TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, August 24, 2016

Congressional Staffer Charged With Failure To File Tax Returns On $170,000 Salary For Five Years

DOJ Logo (2016)Department of Justice Press Release, Congressional Staffer Charged with Failure to File Tax Returns for Five Years:

A congressional staffer was charged yesterday with five counts of willfully failing to file a tax return, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia.

According to the criminal information and affidavit, Isaac Lanier Avant of Arlington, Virginia, is a staff member employed by the U.S. House of Representatives since approximately 2002. For tax years 2009 through 2013, Avant earned annual wages of over $170,000, but did not timely file a personal income tax return for any of those years. In May 2005, Avant filed a form with his employer that falsely claimed he was exempt from federal income taxes. Avant did not have any federal tax withheld from his paycheck until the Internal Revenue Service (IRS) mandated that his employer begin withholding in January 2013.

Continue reading

August 24, 2016 in Congressional News, Tax | Permalink | Comments (7)

Tuesday, August 23, 2016

Republican Congressional Tax Writers Oppose Proposed Debt-Equity Regs

Wednesday, August 3, 2016

Schumer Decries 'Victory Tax,' Urges House To Pass Senate Bill Exempting Olympic Medals From Tax

Olympic RingsPress Release, Schumer Urges House of Representatives to Immediately Pass Bipartisan Legislation That Will Block IRS From Taxing Olympic Medals; Senator Says Olympic and Paralympic Athletes Should Not Have To Pay a Victory Tax:

During a visit to the Olympic Training Center in Lake Placid, U.S. Senator Charles E. Schumer joined with Olympic athletes and launched a major push to urge the U.S. House of Representatives to pass legislation that would prevent the Internal Revenue Service (IRS) from taxing Olympic and Paralympic athletes on medals or other prizes awarded to them in future Olympic games.

Continue reading

August 3, 2016 in Congressional News, Tax | Permalink | Comments (5)

Tuesday, August 2, 2016

Does Vic Fleischer's Appointment As Senate Finance Committee Co-Chief Tax Counsel Imperil Tax Reform, Or Give It A Shot In The Arm?

Fleischer (2016)Following up on my recent posts:

Forbes:  Senator Ron Wyden Endangers Tax Reform With Hire of Radical Partisan Victor Fleischer, by Ryan Ellis:

While most Americans over the past two weeks were consumed with the drama and intrigue of the two party conventions, a major hire was made in Washington, D.C. which could have devastating negative implications for fundamental tax reform prospects in 2017.

Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) has hired University of San Diego law professor Victor Fleischer as co-chief tax counsel. Should the Democrats gain a majority in the Senate this fall, Fleischer would have a key role in shaping the direction of tax reform discussions next year with the new president and with a presumably Republican House of Representatives. Wyden called Fleischer a “true outside thought leader in this space.”

That is very bad news if you were hoping to see fundamental tax reform finally become a reality next year.

Continue reading

August 2, 2016 in Congressional News, Legal Education, Tax | Permalink | Comments (4)

Monday, July 25, 2016

Vic Fleischer—'The Closest Thing The Tax World Has To A Rock Star'—Goes To Washington

Fleischer (2016)Following up on Friday's post, Vic Fleischer Named Co-Chief Tax Counsel For Democrats On Senate Finance Committee:  Bloomberg, Mr. Higher-Tax-on-Carried-Interest Goes to Washington, by Lynnley Browning:

He made his name in academia by criticizing a lucrative tax break for private-equity managers. Now Victor Fleischer is taking his anti-loophole thinking to Washington.

Fleischer will serve as a formal adviser to Democrats on the powerful Senate Finance Committee, a perch from which he says he’ll seek ways to close the so-called “carried interest” loophole -- and to curb other tax benefits.

Continue reading

July 25, 2016 in Congressional News, Tax, Tax Prof Moves | Permalink | Comments (4)

Wednesday, July 20, 2016

Vic Fleischer Named Co-Chief Tax Counsel For Democrats On Senate Finance Committee

Fleischer (2016)Wall Street Journal: He Made ‘Carried Interest’ Famous. Now He’s Going to Help Write The Law, by Richard Rubin:

The tax law professor who helped turn carried interest from a technical tax term into a populist cause is coming to Washington.

Victor Fleischer, whose 2006 academic paper started the debate on how private equity managers are taxed [Two and Twenty: Taxing Partnership Profits in Private Equity Funds, 83 N.Y.U. L. Rev. 1 (2008)], will become co-chief tax counsel for Senate Finance Committee Democrats. His partner will be Tiffany Smith, already a member of the Finance Democrats’ staff.

Continue reading

July 20, 2016 in Congressional News, Tax | Permalink | Comments (2)

Wednesday, July 13, 2016

CBO:  In 30 Years, U.S. Will Have Highest Debt-To-GDP Ratio In Our History—141%

Congressional Budget Office, The 2016 Long-Term Budget Outlook:

If current laws remained generally unchanged, the United States would face steadily increasing federal budget deficits and debt over the next 30 years—reaching the highest level of debt relative to GDP ever experienced in this country. 

Figure 1-1

Continue reading

July 13, 2016 in Congressional News, Tax | Permalink | Comments (7)

Thursday, July 7, 2016

National Taxpayer Advocate Releases FY 2017 Objectives Report To Congress

NTA 2National Taxpayer Advocate Nina E. Olson today released her statutorily mandated mid-year report to Congress:

The Internal Revenue Code requires the National Taxpayer Advocate to submit two annual reports to the House Committee on Ways and Means and the Senate Committee on Finance. The National Taxpayer Advocate is required to submit these reports directly to the Committees without any prior review or comment from the Commissioner of Internal Revenue, the Secretary of the Treasury, the IRS Oversight Board, any other officer or employee of the Department of the Treasury, or the Office of Management and Budget. The first report, due by June 30 of each year, must identify the objectives of the Office of the Taxpayer Advocate for the fiscal year beginning in that calendar year.

Continue reading

July 7, 2016 in Congressional News, IRS News | Permalink | Comments (0)

Tuesday, July 5, 2016

GAO:  IRS's 30% Error Rate With Refundable Tax Credits Results In $30 Billion In Annual Erroneous Payments

GAO (2016)Government Accountability Office, Refundable Tax Credits: Comprehensive Compliance Strategy and Expanded Use of Data Could Strengthen IRS's Efforts to Address Noncompliance (GAO- 16-475):

The Earned Income Tax Credit (EITC), the Additional Child Tax Credit (ACTC), and the American Opportunity Tax Credit (AOTC) provide tax benefits to millions of taxpayers—many of whom are low-income—who are working, raising children, or pursuing higher education. These credits are refundable in that, in addition to offsetting tax liability, any excess credit over the tax liability is refunded to the taxpayer. In 2013, the most recent year available, taxpayers claimed $68.1 billion of the EITC, $55.1 billion of the CTC/ACTC, and $17.8 billion of the AOTC.

Eligibility rules for refundable tax credits (RTCs) contribute to compliance burden for taxpayers and administrative costs for the Internal Revenue Service (IRS). These rules are often complex because they must address complicated family relationships and residency arrangements to determine who is a qualifying child. Compliance with the rules is also difficult for IRS to verify due to the lack of available third party data. The relatively high overclaim error rates for these credits (as shown below) are a result, in part, of this complexity. The average dollar amounts overclaimed per year for 2009 to 2011, the most recent years available, are $18.1 billion for the EITC, $6.4 billion for the CTC/ACTC, and $5.0 billion for the AOTC.

GAO

Continue reading

July 5, 2016 in Congressional News, Gov't Reports, Tax | Permalink | Comments (2)

Friday, July 1, 2016

Kleinbard:  The Trojan Horse Of Corporate Integration (With Shaviro's Commentary)

Edward D. Kleinbard (USC), The Trojan Horse of Corporate Integration:

The U.S. Senate Finance Committee has invested significant resources, including hearings and staff reports, to make the case for an unusual form of corporate dividend integration – a corporate dividends-paid deduction, combined with a universal shareholder dividend withholding tax collected from the firm. This proposal would not reduce the cash tax outlays of U.S. corporations in respect of distributed or retained earnings. It would not reduce the aggregate tax burdens imposed on most shareholders, and in many plausible circumstances would raise those tax costs. It is a poorly targeted response to design weaknesses in the U.S. international corporate tax system. Its efficiency gains are undeveloped and largely overstated.

Continue reading

July 1, 2016 in Congressional News, Scholarship, Tax | Permalink | Comments (0)

Wednesday, June 29, 2016

CBO:  The 2016 Budget Outlook

Congressional Budget Office, The 2016 Budget Outlook (June 29, 2016):

CBO2

CBO

June 29, 2016 in Congressional News, Gov't Reports, Tax | Permalink | Comments (2)

Tuesday, June 14, 2016

Senate Holds Hearing Today On Energy Tax Policy

Senate Finance LogoThe Senate Finance Committee holds a hearing today on Energy Tax Policy in 2016 and Beyond:

  • Karen Alderman Harbert (U.S. Chamber of Commerce, Washington, D.C.)
  • Susan Kennedy (Advanced Microgrid Solutions, San Francisco)
  • Steve Miller (Bulk Handling Systems, Eugene, OR)
  • Benjamin Zycher (American Enterprise Institute, Washington, D.C.)

In connection with the hearing, the Joint Committee on Taxation has released Present Law And Analysis Of Energy-Related Tax Expenditures (JCX-46-16):

Since 2004, the Congress has been active in enacting legislation related to energy production (including oil and gas and renewables) and conservation. Part I of this document ... provides tables that summarize current energy-related Federal tax incentives.

Continue reading

June 14, 2016 in Congressional News, Tax | Permalink | Comments (0)

Friday, June 10, 2016

CBO:  The Distribution Of Household Income And Federal Taxes, 2013

Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2013:

In 2013, according to the Congressional Budget Office’s estimates, average household market income— a comprehensive income measure that consists of labor income, business income, capital income (including capital gains), and retirement income—was approximately $86,000. Government transfers, which include benefits from programs such as Social Security, Medicare, and unemployment insurance, averaged approximately $14,000 per household. The sum of those two amounts, which equals before-tax income, was about $100,000, on average. In this report, CBO analyzed the distribution of four types of federal taxes: individual income taxes, payroll (or social insurance) taxes, corporate income taxes, and excise taxes. Taken together, those taxes amounted to about $20,000 per household, on average, in 2013.1 Thus, average after-tax income—which equals market income plus government transfers minus federal taxes— was about $80,000, and the average federal tax rate (federal taxes divided by before-tax income) was about 20 percent.

CBO

Continue reading

June 10, 2016 in Congressional News, Gov't Reports, Tax | Permalink | Comments (1)

Thursday, June 9, 2016

House Holds Hearing Today On The Need To Control Automatic Spending And Unauthorized Programs

HouseThe House Budget Committee holds a hearing today at 9:30 a.m. EST on The Need to Control Automatic Spending and Unauthorized Programs with these witnesses:

  • Lily Batchelder (NYU)
  • Stuart Butler (Brookings Institution)
  • David Walker (Former Comptroller General of the United States)

June 9, 2016 in Congressional News, Tax | Permalink | Comments (0)

Monday, June 6, 2016

Sen. Hatch Calls For Closer IRS Scrutiny Of Private Museums

Senate LogoFollowing up on my previous posts:

Senate Finance Committee press release, Hatch Concludes Review into Tax-Exempt Private Museums, Notes Concerning Findings:

Senate Finance Committee Chairman Orrin Hatch (R-Utah) recently concluded a review into private, non-profit museums that enjoy tax-exempt status with a letter sent to Internal Revenue Commissioner (IRS) John Koskinen summarizing the findings of the inquiry. The review, launched in November 2015, sought answers from 11 private foundations designed to assess whether the public interest was being met and whether operations of the foundations merited the substantial tax benefits afforded to their collector-founders through the tax code.

In the letter, Hatch noted that some of the private museums welcome up to half a million guests per year at no charge, but others are not readily available to the public, including many that require advanced reservations and hold short public hours. Hatch went on to detail how many of the responses showed that founding donors continue to play an active role in management of the museum, and some of the museums occupy property owned by donors, including, in some cases, their own private residence.

Continue reading

June 6, 2016 in Congressional News, Tax | Permalink | Comments (2)

Thursday, June 2, 2016

Dynamic Scoring May Inject Joint Tax Committee Into Partisan Tax Wars

StaticPolitico:  The Man Who Could Dash the GOP's Tax Dreams: An Economist for a Little-Known Congressional Office Is Getting Pulled Into the Partisan Fight Over Dynamic Scoring. Things Could Get Ugly., by Brian Faler:

The chairmen of the House and Senate tax-writing committees are preparing what they say will be major tax-reform proposals, and both are looking to an obscure congressional agency to make the numbers work.

This normally would be a fairly straightforward task. This year, however, will be different: Republicans now require Congress’ nonpartisan budget analysts to use dynamic scoring — that is, factoring in possible economic benefits of tax cuts considering their effect on the budget.

And that means that very soon, a bunch of people will get mad at Tom Barthold, the Harvard-trained economist heading the little-known Joint Committee on Taxation, which will decide how much the lawmakers’ proposals will cost. He is not looking forward to it. ...

Continue reading

June 2, 2016 in Congressional News, Tax | Permalink | Comments (0)

Thursday, May 26, 2016

House Holds Hearing Today On The Sharing Economy: A Taxing Experience For Entrepreneurs

Senate Small Business Committee (2016)The House Small Business Committee holds a hearing today on Sharing Economy: A Taxing Experience for New Entrepreneurs, Part II.  From the Hearing Memo:

The IRS needs to get past its historical bias against these new entrepreneurs – based on the outmoded and rigid framework of employee versus contractor – and instead focus on ways to improve awareness and education to increase voluntary, accurate tax code compliance. This is important not only because of the tremendous growth of this sector of the labor market, but because that growth, married with a lack of understanding of how the tax code applies to them, could have very significant tax gap implications going forward. Beyond that, “failure to implement rational tax policy can have serious consequences for job creation and economic growth.” This hearing will examine the tax issues faced by sharing economy participants in greater detail and explore potential solutions to address these unique challenges.

  • Nina Olson (National Taxpayer Advocate, IRS) (testimony)

May 26, 2016 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, May 25, 2016

House Holds Hearing Today On Perspectives On The Need For Tax Reform

Ways & Means (2016)The House Ways & Means Committee holds a hearing today on Perspectives on the Need for Tax Reform:

This hearing will focus on perspectives and considerations that drive the need for tax reform, in particular economic growth, business expansion and job creation, simplicity and burden reduction, and other key motivators. The hearing is part of the Subcommittee’s ongoing effort to lay the foundation for legislative action on comprehensive tax reform in 2017.

Continue reading

May 25, 2016 in Congressional News, Tax | Permalink | Comments (0)

House Holds Hearing On The Sharing Economy: A Taxing Experience For Entrepreneurs

Senate Small Business Committee (2016)The House Small Business Committee held a hearing yesterday on Sharing Economy: A Taxing Experience for New Entrepreneurs, Part I.  From the Hearing Memo:

The IRS needs to get past its historical bias against these new entrepreneurs – based on the outmoded and rigid framework of employee versus contractor – and instead focus on ways to improve awareness and education to increase voluntary, accurate tax code compliance. This is important not only because of the tremendous growth of this sector of the labor market, but because that growth, married with a lack of understanding of how the tax code applies to them, could have very significant tax gap implications going forward. Beyond that, “failure to implement rational tax policy can have serious consequences for job creation and economic growth.” This hearing will examine the tax issues faced by sharing economy participants in greater detail and explore potential solutions to address these unique challenges.

Continue reading

May 25, 2016 in Congressional News, Tax | Permalink | Comments (0)

House Holds Hearing Today On Protecting Small Businesses From IRS Abuse

Ways & Means (2016)The Oversight Subcommittee of the House Ways & Means Committee holds a hearing today on Protecting Small Businesses from IRS Abuse, Part II:

[T]he Subcommittee will hold a follow-up hearing to Protecting Small Businesses from IRS Abuse, where members examined how the Internal Revenue Service wrongly used its authority to seize taxpayer dollars and harm small businesses. Despite continued oversight, the Internal Revenue Service (IRS) and Department of Justice (DOJ) have failed to answer the Subcommittee’s questions about how they will help those who were hurt by the agencies’ former policies. At the hearing next week, Members will hear from people whose bank accounts were seized years ago and who are still trying to get their money back. Members will also hear from the IRS and DOJ about what the agencies are doing to address IRS abuse and help those who have been harmed by it.

Panel #1:

Continue reading

May 25, 2016 in Congressional News, IRS News, Tax | Permalink | Comments (2)

Tuesday, May 24, 2016

Senate Holds Hearing Today On Debt Versus Equity: Corporate Integration Considerations

Senate LogoThe Senate Finance Committee holds a hearing today on Debt versus Equity: Corporate Integration Considerations:

  • John Buckley (Former Chief Tax Counsel, House Ways & Means Committee)
  • Jody K. Lurie (Vice President, Janney Montgomery Scott (Philadelphia))
  • John McDonald (Partner, Baker & McKenzie (Chicago))
  • Alvin C. Warren, Jr. (Professor, Harvard Law School)

In connection with the hearing, the Joint Committee on Taxation has released Overview Of The Tax Treatment Of Corporate Debt And Equity (JCX-45-16):

Continue reading

May 24, 2016 in Congressional News, Tax | Permalink | Comments (0)

Thursday, May 19, 2016

TPC Study Fuels New Congressional Push To Integrate Corporate And Shareholder Taxes

Wall Street Journal, Fewer Shareholders Pay U.S. Taxes on Dividends: New Study Is Bolstering Drive to Shift Tax Burden From Corporations to Investors:

WSJ 2A new study showing that a shrinking fraction of shareholders of U.S. corporations pay taxes on dividends is bolstering a drive to revamp the corporate tax system. [Steven Rosenthal & Lydia Austin, The Dwindling Taxable Share of U.S. Corporate Stock, 151 Tax Notes 923 (May 16, 2016)]

The specter of double taxation, which animates complaints about today’s U.S. corporate tax code, is receding, according to a new study from the Tax Policy Center. Tax-exempt and tax-preferred entities—such as 401(k) plans and other retirement accounts—own more than 75% of U.S. corporate stock, nearly opposite the prevailing pattern from 50 years ago, the study said.

Continue reading

May 19, 2016 in Congressional News, Scholarship, Tax, Think Tank Reports | Permalink | Comments (0)

Tuesday, May 17, 2016

Senate Holds Hearing Today On Integrating The Corporate And Individual Tax Systems

Senate LogoThe Senate Finance Committee holds a hearing today on Integrating the Corporate and Individual Tax Systems: The Dividends Paid Deduction Considered:

  • Michael J. Graetz (Columbia)
  • Judy A. Miller (American Society of Pension Professionals & Actuaries)
  • Steven M. Rosenthal (Tax Policy Center)
  • Bret Wells (Houston)

In connection with the hearing:

Michael J. Graetz (Columbia) & Alvin C. Warren, Jr. (Harvard) have published Integration of Corporate and Shareholder Taxes, 69 Nat'l Tax J. ___ (2016):

Integration of the corporate and individual income taxes can be achieved by providing shareholders a credit for corporate taxes paid with respect to corporate earnings distributed as dividends. When such integration was previously considered in the U.S., proponents emphasized that it could reduce or eliminate many of the familiar distortions of a classical corporate income tax. Integration would also provide a framework for addressing current concerns for tax incentives for U.S. companies to shift income to foreign affiliates in lower-taxed countries or to expatriate in "inversion" transactions. A recent Congressional proposal for a corporate dividend deduction coupled with withholding on dividends could achieve equivalent results, while also reducing effective U.S. corporate tax rates.

Steven M. Rosenthal & Lydia S. Austin (Tax Policy Center) have published The Dwindling Taxable Share of U.S. Corporate Stock, 151 Tax Notes 923 (May 16, 2016):

Continue reading

May 17, 2016 in Congressional News, Tax | Permalink | Comments (0)

Coalition For Tax Competition Call On Congress To Eliminate Funding For OECD Due To BEPS Targeting Of American Corporations

BEPSThe Coalition for Tax Competition has sent this letter calling on Congress to stop funding the Organization for Economic Cooperation and Development (OECD) on the ground that its Base Erosion and Profit Shifting (BEPS) project is undermining American interests:

With release of the final reports on Base Erosion and Profit Shifting (BEPS), there can be no doubt that the Organization for Economic Cooperation and Development (OECD) is no friend to the United States. For this reason it should no longer be subsidized by American taxpayers.

Continue reading

May 17, 2016 in Congressional News, Tax | Permalink | Comments (3)

Wednesday, May 11, 2016

Joint Tax Committee:  Overview Of The Federal Tax System

The Joint Committee on Taxation has released Overview Of The Federal Tax System As In Effect For 2016 (JCX-43-16):

This document ... provides a summary of the present-law Federal tax system as in effect for 2016. The current Federal tax system has four main elements: (1) an income tax on individuals and corporations (which consists of both a “regular” income tax and an alternative minimum tax); (2) payroll taxes on wages (and corresponding taxes on self-employment income) to finance certain social insurance programs; (3) estate, gift, and generation-skipping taxes, and (4) excise taxes on selected goods and services. This document provides a broad overview of each of these elements.

Joint Tax 1

Continue reading

May 11, 2016 in Congressional News, Tax | Permalink | Comments (0)

Tuesday, April 26, 2016

Senate Holds Hearing Today On Navigating Business Tax Reform

Senate LogoThe Senate Finance Committee holds a hearing today on Navigating Business Tax Reform:

  • Thomas A. Barthold (Chief of Staff, Joint Committee on Taxation)
  • James R. Hines, Jr. (Professor, University of Michigan)
  • Sanford E. Zinman (Owner, Sanford E. Zinman, CPA, Tarrytown , NY)
  • Gayle Goschie (Vice President, Goschie Farms, Silverton, OR)
  • Eric Toder (Co-director, Tax Policy Center)

In connection with the hearing, the Joint Committee on Taxation has released Background On Business Tax Reform (JCX-35-16):

Continue reading

April 26, 2016 in Congressional News, Tax | Permalink | Comments (1)

Thursday, April 21, 2016

House Democrats Introduce Bill To Raise Estate Tax Rate

Accounting Today, House Democrats Introduce Bill to Raise Estate Tax Rate:

Rep. Sander Levin, D-Mich., the ranking member of the tax-writing House Ways and Means Committee, and other House Democrats introduced legislation Wednesday to restore the estate tax and gift tax rate and exemption level to the same amounts as in 2009.

At the beginning of January 2013, Congress passed legislation raising the estate tax rate to 40 percent (up from 35 percent), with an exemption for estates below $5 million, but indexed for inflation. Under current law, estates valued at or below $5.45 million ($10.9 million for a couple) are exempt from owing any estate tax.

The proposed legislation, The Sensible Estate Tax Act of 2016, would return the exemption and tax rate to 2009 levels, lowering the estate tax exemption to $3.5 million ($7 million jointly) and increasing the maximum tax rate to 45 percent. The bill would also restore the rates for the gift tax and generation-skipping transfer tax. It would reinstate the $1 million lifetime gift exemption and retain the annual $14,000 gift tax exclusion and unlimited spousal portability. A summary of the bill is available here.

Estate Tax

April 21, 2016 in Congressional News, Tax | Permalink | Comments (3)

Wednesday, April 13, 2016

Senator Warren Introduces Bill To Simplify Tax Filing Endorsed By Dozens Of Tax Profs And Economists

Tax MazePress Release, Senator Warren Introduces Bill to Simplify Tax Filing:

United States Senator Elizabeth Warren (D-Mass.) today introduced the Tax Filing Simplification Act of 2016 to simplify and decrease the costs of the tax filing process for millions of American taxpayers. This year, taxpayers will spend an average of 13 hours preparing and filing their returns, and will pay $200 for tax preparation services — a cost equal to almost 10 percent of the average federal tax refund.

The legislation introduced today would direct the Internal Revenue Service (IRS) to develop a free, online tax preparation and filing service that taxpayers can use to prepare and file their taxes directly with the federal government, if they choose to do so, and would prohibit the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services. The Act would give all taxpayers the right to download third-party-reported tax information that the IRS already has, and would provide those with simple tax situations with a return-free option.

In conjunction with the introduction of the Tax Filing Simplification Act, Senator Warren released a staff report [fact sheet] that describes how - for decades - the tax preparation industry has blocked the IRS from implementing laws that would make tax preparation and filing easier for taxpayers. Corporate capture of the filing process means that taxpayers have to absorb billions of dollars in costs and share their personal information with third parties just to file their taxes.

The legislation has been endorsed by dozens of law professors and economists including Austan Goolsbee of the University of Chicago, Emmanuel Saez of the University of California - Berkeley, and Joe Bankman of Stanford University.

Continue reading

April 13, 2016 in Congressional News, Tax | Permalink | Comments (12)

Monday, March 28, 2016

Joint Tax Committee Releases Estimated Revenue Effects Of Tax Provisions In President Obama’s FY2017 Budget

Tuesday, March 22, 2016

House Holds Hearing Today On Fundamental Tax Reform Proposals

House LogoThe Subcommittee on Tax Policy of the House Ways & Mean Committee holds a hearing today on Fundamental Tax Reform Proposals:

Rep. Devin Nunes (R-CA), a member of the Ways and Means Committee, will testify in support of his bill, H.R. 4377, the American Business Competitiveness (ABC) Act of 2015. This proposal would tax a business based on its actual cash-flow instead of its income.

Rep. Michael Burgess (R-TX) will discuss the merits of his bill, H.R. 1040, the Flat Tax Act. This proposal gives businesses and individuals the choice to opt-in to a 17% flat tax and to be taxed on a cash-flow basis for business activities.

Rep. Robert Woodall (R-GA) will speak in support of his bill, H.R. 25, the FairTax Act of 2015. This proposal would repeal all federal income, payroll and withholding, and estate and gift taxes. The taxes would be replaced with a national sales tax on gross payments of taxable property or services.

In connection with the hearing, the Joint Committee on Taxation has released Background On Cash-Flow And Consumption-Based Approaches To Taxation (JCX 14-16):

Continue reading

March 22, 2016 in Congressional News, Gov't Reports, Tax | Permalink | Comments (2)

Wednesday, March 16, 2016

Joint Tax Committee Releases General Explanation Of Tax Legislation Enacted In 2015

Joint Tax CommitteeThe Joint Committee on Taxation has released General Explanation Of Tax Legislation Enacted in 2015 (JCS-1-16):

This document ... provides an explanation of tax legislation enacted in 2015. The explanation follows the chronological order of the tax legislation as signed into law.

For each provision, the document includes a description of present law, explanation of the provision, and effective date. Present law describes the law in effect immediately prior to enactment and does not reflect changes to the law made by the provision or by subsequent legislation. In a case where a Committee report accompanies a bill, this document is based on the language of the report. For a bill with no Committee report but with a contemporaneous technical explanation prepared and published by the staff of the Joint Committee on Taxation, this document is based on the language of the explanation

March 16, 2016 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, February 24, 2016

House Holds Hearing Today On International Tax Reform

House LogoThe House Ways & Means Committee holds a hearing today on The Global Tax Environment in 2016 and Implications for International Tax Reform:

(Click on YouTube button on bottom right to view video directly on YouTube to avoid interruption caused by blog's refresh rate.)

In connection with the hearing, the Joint Committee on Taxation has released Present Law And Recent Global Developments Related To Cross-Border Taxation (JCX-8-16) (Feb. 23, 2016) (100 pages):

Continue reading

February 24, 2016 in Congressional News, Tax | Permalink | Comments (0)

Tuesday, February 2, 2016

House Holds Hearing Today On Delivering Growth And Opportunity For All Americans

House LogoThe House Ways & Means Committee holds a hearing today on Reaching America’s Potential: Delivering Growth and Opportunity for All Americans:

February 2, 2016 in Congressional News, Tax | Permalink | Comments (0)

Thursday, January 28, 2016

Senate Holds Hearing Today On Tax-Favored Retirement Plans

Senate LogoThe Senate Finance Committee holds a hearing today on Helping Americans Prepare for Retirement: Increasing Access, Participation and Coverage in Retirement Savings Plans:

  • Alicia Munnell (Boston College)
  • John J. Kalamarides (Prudential Financial)
  • Thomas Barthold (Joint Committee on Taxation)

In connection with the hearing, the Joint Committee on Taxation has released Present Law And Background Relating To Tax-Favored Retirement Saving And Certain Related Legislative Proposals (JCX-3-16):

Continue reading

January 28, 2016 in Congressional News, Tax | Permalink | Comments (0)

Tuesday, January 12, 2016

Joint Tax Committee Releases List Of Expiring Federal Tax Provisions, 2016-2025

Joint Tax CommitteeThe Joint Committee on Taxation has released its annual List of Expiring Federal Tax Provisions 2016-2025 (JCX-1-16):

This document ... prepared by the staff of the Joint Committee on Taxation, provides a listing of Federal tax provisions (other than those providing time-limited transition relief after the repeal of an underlying rule) that are currently scheduled to expire in 2016-2025 (with references to the applicable section of the Internal Revenue Code of 1986 or other applicable law).

For purposes of compiling this list, the staff of the Joint Committee on Taxation considers a provision to be expiring if, at a statutorily specified date, the provision expires completely or reverts to the law in effect before the present-law version of the provision. A suspension or deferral of the effective date of a provision is not considered an expiration. Certain provisions terminate on dates that refer to a taxpayer’s taxable year and not a calendar year.

Continue reading

January 12, 2016 in Congressional News, Tax | Permalink | Comments (0)

Monday, December 28, 2015

Hoffer & Walker:  The Tax Court And The Administrative State — Congress Responds To The D.C. Circuit

Hoffer & WalkerFollowing up on my previous posts (links below):  TaxProf Blog op-ed, The Tax Court and the Administrative State: Congress Responds to the D.C. Circuit’s Decision in Kuretski, by Stephanie Hoffer (Ohio State) & Christopher J. Walker (Ohio State):

Congress recently passed its annual “tax extender” legislation: the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). Although the bulk of the PATH Act extends a variety of tax breaks, as Daniel Hemel notes over at the University of Chicago Law School Faculty Blog the last few pages of the more-than-two-hundred-page bill attempt to clarify the position of the United States Tax Court within the modern administrative state.

Continue reading

December 28, 2015 in Congressional News, Tax | Permalink | Comments (0)

Hickman:  What Is The Tax Court? Congress Speaks.

Hickman 2014 2Following up on my previous posts (links below):  TaxProf Blog op-ed, What Is The Tax Court? Congress Speaks (or Attempts To, Arguably Unsuccessfully), by Kristin Hickman (Minnesota):

In the latest round in the Kuretski brouhaha, the new omnibus appropriations bill passed by Congress and signed by President Obama last week adds the following text to the Internal Revenue Code:

The Tax Court is not an agency of, and shall be independent of, the executive branch of the Government.

What does this amendment mean, and why does it matter—or not?

Exactly what the amendment really accomplishes is unclear.  The amendment arguably speaks to two ongoing conversations about the Tax Court.  One is constitutional, concerning separation of powers principles.  The second is statutory, addressing the interplay of the Internal Revenue Code and the Administrative Procedure Act.  In the end, however, the amendment offers little to resolve either one.

Continue reading

December 28, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, December 23, 2015

Lederman:  On The PATH To A More Judicial Tax Court

Ledderman (2016)Following up on Friday's post, Tax Extenders Bill Puts Tax Court In Constitutional Limbo:  TaxProf Blog op-ed:  On the PATH to a More Judicial Tax Court, by Leandra Lederman (Indiana-Bloomington):

The recently enacted Protecting Americans from Tax Hikes (PATH) Act of 2015 includes a subtitle containing several sections addressing the U.S. Tax Court. This post focuses primarily on Congress’s “clarification” of what the Tax Court is not, but it also briefly addresses some changes the new law makes to Tax Court administration.

Since 1969, when Congress enacted Internal Revenue Code (Code) section 7441, making the Tax Court an Article I court, the Tax Court has faced issues resulting from its lack of a clear place in the federal government structure. The clarifying amendment in the PATH Act adds a third sentence at the end of section 7441 (highlighted in bold below), which makes the provision read as follows:

Continue reading

December 23, 2015 in Congressional News, New Cases, Scholarship, Tax | Permalink | Comments (0)

Saturday, December 19, 2015

President Obama Signs Omnibus Bill With $680 Billion In Tax Cuts, 70% For Democratic Priorities

President Obama yesterday signed the omnibus appropriation bill after its approval by the House (318-109) and Senate (65-33).  The bill includes $680 billion in tax extenders and other tax changes (according to Lily Batchelder, $236 billion for Democratic priorities, $97 billion for Republican priorities, and $347 billion for bipartisan priorities).

Press and blogosphere coverage:

Continue reading

December 19, 2015 in Congressional News, Tax | Permalink | Comments (1)

Saturday, December 12, 2015

Obama Pick For Top Tax Lawyer Stalls On Pastor-Politics Issue

CanoFollowing up on Wednesday's post, Tax Lawyers Urge Rapid Confirmation Of Cono Namorato As Assistant Attorney General For The Tax Division:  Chicago Tribune, Obama Pick for Top Tax Lawyer Stalls on Pastor-Politics Issue:

President Barack Obama's nominee to serve as the top U.S. tax prosecutor has stalled over an obscure letter he wrote seven years ago questioning the legal tactics of a group that wants pastors to speak out on politics.

The standoff involves Cono Namorato, a Washington defense attorney and former government lawyer, who was nominated Feb. 24 to serve as the assistant attorney general over the Justice Department's tax division. The outcome will determine the leadership of the division's 370 criminal and civil lawyers, who pursue offshore tax evasion and other investigations.

Namorato, 73, won bipartisan praise at his July 22 hearing in the Senate Judiciary Committee, but never got a confirmation vote from that panel. In response, a group of former Justice Department and Internal Revenue Service officials wrote this week to urge the committee to approve Namorato. ...

Behind the scenes, some members of the judiciary panel have concerns. After Namorato's hearing Republican Sen. Charles Grassley of Iowa, the panel's chairman, asked him about a 2008 letter he co-signed that urged the IRS to investigate the actions of lawyers at the Alliance Defense Fund, based in Scottsdale, Arizona.

Continue reading

December 12, 2015 in Congressional News, Tax | Permalink | Comments (1)

Wednesday, December 9, 2015

Joint Tax Committee Releases Tax Expenditure Estimates for 2015-2019

Joint Tax CommitteeJoint Committee on Taxation, Estimates of Federal Tax Expenditures for Fiscal Years 2015-2019 (JCX-141-15):

Tax expenditure analysis can help both policymakers and the public to understand the actual size of government, the uses to which government resources are put, and the tax and economic policy consequences that follow from the implicit or explicit choices made in fashioning legislation. This report on tax expenditures for fiscal years 2015-2019 is prepared by the staff of the Joint Committee on Taxation (“Joint Committee staff”) for the House Committee on Ways and Means and the Senate Committee on Finance. The report also is submitted to the House and Senate Committees on the Budget.

As in the case of earlier reports, the estimates of tax expenditures in this report were prepared in consultation with the staff of the Office of Tax Analysis in the Department of the Treasury (“the Treasury”). The Treasury published its estimates of tax expenditures for fiscal years 2014-2024 in the Administration's budgetary statement of February 2, 2015. The lists of tax expenditures in this Joint Committee staff report and the Administration's budgetary statement overlap considerably; the differences are discussed in Part I of this report under the heading “Comparisons with Treasury.”

Continue reading

December 9, 2015 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0)

Tuesday, December 1, 2015

House And Senate Hold Hearings Today On The OECD Base Erosion And Profit Shifting (BEPS) Project

Congress (2015)The Subcommittee on Tax Policy of the House Ways and Means Committee and the Senate Finance Committee host hearings today on The OECD Base Erosion and Profit Shifting (BEPS) Project:

House Witnesses (with links to their testimony):

Senate Witnesses:

Continue reading

December 1, 2015 in Congressional News, Tax | Permalink | Comments (0)

Monday, November 2, 2015

As Speaker, Paul Ryan Can Finally Get Tax Overhaul Done

Wall Street Journal, As Speaker, Paul Ryan Can Finally Get Tax Overhaul Done:

Washingtonians agree almost universally on two political phenomena: The House Republican conference is ungovernable, and tax reform is dead.

That was yesterday. In a matter of days we will have Speaker Paul Ryan, whose track record shows a man that may make the impossible happen. This is based on three key assets.

Continue reading

November 2, 2015 in Congressional News, Tax | Permalink | Comments (2)

Tuesday, October 27, 2015

Budget Deal Changes Partnership Tax Audits

Wall Street Journal, IRS Would More Easily Audit Large Partnerships Under Proposal; Provision in Budget Deal Would Make It Easier to Audit Private-Equity Firms, Hedge Funds:

The Internal Revenue Service would have an easier time auditing large partnerships, including private-equity firms and hedge funds, under a provision in the bipartisan budget deal announced late Monday night.

The proposal, built on ideas from both parties, would revamp a 33-year-old law that sets the rules for partnership audits and requires the IRS to pass additional taxes to each of the partners. That task has proven difficult for the IRS and has made the biggest and most complex multitiered partnerships extremely tough to audit.

A Government Accountability Office study last year found the IRS audited just 0.8% of large partnerships—those with at least 100 partners and $100 million in assets—compared with a 27.1% audit rate for corporations with at least $100 million in assets. Most of those partnership audits resulted in no additional taxes, and the GAO said it wasn’t sure whether that was because of high compliance or the agency’s inability to find noncompliance.

Continue reading

October 27, 2015 in Congressional News, IRS News, Tax | Permalink | Comments (0)

Thursday, October 8, 2015

Senate Launches Volkswagen Tax Fraud Probe

VW2Senate Finance Committee Chair Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Oregon) sent a letter Tuesday to Volkswagen asking whether the automaker defrauded the IRS in obtaining federal tax credits despite the installation of “defeat devices” in diesel passenger cars.

Continue reading

October 8, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, October 7, 2015

House Holds Hearing Today On The Rising Costs Of Higher Education And Tax Policy

House LogoThe Subcommittee on Oversight of the House Ways & Means Committee holds a hearing today on The Rising Costs of Higher Education and Tax Policy.  In connection with the hearing, the Joint Committee on Taxation has released Background and Present Law Related to Tax Benefits for Education (JCX-133-15):

This document ... includes a description of present law and analysis relating to tax benefits for education. Present law includes a variety of provisions that provide tax benefits to individual taxpayers for education expenses.

Figure 3

Table 4

Continue reading

October 7, 2015 in Congressional News, Legal Education, Tax | Permalink | Comments (3)

Thursday, October 1, 2015

Federal Tax Law And Issues Related To The Commonwealth Of Puerto Rico

Senate LogoThe Senate Finance Committee held a hearing yesterday on Financial and Economic Challenges in Puerto Rico.  In connection with the hearing, the Joint Committee on Taxation released Federal Tax Law And Issues Related To The Commonwealth Of Puerto Rico (JCX-132-15):

This document ... provides an overview and analysis of Federal tax laws relating to the Commonwealth of Puerto Rico and other U.S. territories, summarizes recent prominent changes in Puerto Rican tax law, and describes the economy of Puerto Rico, in part by comparison to economic measures for the United States as a whole. ...

Continue reading

October 1, 2015 in Congressional News, Tax | Permalink | Comments (0)

Wednesday, September 16, 2015

Senate Holds Hearing Today On Identity Theft, Tax Refund Fraud, And The IRS's Authority To Regulate Paid Tax Return Preparers

Senate LogoThe Senate Finance Committee holds an Open Executive Session today at 10:00 EST to consider an Original Bill to Prevent Identity Theft and Tax Refund Fraud.  Among the bill's twenty provisions is a grant of authority to the Treasury Department and the IRS authority to regulate paid tax return preparers (at a cost of $135 million over ten years).

September 16, 2015 in Congressional News, Tax | Permalink | Comments (0)

Thursday, August 6, 2015

Senate Releases Summaries of Tax Extenders Bill; Joint Tax Committee's Dynamic Scoring Says Bill Will Cover 11% Of Its Costs

The Senate Finance Committee yesterday released updated summaries (here and here) of the committee-passed tax extenders legislation (S. 1946). In connection with the bill, the Joint Committee on Taxation released A Report To The Congressional Budget Office Of The Macroeconomic Effects Of The “Tax Relief Extension Act Of 2015”.

Bloomberg, Tax Cut Pays Part of Its Way in Test of Republican Scoring:

A bipartisan U.S. Senate bill that would revive and extend dozens of lapsed tax breaks would spur economic growth and cover about 11 percent of its own costs, according to Congress’s nonpartisan scorekeeper.

The analysis released Tuesday is an early test of Republicans’ focus on what’s known as dynamic scoring. It refers to the principle that legislation can be significant enough to change the size of the economy and affect the U.S. budget.

Republicans say that’s a more accurate way to study bills, and they’ve changed budget rules to include the analyses. Democrats are dubious, citing the uncertainty of projections.

Jared Bernstein (Center on Budget and Policy Priorities), Dynamic Scoring in Action: Unwarranted Certainty:

Jared

Continue reading

August 6, 2015 in Congressional News, Gov't Reports, Tax | Permalink | Comments (0)

The IRS Scandal, Day 819

IRS Logo 2Senate Finance Committee, Bipartisan Investigative Report on the IRS's Processing of 501(c)(3) and 501(c)(4) Applications for Tax-Exempt Status Submitted by "Political Advocacy" Organizations From 2010-2013 (145 pages):

While much has been reported about the alleged political targeting over the last two years, it is important to stress that this Committee has conducted the only bipartisan investigation into the matter. Consequently, this report will perhaps serve as the definitive account of events transpiring at the IRS and the management failures and other causes that were at the root of the IRS's actions. Hopefully, this report will provide a roadmap for how Congress and the public can act to make sure this type of conduct does not happen again. ...

Continue reading

August 6, 2015 in Congressional News, IRS News, IRS Scandal, Tax | Permalink | Comments (1)