credit would affect housing finance choices between debt and equity and show how these changes would have changed the tax benefits for various households. Furthermore, we simulate the number of mortgage originations in 2004 (the most recent year which data is available) that would have been subject to the caps in the Panel's recommendation, and we identify the specific urban housing markets that would have been most severely affected. Finally, we conclude with policy discussion of the proposed credit alternative.
- Tax Prof Profile: Katie Pratt
- Founder of LexisNexis Dies in Front of His Computer
- Keinan on The Role of Penalties in the U.S. Tax Law in the Aftermath of Long Term Capital Holdings
- Pease-Wingenter on Efficiency versus Validity: The Dilemma of the INDOPCO Regulations
- Top 5 Tax Paper Downloads
- Welcome Back to the Law Prof Blogosphere: Steve Bainbridge
- Cohen & Sager on Discrimination Against Damages for Unlawful Discrimination
- Lee on Class Warfare 1988-2005 Over Top Individual Income Tax Rates
November 26, 2006
Top 5 Tax Paper Downloads
2. [194 Downloads] Jewish Perspecitves on the Ethics of Tax Evasion, by Robert W. McGee (Barry University, Andreas School of Business) & Gordon Cohn (City University of New York, Stan Ross Department of Accountancy) [blogged here]
3. [156 Downloads] Options Backdating, Tax Shelters, and Corporate Culture, by Victor Fleischer (Colorado) [blogged here]
4. [127 Downloads] Substance Over Form? Phantom Regulations and the Internal Revenue Code, by Andy Grewal (Mayer, Brown, Rowe & Maw, Washington, D.C.) [blogged here]
5. [95 Downloads] The Cost of Norms: Tax Effects of Tacit Understandings, by Alex Raskolnikov (Columbia) [blogged here]
Welcome Back to the Law Prof Blogosphere: Steve Bainbridge
- Business Assoications (law, business, and economics)
- Journal (politics, religion, culture, photography, and dogs)
Cohen & Sager on Discrimination Against Damages for Unlawful Discrimination
Stephen B. Cohen (Georgetown) & Laura Sager (NYU) have posted Discrimination Against Damages for Unlawful Discrimination: The Supreme Court, Congress, and the Income Tax, 35 Harv. J. Legis. 447 (1998), on SSRN. Here is the abstract:
Should damages for victims of unlawful discrimination be taxable income? For over seventy years, damages for lost earnings and for pain and suffering were excluded from taxation in all personal injury cases, including discrimination claims. In 1992 and 1995, however the Supreme Court held in two employment discrimination cases that damages for lost earnings were taxable. In 1996, Congress went further, amending the Internal Revenue Code to tax pain and suffering damages, as well as lost earnings, in all nonphysical injury cases, while retaining the exclusion for such damages resulting from physical injuries. This Article argues that the distinction between physical and nonphysical harm results in invidious treatment of discrimination damages. The authors contend that all personal injury awards should be governed by the “in lieu of” principle. Under this principle, damages for lost earnings should be taxed, because earnings are ordinarily taxable, and damages for pain and suffering should be excluded, because they compensate for rights that are ordinarily enjoyed tax-free.
Lee on Class Warfare 1988-2005 Over Top Individual Income Tax Rates
John W. Lee III (William & Mary) has published Class Warfare 1988-2005 Over Top Individual Income Tax Rates: Teeter-Totter From Soak-the-Rich to Robin-Hood-in-Reverse, 2 Hastings Bus. L.J. 47 (2006). Here is part of the Introduction:
Ideally the tax cuts should be reversed now. Given the narrowness of the victory of the Clinton 1993 tax increases at the top when the Democrats had majority control of both Houses, this is unlikely. Even if the GOP lost control of Congress in the upcoming mid-term elections, a reversal is unlikely under President George W. Bush since he surely would veto any reversal of his tax cuts and opponents of the cuts would not likely be able to override any such veto.
The second best alternative is for these cuts to expire pursuant to their various sunsets. A better alternative would be to narrow the gap between the pre-Bush II tax cuts maximum individual capital gains (20%) and ordinary income tax rates (approximately 42% taking account of the PEP and Pease phase-outs).
November 25, 2006
Katherine T. Pratt (Loyola-L.A.)
- B.A. 1978, Florida
- J.D. 1984, UCLA
- LL.M. (Tax) 1989, NYU
- LL.M. (Corporate Law) 1990, NYU
My father used to say that I had to become a lawyer because, in his entire life, he had been beaten in an argument by only three people, one of whom was a child – me. My route to law school was indirect, however. In college, I participated on an intercollegiate speech team, but later majored in psychology. In my senior year at the University of Florida, I worked on several experiments in the areas of physiological psychology and cognitive psychology. My psychology professors understandably assumed that I would continue on to graduate school in psychology, but I wasn’t sure what I wanted to do after college. A wide range of public policy issues intrigued me. Also, I was interested in nutrition and exercise physiology, took 30 hours of dance classes, and was a member of the University Dance Company. I knew that I would attend graduate school, but was unsure about what type of graduate school I wanted to attend. Psychology graduate school, law school, and business school all were in the running. I even toyed with the idea of becoming a nutritionist or physical therapist. I thought that some work experience might help me decide which professional path to take and I wanted to see a bit of the world before applying to graduate school.
After I graduated from college, I moved to Montauk, New York and became the fitness director at an exclusive resort spa. I taught 10 exercise classes a day and did private training sessions with spa guests, most of whom struggled mightily with their weight. The job was rewarding and produced significant psychic income (who wouldn’t enjoy starting each day with a 7 a.m. “Beach Walk”?), but paid only a pittance. Eventually, I tired of living as a pauper and joined American Airlines, in the pursuit of greater adventure, better pay, and employer-provided health insurance. I supervised a group of 40 adventurous, fun-loving flight attendants at La Guardia Airport. When the airline industry took a turn for the worse, I decided to head back to school. Having narrowed the graduate school decision to psychology graduate school and law school, I took the GRE and LSAT. When I scored significantly higher on the LSAT than on the GRE, I decided to follow my natural intellectual strengths and applied to law school -- at which point my dad said “I told you so.”
I headed west to UCLA School of Law, lured by the promise of warm winters and a relatively inexpensive education at a law school with a great reputation. My UCLA law school buddy, Nancy, and I decided that we must endure the dreaded federal income tax class if we hoped to avoid committing malpractice as lawyers. We enrolled in Mike Asimow’s tax class in the fall of our second year. From the beginning of the term, we were hooked. Mike is an intense, energetic, and enthusiastic teacher. During our tax class, he sometimes beat his chest, like Tarzan, while shouting: “That’s like saying to the Commissioner: [thump, thump, thump] AUDIT ME!!!” Nancy and I discovered, to our delight, that the application of tax law often produces numerical answers, a thing unheard of in the first-year “there-are-no-right-answers” curriculum. Class assignments felt like doing puzzles. Years later, I still like to solve those puzzles.
The L.A. law firm in which I practiced accommodated my interest in tax and tax partner Bob Boffa (a graduate of the NYU Tax LL.M. program and recipient of the Dana Latham Award for service to the L.A. tax community) was my capable mentor. My tax practice involved an interesting and eclectic mix of transactional work and controversy work.
After four years of law firm practice in L.A., I moved to New York City and enrolled in the NYU Tax LL.M. program full-time. I loved being back in school and enrolled in the NYU Corporate Law LL.M. program immediately after I graduated from the Tax LL.M. program. Until the final term of my second LL.M. degree program, it never occurred to me that I could be a law professor. Irene Dorzback, Assistant Dean for Career Services at NYU, was chatting with me about my prior law firm experience and asked me to talk about my favorite aspects of practice. I confided that, aside from the puzzle-solving aspect of tax practice, what I most enjoyed about working in a firm were all of the non-billable activities, such as working on articles with Bob, mentoring summer associates, participating on the firm’s hiring committee, and so on. Irene said that I should consider a career in law teaching and suggested that I apply for an Acting Assistant Professor position at NYU, which I did immediately. When NYU hired me, my career in law teaching was underway. I benefited in many ways from beginning my teaching career in the midst of the legendary NYU tax faculty.
After two years of teaching various Tax LL.M. courses at NYU, I moved to a tenure-track position at Saint Louis University School of Law. At SLU, I communed with the renowned health law faculty and the intellectually engaged group of young, untenured professors SLU had recently hired. The environment at SLU was collegial and supportive. I taught tax as a first-year subject, which was a new and rewarding experience.
My tax colleagues (Ellen Aprill, Ted Seto, Jenny Kowal, Joe Sliskovich, and Dean Weiner) are bright, energetic, and collegial. We work well together as a group and all contribute to the success of our J.D. and Tax LL.M. programs. We also encourage and support each other’s scholarship and enjoy participating in the vibrant tax policy community in the greater Los Angeles area.
Several of my articles have focused on corporate tax issues, but my scholarship recently has taken off in new directions. The first article I wrote after receiving tenure included poetry and focused on the controversial topic of medical expense deductions for fertility treatment costs. More recently, I have developed new scholarly interests in budget policy and public health policy. My most recent article, Deficits and the Dividend Tax Cut: Tax Policy as the Handmaiden of Budget Policy, is forthcoming in 41 Ga. L. Rev ___ (2006). I have presented my current work-in-progress, Normative Justifications for Food Excise Taxes, at the UCLA School of Law and the UCLA Medical School Center for Human Nutrition. This project incorporates several areas of long-standing interest to me, including tax policy, behavioral economics, and nutrition. I have spoken twice at the Public Health Advocacy Institute’s annual conferences on Legal Approaches to the Obesity Epidemic and PHAI has invited me to speak again at this year’s conference in November.
[Editor's note: Katie also is a co-author of the wonderful Federal income Tax: Examples and Explanations (Aspen, 4th ed. 2005), which I enthusiastically recommend to my Tax I students each year.]
On a personal note, my husband, Peter Gardiner, and I have been married 17 years. Peter works in finance, so our house runs on East Coast time, despite the fact that we live on the West Coast. Peter and I share an appreciation for a wide variety of films, including foreign classics by Bergman and Kurosawa, period dramas, indie films, documentaries, and some mainstream escapist entertainment. As a confirmed “foodie,” I enjoy shopping at LA’s specialty food and restaurant stores (e.g., Surfas Restaurant Supply and Bay Cities Italian Deli) and the organic Farmers’ Market near my home. My family tells anyone who will listen that I am a world-class baker. (My current favorite dessert is a Scharffenberger chocolate cake with a chocolate ganache.) I am pressed into baking service for any event that arguably could be described as a special occasion. I also study myth and fairy tales and lately have been reading the nonfiction works of Marie-Louise von Franz. My nine-year-old son, Andrew, and I share an interest in mythic fantasy (literature and film), including The Lord of the Rings, the Harry Potter series, and the Japanese anime films of Hayao Miyazaki.
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.
Founder of LexisNexis Dies in Front of His Computer
From today's Washington Post:
H. Donald Wilson, 82, under whose leadership the commercial database service LexisNexis introduced electronic research to law firms and news organizations, died of a heart attack Nov. 12 in front of his computer at his home in Mitchellville.
From 1969 to 1973, Mr. Wilson was the first president of Mead Data Central, which developed LexisNexis, a database of information for law firms, businesses, libraries and the news industry....
At first, many lawyers refused to use the software, regarding computer work as a secretarial job. In order to spur adoption of the product, Mr. Wilson gave law students almost free access to electronic files of court decisions, so that when they graduated, the young associates at law firms immediately asked their employers: "Where's your Lexis?" Zurkowski said. Mr. Wilson also realized that tax lawyers and those in other specialized fields were more likely to do their own research, and he focused the company's early efforts in those areas...
Keinan on The Role of Penalties in the U.S. Tax Law in the Aftermath of Long Term Capital Holdings
Yoram Keinan (Ernst & Young, Washington, D.C.) has published Playing the Audit Lottery: The Role of Penalties in the U.S. Tax Law in the Aftermath of Long Term Capital Holdings v. United States, 3 Berkeley Bus. L.J. 381 (2006). Here is part of the Introduction:
This Article focuses on business entities and assumes that business entities decide whether to enter into a tax-motivated transaction based solely on quantitative economic considerations. It is unquestionable that the primary purpose behind the enactment of the various accuracy-related penalty provisions in the Internal Revenue Code was to deter taxpayers from "playing the audit lottery." As of today, the various penalty provisions have only partially achieved their stated goals. In 1999, the Treasury and the Joint Committee on Taxation issued lengthy reports pertaining to the problem of tax shelters. While the Joint Committee and Treasury focused on increasing the rates of penalties as a means to reduce tax-motivated transactions, in recent years, the pendulum has shifted to disclosure rules (mainly, the reportable transactions rules).
This Article discusses these two measures as well as various others taken by Congress and the Treasury in recent years to crack down on tax-motivated transactions. By using cost-benefit analysis, I will evaluate the effectiveness of these measures and show that in order to reduce the taxpayer's incentive to play the audit lottery, Congress must focus on increasing the likelihood that the taxpayer will face audit and detection rather than the penalty rate
Pease-Wingenter on Efficiency versus Validity: The Dilemma of the INDOPCO Regulations
Claudine Pease-Wingenter (J.D., Houston) has posted Efficiency versus Validity: The Dilemma of the INDOPCO Regulations on SSRN. Here is the abstract:
The article examines the potential invalidity of the INDOPCO regulations, which were finalized by Treasury in 2004 to provide bright lines as to the proper tax treatment of costs associated with intangibles. They were promulgated to reduce tax controversies, which had abounded due to the broad underlying statutory language, and the imprecise standards developed in case law.
Although Treasury's intent was laudable, the regulations are likely invalid in several aspects because they conflict with prior judicial interpretations of the statute. This conclusion seems likely despite the Supreme Court's 2005 decision in National Cable & Telecommunications Association v. Brand X Internet Services (indicating administrative agencies could sometimes overturn prior judicial statutory interpretations).
Certain provisions of the INDOPCO regulations are likely invalid, but detrimental primarily to taxpayers that are particularly ill-suited to wage a costly and time-consuming legal battle to challenge them. An invalid administrative action that is likely to remain unchallenged has troubling policy implications generally. However, this appears to be an emerging trend by Treasury to overturn adverse court decisions by administrative decree.
November 24, 2006
SOI Releases Individual Income Tax Return Statistics by Geography
Updated statistics from three studies covering individual income tax returns classified by geographic bases are now available:
- 2004 County Income Study includes total and selected sources of income, as well as numbers of returns and personal exemptions. The data are presented by county (and States). Statistics for Tax Years 1989 through 2004 are available.
- 2004-2005 County-to-County Migration Study includes income items and numbers of returns and personal exemptions. Data from this study present migration patterns by county for the entire United States, including inflows and outflows. Data are available for Filing Years 1984 through 2005.
- 2004-2005 State-to-State Migration Study also includes income items and numbers of returns and personal exemptions. Data from this study also present migration patterns, by State, for the entire United States. Data are available for Filing Years 1989 through 2005.
Statistics of all three studies are based on addresses shown on the population of returns from the IRS Individual Master File system. Examples of the statistics are available on Tax Stats (use above linkages); complete statistics are available for purchase.