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Friday, July 3, 2015

Weekly SSRN Tax Roundup

Avi-Yonah: Constructive Unilateralism — U.S. Leadership And International Taxation

Reuven S. Avi-Yonah (Michigan), Constructive Unilateralism: US Leadership and International Taxation:

In recent years, various US international tax proposals have been advanced on the basis that we should follow the lead of our major trading partners. For example, it has been argued that we should adopt a “territorial” tax system (really, an exemption for dividends from controlled subsidiaries of US multinationals) because most of our trading partners have done so, or that we should adopt a “patent box” because some EU countries have one. But is this an adequate policy argument? Historically, most of the advances in international taxation occurred because the US led, not because it has followed. This paper reviews the history of instances in which other countries followed US international tax reforms, and then argues that positive results can be expected if the US maintains its leadership by “constructive unilateralism”.

July 3, 2015 in Scholarship, Tax | Permalink | Comments (0)

Thursday, July 2, 2015

Shaviro: Taxing Potential Community Members' Foreign Source Income

Daniel Shaviro (NYU), Taxing Potential Community Members' Foreign Source Income:

Recent years have witnessed rising debate, on both sides of the Atlantic, regarding how to define the category of individuals whom a given country classifies as domestic taxpayers, and who thus may be taxable on their foreign source income (FSI) even if they live abroad. While the United States rules focus distinctively on citizenship, the broader issue is better viewed as pertaining to the taxation of “potential community members” (PCMs) – that is, all those who plausibly might be viewed as members of the home community.

This paper makes two main points regarding the taxation of PCMs on their FSI. First, the issues turn in large part on drawing a distinction between “us” and “them” – that is, between people whom we classify as members of the home community, and thus whose welfare we care about, and those whom we classify as normatively irrelevant (or less relevant) outsiders. While such a distinction is inevitable in a world with separate national governments, conventional tax policy and public economics tools shed little direct light on how one might operationalize it.

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July 2, 2015 in Scholarship, Tax | Permalink | Comments (0)

Morriss: BEPS, FATCA & EU Tax Harmonization: Seeing The Taxman

Andrew P. Morriss (Dean, Texas A&M), Seeing Like A Taxman:

The world of international financial regulation and taxation is in turmoil. New initiatives from the United States, the OECD and the European Union seek to reign in tax avoidance and evasion through a wide array of measures. These include the US FATCA, the OECD's base erosion and profit shifting (BEPS) initiative, and EU tax harmonization measures. As Richard Gordon and I have argued elsewhere, these measures were generally adopted without regard to whether the benefits they might yield in revenue collection are worth the costs they impose [Moving Money: International Financial Flows, Taxes, & Money Laundering, 35 Hastings Int'l & Comp. L. Rev. (2014)]. Why then do they continue to appear?

Scott 3One advantage academics have in such circumstances is to bring to bear ideas from outside a narrow field that can help make sense of events by providing a framework for analysis. Two books by James C. Scott, a political scientist and anthropologist at Yale, offer a perspective on anti-avoidance and anti-evasion measures that can suggest where things might be headed. In Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (Yale 1998), Scott drew on his work in Southeast Asia to analyze why many ambitious development projects failed. In The Art of Not Being Governed: An Anarchist History of Upland Southeast Asia (Yale 2009), he looked at the history of upland people who avoided incorporation into pre-colonial and colonial states by running away. We can use Scott's analysis as an opportunity to re- think how governments are approaching tax avoidance and tax evasion. In doing so, I am stretching Scott's analysis well beyond where he deployed it. Nonetheless, the analogy between Southeast Asian societies and modern tax avoidance and evasion is a powerful one.

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July 2, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Weidner: Capital Accounts In LLCs And Partnerships

Donald J. Weidner (Dean, Florida State), Capital Accounts in LLCs and in Partnerships: Powerful Default Rules and Potential Tax Significance, 14 Fla. St. U. Bus. Rev. 1 (2015):

Balance sheets for limited liability companies and for partnerships differ from corporate balance sheets in one important respect. Accounting for these alternative forms traditionally includes a separate equity account, or “capital account,” for each owner. Accounting practice and case law suggest that, at least as a default rule or norm, these accounts guide distributions on liquidation or buyout, and, if negative, may also reflect debts to the firm. Indeed, the statutory default rule of partnership law in most states requires that individual capital accounts be maintained and given economic significance on liquidation or buyout. Although the statutory law of LLCs does not contain these default rules, partnership law provides analogy. Furthermore, the federal income tax rules that apply both to partnerships and to most multi-member LLCs closely examine the maintenance and significance of capital accounts to determine the validity of special allocations of tax benefits. Finally, capital accounts analysis also sharpens the understanding of the economic arrangement of the owners, particularly with respect to how and to what extent they have agreed to share different items of loss.

July 2, 2015 in Scholarship, Tax | Permalink | Comments (0)

Three Rules for Educating Tomorrow's Lawyers

ThreeMichael D. Cicchini, Three Rules for Educating Tomorrow's Lawyers, 34 Miss. C. L. Rev. 1 (2015):

Legal education reform is currently a hot topic. The most promising ideas involve elevating skills-based training from its current sideshow status (where it is taught by adjunct and clinical instructors) to a meaningful and integral part of the mainstream curriculum. This type of skills-based reform, however, not only faces some practical roadblocks, but also it glosses over legal education’s deeper, more fundamental problem: the failure to adequately train students in the underlying substantive and procedural law. To address this more immediate issue, this Essay recommends three basic rules for reform.

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July 2, 2015 in Legal Education, Scholarship | Permalink | Comments (2)

Wednesday, July 1, 2015

Palfrey: BiblioTech — Why Libraries Matter More Than Ever In The Age Of Google

PalfreyJohn Palfrey (Head of School, Phillips Academy; former Henry N. Ess III Professor of Law & Vice Dean for Library and Information Resources, Harvard Law School), BiblioTech: Why Libraries Matter More Than Ever in the Age of Google (May 2015):

Libraries today are more important than ever. More than just book repositories, libraries can become bulwarks against some of the most crucial challenges of our age: unequal access to education, jobs, and information.

In BiblioTech, educator and technology expert John Palfrey argues that anyone seeking to participate in the 21st century needs to understand how to find and use the vast stores of information available online. And libraries, which play a crucial role in making these skills and information available, are at risk. In order to survive our rapidly modernizing world and dwindling government funding, libraries must make the transition to a digital future as soon as possible—by digitizing print material and ensuring that born-digital material is publicly available online.

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July 1, 2015 in Book Club, Legal Education, Scholarship | Permalink | Comments (0)

Are Academic Law Libraries Doomed?

Law LibraryYesJames Milles (SUNY-Buffalo), Legal Education in Crisis, and Why Law Libraries are Doomed, 106 Law Libr. J. 507 (2014):

The dual crises facing legal education - the economic crisis affecting both the job market and the pool of law school applicants, and the crisis of confidence in the ability of law schools and the ABA accreditation process to meet the needs of lawyers or society at large - have undermined the case for not only the autonomy, but the very existence, of law school libraries as we have known them. Legal education in the United States is about to undergo a long-term contraction, and law libraries will be among the first to go. A few law schools may abandon the traditional law library completely. Some law schools will see their libraries whittled away bit by bit as they attempt to answer “the Yirka Question” in the face of shrinking resources, reexamined priorities, and university centralization. What choices individual schools make will largely be driven by how they play the status game.

NoKenneth J. Hirsh (Cincinnati), Like Mark Twain: The Death of Academic Law Libraries Is an Exaggeration, 106 Law Libr. J. 521 (2014):

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July 1, 2015 in Legal Education, Scholarship | Permalink | Comments (3)

Pittsburgh Tax Review Publishes New Issue

Pittsburgh Tax Review The Pittsburgh Tax Review has published Vol. 12, No. 1 (Fall 2014):

July 1, 2015 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, June 30, 2015

NYU Tax Law Review Publishes New Issue

NYU Law (2014)The Tax Law Review has published a new issue (Vol. 68, No. 1 (Fall 2014)):

June 30, 2015 in Scholarship, Tax | Permalink | Comments (0)

Call For Estate Planning Papers: ACTEC Law Journal

ACTECCall For Papers:  ACTEC Law Journal:

Estate Planning In the 21st Century:  Seismic Shifts and Predictions for the Future

The American College of Trust and Estate Counsel announces a Call For Papers on the following topics:

Estate planning has radically changed in the last several decades.   Statutes such as the Uniform Probate Code and the Uniform Parentage Act altered the presumptive definitions of such terms as "children" and "descendants" to include a much broader range of beneficiaries, including adoptees, out-of-wedlock children, and in some cases foster children and stepchildren.  Some children may now inherit from more than two parents.  Very recent changes have broadened those allowed to marry and thus inherit in intestacy from each other.  The assets dealt with by estate planners have transformed dramatically, with the rise in the acceptance of non-probate forms of title, digital assets, etc.  Perpetual trusts, once allowed only for charities, now exist for families, with attendant issues such as decanting, virtual representation, and non-judicial trust modification.  Advance health care directives have become a common tool in the estate planner's box, and in a few states estate planners may deal with clients opting for physician aid in dying.  Papers will address ways in which estate planning has transformed in the last 20, 30 or 40 years, and how it may continue to change over a comparable time in the future. 

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June 30, 2015 in Legal Education, Scholarship, Tax | Permalink | Comments (0)

Avi-Yonah: The International Tax Regime — A Centennial Reconsideration

Reuven S. Avi-Yonah (Michigan), The International Tax Regime: A Centennial Reconsideration:

The international tax regime is almost a hundred years old. The two principles it is based on (the benefits principle and the single tax principle) were developed in the 1920s and 1930s. The regime functioned reasonable well until the 1980s, where globalization led to tax competition that undermined its principles. As the OECD is reconsidering the regime in the context of the BEPS and MAATM projects, now is a good time to rethink the fundamentals. Upon reconsideration, it is clear that the regime cannot function without multilateral consensus, and that such consensus is easier to achieve among source countries in the case of passive income and residence countries in the case of active income. This, in turn, suggests that the priorities underlying the benefits principle need to be reversed.

June 30, 2015 in Scholarship, Tax | Permalink | Comments (0)

The Tax Lawyer Publishes New Issue

The Tax Lawyer (2013)The Tax Lawyer has published Vol. 68, No. 3 (Spring 2015):

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June 30, 2015 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Monday, June 29, 2015

Halperin: Corporate Rate Reduction And Fairness To Passthrough Entities

HalperinDaniel Halperin (Harvard), Corporate Rate Reduction and Fairness to Passthrough Entities, 147 Tax Notes 1299 (June 15, 2015):

There is considerable support for reducing the corporate tax rate but not for a corresponding reduction in individual rates. Since it seems likely that corporate rate reduction would have to be financed by reduction or even elimination of many tax preferences for business income equitable treatment of pass-throughs is a vexing problem. The article suggests a possible approach to fairness to pass-throughs which follows from recognition of the actual benefit of reducing corporate rates that I described in 2010 [Mitigating the Potential Inequity of Reducing Corporate Rates, 126 Tax Notes 641 (Feb. 10, 2010)].

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June 29, 2015 in Scholarship, Tax | Permalink | Comments (1)

Sunday, June 28, 2015

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's:

  1. [369 Downloads]  Taxation of E-Commerce, by Orkhan Abdulkarimli (Baku State)
  2. [304 Downloads]  Trust Decanting: A Sale Without Gain Realization, by Jason Kleinman (Herrick, New York)
  3. [184 Downloads]  Reducing Inequality With A Retrospective Tax On Capital, by James Kwak (Connecticut)
  4. [171 Downloads]  Citizenship Taxation, by Ruth Mason (Virginia)
  5. [158 Downloads]  What Does Voluntary Tax Compliance Mean?: A Government Perspective, by J. T. Manhire (U.S. Treasury Department)

June 28, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, June 26, 2015

Weekly SSRN Tax Roundup

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June 26, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

Gamage: Reflections On The King v. Burwell Decision

Gamage (2014)TaxProf Blog op-ed:  Reflections on the King v. Burwell Decision, by David Gamage (UC-Berkeley):

And, so, another judicial threat to Obamacare bites the dust.  Yesterday, the Supreme Court issued its decision in King v. Burwell, affirming that Obamacare’s premium tax credits are to be available in all States.  The 6-3 majority opinion written by Chief Justice Roberts concludes that the key statutory text is ambiguous.  To resolve this ambiguity, the majority looks to the Act’s context and structure, and decides for the government.

Crucial to the majority’s reasoning is that the term “Exchange” is defined by the statute as a term of art, and—as so defined—all Exchanges are explicitly deemed as being established by a State.  Although the statutory language is beyond inelegant and creates substantial ambiguity, it would be improper to ignore that “Exchange” is a defined term.  When a statute explicitly defines terms, this has always been understood to trump what might otherwise be the ordinary meaning of those terms.  I thus find the majority’s reasoning persuasive.  Indeed, I have been arguing along similar lines since this controversy first arose, and Darien Shanske and I previously co-authored an essay that made this argument in greater depth:  Why the Affordable Care Act Authorizes Tax Credits on the Federal Exchanges, 71 State Tax Notes 229 (2014).

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June 26, 2015 in New Cases, Scholarship, Tax | Permalink | Comments (4)

Winn: Law Students Can Disrupt The Market For High-Priced Textbooks By 'Naming And Shaming' Faculty Who Refuse To Use Free Open Access Books

NameJane K. Winn (University of Washington), Can Law Students Disrupt the Market for High-Priced Textbooks?, 10 Wash. J. L. Tech. & Arts ___ (2015):

The Center for Computer-Assisted Legal Instruction (CALI) is a non-profit organization whose mission is to advance legal education through technological innovation and collaboration. With its eLangdell Press project, CALI publishes American law school textbooks in open access, royalty-free form, offering faculty authors compensation equivalent to what most law school textbook authors would earn in royalties from a traditional full-price publisher. I am writing a new sales textbook and “agreements supplement” based on contemporary business practice that I will publish in open access form with CALI’s eLangdell Press. Relatively few other American legal academics publish in open access form, however, suggesting that the market for textbooks may be “locked-in” to a principal-agent conflict between students and faculty members. If American law students organized a website showing the textbook costs of all law faculty members at all law schools, they might be able to use a “naming and shaming” strategy to overcome faculty “lock-in” to high-priced textbooks and increase the adoption of open access textbooks.

Geier 4Deborah H. Geier (Cleveland State) has published a free eLangdell textbook, U.S. Federal Income Taxation of Individuals (CALI 2015):

As one, lone law professor, I have little direct ability to reduce tuition costs for my students. When writing this textbook, however, I decided to decline expressions of interest from the legacy legal publishers in favor of making this textbook available as a free download over the internet (in ePub format for iPads, Mobi format for Kindles, and pdf format for laptops), with an at-cost, print-on-demand alternative for those who like a hard copy. Fortunately, eLangdell (a division of CALI, the Center for Computer-Assisted Legal Instruction) has been an ideal partner in this regard.

In addition to eliminating (or lowering) student cost, this mode of publication will permit me to quickly and fully update the book each December, incorporating expiring provisions, inflation adjustments for the coming calendar year, new Treasury Regulations, etc., in time for use in the spring semester, an approach that avoids cumbersome new editions or annual supplements. This publication method also makes the textbook suitable for use as a free study aid for students whose professors adopt another textbook, as this textbook walks the student through the law with many more fact patterns and examples than do many other textbooks. While this practice adds length, I believe that it also makes the book more helpful to students in confronting what can be daunting material. Finally, having the textbook easily accessible to foreign students enrolled in a course examining the U.S. Federal income taxation of individuals is important to me, and having the textbook available as a free internet download succeeds well in that regard.

A Teacher’s Manual is available for professors who adopt the book (or parts of it) for use in their course.

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June 26, 2015 in Book Club, Legal Education, Scholarship, Tax | Permalink | Comments (4)

Wednesday, June 24, 2015

SSRN Tax Professor Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through June 1, 2015) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

 

 

All-Time

 

Recent

1

Reuven Avi-Yonah (Michigan)

46,303

Reuven Avi-Yonah (Michigan)

6594

2

Paul Caron (Pepperdine)

28,757

Ed Kleinbard (USC)

5583

3

Michael Simkovic (Seton Hall)

27,841

Michael Simkovic (Seton Hall)

4472

4

Louis Kaplow (Harvard)

24,245

D. Dharmapala (Chicago)

3789

5

D. Dharmapala (Chicago)

23,576

Gregg Polsky (N. Carolina)

3236

6

Vic Fleischer (San Diego)

20,920

Paul Caron (Pepperdine)

2687

7

James Hines (Michigan)

20,729

Richard Ainsworth (BU)

2239

8

Ted Seto (Loyola-L.A.)

19.983

Omri Marian (Florida)

1963

9

Richard Kaplan (Illinois)

19,752

Robert Sitkoff (Harvard)

1878

10

Ed Kleinbard (USC)

18,340

Katie Pratt (Loyola-L.A.)

1706

11

Katie Pratt (Loyola-L.A.)

17,484

Jeff Kwall (Loyola-Chicago)

1620

12

Carter Bishop (Suffolk)

15,929

Louis Kaplow (Harvard)

1592

13

Dennis Ventry (UC-Davis)

15.712

David Gamage (UC-Berkeley)

1550

14

Richard Ainsworth (BU)

15,601

Brad Borden (Brooklyn)

1498

15

Jen Kowal (Loyola-L.A.)

15,511

William Byrnes (Texas A&M)

1449

16

Robert Sitkoff (Harvard)

15,278

Jen Kowal (Loyola-L.A.)

1446

17

Chris Sanchirico (Penn)

15,165

Dan Shaviro (NYU)

1381

18

David Weisbach (Chicago)

15,158

Dick Harvey (Villanova)

1370

19

Brad Borden (Brooklyn)

15,020

James Hines (Michigan)

1187

20

Francine Lipman (UNLV)

14,714

Francine Lipman (UNLV)

1159

21

Bridget Crawford (Pace)

14,513

Vic Fleischer (San Diego)

1138

22

David Walker (BU)

14,321

Carter Bishop (Penn)

1130

23

Dan Shaviro (NYU)

13,298

Chris Sanchirico (Penn)

1119

24

Herwig Schlunk (Vanderbilt)

12,774

Richard Kaplan (Illinois)

1074

25

Wendy Gerzog (Baltimore)

12,059

David Weisbach (Chicago)

1074

Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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June 24, 2015 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Tuesday, June 23, 2015

Tax Presentations At The 16th Harvard/Stanford/Yale Junior Faculty Forum

JuniorTax presentations at the 16th Harvard/Stanford/Yale Junior Faculty Forum held last week at Harvard Law School (abstracts below the fold):

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June 23, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Borden: Reforming REIT Taxation (Or Not)

REITBradley T. Borden (Brooklyn), Reforming REIT Taxation (Or Not), 53 Hous. L. Rev. ___ (2015):

Tax law treats the income of real estate investment trusts (REITs) differently from the income of regular corporations. Income distributed by regular corporations is subject to an entity-level tax and a shareholder-level tax, while taxable income distributed by REITs is subject to tax only at the shareholder level. To qualify for that single-level of tax, REITs must hold primarily real estate assets, and their income must be primarily from such assets. After being a relatively insignificant part of the economy for the first three decades of their existence, REITs have become relevant over the last twenty years, with the market capitalization of publicly traded REITs eclipsing 5% of U.S. GDP at the end of 2014. Reports about REITs appear frequently in major media outlets, with an emphasis on corporate-tax-base erosion that results from REIT taxation. Calls for REIT reform have been answered with proposed legislation that would change various aspects of REIT taxation. Recent work in this area shows that even though REITs do erode the corporate tax base, the requirement that they distribute income and the higher tax rates of REIT shareholders offset corporate-tax-base erosion and minimize the tax-revenue effects of REIT taxation.

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June 23, 2015 in Scholarship, Tax | Permalink | Comments (1)

The Winning Papers In The 2014 Tannenwald Tax Writing Competition

TannenwaldThe co-winning papers in the 2014 Tannenwald Tax Writing Competition, have been published by the Florida Tax Review:

Here are the abstracts:

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June 23, 2015 in Scholarship, Tax | Permalink | Comments (0)

Sokol: Teaching Compliance

Compliance 2D. Daniel Sokol (Florida), Teaching Compliance, 84 U. Cin. L. Rev. ___ (2015):

Compliance is a growing field of practice across multiple areas of law. Increasingly companies put compliance risk among the most important corporate governance issues facing them. Moreover, as “JD plus” jobs proliferate, the demand for hiring both at the entry level and for former students currently in practice who are experienced in the compliance field will continue to grow. The growth in compliance jobs comes at a time in shifting demand for legal jobs for law school graduates. Traditional law firm entry level jobs at large law firms, which were the staple of on campus recruiting before 2007, have not returned to pre-2007 levels even with the end of the recession. Technological changes, greater in-house hiring, and better creation of efficiencies have reduced demand for large law firms, which were the traditional training ground for in-depth legal skills and soft skills.

Law schools have responded to the demand shift in entry level hiring with a supply side response - classes in compliance. In some cases, law schools have set up compliance certificates or degrees in areas such as health care and business law. There is now even a casebook devoted to compliance. Yet, with all of these efforts at creating opportunities for careers in compliance, many programs and classes in compliance are nothing other than dressed up versions of classes in white collar crime or regulation or lectures on latest case developments that one might find in a continuing legal education program. These courses do not focus on the substantive areas needs practice with the highest demand for compliance (in-house legal and JD plus jobs) and do not teach the analytical skills necessary to succeed in such jobs. Nor do they focus on the special context within which compliance operates – ideally independent of the “business” but always a part of it. Essentially, law schools have misdiagnosed the demand side - it is not merely the particular type of class (compliance) but also the substance of such classes with the type of quality offering necessary to maximize student short term (entry level hiring) and long term (preparation for ever-shifting analytically complex practice challenges).

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June 23, 2015 in Legal Education, Scholarship | Permalink | Comments (2)

Monday, June 22, 2015

Oxford Hosts Business Tax Conference This Week

Sanchirico: Tax Inertia And Business Tax Reform

Chris William Sanchirico (Pennsylvania), Tax Inertia: A General Framework with Specific Application to Business Tax Reform (appendix):

A surprising degree of bipartisan consensus has lately formed in the United States around two propositions of business tax reform: that something should be done about the “lockout” of US multinationals’ foreign earnings; and that the corporate income tax rate should be reduced. This paper questions whether these two propositions are really consistent. In the process of attempting to provide an answer, it develops a framework for relating and measuring various forms of “tax inertia”: tax-based disincentives to alter investments. Applying this framework, the paper concludes that the current agreement on business tax reform is substantially in disagreement with itself. 

June 22, 2015 in Scholarship, Tax | Permalink | Comments (0)

Sunday, June 21, 2015

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's:

  1. [357 Downloads]  Taxation of E-Commerce, by Orkhan Abdulkarimli (Baku State)
  2. [281 Downloads]  Trust Decanting: A Sale Without Gain Realization, by Jason Kleinman (Herrick, New York)
  3. [180 Downloads]  Reducing Inequality With A Retrospective Tax On Capital, by James Kwak (Connecticut)
  4. [164 Downloads]  Citizenship Taxation, by Ruth Mason (Virginia)
  5. [143 Downloads]  What Does Voluntary Tax Compliance Mean?: A Government Perspective, by J. T. Manhire (U.S. Treasury Department)

June 21, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, June 19, 2015

Atanassov Presents Corporate Income Taxes, Financial Constraints And Innovation Today At Northwestern

SearleJulian Atanassov (Oregon) presents Corporate Income Taxes, Financial Constraints and Innovation (with Xiaoding Liu (Oregon)) at the Eighth Annual Conference on Innovation Economics today at Northwestern's Searle Center on Law, Regulation, and Economic Growth:

We examine exogenous changes in state corporate income taxes over the 1988-2006 period and find that tax decreases significantly boost both the quantity, measured by the number of patents, and the quality, measured by citations per patent, of innovative output, while tax increases have little impact on innovation. Most of the impact of tax changes on innovation occurs two or more years after the tax change, which alleviates concerns of reverse causality. Further tests examine the channels through which tax decreases affect innovation. We document that tax decreases have stronger impact on innovation for more financially constrained firms, for firms with weaker governance and for firms that engage in tax avoidance to a greater extent. The latter result suggests that, after a tax decrease, firms can allocate more resources to innovative activities rather than to tax avoidance. We conduct numerous additional tests to demonstrate that our results are not spurious and subject to endogeneity biases.

June 19, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Weekly SSRN Tax Roundup

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June 19, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

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June 19, 2015 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Crespi: The 'Tax Bomb' Facing Lawyers Who Enroll In Income-Based Student Loan Repayment Plans Is Even Bigger

IBRFollowing on last week's post, The 'Tax Bomb' Facing Lawyers Who Enroll In Income-Based Student Loan Repayment Plans:  Greg Crespi (SMU) reports that he has

substantially revised and greatly improved my IBR “tax bomb” draft paper that I sent to you on June 7, in response to a lot of very helpful feedback from other scholars and practitioners, and I have replaced my prior SSRN posting with this new draft (attached) .  This new draft has a much more accurate assessment of the actually quite limited significance of the DOE’s new REPAYE Plan (more limited than I had previously realized), and now includes significantly larger and probably much more accurate projections of the size of the problem.  I now project that by 2038 approximately 20,000+ lawyers will be impacted each year by this IBR or PAYE debt forgiveness tax liability (see p. 80-81), with an annual aggregate tax bill imposed upon these lawyers of approximately $800 million to $900 million (see p. 82-83).  According to SSRN many of your readers have downloaded my draft, and you may want to give them a heads-up as to this new and improved  draft with its more dramatic predictions as to the 2032 and later tax implications for high-debt law school graduates of the IBR program.

June 19, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Thursday, June 18, 2015

Fennell: Do Not Cite Or Circulate

DNCCLee Anne Fennell (Chicago), Do Not Cite or Circulate, 18 Green Bag 2d 151 (2015):

This short essay ponders why legal scholars attach formulations such as "Do Not Cite or Circulate" to draft works. It argues against the practice in most circumstances, particularly for work posted on the internet.

June 18, 2015 in Legal Education, Scholarship | Permalink | Comments (1)

Wednesday, June 17, 2015

IRS-TPC Research Conference Today On Improving Tax Administration Through Research-Driven Efficiencies

TPC-IRSThe IRS and Tax Policy Center are hosting a research conference today on Improving Tax Administration Through Research-Driven Efficiencies with these presentations and papers:

Session 1Innovative Methods for Improving Resource Allocation

Estimating Marginal Revenue/Cost Curves for Correspondence Audits
Ron Hodge, Alan Plumley, Kyle Richison, and Getaneh Yismaw (IRS, RAS), and Nicole Khoury, Matt Olson, and H. Sanith Wijesinghe (MITRE Corporation)

Examining the TDA Collectability Curve: How Does the Aging of TDA Delinquencies Impact Dollars Collected?
Joe Saldana, Jeff Wilson, and Tom Beers (IRS, Taxpayer Advocate Service)

Analysis of Flow-Through Entities Using Social Network Analysis Techniques
Rahul Tikekar, Ririko Horvath, and Larry May (IRS, RAS), Ashish Agarwal and Shannon Chen (University of Texas at Austin)


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June 17, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Tuesday, June 16, 2015

Walker: Inside Agency Statutory Interpretation

Christopher J. Walker (Ohio State), Inside Agency Statutory Interpretation, 67 Stan. L. Rev. 999 (2015):

The Constitution vests all legislative powers in Congress, yet Congress grants expansive lawmaking authority to federal agencies. As positive political theorists have long explored, Congress intends for federal agencies to faithfully exercise their delegated authority, but ensuring fidelity to congressional wishes is difficult due to asymmetries in information, expertise, and preferences that complicate congressional control and oversight. Indeed, this principal-agent problem has a democratic and constitutional dimension, as the legitimacy of administrative governance may well depend on whether the unelected bureaucracy is a faithful agent of Congress. Despite the predominance of lawmaking by regulation and the decades-long application of principal-agent theory to the regulatory state, we know very little about how federal agencies interpret statutes.

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June 16, 2015 in Scholarship, Tax | Permalink | Comments (0)

Monday, June 15, 2015

Call For Review Essays: ABA Tax Section NewsQuarterly

ABA News QuarterlyFrom Linda Beale (Wayne State):

The ABA Tax Section’s NewsQuarterly is transitioning to an all-digital format. One new feature to be introduced in connection with the move to digital is reviews of books and articles on topics of interest to tax practitioners. Reviews serve the purpose of informing readers of recent publications pertaining to tax policy and emerging issues, as well as broader concerns about the interrelationship between tax policies and economic growth. Reviews may be of single books or articles or they may be review essays that discuss and compare two or more books and articles addressing the same topic, similar to such review essays in the New York Review of Books. Reviews will be considered for publication in each quarterly issue, with the first review appearing in the Winter 2016 issue.

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June 15, 2015 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Zelinsky: Preliminary Thoughts About The Enigma Of Wynne

ZelinskyTaxProf Blog op-ed:  Preliminary Thoughts About The Enigma of Wynne, by Edward Zelinsky (Cardozo):

Maryland’s county income tax does not grant a credit to Maryland residents for the out-of-state income taxes such residents pay on the income they earn outside of Maryland. In Comptroller of the Treasury of Maryland v. Wynne, the U.S. Supreme Court held that this failure causes the Maryland county income tax to violate the dormant Commerce Clause of the U.S. Constitution.

Wynne perpetuates an inherent problem of the Court’s dormant Commerce Clause doctrine: The Court declares some, ill-defined taxes such as the Maryland county income tax unconstitutionally discriminatory while other, economically equivalent taxes and government programs are apparently acceptable under the dormant Commerce Clause. A decision as enigmatic as it is important, Wynne raises as many questions as it answers. Among these are the continuing viability (or not) of external consistency and apportionment, concepts which have been central to the Court’s formulation of the dormant Commerce Clause. Wynne also undermines the Supreme Court’s traditional tolerance of the double state income taxation of dual residents.

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June 15, 2015 in New Cases, Scholarship, Tax | Permalink | Comments (5)

Sunday, June 14, 2015

The Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #2:

  1. [335 Downloads]  Taxation of E-Commerce, by Orkhan Abdulkarimli (Baku State)
  2. [175 Downloads]  Trust Decanting: A Sale Without Gain Realization, by Jason Kleinman (Herrick, New York)
  3. [171 Downloads]  Reducing Inequality With A Retrospective Tax On Capital, by James Kwak (Connecticut)
  4. [152 Downloads]  Citizenship Taxation, by Ruth Mason (Virginia)
  5. [135 Downloads]  What Does Voluntary Tax Compliance Mean?: A Government Perspective, by J. T. Manhire (U.S. Treasury Department)

June 14, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, June 12, 2015

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

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June 12, 2015 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Call for Papers: University of North Carolina Tax Symposium

North Carolina Tax SymposiumThe University of North Carolina Kenan-Flagler School of Business has issued a call for papers for its Nineteenth Annual Tax Symposium to be held March 18-19, 2016. The symposium "is designed to bring together leading tax scholars from economics, accounting, finance, law, political science, and related fields." The deadline for the call for papers is December 15, 2015:

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June 12, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Thursday, June 11, 2015

Stiglitz: New Theoretical Perspectives On The Distribution Of Income And Wealth

Joseph E. Stiglitz (Columbia), New Theoretical Perspectives on the Distribution of Income and Wealth Among Individuals:

June 11, 2015 in Scholarship, Tax | Permalink | Comments (1)

Mintz & Venkatachalam:The Low-Tax Backlash

Jack Mintz (Calgary) & Ven Venkatachalam (Calgary), The Problem with the Low-Tax Backlash: Rethinking Corporate Tax Policies to Adjust for Uneven Reputational Risks:

When a major corporation is found to be paying little or no taxes, public backlash and media furor over the issue may ensue. Some governments may well be just fine with it, while others like U.S. may take steps to ensure companies pay more tax. Sometimes, companies being in a non-taxpaying position properly reflects appropriate tax policy. That explanation, however, does not sell lattés, which is why in 2012, after the British public grew outraged over the discovery that Starbucks was paying no corporate taxes in the U.K., the coffee retailer actually volunteered to just write a cheque to the government. The reputational damage to Starbucks’ brand, the company calculated, was not worth the money it was saving in avoiding taxes, even if it was doing so perfectly legally.The fear of this kind of reputational damage can foil the very taxation policies that governments design specifically as a means to tax corporations fairly, efficiently and competitively. It may be good tax policy to allow corporations various deductions, or the ability to carry forward or carry back losses, but it can be politically vexatious. U.S. President Barack Obama demonstrated that explicitly when he suggested certain American companies using so-called tax inversions to relocate their headquarters to low-tax jurisdictions, were failing in their “economic patriotism.”Yet more multinationals than ever are legally and quite appropriately using tax strategies to minimize their taxes in various jurisdictions to the point where they are paying little to no corporate tax. For some corporations, the risk of public backlash is greater than it is for others: Starbucks and Facebook, being consumer-facing companies with a great deal of brand goodwill, have a lot more at risk than do Pfizer and Oracle. This risk makes the playing field for taxation less level, jeopardizing the fundamental tax principle of horizontal equity — that those of similar means should pay similar taxes. If Starbucks feels pressured to pay extra taxes, then the tax system is not functioning optimally.This emerging reputational risk is a new dimension governments are going to have to take into account when designing tax policy. Understanding that there is more to consider than the financial implications of a tax policy should and will have an effect on the way policies are designed. One important approach that governments should take is to avoid the practice of targeted tax incentives, such as tax holidays or accelerated depreciation. The reputational risk will see some companies willing to take the government up on tax breaks, but others may prefer to pass. Better to focus on more general corporate tax reductions, which will be less distortive and unfair to those companies at greater risk of reputational damage.

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June 11, 2015 in Scholarship, Tax | Permalink | Comments (0)

Why Is Obamacare Constitutional While DOMA Was Not?

John R. Dorocak (California State University, San Bernardino), Why is Obamacare Constitutional While DOMA Was Not? How Libertarian Is the Constitution?, 14 Conn. Pub. Int. L.J. 1 (2014):

Despite the Supreme Court's holding in NFIB, that the individual mandate of Obamacare was constitutional as a tax, Obamacare's tax may be unconstitutional under the Direct Tax Clause, the Uniformity Clause, and the Origination Clause of the U.S. Constitution. The conclusion, that Obamacare's tax and individual mandate are unconstitutional even as a tax, may seem far afield from the unconstitutionality of Obamacare as violating liberty rights, the focus of this article. However, the Obamacare legislation may now appear unconstitutional under various constitutional analyses, including as a denial of liberty rights, as a tax, as an exercise of the Commerce Clause, and as an exercise beyond the enumerated powers. Such a conclusion indicates that the various constitutional analyses are in harmony, or that the Constitution is holistic. And, more specifically, a conclusion, that the Obamacare legislation is unconstitutional under a liberty rights analysis as advanced by Justice Kennedy in Windsor and Lawrence, which suggests that the the Constitution is not only holistic but libertarian.

June 11, 2015 in Scholarship, Tax | Permalink | Comments (1)

Wednesday, June 10, 2015

The State Tax Implications Of Paying Student Athletes

NCAAKathryn Kisska-Schulze (North Carolina A&T) & Adam Epstein (Central Michigan), "Show Me the Money!"—Analyzing the Potential State Tax Implications of Paying Student-athletes, 14 Va. Sports & Ent. L.J. 13 (2014):

On March 26, 2014, the Chicago district (Region 13) of the National Labor Relations Board (NLRB) ruled that Northwestern University football players qualify as employees and can unionize and bargain collectively, a decision which contravenes the National Collegiate Athletic Association’s (NCAA) core principle of amateurism. Shortly after, Northwestern University filed an appeal with the NLRB in Washington, D.C. to quash the prior Region 13 decision. This case has added fuel to the longstanding debate over whether student-athletes should be paid. Amidst arguments both for and against supporting the pay-for-play model from a purely compensatory stance, there has been minimal focus on the realistic implications of paying student-athletes from an income tax perspective.

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June 10, 2015 in Scholarship, Tax | Permalink | Comments (0)

Smith: Challenges To Tax Regulations — The APA And The Anti-Injunction Act

Patrick J. Smith (Ivins, Phillips & Barker, Washington, D.C.), Challenges to Tax Regulations: The APA and the Anti-Injunction Act, 147 Tax Notes 915 (May 25, 2015):

In this report, Smith focuses on post-Mayo tax regulation challenges under the direct review provisions of the Administrative Procedure Act (APA). He examines how those cases overcame the procedural hurdle traditionally presented by the Anti-Injunction Act and argues that in light of the Supreme Court’s recent decision in Direct Marketing Association, the Anti-Injunction Act will likely pose much less of an obstacle to future direct APA challenges to tax regulations. 

June 10, 2015 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, June 9, 2015

Borden: Rethinking The Tax-Revenue Effect Of REIT Taxation

Florida Tax ReviewBradley Borden (Brooklyn), Rethinking the Tax-Revenue Effect of REIT Taxation, 17 Fla. Tax Rev. 527 (2015):

Real estate investment trusts (REITs) have recently made headlines in major media outlets and have caught the attention of lawmakers and analysts because they erode the corporate tax base. REITs are not subject to the entity-level tax that typically applies to corporations. To avoid being taxed on real-estate income, some corporations spin off real estate into REITs. After a REIT spinoff, such corporations rent the real estate from the REIT and continue to use it in their operations. Thus, a mere change in corporate form removes taxable income from the corporation (i.e., erodes the corporate tax base) and eliminates the entity-level tax on income from the spun-off real estate. This erosion of the corporate tax base concerns lawmakers (who have proposed prohibiting tax-free REIT spinoffs), some economists, and the media. Another concern is that the IRS has extended REIT classification to entities that hold non-traditional real estate, such as telecommunications infrastructure, billboards, oil and gas pipeline systems, timber, casinos, prisons, and data centers.

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June 9, 2015 in Scholarship, Tax | Permalink | Comments (0)

Roig: The Case For Retaining Law Faculty Tenure

Jorge R. Roig (Charleston), The First Thing We Do, 47 J. Marshall L. Rev. 1275 (2014):

There is currently a concerted effort to dumb down America. In the midst of this, the American Bar Association’s Council of the Section on Legal Education and Admissions to the Bar recently agreed to propose that tenure for law professors be eliminated as a requirement for accreditation of law schools. This article analyzes the arguments for and against tenure in legal academia, and concludes that the main proposed justifications for eliminating tenure are highly questionable, at best. A lawyer is more than a legal technocrat. Lawyers are policy makers and public defenders. They are prosecutors and activists. And the development of a critical and independent mind is no more important in any area of human action than in the law. There is a concerted effort to turn law schools into automaton production lines. Practice-ready, skills-oriented legal education (quite meritorious in itself) has become code for the manufacture of attorneys capable only of following their corporate clients’ instructions to the tee. The goal of this concerted effort is not a truly practice-ready and skilled attorney. The endgame is a mindless legal machine. That is not what a legal education is about. The survival of critical thought is at stake. This is not just about law professors. This is but one salvo in a much larger war against independent minds.

June 9, 2015 in Legal Education, Scholarship | Permalink | Comments (2)

Hellwig: The United States Tax Court – An Historical Analysis

HellwigPress Release, W&L Law’s Brant Hellwig Publishes Book on U.S. Tax Court:

Washington and Lee law professor and incoming dean Brant Hellwig recently completed a manuscript detailing the historical evolution and jurisdiction of the United States Tax Court.

The text, titled The United States Tax Court – An Historical Analysis, is an expanded second edition of the seminal Tax Court history published by Professor Harold Dubroff in the late 1970s. Dubroff’s edition was written shortly after Congress established the Tax Court as a court of record under Article I of the Constitution.  The Tax Court commissioned Hellwig to update Dubroff’s work in light of the considerable expansion in the Tax Court’s statutory jurisdiction in recent years.

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June 9, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Federal Taxation Of Non-resident Aliens' Wagering Gains From Slot Machines

Denis M. McDevitt, Michael D. McDevitt (Hancock & Dana, Omaha), & Drew M. BouchardMr. Park Goes to D.C.: Federal Taxation of Non-resident Aliens' Wagering Gains from Slot Machines and the Per Session Rule, 48 Creighton L. Rev. 65 (2014):

Nonresident alien individuals who visit the United States and play slot machines in a state where slots are legal have always been subject to tax at a thirty percent rate, unless exempted by treaty, on *66 their U.S. source wagering gains as defined by I.R.C. § 871(a)(1)(A). This tax is enforced by a withholding system that requires casinos to withhold thirty percent of each slot jackpot of $1,200 or more and remit those funds to the United States government. The definition of wagering gains was first addressed in Barba v. United States. The Barba case instituted the per-bet rule that defined wagering gains to be equal to gross winnings taxable under I.R.C. § 871(a). Under the per-bet rule, all wagers and wagering losses were never considered in calculating the amount of tax due. The per-bet rule ignored the fact that gambling is by nature a series of individual bets and had the practical result that no foreign slot player could ever recover any of the taxes withheld by the casino on their jackpots. Between 1983 and 2011, no taxpayer ever questioned the per-bet rule and it was not until the case of Sang Park v. Commissioner, a case recently decided by the United States Court of Appeals for the District of Columbia Circuit, that a court revisited the issue of defining wagering gains for purposes of I.R.C. § 871(a).

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June 9, 2015 in Scholarship, Tax | Permalink | Comments (0)

Monday, June 8, 2015

Morse: Safe Harbors, Sure Shipwrecks

Safe HarborSusan C. Morse (Texas), Safe Harbors, Sure Shipwrecks, 49 UC Davis L. Rev. ___ (2016):

In law, a safe harbor describes behavior that will not be penalized, and leaves other facts that fall outside the safe harbor to be judged case-by-case. A sure shipwreck, as I call it, is the mirror image. It describes behavior that violates the law as a matter of rule, and leaves other conduct to be judged by a standard. Prior literature analyzes rules and standards at length. But it has largely missed safe harbors and sure shipwrecks, even though these hybrids are everywhere in statutory, regulatory and case law.

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June 8, 2015 in Scholarship, Tax | Permalink | Comments (0)