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Wednesday, July 23, 2014

Tahk: Crossing the Tax Code's For-Profit/Nonprofit Border

Susannah Camic Tahk (Wisconsin), Crossing the Tax Code's For-Profit/Nonprofit Border, 118 Penn St. L. Rev. 489 (2014):

The federal tax code erects and enforces a firm border between for-profit and nonprofit organizations. Multiple provisions of the code monitor the boundaries of the tax-exempt, or nonprofit, sector to ensure that no nonprofit organization slips over the border to become a for-profit organization. Other code provisions restrict entry into the tax-exempt sector by for-profit organizations. Despite serious legal impediments, however, organizations on both sides of the boundary have increasingly found means by which they can cross the border. Arrangements such as corporate social responsibility, for-profit philanthropy, and social enterprise illustrate this recent trend. Through these arrangements, for-profit organizations are beginning to embrace social goals, while nonprofit organizations have started to use methods more traditionally associated with efficient business organizations. Research in organizational sociology provides tools by which to understand these new cross-border developments. This body of research has shown that organizational sectors, or fields, evolve according to well-understood patterns, whose significance tax scholars have overlooked. Then, federal tax law has failed to recognize and to make productive use of these organizational trends. This Article proposes that tax law should acknowledge the cross-sector movements of for-profit and nonprofit organizations, as well as the major advantages that these movements can produce. Tax law could then harness border-crossing activity to create social benefits. To achieve this result, federal tax law needs significantly to loosen the for-profit/nonprofit boundary. This change would enable the tax code to encourage cross-sector “collaborations” between for-profit and nonprofit organizations. This change to the tax law is one that Congress and the IRS could now accomplish through several basic measures. These measures would make it possible for federal tax law to realize the large potential for social good that lies at the changing for-profit/nonprofit border.

July 23, 2014 in Scholarship, Tax | Permalink | Comments (0)

Camp: Preliminary Thoughts on Habig and King

TaxProf Blog op-ed:  Preliminary Thoughts on Habig and King, by Bryan Camp (Texas Tech):

CampYesterday two different U.S. Courts of Appeal disagreed on the validity of a tax regulation.  It is not a rare event for two federal courts of appeals to disagree on the same issue of law.  What made yesterday’s rulings a rare event was that the disagreement arose within a matter of hours and involved a key provision of the Affordable Care Act (ACA).  At issue was the validity of a Treasury regulation on how certain ACA tax credits are to be calculated.  At trial, both the district court for the District of Columbia and the district court for the Eastern District of Virginia had upheld the regulation.  On appeal, the D.C. Circuit struck down the regulation in Halbig v. Burwell but, hours later, the 4th Circuit upheld the same regulation in King v. Burwell.

The two panels of three judges produced five written opinions.  The D.C. Circuit panel found the Treasury regulation an invalid interpretation of the statute by a 2-1 vote.  Each judge wrote an opinion.  The majority opinion was penned by Judge Griffith, with Senior Judge Randolph joining and writing a short concurrence to emphasize his view that the government’s arguments really sucked wind.  Senior Judge Edwards wrote an impassioned dissent.  The 4th Cir. vote was 3-0, with two opinions.  Judge Gregory, joined by Judge Thacker and Senior Judge Davis, penned the opinion for the Court.  Senior Judge Davis added a short concurrence to emphasize his view that the plaintiff’s arguments really sucked wind. 

This post will summarize the arguments and the opinions, then make three brief observations about (1) a non-barking dog, (2) plain language pizza, and (3) what these cases might teach  about who---as between courts, Congress, or agencies---ought to be cleaning up statutory messes created by poor drafting. 

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July 23, 2014 in Scholarship, Tax | Permalink | Comments (3)

Tuesday, July 22, 2014

Crawford: Occupy Wall Street, Income Inequality and Tax Scholarship

Patrick B. Crawford (People's College of Law), Occupy Wall Street, Income Inequality and Tax Scholarship: An Ideology Critique of the Consumption Tax Debate, 12 U.N.H. L. Rev. 137 (2014):

This is the first article to address the question: “What does Occupy Wall Street (“OWS”) have to say about American legal scholarship on income inequality (distributive justice) and tax policy?” The article shows, in the example of the leading tax scholarship on distributive justice and the consumption tax, how legal scholarship on economic regulation more generally systematically obscures rather that illuminates the important most important social welfare issue of our time. That is, the form and framing of analysis in the consumption tax literature preempts from serious analysis OWS major beef with our economic regulations: the fact that over the past 30-odd years big-business and big capital has dramatically increased its rent seeking and capture of the regulatory system.

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July 22, 2014 in Scholarship, Tax | Permalink | Comments (0)

Monday, July 21, 2014

Marian: The Function of Corporate Tax-Residence in Territorial Systems

Omri Y. Marian (Florida), The Function of Corporate Tax-Residence in Territorial Systems, 18 Chapman L. Rev. ___ (2014):

In this symposium Essay, I explore the instrumentality of corporate tax-residence determination in territorial tax systems. Using the United States as a case study, I show that tax-residence determination had a historic “positive functionality”. Namely, tax-residence positively pointed to the source of income earned, and distributed by, a corporation. However, in current economic environment the positive functionality is obsolete. Instead, the modern functionality of corporate tax residence is a “negative” one. That is, to assure that income is not sourced at a jurisdiction in which income could not have possibly been produced. Under such a view, corporate tax-residence should be constructed as an anti-income-shifting mechanism. One way to achieve such result is to base corporate tax-residence determination on formulary apportionment that takes into account the corporation's real economic attributes, as well as the proportional part of corporation’s contribution to the control-group earnings. The functionality of formulary apportionment in this a context is not to allocate tax jurisdiction (the traditional use of formulary apportionment), but rather to assure that a corporation is not resident where is has no economic existence. Current territorial reform proposals in the United States ignore the important function of tax-residence in supporting source-taxation. I therefore conclude with a call to incorporate a reform of corporate-tax residence determination in any territorial reform legislation.

July 21, 2014 in Scholarship, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, July 20, 2014

Top 5 Tax Paper Downloads

Saturday, July 19, 2014

Blair-Stanek: Intellectual Property Law Solutions to Transfer Pricing Abuse

Tax Analysys Logo (2013)Andrew Blair-Stanek (Maryland), IP Law Solutions to Transfer Pricing Abuse, 143 Tax Notes 175 (June 30, 2014):

The article discusses a new way to attack transfer-pricing abuse: change intellectual property (IP) law.

July 19, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Friday, July 18, 2014

Weekly SSRN Tax Roundup

July 18, 2014 in Scholarship, Tax | Permalink | Comments (0)

Weekly Student Tax Note Roundup

July 18, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Johnson: Reflections on Ridgely v. Lew

Johnson (Steve)TaxProf Blog op-ed:  Reflections on Ridgely v. Lew, by Steve R. Johnson (Florida State):

On July 16, the D.C. district court decided Ridgely v. Lew, Civ. No. 1:12-cv-00565 (CRC). It invalidated part of 31 C.F.R. sec. 10.27, restricting the ability of practitioners to charge contingent fees for services in connection with original returns, amended returns, and refund claims. The purported statutory authority for section 10.27 is 31 U.S.C. sec. 330(a), allowing Treasury to “regulate the practice of representatives of persons before the Department of the Treasury.”

In Loving v. IRS, 742 F.3d 1013 (D.C. Cir. 2014), a panel of the circuit invalidated regulations set out in 31 C.F.R. secs. 10.3 to 10.6 regulating return preparers. Affirming the Loving district court, the panel held that preparers are not “representatives” engaged in “practice” before the IRS, thus that Treasury lacked statutory authority to promulgate the regulations. The government chose not to seek Supreme Court review.

Loving, of course, has been quite controversial and has occasioned much commentary. My view, developed in Loving and Legitimacy: IRS Regulation of Tax Return Preparation forthcoming in the next issue of the Villanova Law Review, is that Loving was correctly decided. The “practice” rationale is not strong, but the “representative” rationale is sound, in my estimation. Cf. All Party Parliamentary Group on Extraordinary Rendition v. United States Dep’t of Defense, 2104 WL 2721381 (D.C. Cir. June 17, 2014) (FOIA case in which the court followed and applied Loving’s definition of “representative”).

The Ridgely plaintiff is a CPA. He brought suit under the Administrative Procedure Act and the Declaratory Judgment Act, arguing that the sec. 10.27 restrictions exceed Treasury’s statutory authority insofar as they apply to the preparation and filing of “Ordinary Refund Claims.” The Ridgely court followed Loving, finding that CPAs who advise as to and prepare Ordinary Refund Claims are not representatives practicing before the IRS. The result is not a big surprise. The government’s half-hearted attempts to distinguish Ridgely from Loving were easily brushed aside, and the district court obviously wasn’t going to disagree with its circuit court. If one believes Loving was correctly decided, then Ridgely too was correctly decided.

As to Ridgely’s aftermath, four thoughts.

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July 18, 2014 in Scholarship, Tax | Permalink | Comments (2)

Thursday, July 17, 2014

District Court Joins Loving, Holds IRS Lacks Statutory Authority to Regulate Tax Return Preparers

RTRPThe U.S. District Court for the District of Columbia yesterday followed Loving v IRS, 742 F.3d 1014 (D.C. Cir. 2014), and held that the IRS lacks statutory authority to regulate tax return perparers.  Ridgely v. Lew, 1:12-cv-00565 (D.D.C. July 16, 2014).

Prior TaxProf Blog coverage:

July 17, 2014 in IRS News, Scholarship, Tax | Permalink | Comments (0)

Gamage: Analyzing the Optimal Choice of Tax Instruments

David Gamage (UC-Berkeley), Analyzing the Optimal Choice of Tax Instruments: The Case for Levying (all of) Labor-Income Taxes, Value-Added Taxes, Capital-Income Taxes, and Wealth Taxes, 68 Tax L. Rev. ___ (2014):

Economic analyses of taxation have largely focused on the problems of labor-to-leisure and saving-to-spending distortions. Based on these analyses, the prior literature has generally treated labor-income and consumption taxes as being essentially equivalent, and has also treated capital-income and wealth taxes as being essentially equivalent. Further, based on these analyses, the dominant view in the prior literature has been that neither capital income nor wealth should be taxed.

This Article expands on these prior analyses by incorporating a variety of tax-gaming responses and also administrative and compliance costs. By doing so, this Article argues that it is probably optimal for governments to levy some version of (all of) labor-income taxes, value-added taxes, capital-income taxes, and wealth taxes.

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July 17, 2014 in Scholarship, Tax | Permalink | Comments (0)

Madison: The Futility of Tax Protester Arguments

Allen D. Madison (South Dakota), The Futility of Tax Protester Arguments,  36 T. Jefferson L. Rev. 253 (2014):

Tax protesters offer uncommonly silly arguments in support of their positions -- so silly, in fact, that courts commonly refuse to address them, lest those arguments be given any credence. Yet the wave of tax protestor arguments has not ebbed, and tax protestors continue to challenge, for example, the legal obligation to pay taxes, the constitutionality of the income tax, and the authority of the IRS to enforce the tax laws.

Maybe some education will help solve this problem. This Article provides a framework for analyzing tax protestor arguments through a civics discussion and explains why tax protestor arguments fail under our system of government.

July 17, 2014 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, July 16, 2014

Bankruptcy’s Corporate Tax Loophole

Diane Lourdes Dick (Seattle), Bankruptcy’s Corporate Tax Loophole, 82 Fordham L. Rev. 2273 (2014):

Imagine you are a company with a failing business that is drowning in debt. On the bright side, you also possess a very valuable asset. This asset is unique because, unlike most assets, if you liquidate the business through a Chapter 7 bankruptcy, it will be extinguished and its value will not be realized by any shareholders or creditors. On the other hand, even if you substantially liquidate the business using Chapter 11, you can, thanks to an extraordinary ambiguity in the law, preserve this valuable asset. Even better, you can direct the value of this asset to your preferred stakeholders—whether they are shareholders or creditors—rather than have the asset’s value allocated among stakeholders according to bankruptcy’s absolute priority rule. You can do this because you have the most information about this valuable asset and because bankruptcy law and courts effectively ignore its existence, leaving you to allocate its value as you see fit. What is this unique asset? Valuable tax attributes, including net operating losses and credit carryovers. This scenario is not purely hypothetical; Solyndra and Washington Mutual, among others, have effectively used Chapter 11 to divert the value of tax losses and credits to a select group of shareholders and creditors in contravention of bankruptcy‘s distributional norms. This Article recommends statutory revisions to the tax and bankruptcy laws to remove the unintended tax advantage and thus neutralize the tax consequences of corporate restructuring decisions.

July 16, 2014 in Scholarship, Tax | Permalink | Comments (1)

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 July 1, 2014) 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 (Mich.)

39,386

Reuven Avi-Yonah (Mich.)

6823

2

Paul Caron (Pepperdine)

26,267

Paul Caron (Pepperdine)

2702

3

Louis Kaplow (Harvard)

22,744

Richard Ainsworth (BU)

2686

4

D. Dharmapala (Illinois)

19,997

D.Dharmapala (Illinois) 

2585

5

Vic Fleischer (San Diego)

19,867

Richard Kaplan (Illinois)

1930

6

James Hines (Michigan)

19,626

Bridget Crawford (Pace)

1900

7

Ted Seto (Loyola-L.A.)

19,004

Katie Pratt (Loyola-L.A.)

1893

8

Richard Kaplan (Illinois)

18,863

Ed Kleinbard (USC)

1825

9

Katie Pratt (Loyola-L.A.)

15,918

Omri Marian (Florida)

1787

10

Dennis Ventry (UC-Davis)

15,341

Louis Kaplow (Harvard)

1751

11

Carter Bishop (Suffolk)

14,896

Robert Sitkoff (Harvard)

1713

12

Jen Kowal (Loyola-L.A.)

14,185

Brad Borden (Brooklyn)

1705

13

David Weisbach (Chicago)

14,162

Jen Kowal (Loyola-L.A.)

1628

14

Chris Sanchirico (Penn)

14,136

James Hines (Michigan)

1466

15

David Walker (BU)

13,885

Dick Harvey (Villanova)

1442

16

Francinet Lipman (UNLV)

13,741

Jeff Kwall (Loyola-Chicago)

1442

17

Richard Ainsworth (BU)

13,692

Francine Lipman (UNLV)

1367

18

Bridget Crawford (Pace)

13,686

Ted Seto (Loyola-L.A.)

1362

19

Brad Borden (Brooklyn)

13,623

Dan Shaviro (NYU)

1350

20

Robert Sitkoff (Harvard)

13,535

Carter Bishop (Suffolk)

1268

21

Ed Kleinbard (USC)

12,846

David Gamage (UCBerkeley)

1237

22

Herwig Schlunk (Vanderbilt)

12,442

Vic Fleischer (San Diego)

1190

23

Dan Shaviro (NYU)

11,947

Brian Galle (BC)

1189

24

Ed McCaffery (USC)

11,692

Dan Simmons (UC-Davis)

1184

25

Wendy Gerzog (Baltimore)

11,682

Chris Sanchirico (Penn)

1169

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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July 16, 2014 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Tuesday, July 15, 2014

Ault, Schoen & Shay: Base Erosion and Profit Shifting: A Roadmap for Reform

Hugh J. Ault (Boston College), Wolfgang Schoen (Max Planck) & Stephen E. Shay (Harvard), Base Erosion and Profit Shifting: A Roadmap for Reform, 68 Bull. Int'l Tax'n 275 (2014):

In this Editorial, the authors explain the context of this special issue of the Bulletin for International Taxation. The fundamental premise of the BEPS project is that a coordination of national responses to BEPS can both eliminate double non-taxation and protect against material unrelieved double taxation. The articles in this issue further a dialogue among tax policymakers, taxpayers, advisors and academics that is critical to achieve this objective.

July 15, 2014 in Scholarship, Tax | Permalink | Comments (0)

Monday, July 14, 2014

Grewal: Mixing Management Fee Waivers with Mayo

Florida Tax ReviewAndy Grewal (Iowa), Mixing Management Fee Waivers with Mayo, 16 Fla. Tax Rev. 1 (2014):

This Article examines whether the management fee waiver strategy used by private equity firms to convert ordinary income into long-term capital gains actually works. Scholars have almost uniformly condemned the strategy, calling it "extremely aggressive," "profoundly piggish," or illegal. However, this Article shows that the critics substantially overstate their case (the provision of law most frequently cited by the critics doesn't even exist), especially in light of the changes in the tax-administrative law landscape wrought by Mayo v. United States.

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July 14, 2014 in Scholarship, Tax | Permalink | Comments (0)

Fall 2014 Law Review Article Submission Guide

Nancy Levit (UMKC) & Allen Rostron (UMKC) have updated their incredibly useful document, which contains two charts for the Fall 2014 submission season covering 203 law reviews.

The first chart (pp. 1-51) contains information gathered from the journals’ websites on:

  • Methods for submitting an article (such as by e-mail, ExpressO, regular mail, Scholastica, or Twitter)
  • Any special formatting requirements
  • How to request an expedited review
  • How to withdraw an article after it has been accepted for publication elsewhere

The second chart (pp. 52-58) contains the ranking of the law reviews and their schools under six measures:

  • U.S. News: Overall Rank
  • U.S. News: Peer Reputation Rating
  • U.S. News: Judge/Lawyer Reputation Rating
  • Washington & Lee Citation Ranking
  • Washington & Lee Impact Factor
  • Washington & Lee Combined Rating

They also have posted a list of links to the submissions information on each law journal’s website. Nancy notes:

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July 14, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

Hariton: Should Share Repurchases Be Dividends to Remaining Holders?

Tax Analysys Logo (2013)David P. Hariton (Sullivan & Cromwell, New York), Should Share Repurchases Be Dividends to Remaining Holders?, 144 Tax Notes 175 (July 14, 2014):

Under current law, holders of common stock pay less tax than holders of debt, and arguably less tax than might be deemed desirable from a utilitarian perspective. The most frequently proposed solution is to require investors to mark publicly traded stocks to market and pay current tax on their associated gains. But there is a more modest alternative that might present fewer problems and better target the simple objective of ensuring that most shareholders pay at least some amount of tax.

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July 14, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (3)

Sunday, July 13, 2014

Top 5 Tax Paper Downloads

Friday, July 11, 2014

Weekly SSRN Tax Roundup

Ventry: State Tax Whistleblower Statutes Complement Traditional Tax Enforcement

Tax Analysys Logo (2013)Jennifer Carr (Tax Analysts), Qui Tam Troubles, Part III: A Potential Solution, 72 State Tax Notes 730 (June 30, 2014) :

In an extended interview with State Tax Notes, Professor Dennis Ventry [UC-Davis] endorses tax whistleblower statutes on the state level as a complement to traditional tax enforcement. [See Whistleblowers and Qui Tam for Tax, 61 Tax Law. 357 (2008)] In particular, he argues that knowledgeable informant insiders can provide unique information to assist state tax agencies in combatting two persistent problems in tax administration, namely the information gap and the tax gap. In addition, Ventry offers simple solutions to potential concerns that whistleblower statutes might result in nuisance suits, undue disclosure of taxpayer information, and a duplicative tax enforcement regime.

July 11, 2014 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, July 9, 2014

Jensen: The Constitutionality of a Mark-to-Market Taxing System

Tax Analysys Logo (2013)Erik M. Jensen (Case Western), The Constitutionality of a Mark-to-Market Taxing System, 143 Tax Notes 1299 (June 16, 2014):

This article comments on Is a Broadly Based Mark-to-Market Tax Unconstitutional, 143 Tax Notes 952 (May 26, 2014), by Gene Magidenko. Magidenko gets all the big points right in questioning the constitutionality of a mark-to-market system of taxation, but this article suggests he did not emphasize one point enough: the Supreme Court’s 1920 decision in Eisner v. Macomber, which concluded that realization is a requirement for a tax to be on income within the meaning of the Sixteenth Amendment, continues to reflect the Court’s understanding. Although the Court cut back on Macomber’s scope over the years, it has not repudiated the case. And in National Federation of Independent Business v. Sebelius, decided in 2012, Chief Justice Roberts, in an opinion joined in relevant part by four other justices, cited Macomber favorably on an issue of constitutional law.

July 9, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Monday, July 7, 2014

Sullivan: The Pros and Cons of Federal-State Corporate Tax Harmonization

Tax Analysys Logo (2013)Martin A. Sullivan (Tax Analysts), The Pros and Cons of Federal-State Corporate Tax Harmonization, 73 State Tax Notes 11 (July 7, 2014):

Martin A. Sullivan examines the benefits and drawbacks of harmonizing federal and state corporate tax regimes.

STN

July 7, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Sunday, July 6, 2014

Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads on SSRN, with a new #1 paper and new papers debuting on the list at #3 and #5:

  1. [206 Downloads]  Sales Suppression as a Service (SSaaS) & the Apple Store Solution, by Richard Ainsworth (Boston University)
  2. [201 Downloads]  A State Tax Approach to Regulating Greenhouse Gases Under the Clean Air Act, by Samuel Eisenberg (Stanford), Michael Wara (Stanford), Adele Morris (Brookings Institution), Marta Darby (Stanford) & Joel Minor (Stanford)
  3. [146 Downloads]  Desperate Retirees: The Perplexing Challenge of Covering Retirement Health Care Costs in a YOYO World, by Richard L. Kaplan (Illinois)
  4. [140 Downloads]  The Relationship between China's Tax Treaties and Indirect Transfer Antiavoidance Rules, by Qiguang Hardy Zhou (Baker & McKenzie, Shanghai City, China)
  5. [118 Downloads]  Reducing Inequality on the Cheap: When Legal Rule Design Should Incorporate Equity as Well as Efficiency, by Zachary Liscow (J.D. 2015, Yale)

July 6, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 5, 2014

Crawford: 7 Notable Estate & Gift Tax Articles of 2013

Tax Analysys Logo (2013)Bridget Crawford (Pace), Law Review Articles You Should've Read (But Probably Didn't) in 2013, 143 Tax Notes 1305 (June 16, 2014):

This short column is part of the annual Tax Notes issue that highlights noteworthy law review articles published during the previous year. In this piece, I identify articles relating to estate and gift taxation that practitioners likely will find of interest. The articles reviewed (in alphabetical order by author's last name) are:

  1. Ellen Aprill (Loyola-L.A.), Reforming the Charitable Contribution Substantiation Rules, 14 Fla. Tax Rev. 275 (2013)
  2. Arianne Renan Barzilay (Haifa), You're on Your Own, Baby: Reflections on Capato's Legacy, 46 Ind. L. Rev. 557 (2013)
  3. John F. Coverdale (Seton Hall), Of Red Bags and Family Limited Partnerships: Reforming the Estate and Gift Tax Valuation Rules to Achieve Horizontal Equity, 51 U. Louisville L. Rev. 239 (2013)
  4. John P. Goldberg (Harvard) & Robert H. Sitkoff (Harvard), Torts and Estates: Remedying Wrongful Inheritance, 65 Stan. L. Rev. 335 (2013)
  5. Adam Hirsch (San Diego), Incomplete Wills, 111 Mich. L. Rev. 1423 (2013)
  6. Grayson M.P. McCouch (Florida), Who Killed the Rule Against Perpetuities?, 40 Pepp. L. Rev. 1291 (2013)
  7. Carla Spivack (Oklahoma City), Killers Shouldn't Inherit From Their Victims -- Or Should They?, 48 Georgia L. Rev. 145 (2013)

July 5, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Friday, July 4, 2014

Weekly SSRN Tax Roundup

 Weekly Roundup

July 4, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Thursday, July 3, 2014

Brauner: What the BEPS?

Yariv Brauner (Florida), What the BEPS?, 16 Fla. Tax Rev. 55 (2014):

Florida Tax ReviewUnprecedented attention to aggressive international tax planning has shaken the earth under the most powerful players in the world of international tax policy design. The media exposure of what Bloomberg’s calls “The Great Corporate Tax Dodge,” combined with the ever-growing discontent of civil society with the magnitude of contribution of the largest multinational enterprises to the society within which they operate, has recently forced the politicians to take action. Leaders of the strongest world economies demanded a revision of the rules of the international tax regime that would generate more revenues for their challenged coffers and would restore public trust in the system. In what is now commonly known as the Base Erosion and Profit Sharing (“BEPS”) project, the OECD has established three principles: (1) promotion of collaborative rather than competition based solutions; (2) take a holistic view of the challenges and their corresponding solutions rather than an ad hoc approach; and (3) permit the consideration of innovative solutions even when they conflict with the traditional premises of the current international tax regime. This Article reviews the progress of the BEPS project and its compatibility with the fundamental principles for reform set by the OECD with a view to influence the discourse and the outcome of the project. This Article focuses on the importance of the paradigm shift from the current emphasis on competitiveness and the perfection of competition to a collaborative international tax regime, demonstrating the desirability of such a shift and suggesting how the OECD should go about making that shift.”

July 3, 2014 in Scholarship, Tax | Permalink | Comments (1)

Fleischer & Staudt: The Supercharged IPO

Victor Fleischer (San Diego) & Nancy Staudt (Dean, Washington University), The Supercharged IPO, 66 Vand. L. Rev. 303 (2013):

A new innovation on the IPO landscape has emerged in the last two decades, allowing owner-founders to extract billions of dollars from newly-public companies. These IPOs — labeled supercharged IPOs — have been the subject of widespread debate and controversy: lawyers, financial experts, journalists, and Members of Congress have all weighed in on the topic. Some have argued that supercharged IPOs are a “brilliant, just brilliant,” while others have argued they are “underhanded” and “bizarre.”

In this article, we explore the supercharged IPO and explain how and why this new deal structure differs from the more traditional IPO. We then outline various theories of financial innovation and note that the extant literature provides useful explanations for why supercharged IPOs emerged and spread so quickly across industries and geographic areas. The literature also provides support for both legitimate and opportunistic uses of the supercharged IPO.

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July 3, 2014 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, July 2, 2014

Smith: Charitable Deductions for Live-Burn Donations

Eric Smith (Weber State), A Deduction Properly Extinguished? The Live-Burn Donation: A Proposed Sequence of Analysis and Policy Evaluation, 33 Va. Tax. Rev. 459 (2014):

This article updates the literature analyzing the charitable deduction associated with live-burn donations. This deduction has been the subject of multiple recent Tax and appellate Court rulings, all of which have disallowed the deduction. The article examines and reconciles the resulting live-burn donation line of cases. It agrees with prior scholarship finding that the courts’ treatment of the deduction has rendered it ineffective as a tax planning tool, but proposes a theoretical sequence of analysis to gauge the state of the law and determine whether any avenue remains which leads to deduction. Scholarly response to the disallowance of the live-burn donation has been generally negative. In contrast to these positions in the literature, this article finds that denial of a deduction for live-burn donations is consistent with and reconcilable on grounds of traditional tax policy notions of equity and fairness. Despite the live-burn donation’s initial acceptance on the basis of public benefit, the doctrine is fundamentally vulnerable on multiple fronts: it pushes the bounds of vertical equity, it disproportionately favors the wealthy, it undermines traditional concepts of charitable intent, and it provides an excessive private benefit in exchange for a public benefit which is too difficult to measure or quantify.

Prior TaxProf Blog coverage:

July 2, 2014 in Scholarship, Tax | Permalink | Comments (1)

Borden: 11 Notable Partnership Tax Articles of 2013

Tax Analysys Logo (2013)Bradley T. Borden (Brooklyn), Notable Partnership Articles From 2013, 143 Tax Notes 1513 (June 30, 2014):

July 2, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Tuesday, July 1, 2014

Gamage: A Way Forward for Tax Law and Economics?

David Gamage (UC-Berkeley), A Way Forward for Tax Law and Economics? A Response to Osofsky's Frictions, Screening, and Tax Law Design, 61 Buff. L. Rev. 189 (2014):

This Essay responds to Leigh Osofsky's Who’s Naughty and Who’s Nice? Frictions, Screening, and Tax Law Design. Osofsky’s analysis suggests that tax rules might be designed so as to take account both of heterogeneity in taxpayers’ tax planning proclivities and of taxpayer characteristics relevant for distribution. By designing tax rules so as to create frictions that differentially impose higher costs on those taxpayers who are more successfully circumventing existing taxes we can perhaps reform our tax system so as to better achieve equitable distribution at lower efficiency costs. This Essay argues that Osofsky's analysis is generally correct and that it potentially suggests a path toward a more useful law and economics analysis of detailed tax rules.

July 1, 2014 in Scholarship, Tax | Permalink | Comments (1)

Zelenak: The Almost-Restatement of Income Tax of 1954

Lawrence Zelenak (Duke), The Almost-Restatement of Income Tax of 1954: When Tax Giants Roamed the Earth, 79 Brook. L. Rev. 709 (2014):

This essay describes the ALI’s Income Tax Project of 1948–1954—its origins, goals, drafting process, final product, and influence on Congress. The essay concludes with some thoughts on what role the ALI can and should play today in the tax legislative process. Whether the fault is in the stars or in ourselves (probably both, but with the stars deserving most of the blame), the drafting of a new ALI model income tax statute for the twenty-first century would be an almost insurmountable challenge in technical terms, and probably pointless in political terms. Nevertheless, there remains room for targeted ALI tax interventions, with a Restatement-type approach to the interpretation of the recently-codified economic substance doctrine16 seeming especially promising.

July 1, 2014 in Scholarship, Tax | Permalink | Comments (0)

Yin: The Most Critical Issue Facing Tax Administration Today -- And What to Do About It

George K. Yin (Virginia), The Most Critical Issue Facing Tax Administration Today -- And What to Do About It:

This very brief paper contains the text of the keynote address delivered on June 19, 2014 to a research conference in Washington, DC on Advancing Tax Administration, co-sponsored by the IRS and the Tax Policy Center.

July 1, 2014 in IRS News, Scholarship, Tax | Permalink | Comments (1)

Monday, June 30, 2014

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, 2014) 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 Downloads

 

Recent Downloads

1

Reuven Avi-Yonah (Mich.)

38,995

Reuven Avi-Yonah (Mich.)

6932

2

Paul Caron (Pepperdine)

26,070

Paul Caron (Pepperdine)

2823

3

Louis Kaplow (Harvard)

22,653

D. Dharmapala (Illinois)

2533

4

D. Dharmapala (Illinois)

19,787

Richard Ainsworth (BU) 

2508

5

Vic Fleischer (San Diego)

19,782

Ed Kleinbard (USC)

2183

6

James Hines (Michigan)

19,542

Katie Pratt (Loyola-L.A.)

2030

7

Ted Seto (Loyola-L.A.)

18,915

Bridget Crawford (Pace]

1901

8

Richard Kaplan (Illinois)

18,678

Louis Kaplow (Harvard)

1846

9

Katie Pratt (Loyola-L.A.)

15,778

Richard Kaplan (Illinois)

1832

10

Dennis Ventry (UC-Davis)

15,312

Jen Kowal (Loyola-L.A.)

1766

11

Carter Bishop (Suffolk)

14,797

Brad Borden (Brooklyn)

1750

12

David Weisbach (Chicago)

14,084

Omri Marian (Florida)

1738

13

Jen Kowal (Loyola-L.A.)

14,065

Robert Sitkoff (Harvard)

1694

14

Chris Sanchirico (Penn)

14,046

James Hines (Michigan)

1583

15

David Walker (BU)

13,833

Dick Harvey (Villanova)

1554

16

Bridget Crawford (Pace)

13,592

Ted Seto (Loyola-L.A.)

1431

17

Francine Lipman (UNLV)

13,555

Jeff Kwall (Loyola-Chicago)

1425

18

Brad Borden (Brooklyn)

13,522

Dan Shaviro (NYU)

1401

19

Robert Sitkoff (Harvard)

13,399

Susan Morse (Texas)

1342

20

Richard Ainsworth (BU)

13,362

Vic Fleischer (San Diego)

1268

21

Ed Kleinbard (USC)

12,757

Francine Lipman (UNLV)

1266

22

Herwig Schlunk (Vanderbilt)

12,424

Carter Bishop (Suffolk)

1260

23

Dan Shaviro (NYU)

11,917

David Gamage (UCBerkeley)

1204

24

Ed McCaffery (USC)

11,667

David Weisbach (Chicago)

1165

25

Wendy Gerzog (Baltimore)

11,610

Dan Simmons (UC-Davis)

1162

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 30, 2014 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Rosenzweig: The Article III Fiscal Power

Adam H. Rosenzweig (Washington U.), The Article III Fiscal Power, 29 Const. Comm. ___ (2014):

What should happen when Congress and the President find themselves in a fiscal policy showdown resulting in a Constitutional violation? This question has risen to the fore in light of the recent political showdowns over the so-called “debt ceiling.” But the question is one that reaches far beyond the debt ceiling debate. Rather, it implicates the broader question of the proper role of the coordinate branches to make the government work within the Constitutional framework.

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June 30, 2014 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. ___ (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 30, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

Sunday, June 29, 2014

Top 5 Tax Paper Downloads

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

  1. [271 Downloads]  Carried Interest for the Common Man, by Richard Winchester (Thomas Jefferson)
  2. [235 Downloads]  The Real Problem with Carried Interests, by Heather Field (UC-Hastings)
  3. [199 Downloads]  A State Tax Approach to Regulating Greenhouse Gases Under the Clean Air Act, by Samuel Eisenberg (Stanford), Michael Wara (Stanford), Adele Morris (Brookings Institution), Marta Darby (Stanford) & Joel Minor (Stanford)
  4. [193 Downloads]  Sales Suppression as a Service (SSaaS) & the Apple Store Solution, by Richard Ainsworth (Boston University)
  5. [140 Downloads]  The Relationship between China's Tax Treaties and Indirect Transfer Antiavoidance Rules, by Qiguang Hardy Zhou (Baker & McKenzie, Shanghai City, China)

June 29, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, June 27, 2014

University of Oxford 8th Annual Academic Tax Symposium

OxfordThe Oxford University Centre for Business Taxation's 8th Annual Academic Tax Symposium concludes today with these speakers and papers:

David Gamage (UC-Berkeley), On Double-distortion Arguments, Distribution Policy, and the Optimal Choice of Tax Instruments
Discussant:  Jacob Nussim (Bar-Ilan) 

Joerg Paetzold (Salzburg), Unwilling, Unable or Uninformed to Cheat? Tax Evasion vVa Self-reporting in Austria (wth Hannes Winner (Salzburg))
Discussant:  Nirupama Rao (NYU) 

Martin Ruf (Tübingen), Tax Avoidance as a Driver of Mergers and Acquisitions (with Thomas Belz (Mannheim), Leslie Robinson (Dartmouth) & Christian Steffens (Mannheim))
Discussant:  Paul Baker (Bath)

Rosanne Altshuler (Rutgers), The Spillover Effects of Outward Foreign Direct Investment on Home Countries: Evidence from the United States (with Jitao Tang (Ernst & Young))
Discussant:  Estelle Dauchy (New Economic School, Moscow)

June 27, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Weekly SSRN Tax Roundup

 Weekly Roundup

June 27, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Virginia Tax Review Publishes New Issue

Virginia Tax Review 2The Virginia Tax Review has published Vol. 33, No. 2 (Fall 2013):

June 27, 2014 in Scholarship, Tax | Permalink | Comments (0)

Thursday, June 26, 2014

University of Oxford 8th Annual Academic Tax Symposium

OxfordThe Oxford University Centre for Business Taxation's 8th Annual Academic Tax Symposium continues today with these speakers and papers:

Li Liu (Oxford), Small Business Incorporation and Investment: The Role of Corporation Tax (with Michael Devereux (Oxford))
Discussant:  Tim Goodspeed (CUNY)

Joana Naritomi (Harvard), Consumers as Tax Auditors
Discussant:  Jon Kerr (CUNY) 

Daniel Reck (University of Michigan), Reporting What You Can't Hide: How Credit Card Information Reporting Affects Small Business Tax Compliance (with Brett Collins (IRS), Jeffrey Hoopes (Ohio State) & Joel Slemrod (Michigan))
Discussant:  Michelle Hanlon (MIT)

Alex Raskolnikov (Columbia), The Uneasy Case for Graduated Tax Penalties
Discussant:  Miranda Stewart (Melbourne)

Matthew Smith (U.S. Treasury Department), At a Loss: Corporate Elasticity of Income at the Zero Kink (with Elena Patel (U.S. Treasury Department) & Nathan Seegert (Utah))
Discussant:  Tuomas Kosonen (VATT, Helsinki)

Eric Zwick (Harvard), Do Financial Frictions Amplify Fiscal Policy? Evidence from Business Investment Stimulus
Discussant:  Dominika Langenmayr (Munich)

Mazhar Waseem (Manchester) Taxes, Informality and Income Shifting: Evidence From a Recent Pakistani Tax Reform
Discussant:  Miguel Almunia (Warwick)

June 26, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Morse: Supreme Court Clarifies Standard for Evidentiary Hearing in Enforcement of IRS Summons

Following up on Saturday's op-ed by Steve Johnson on Thursday's Supreme Court decision in United States v. Clarke, No. 13.301 (U.S. June 19, 2014):  SCOTUSBlog:  Court Clarifies Standard for Evidentiary Hearing in Enforcement of IRS Summons, by Susan C. Morse (Texas):

The Supreme Court on June 19 unanimously vacated and remanded an Eleventh Circuit per curiam decision in United States v. Clarke.  The Eleventh Circuit had reversed a district court refusal to grant a summons recipient an evidentiary hearing to challenge an IRS summons.  The Supreme Court emphasized the abuse of discretion standard applicable to the review of the district court’s decision and clarified the standard that the district court itself should apply.  It explained that “the taxpayer is entitled to examine an IRS agent when he can point to specific facts or circumstances plausibly raising an inference of bad faith.”  The decision leaves open an underlying legal question in the case:  whether improper purpose can follow from the issuance of a summons in retaliation for refusal to extend a statute of limitations and/or in anticipation of a not-yet-filed Tax Court suit.

June 26, 2014 in Scholarship, Tax | Permalink | Comments (4)

Papers from the 2013 IRS-TPC Research Conference: Administration at the Centennial

TPC-IRSThe IRS has released the papers from the 2013 IRS-TPC Research Conference: Administration at the Centennial (abstracts of papers here):

Session #1  Individual Income Tax Dynamics

Session #2:  Business Compliance Behavior

Session #3:  Corporation Income Tax Enforcement

Session #4:  Lessons From Other Tax Administrations

June 26, 2014 in IRS News, Scholarship, Tax | Permalink | Comments (0)

Wednesday, June 25, 2014

Osgood Presents Reform of [the Tax Treatment of] Nonprofit Institutions Today at Washington University

OsgoodRussell K. Osgood (Washington University) presents Reform of [the Tax Treatment of] Nonprofit Institutions at Washington University today as part of its Faculty Workshop Series:

The paper: 1) reviews the growth in many dimensions of the nonprofit sector, 2) discusses the history from 1969 onward of the 1969 Act and the subsequent lack of statutory reform due to Congressional inaction and the reasons for it, and 3) makes six significant proposals, including imposition of 1% excise tax on the endowments of all nonprofits, redrafting and narrowing the definitions of allowable 501(c)(3) purposes and regulating more heavily changes in purposes, expanding the taxation of quasi business income by taxing all income “not closely” related to the exempt purpose(s), eliminating much of the private foundation regime but requiring private foundations to liquidate after ten years and disqualifying them for any violation of core fiduciary duties, and revising the 170 deduction rules by limiting the deductibility (to the higher of adjusted basis or 50% of fair market value) of appreciated property, reducing the estate and gift tax charitable deduction limit to 50% (vs. 100%) of the gifted property, and reducing the regular contribution limits for all property and all taxpayers to a uniform 25% of adjusted gross income with only a one year carry forward.

June 25, 2014 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

University of Oxford 8th Annual Academic Tax Symposium

OxfordThe Oxford University Centre for Business Taxation's 8th Annual Academic Tax Symposium continues today with these speakers and papers:

David Weisbach (Chicago), International Capital Taxation
Discussant:  Alan Auerbach (UC-Berkeley)

Chris Sanchirico (Pennsylvania), As American as Apple Inc.: Tax and Ownership Nationality
Discussant:  Ilan Benshalom (Hebrew University of Jerusalem) 

Johannes Becker (University of Muenster), A Negotiation-based Model of Tax-induced Transfer Pricing (with Ron Davies (University College Dublin))
Discussant:  Michael Stimmelmayer (KOF, ETH Zurich) 

Mitchell Kane (NYU), Transfer Pricing, Integration, and Novel Intangibles: A Consensus Approach to the Arm’s Length Standard
Discussant:  John Vella (Oxford University)

Alfons Weichenrieder (Goethe University Frankfurt), Does Exchange of Information Between Tax Authorities Influence Foreign Direct Investment Into Tax Havens? (with Julia Braun (WU Vienna University of Economics and Business))
Discussant:  Celine Azemar (Glasgow University) 

Jeffrey Hoopes (Ohio State), Real Costs of Disclosure: Evidence From an Exogenous Shock to Subsidiary Disclosure in the UK (with Jaron Wilde (Iowa))
Discussant:  Travis Chow (Singapore Management University)

David Agrawal (Georgia), The Internet as a Tax Haven? The Effect of the Internet on Tax Competition
Discussant:  Giorgia Maffini (Oxford University) 

June 25, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Wells: Corporate Inversions and Whack-a-Mole Tax Policy

Tax Analysys Logo (2013)Bret Wells (Houston), Corporate Inversions and Whack-a-Mole Tax Policy, 143 Tax Notes 1429 (June 23, 2014):

In this article, Wells argues that until policymakers address the fundamental tax disparity that creates corporate inversions, ever changing forms of the transaction will continue to pop up like moles in a whack-a-mole game.

June 25, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Kaplan: Covering Retirement Health Care Costs

Richard L. Kaplan (Illinois), Desperate Retirees: The Perplexing Challenge of Covering Retirement Health Care Costs in a YOYO World, 20 Conn. Ins. L.J. 433 (2014):

A retiree’s single largest and most unpredictable expense is paying for health care, and this article explains the various choices and options that a retiree confronts regarding that expense. The article examines the traditional components of Medicare (Parts A and B), prescription drug plans (Medicare Part D), Medigap coverage, and managed care alternatives, as well as long-term care insurance. Each section addresses the financial trade-offs and time-sensitive decisions that are involved.

June 25, 2014 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, June 24, 2014

University of Oxford 8th Annual Academic Tax Symposium

OxfordThe Oxford University Centre for Business Taxation's 8th Annual Academic Tax Symposium kicks off today with these speakers and papers:

Joel Slemrod (Michigan), Do the Laws of Tax Incidence Hold? Point of Collection and the Pass-through of State Diesel Taxes (with Wojciech Kopczuk (Columbia), Justin Marion (UC-Santa Cruz) & Erich Muehlegger (Harvard))
Discussant:  Stephen Bond (Oxford)

Owen Zidar (UC-Berkeley), Who Benefits From State Corporate Tax Cuts? A Local Labor Markets Approach With Heterogeneous Firms (with Juan Carlos Suárez Serrato (Stanford))
Discussant:  Martin Simmler (DIW, Berlin)

Jing Xing (Oxford Corporate Tax Incentives and Capital Structure: Empirical Evidence From the UK Tax Returns (with Michael Devereux (Oxford) & Giorgia Maffini (Oxford))
Discussant:  Dhammika Dharmapala (Illinois)

Jacob Nussim (Bar-Ilan), A Theory of Tax Losses Mechanisms (with Avraham Tabbach (Tel Aviv))
Discussant:  Norman Gemmell (Victoria)

June 24, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Hoffer & Walker: Kuretski, the Tax Court, and the Administrative Procedure Act

HWResponding to Sunday’s op-ed by Patrick Smith and Monday's op-ed by Kristin Hickman on Friday’s D.C. Circuit opinion in Kuretski v. Commissioner, No. 13-1090 (D.C. Cir. June 20, 2014):  TaxProf Blog op-ed:  Kuretski, the Tax Court, and the Administrative Procedure Act, by Stephanie Hoffer (Ohio State) & Christopher J. Walker (Ohio State):

Friday’s decision in Kuretski v. Commissioner is perhaps the first major opinion penned by Judge Sri Srinivasan—a recent Obama appointee considered by many to be on the short list for the Supreme Court.  In a well-written opinion, the D.C. Circuit rejects a constitutional challenge to the President’s removal power of judges on the United States Tax Court.  To reach this conclusion, the court has to grapple with the Tax Court’s puzzling position in the modern administrative state, concluding that the Tax Court is not an Article III (judicial branch) court but a court established under Article I (legislative branch) that actually exercises Article II (executive branch) powers.  Or as Judge Srinivasan writes (at 20) for the court:

We have explained that Tax Court judges do not exercise the ‘judicial power of the United States’ pursuant to Article III.  We have also explained that Congress’s establishment of the Tax Court as an Article I legislative court did not transfer the Tax Court to the Legislative Branch.  It follows that the Tax Court exercises its authority as part of the Executive Branch.

No doubt many tax and administrative law professors will weigh in on the constitutional issues (early coverage here, here, and here).  Here, however, we focus on Kuretski’s impact on the relationship between the Tax Court and the Administrative Procedure Act (“APA”).  Patrick Smith, for instance, worries that Kuretski could open the door for the argument that “APA judicial review provisions simply do not apply in Tax Court proceedings.”  But we agree with the contrary position reached by Kristin Hickman (Minnesota) and write separately to show our math for this conclusion. 

At the outset, it is important to underscore that Smith’s worry is already a reality.  As we explain in a forthcoming paper, The Death of Tax Court Exceptionalism, 99 Minn. L. Rev. ___ (2014), the Tax Court has declared that “[t]he APA has never governed proceedings in the Court (or in the Board of Tax Appeals).”  In other words, the Tax Court refuses to apply the APA’s default standard (abuse of discretion) and scope (administrative record) of review.  Instead, it considers the default in both contexts to be de novo, and only departs from de novo review when it determines that the Internal Revenue Code suggests more deferential review.

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June 24, 2014 in Scholarship, Tax | Permalink | Comments (0)