Friday, May 26, 2017
On August 1, 2016, I announced that, due to my growing other commitments, I was reducing the amount of time that I devote to TaxProf Blog by dropping my weekly tax, legal education, SSRN, and student tax note roundups. Happily, Joe Kristan took over the weekly tax roundup, Scott Fruehwald took over the weekly legal education roundup, and David Gamage (Indiana), Ari Glogower (Ohio State), Daniel Hemel (Chicago), and Erin Scharff (Arizona State) took over the weekly SSRN roundup — and frankly have done better jobs than I did. (Regrettably, no one volunteered to take over the weekly student tax note roundup and it remains dormant.)
As Joe describes below, this is the 31st and last installment of his weekly tax roundup on TaxProf Blog. On behalf of all of my readers, I thank Joe for sharing his great work with us. Joe belongs on the Mount Rushmore of tax bloggers. We will miss him greatly.
As I get ready to assume the Pepperdine deanship on June 1 (more here, here, here, here, and here), I am struggling to fulfill my commitment to continue TaxProf Blog. If you are a law professor who has found TaxProf Blog a helpful resource and would like to help it continue by contributing legal education or tax content on a regular basis, please email me.
Monday, May 22, 2017
Annette Nellen, What’s simple about a postcard size tax return? “Gen Z filers might wonder what a postcard is.”
Jack Townsend, Article on Justice Gorsuch’s Approach to Criminal Tax Cases. “The data set for the article is slim…”
Jason Dinesen, What I Mean When I Say “Consult an Attorney” “I am shocked at the number of corporations I work with who have never talked to an attorney because ‘it’s a waste of money.'”
Jim Maule, Running Out of Sin Taxes. But sin, we still have plenty of that, including the sin Prof. Maule discusses: using other people’s money to upgrade your professional sports team.
Kay Bell, Some sales of beneficial insects could be tax-free. Don’t tell the SLA.
Laura Saunders, The Blind Spot in a Sharing Economy: Tax Collection, (via the TaxProf):
While some gig workers mean to cheat Uncle Sam, experts say others are bewildered by tax requirements that can be almost as complex for the owner of a microbusiness as for a much larger firm. Many know nothing about Schedule C (for a small business), payroll taxes and quarterly estimated payments. Often they’re unaware of valuable write-offs as well.
Like regulation, complexity favors the big.
Leslie Book, Who Needs Netflix? Tax Videos on Demand (Procedurally Taxing). It’s not an advocacy of taxing videos on demand; it links to tax videos you can watch, including the cozy Fireside Chat with Inspectors General, Ombuds, and Advocates.
Lew Taishoff, THE FACTS ARE EVERYTHING. “But I suggest we all, bloggers, litigants, attorneys, USTCPs, and even Judges, must ‘with a joyful mind, bear through life like a torch in flame’ the simple rule: The facts are everything.”
Richard Phillips, Tax Avoiding Companies Well Represented at Tax Reform Hearing (Tax Justice Blog). I’ll bet there were very few tax-seeking companies represented.
Robert D. Flach, DON’T TOUCH THAT 401(K)! “This is a very expensive way to get money. A loan shark might be cheaper!”
Roger McEowen, Employer-Provided Meals and Lodging. “The IRS, at least in certain parts of the country, appears to have an audit program that examines farm and ranch corporations on the meals and lodging issue. In light of that, today’s post takes a look at the basic rules and what might cause concern for the IRS.”
Tuesday, May 23, 2017
Buzzday Tuesday at Robert D. Flach’s place. Today’s Buzz roundup covers tax season demands, fixing do-it-yourself blunders, bike commuter breaks, and more.
Jack Townsend, Restitution Permits Double Assessments But Only One Collection. “The problem with which the Court grappled, at bottom, was whether so increasing the deficiency amount to include the amount already assessed would permit the IRS to assess the increased amount if ‘redetermined’ by the Court and thus have two assessments that, in part, are for the same tax liability.”
Joseph Henchman, Supreme Court Won’t Hear Retroactive Tax Increase Cases (Tax Policy Blog):
An unfortunate development today from the U.S. Supreme Court, where the justices declined to hear several challenges to a retroactive tax law passed by Michigan. In 2014, Michigan decided that a tax compact it had signed in 1967 was no longer advantageous and repealed it, retroactively to 2008. This harmed a number of business taxpayers who had been counting on tax refunds.
It’s good to be king.
Kay Bell, House, Senate seek to expand tax-free employer educational assistance to paying down workers’ student debt. Congress keeps providing tax breaks to pay for college tuition, and college tuition keeps going up. Funny how that works.
Leslie Book, Legal Practice and Mental Health (Procedurally Taxing). “As someone who has over the years benefitted from confronting mental health issues with the care of professionals, and who lost a dear friend to suicide, I believe that tax professionals and the organizations where they work should have at their disposal resources to help through inevitable tough times that are part of life.”
Lew Taishoff, AN ANSWER IS NOT A MOTION. “Pre-answer motions are a favorite tactic of defendants. I like them too.”
Paul Neiffer, Are You Taming The Deferred Tax Monster?! “Current deferred taxes is comprised of the estimated taxes owed on deferring crop sales and prepaying farm expenses.” A problem only farmers have because it arises from tax breaks that only farmers get.
Peter Reilly, Housing Industry Panicking About Tax Reform:
The specific tax issues that are of concern are the treatment of flow-throughs, like-kind exchanges, depreciation, carried interest, the low-income housing tax credit and deductibility of business interest.
This shows how industries work to game the system to keep their own special breaks. Yet somehow I think people would need apartments regardless of what the tax law has to say.
Russ Fox, WSOP and Taxes: 2017 Update. “The poker world is about to descend on Las Vegas for the World Series of Poker (WSOP) and a score of other tournament series. The tax environment has changed, so I’ve decided to do a thorough update of the tax situation.”
Tax Justice Blog, WE’RE NOW BLOGGING AT justtaxesblog.org. “ITEP today is pleased to announce that we’re launching an overhauled website that better reflects the work of our organization and makes our federal and state tax policy research more accessible.”
TaxProf, Private Investigator’s Attempt To Obtain Donald Trump’s Tax Return Led IRS To Shut Down FAFSA Data Retrieval Tool; Who Hired Him?. The TaxProf quotes from a story in the Diverse education blog:
The person accused of a 2016 attempt to use a web-based federal student-aid tool to illegally obtain taxpayer information is a Louisiana-based private investigator who used the tool to target then-presidential candidate Donald J. Trump, court records obtained by Diverse show.
The records allege that when Jordan Hamlett, 31, met FBI agents in the atrium of the Embassy Suites in Baton Rouge, he “immediately volunteered that he had committed the crime and he even sounded proud of what he had done.”
The Treasury Inspector General’s report on the hack said:
In September 2016, TIGTA detected an attempted access to the AGI of a prominent individual. When we investigated the attempted access, we determined that the FAFSA application and the DRT were used in this attempt. Since FAFSA is a Department of Education application, we notified the Education OIG and we notified the IRS Privacy, Governmental Liaison and Disclosure (PGLD) program office. We initiated a joint investigation with the Education OIG that included the Cyber Crimes Task Force. The investigation identified the individual responsible for the attempted access and he was arrested. This case is still proceeding through the court system. In November 2016, we noticed another attempted access of the same prominent individual’s AGI through the FAFSA and the DRT, this time, from an entirely different location.
A prominent individual, indeed.
Prior coverage: FAFSA IRS data hack used already stolen info
Wednesday, May 24, 2017
Career Corner: How to Get Ahead: Speak Up When You Want Something to Change (Rachel Andujar, Going Concern).
Howard Gleckman, Trump’s Can Opener Budget. (TaxVox) “You know the old joke: An economist and a seaman are stranded on a desert island with only canned food to eat. But they have no way to open the containers. ‘What do we do,’ asks the sailor. ‘Assume a can opener,’ replies the economist.”
Jason Dinesen, Glossary: Bonus Depreciation. “Bonus depreciation, in tax terms, refers to an accelerated form of depreciation available on certain types of assets.”
Jim Maule, A New Tax, Proposed But Rejected . . . Until? “Last week, a reader asked me if I was aware of a tax proposal in Oregon. I was not. The tax, proposed in Oregon House Bill 2877 would have been imposed on motor vehicles 20 years old or older, at the rate of $1,000 every five years.”
Keith Fogg, Submitting a Tax Court Case Fully Stipulated (Procedurally Taxing). “I do not recall a previous case which the Court remanded due to an incomplete stipulation.”
Kyle Pomerleau, How the Border Adjustment Helps Fix Business Taxation in the United States (Tax Policy Blog).
By itself, the border adjustment directly addresses two major problems with the corporate income tax. First, it eliminates the ability and incentive for corporations to shift their profits out of the United States. Second, it would greatly simplify business taxation by eliminating the need for complex current-law transfer pricing rules and anti-base erosion provisions. In addition, the border adjustment would raise additional revenue over the next decade, which would help fund the transition to a cash-flow business tax. The components of the cash-flow tax (most notably, expensing) would greatly improve the incentive for companies to invest and would grow the long-run size of the U.S. economy.
So far, the border adjustment seems to be a step too far for Congress.
Lew Taishoff, OVERPAID IS NOT PAID. “As a matter of law amounts paid or deemed paid more than three years before a tax return claiming them is filed cannot reduce or eliminate the additions to tax.”
Robert Wood, IRS Amnesty Can Cover Broader Tax Evasion Too. “Admitting your mistakes isn’t easy, but paying taxes, interest and penalties is better than the alternative.”
Roger McEowen, Self-Employment Tax On Farming Activity Of Trusts. “An active business conducted through a trust can achieve self-employment tax savings. But, proper structuring is critical.”
Sam Brunson, On Marginal and Effective Tax Rates (Surly Subgroup). “First, people have no idea the difference between effective and marginal rates, and will use whichever is most convenient for their point. And second, people vastly overestimate the amount they pay in taxes.”
Thursday, May 25, 2017
Kristine Tidgren, Iowa Supreme Court Upholds Class Certification in Nuisance Case (Ag Docket). “This case is important to any business that may emit pollutants or odor. Class treatment can transform a manageable disagreement into a tremendous liability.”
Leslie Book, Trump Budget: Perhaps Dead on Arrival But Key Themes Emerge for Tax Administration (Procedurally Taxing). “The theme of reducing errors and saving money through increased compliance will be recurring over the next few years, and that will likely lead to proposals like these that if enacted could mean significant tax administration changes.”
Lew Taishoff, THERE THEY GO AGAIN. “So remember, if the magic moment is 5 p.m., using the self-service kiosk at 5:01 p.m. may not help you. You’ll get the next day’s date on the machine-made postage.”
Mark Mazur, New CBO AHCA Score Confirms What We Already Knew (TaxVox). “The bottom line: CBO estimates confirm the AHCA is largely a tax bill paired up with Medicaid cuts to offset the costs.”
Meg Wiehe, State Rundown 5/24: Several States Scramble to Finalize Budgets (Tax Justice Blog). “This week, Kansas lawmakers continued work on fixing the fiscal mess created by tax cuts in recent years, as legislators in Louisiana, Minnesota, Oklahoma, and West Virginia attempted to wrap up difficult budget negotiations before their sessions come to an end, and Delaware lawmakers advanced a corporate tax increase as one piece of a plan to close that state’s budget shortfall.”
Peter Reilly, IRS Nixes Student Loan Payoff Charity:
This is great. You can have your kid take out the maximum amount of loans and pay them off with tax deductible dollars. Too bad it doesn’t work.
If you can direct your contribution to a specific person, that usually kills the deduction.
Stephen Entin, Tax Treatment of Structures Under Expensing (Tax Policy Blog). “A large part of the benefit of expensing, over seventy percent, is due to the inclusion of outlays for structures. Their inclusion in the expensing provision would add significantly to economic growth and job creation, and would return higher revenue to the Treasury in the out-years.”
TaxGrrrl, Court Rules That Religious Freedom Law Is Not A Free Pass for Tax Evasion. “In this case, Tyms-Bey argued that paying state taxes would be a burden on his religious beliefs. Prosecutors responded that the act of paying taxes does not interfere with religious beliefs. They also noted that Tyms-Bey has never identified his religion; documents filed with the court indicate that ‘he is a sovereign citizen.'”