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Wednesday, January 28, 2015

Cockfield: David Foster Wallace on Tax Policy

Pale KingArthur J. Cockfield (Queen's University), David Foster Wallace on Tax Policy, How to Be an Adult, and Other Mysteries of the Universe, 15 Pitt. Tax Rev. ___ (2015):

As one of the most highly acclaimed fiction writers of his generation, David Foster Wallace had many things to say on a seemingly endless variety of topics. In his last work, the unfinished novel The Pale King, he chose to elaborate on, of all things, tax policy and tax administration. Wallace directed tax topics at one of the novel’s main themes: true adulthood often involves overcoming boredom in the workplace to derive a sense of community and care for others. In a sense, the book serves as a guide on how to become a reasonably happy and fulfilled adult. This Essay integrates archival research from the Collected Works of David Foster Wallace at the Harry Ransom Center at the University of Texas at Austin.

Prior TaxProf Blog coverage:

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January 28, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Tuesday, January 27, 2015

Kamin Presents Designing Legislation That Responds to Fiscal Uncertainty Today at NYU

Kamin (2015)David Kamin (NYU) presents In Good Times and Bad: Designing Legislation That Responds to Fiscal Uncertainty at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Viard:

Congress often moves slowly to change tax and spending laws when circumstances change, but there are ways to design legislation to anticipate and prevent the tendency towards “policy drift.”

Enactment of major pieces of legislation tends to be followed by periods of legislative stasis, even when economic conditions change. Policies during the Great Recession are an example of this. The Great Recession proved significantly deeper than forecasters had predicted, when the American Recovery And Reinvestment Act was enacted, but but as new information became available, Congress did little to alter the fiscal stimulus in response, other than to continue some expiring provisions.

There are ways to design legislation to anticipate and prevent the tendency towards “policy drift.” This paper identifies four mechanisms: delegation of legislative authority to administrative agencies, triggers that either automatically adjust policy for changed circumstances or try to force an issue onto Congress’s agenda, expirations of legislation that sunset laws on a predetermined date, and indexing to adjust policy in discrete increments in response to changes in conditions.

 
Responsive to Economic Conditions
Easy for Congress to Initiate
Reduces Uncertainty
Holds Congress Accountable
1. Delegation of legislative authority
2a. Automatic-adjustment triggers
2b. Alarm Bell Triggers
3. Expiration Dates for Legislation
4. Indexing
= Yes     = No     = Mixed    

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January 27, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

McCormack: (Over-)Taxing the Working Family

Shannon Weeks McCormack (University of Washington), Uncle Sam and the Childcare Squeeze: (Over-)Taxing the Working Family:

Today, it is more common for families to consist of two earners than one, and parents increasingly report that they require two incomes to make ends meet. But parents lucky enough to find themselves employed will also find themselves in the “childcare squeeze.” With childcare costs representing one of the highest costs incurred by young families, today’s working parents spend a strikingly large percentage of their income on childcare in order to work away from the home. Worse still, other families find themselves “squeezed out” entirely, unable to find employment with wages high enough to pay soaring childcare expenses. This Article describes the role that two provisions of the Internal Revenue Code have played in creating and aggravating these hardships and provides a blueprint for meaningful reform that will prevent the pervasive over-taxation of the working family.

January 27, 2015 in Scholarship, Tax | Permalink | Comments (0)

Blair-Stanek: Intellectual Property Law Solutions to Tax Avoidance

Andrew Blair-Stanek (Maryland), Intellectual Property Law Solutions to Tax Avoidance, 62 UCLA L. Rev. 2 (2015):

Multinational corporations use intellectual property (IP) to avoid taxes on a massive scale, by transferring their IP offshore for artificially low prices. Economists estimate that this abuse costs the U.S. Treasury as much as $90 billion each year. Yet tax policymakers and scholars have been unable to devise feasible tax-law solutions to this problem. This Article introduces an entirely new solution: change IP law rather than tax law. Multinationals’ tax-avoidance strategies rely on undervaluing their IP. This Article proposes extending existing IP law so that these low valuations make it harder for multinationals subsequently to litigate or to license the IP. For example, transferring a patent for a low price to a tax-haven subsidiary should make it harder for the multinational to demonstrate the patent’s validity, a competitor’s infringement, or entitlement to any injunctions. The low transfer price should also weigh toward lower patent damages and potentially even a finding of patent misuse. Extending IP law in such ways would deter multinationals from using IP to avoid taxes. Both case law and IP’s theoretical justifications support this approach, which also has the counterintuitive benefit of encouraging the flourishing of creative professionals such as inventors and authors.

January 27, 2015 in Scholarship, Tax | Permalink | Comments (0)

Encouraging Engaged Scholarship: Perspectives from an Associate Dean for Research

Sonia Katyal (Fordham), Encouraging Engaged Scholarship: Perspectives from an Associate Dean for Research, 31 Touro L. Rev. ___ (2015):

Today, there is little question that faculty scholarship is intimately related to the reputation of a law school, and also relatedly, to the law school rankings game. Central to this reality are some emergent administrative positions — the position of Associate Dean for Research, for example — which carry important possibilities for a law school, both internally and externally, in terms of promoting attention to scholarship. Yet this position, which has only recently emerged in law schools over the last twenty years, is also one that is largely fluid and often determined by the relative institutional capabilities of the rest of the University administration, in addition to the larger landscape of legal education. Because there is no precise one size fits all model for an Associate Dean, the fluidity of the position enables us to consider a range of variables that impact scholarly visibility, both internally within a law school community, and externally within the larger scholarly world. How can we, as Associate Deans, strive to support the productivity of faculty members in these shifting times? How can Associate Deans navigate complex social relations on faculties, where issues of gender, race, class, and other variables often abound? How can we draw attention to scholarly endeavors at a time when law schools are undergoing a massive transformation for the future? How can we ensure that legal scholarship remains relevant and important? How can we value the many types of scholarly contributions that our faculty can make, without imposing a narrow view of what counts as “serious” scholarship?

Answering these questions is not an easy task. Just as there are many different types of research and scholarship, there are many different roles for an Associate Dean for Research. As Associate Dean for Research at Fordham, and one of the small number of minority women who have held this position in law school academia, I have been struck by how many of these issues can be indirectly tied to traditional, institutional questions about building a law school community. Here, questions about identity, seniority, productivity, and interdisciplinary scholarship emerge, often without clear answers. Indeed, also, identity politics — not just demographic identities, but institutional identities — affect so many of the range of questions that surround productivity and the way in which research is valued and embraced in a law school community. Mainstream law review publications, clearly, are an essential part of every law faculty in the country, and should be valued and encouraged, but an administration, should also have a greater sense of the importance of other types of engaged scholarship. Here, I draw on the history and trajectory of American Indian legal scholarship as an illustrative example.

For my perspective, see The Associate Dean for Faculty Research Position: Encouraging and Promoting Scholarship, 33 U. Tol. L. Rev. 233 (2001) (Leadership in Legal Education Symposium) (with Joseph P. Tomain):

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January 27, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Monday, January 26, 2015

Spring 2015 Law Review Article Submission Guide

Nancy Levit (UMKC) & Allen Rostron (UMKC) have updated their incredibly useful document, which contains two charts for the Spring 2015 submission season covering 204 law reviews.

The first chart (pp. 1-52) 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. 53-59) 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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January 26, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Sunday, January 25, 2015

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 #1 paper and a new paper debuting on the list at #5:

  1. [230 Downloads]  The Rise and Fall of the Consumption Tax: A Historical Perspective, by Reuven Avi-Yonah (Michigan)
  2. [216 Downloads]  Important Developments in Federal Income Taxation (2014), by Edward A. Morse (Creighton)
  3. [169 Downloads]  Do Audits Matter?: A Parallax Theory of the Relation between Tax Enforcement and Underreporting, by J. T. Manhire (U.S. Treasury Department)
  4. [139 Downloads]  Thomas Piketty and Inequality: Legal Causes and Tax Solutions, by Paul L. Caron (Pepperdine)
  5. [139 Downloads]  Return on Political Investment in the American Jobs Creation Act of 2004, by Hui Chen (Zurich), Katherine Gunny (Colorado) & Karthik Ramanna (Harvard)

January 25, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, January 23, 2015

Weekly Tax Roundup

Weekly SSRN Tax Roundup

Thursday, January 22, 2015

Knoll Presents Balancing State Sovereignty and Interstate Commerce Today at Northwestern

KnollMichael Knoll (Pennsylvania) presents Striking a Balance Between State Sovereignty and Interstate Commerce, 75 State Tax Notes ___ (2015) (with Ruth Mason (Virginia)), at Northwestern today as part of its Tax Colloquium Series hosted by Lawrence Zelenak:

This Article discusses Wynne v. Comptroller, a dormant Commerce Clause case against Maryland pending before the Supreme Court. We use economic analysis to rebut Maryland’s claim that its tax regime does not discriminate against interstate commerce. We also argue that the parties’ framing of the central issue in the case as whether the Constitution requires states to relieve double taxation draws focus away from the discrimination question, and therefore could undermine the Wynnes’ case and lead to unjustified narrowing of the dormant Commerce Clause. We also show how our approach to tax discrimination resolves many of the issues that seemed to trouble the Justices at oral argument.

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

The Responsible Way Out of the Law School Crisis

Law School (2015)Jay Sterling Silver (St. Thomas), Pedagogically Sound Cuts, Tighter (Not Looser) Accreditation Standards, and a Well-oiled Doomsday Machine: The Responsible Way Out of the Crisis in Legal Education, 66 Rutgers L. Rev. 353 (2014):

With runaway tuition, sky-high graduate debt and unemployment, plummeting law school applications, and the tectonic shift in the nature and delivery of legal services further clouding the picture, we must do more than bitterly bemoan the plight of law students and loosely cast aspersions over how we got here. We must decide, very quickly, exactly what in legal education should be salvaged, what should be reengineered, and what should be tossed overboard. The trouble is, with little agreement on what legal education is supposed to do, how it should do it, or who it is supposed to serve, most of the solutions posed to date are shots in the dark, often liberally laced with acrimony, that will do more harm than good. Dean Erwin Chemerinsky got it right when he said that the measures recently proposed by the ABA's Task Force on the Future of Legal Education to address the crisis in legal education are “definitely not a blueprint for useful reform.”

With an eye to the role of legal education as a training ground, a public and private good, and a unit of the academy, this Article prescribes a clear set of pedagogically sound measures to root out the actual causes of the crisis and significantly reduce law school tuition, graduate debt, and graduate unemployment, while preserving the considerable, but underappreciated, good in legal education. The man who sounded the general alarm with his book Failing Law Schools lays much of the blame at the feet of the professoriate, which, he says, is overpaid, underworked, and resistant to change. According to Professor Brian Tamanaha, the ABA Task Force on the Future of Legal Education, and numerous others, the principal culprits are tenure, high salaries, the shunning of adjuncts, emphasis on scholarship, and the ABA accreditation standards that prop it all up, drive up tuition, and block competition and change. Deregulate legal education, they advise, and allow the marketplace to develop leaner alternatives to the one-size-fits-all model. Specific suggestions include replacing the third year of law school with apprenticeships or lopping it off altogether to eliminate a year of esoteric filler, and replace tenured faculty with adjuncts fresh from practice.

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January 22, 2015 in Legal Education, Scholarship | Permalink | Comments (1)

Ryan: Merger Is Indirect Gift In Cavallaro

Kerry A. Ryan (Saint Louis), Merger is Indirect Gift in Cavallaro, 146 Tax Notes 139 (Jan. 5, 2015):

In Cavallaro v. Commissioner, [T.C. Memo. 2014-189,] the Tax Court held that a merger of two family-owned businesses resulted in a substantial taxable gift. The taxpayers avoided penalties by demonstrating that they relied in good faith on the mistaken advice of competent tax advisers.

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

Wednesday, January 21, 2015

Abreu & Greenstein: The Rule of Law as a Law of Standards -- Interpreting the Internal Revenue Code

Alice Abreu (Temple) & Richard K. Greenstein (Temple), The Rule of Law as a Law of Standards: Interpreting the Internal Revenue Code, 64 Duke L.J. Online 53 (2015):

Although fields of law ordinarily comprise both rules and standards, and foundational tax scholars such as Professors Surrey, Warren, and Bittker understood the importance of standards in tax law, many tax scholars and professionals have come to regard federal tax law as “the paradigmatic system of rules.” The vision of tax-as-rules is particularly alluring because rules have been associated with rule-of-law values, and it seems that the rule of law might be especially important in the field of taxation. The rule of law constrains the coercive power of government, and perhaps few powers are viewed with as much suspicion as the taxing power. Our claim that the existence of many rules in the tax law does not dictate the interpretation of all tax formulations as rules seems to threaten critical rule-of-law values. Nevertheless, we believe with Surrey and Warren that tax, like other areas of law, can flourish only if the IRS and the courts are able to respond to “unforeseen cases as they arise” and that this flexibility demands that many Code provisions be interpreted as standards. We also believe that this use of standards does not threaten rule-of-law values. In this essay we defend both propositions.

To do so we engage pointedly with Professor Larry Zelenak’s critique of the position we took in our earlier article, Defining Income [11 Fla Tax Rev. 295 (2011)], where we claimed that the category of “gross income” in the Internal Revenue Code is best understood as a standard, not a rule. In Custom and the Rule of Law in the Administration of the Income Tax, Professor Zelenak worried that our position threatened the rule of law by “stretch[ing] beyond the breaking point” the concept of interpretation [Custom and the Rule of Law in the Administration of the Income Tax, 62 Duke L.J. 855 (2012)].

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January 21, 2015 in Scholarship, Tax | Permalink | Comments (0)

Graetz: Taxation of Unrealized Gains at Death Redux

Michael J. Graetz (Columbia), What Goes Around Comes Around: Taxation of Unrealized Gains at Death:

Forty-two years ago, in the Virginia Law Review, long before Congress twice enacted—and twice repealed—carryover basis for assets transferred at death, I published this article examining and evaluating a number of proposals for taxing gains at death, as well as for carryover basis. (One of these was being advanced by the American Bankers Association.)  [Taxation of Unrealized Gains at Death -- An Evaluation of the Current Proposals, 59 Va. L. Rev. 830 (1973)]  The president, in his State of the Union address on January 20, 2015, has again proposed a tax on gains on assets transferred at death.  This article may be helpful in identifying some of the main issues and alternatives if Congress considers the proposal in its upcoming tax reform deliberations.  I have made no attempt to update this article for current circumstances. Most of the design issues remain unchanged, although the exemption and illustrative numbers are out of date. 

January 21, 2015 in Scholarship, Tax | Permalink | Comments (2)

Leviner Presents Tax Policy Making in Israel at Hebrew University Law School

Leviner (2015)Sagit Leviner (Ono) presented Comparative Evaluation of Tax Policy-Making in Israel: Exploring the Trajectories on Monday at the Hebrew University Law School Tax Colloquium:

This project explores the transformation of Israel’s tax policy over the years while placing it within Israel’s broader economic and social context and unique characteristics. To better evaluate the merit and trajectory of this transformation, the project positions the Israeli tax experience under a comparative lens. In other words, the project evaluates whether the Israeli experience brings Israel closer to, or further from, its counterparts in the developed world.

January 21, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tuesday, January 20, 2015

Madrian Presents The Roth 401(k): Does Front-Loading Taxation Increase Savings? Today at NYU

MadrianBrigitte Madrian (Harvard) presents Does Front-Loading Taxation Increase Savings? Evidence from Roth 401(k) Introduction (with John Beshears (Harvard), James Choi (Yale) & David Laibson (Harvard)) at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Viard:

Can governments increase private savings by taxing savings up front instead of in retirement? Roth 401(k) contributions are not tax-deductible in the contribution year, but withdrawals in retirement are untaxed. The more common before-tax 401(k) contribution is tax-deductible in the contribution year, but both principal and investment earnings are taxed upon withdrawal. Using administrative data from eleven companies that added a Roth contribution option to their existing 401(k) plan between 2006 and 2010, we find no evidence that total 401(k) contribution rates differ between employees hired before versus after the Roth introduction, which means that the amount of retirement consumption being purchased by 401(k) contributions increases after the Roth introduction. A survey experiment suggests two behavioral factors play a role in the unresponsiveness of contribution rates to their tax treatment: (1) employee confusion about or neglect of the tax properties of Roth balances and (2) partition dependence.

January 20, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Freedman Presents Tax Avoidance and the Proposed Google Tax Today at Florida

FreedmanJudith Freedman (Oxford) presents Tax Avoidance and the Proposed U.K. Diverted Profits Tax (Google Tax) at Florida today as part of its Graduate Tax Program Colloquium Series hosted by Yariv Brauner:

This paper aims to inform the important debate on tax avoidance by exploring the language used and setting this in context. Tax avoidance is something that needs to be tackled with vigour and public confidence that the tax system treats people equitably is vital. Yet the actors concerned ‐ taxpayers, advisers and revenue authorities ‐ operate within a complex domestic and international tax environment. Many of the complexities and flaws in the system can only be tackled by radical structural changes, which will require fundamental policy thinking and change and international co‐operation. Oversimplifying the debate and searching for individual or corporate villains will not assist in remedying the underlying problems. Even if public naming and shaming influences a few taxpayers in the public eye to impose their own voluntary constraints, it will not necessarily affect the worst avoiders, and may even encourage some non‐compliance from those who feel that “everyone is at it”. Only understanding the flaws in the tax system and working on serious changes can give long‐term results.

Ana Paula Dourado (University of Lisbon) is the discussant.

January 20, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Marian Presents A Conceptual Framework for the Regulation of Cryptocurrencies Today at Tulane

MarianOmri Marian (Florida) presents A Conceptual Framework for the Regulation of Cryptocurrencies, 81 U. Chi. L. Rev. Dialogue ___ (2015), at Tulane today as part of its Regulation and Coordination Workshop Series hosted by Adam FeibelmanShu-Yi Oei, and Steve Sheffrin:

This Essay proposes a conceptual framework for the regulation of transactions involving cryptocurrencies. Cryptocurrencies offer tremendous opportunities for innovation and development, but at the same time are uniquely suited to facilitate illicit behavior. The suggested regulatory framework is intended to support (or, at the least, not impair) cryptocurrencies’ innovative potential. At the same time, the aim is to disrupt cryptocurrencies’ utility for criminal activities. To achieve such purposes, this Essay suggests a regulatory framework that imposes costs on the characteristics of cryptocurrencies that make them particularly useful for criminal behavior (in particular, anonymity), but does not impose costs on characteristics that are at the core of the generative potential (in particular, the decentralization of value-transfer processes). Using a basic utility model of criminal behavior as a benchmark, the Essay explains how regulatory instruments can be so designed. One such regulatory instrument is proposed as an example – an elective anonymity tax on cryptocurrency transactions in which at least one party is not anonymous. 

January 20, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Watson: SFRs and Problems in Tax Administration and Enforcement

Tax Analysys Logo (2013)Camilla E. Watson (Georgia), SFRs and Problems in Tax Administration and Enforcement, 146 Tax Notes 363 (Jan. 20, 2015):

When the IRS prepares substitutes for returns (SFRs) for a married couple, it prepares separate returns for each of the parties and considers them married filing separately. It will then send separate notices of deficiency to the parties. If only one of the spouses petitions the Tax Court, this could be problematic for both, even if the court’s decision is favorable to the petitioner. The problems identified in this report, while narrow in scope, highlight broader issues in the administration of the tax system. This report proposes reforms to correct the problems in the SFR process, but these proposals apply more broadly to address general problems in the administration of the tax system.

January 20, 2015 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Monday, January 19, 2015

Mehrotra Reviews Zelenak's Learning to Love Form 1040

Learning to Love 1040Ajay K. Mehrotra (Indiana), Reviving Fiscal Citizenship, 113 Mich. L. Rev. ___ (2015) (reviewing Lawrence Zelenak (Duke), Learning to Love Form 1040: Two Cheers for the Return-Based Mass Income Tax (University of Chicago Press, 2013)): 

In recent years, numerous lawmakers, policy analysts, and scholars have been decrying the many defects of the present U.S. income tax system. Few have attempted to defend our return-based mass income tax. This essay reviews Learning to Love Form 1040, Lawrence Zelenak’s stirring and persuasive defense of a simplified version of our present federal income tax system. In contrast to the conventional economic critiques, Zelenak explores the underappreciated social, cultural, and political benefits of a return-based, mass income tax. Chief among these, he argues, is the existing regime’s potential to raise the tax consciousness of the average citizen and to enhance modern notions of fiscal citizenship.

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January 19, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (1)

Reviews of Piketty's Capital in the Twenty-First Century

Mark W. Hendrickson (Grove City College), Problems with Piketty: The Flaws and Fallacies in Capital in the Twenty-First Century (2014):

HendricksonIf you have read or even heard about Capital in the Twenty-First Century—economist Thomas Piketty’s egalitarian treatise—you owe it to yourself to read Hendrickson’s powerful critique. Hendrickson combines extensive knowledge, mature wisdom, common sense, and a rare ability to render complex subjects clear and easily understood. Problems with Piketty shows us the grim consequences of egalitarian policies; exposes the flaws and explodes the fallacies in Piketty’s book; and presents a stirring defense of free enterprise.

Far more than just a corrective to Capital’s many errors, Problems with Piketty works well as a stand-alone teaching tool. Thanks to a detailed Table of Contents, its multiple lessons are easy to find. You may find yourself referring to this book for years to come.

Michael Potter (Australian National University), Capital in the Twenty-First Century: A Critique of Thomas Piketty’s Political Economy, 21 Agenda 91 (2014):

PikettyThe argument by Piketty and others that there is growing inequality and this is causing damage is not new. But regardless of who is running this argument, it is significantly flawed. The poor have definitely improved their situation, especially if taxes and income support are included, in many countries in the developing world and the US. A focus on inequality to the exclusion of poverty glosses over the large successes over recent decades. It paints a false picture of decline when large improvements have occurred.

To the extent there have been increases in executive wages, this has probably been driven by technology and globalisation, not by poor corporate governance. And the returns to wealth being (relatively) high should be expected given the riskiness of owning wealth, and is actually necessary to ensure that investment occurs. Piketty’s (implied) argument that investment is bad should be dismissed out of hand, as should his argument that high taxes are required on wealth. Instead, the problems generated by ‘unfairly’ acquired wealth should be addressed by removing rents. Policymakers should consider broadening the ownership of capital and assisting those who are in genuine need, and reject proposals that pander to envy.

For my perspective, see Thomas Piketty and Inequality: Legal Causes and Tax Solutions, 64 Emory L.J. Online ___ (2015):

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January 19, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Sunday, January 18, 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 list.  The #1 paper is now #69 in all-time downloads among 10,644 tax papers:

  1. [1631 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [223 Downloads]  The Rise and Fall of the Consumption Tax: A Historical Perspective, by Reuven Avi-Yonah (Michigan)
  3. [192 Downloads]  Important Developments in Federal Income Taxation (2014), by Edward A. Morse (Creighton)
  4. [149 Downloads]  Do Audits Matter?: A Parallax Theory of the Relation between Tax Enforcement and Underreporting, by J. T. Manhire (U.S. Treasury Department)
  5. [126 Downloads]  Thomas Piketty and Inequality: Legal Causes and Tax Solutions, by Paul L. Caron (Pepperdine)

January 18, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, January 17, 2015

American College of Employee Benefits Counsel Student Writing Competition

ACBThe American College of Employee Benefits Counsel is sponsoring its 11th Annual Employee Benefits Writing Competition on any topic in the field of employee benefits law. The competition is open to any J.D. and graduate (L.L.M. or S.J.D) law students enrolled at any time between August 14, 2014 and August 15, 2015. Two $1,500 prizes will be awarded. The submission deadline is June 2, 2015.

January 17, 2015 in Scholarship, Tax, Teaching | Permalink | Comments (0)

Friday, January 16, 2015

Weekly SSRN Tax Roundup

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January 16, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Thursday, January 15, 2015

The Winter Of Our Discontent: Legal Practice, Legal Education, and the Culture of Distrust

WinterAlfred S. Konefsky (SUNY-Buffalo) & Barry Sullivan (Loyola-Chicago), In This, the Winter of Our Discontent: Legal Practice, Legal Education, and the Culture of Distrust, 62 Buff. L. Rev. 659 (2014):

This essay seeks to situate the challenges facing legal education within the broader context of professional culture — a context that seems to us to have been neglected in the present debates. In a sense, the “market reformers” have been swept up, consciously or not, in a wider movement that elevates markets over other forms of social analysis and therefore asserts and takes for granted what is in fact deeply contested. More specifically, they have pushed to the side the public-serving dimension of the lawyer’s role because it allegedly conflicts with the psychology of classical economic liberalism. Our aim, then, is to restore the concept of the public domain to a discussion now dominated by mere considerations of costs and a belief in the inevitable triumph of a narrowed sense of professional culture. Before we can begin to reform the infrastructures of legal education, we need to identify the function of the legal profession in a democratic society and the role that a legal education might play in preparing men and women for service in a profession so conceived. In that sense, cost is not an independent variable, and any judgment about the cost-effectiveness of legal education necessarily depends on a decision concerning the purposes to be served by a legal education.

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January 15, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Kirsch: The Tax Treatment of Citizens Abroad

Florida Tax ReviewMichael S. Kirsch (Notre Dame), Revisiting the Tax Treatment of Citizens Abroad: Reconciling Principle and Practice, 16 Fla. Tax Rev. 117 (2014):

In an increasingly mobile world, the taxation of citizens living abroad has taken on increased importance. Recent international administrative developments — most notably, the weakening of foreign bank secrecy and expansion of global information sharing norms — have further raised the profile of this issue. While U.S. law traditionally has taxed U.S. citizens living abroad in the same general manner as citizens living in the United States, a number of scholars have proposed abandoning the use of citizenship as a jurisdictional basis to tax. In its place, they would apply residence-based principles — i.e., exercising full taxing rights over U.S. citizens only if the citizens reside in the United States. Citizens residing outside the United States would be taxed in the same limited manner as non-citizens residing outside the United States.

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January 15, 2015 in Scholarship, Tax | Permalink | Comments (0)

Brunson: It Is Time for the IRS to Enforce the Prohibition on Campaigning by Churches

CHurchSamuel Brunson (Loyola-Chicago), Dear IRS, It Is Time to Enforce the Campaigning Prohibition. Even Against Churches:

In 1954, Congress prohibited tax-exempt public charites, including churches, from endorsing or opposing candidates for office. To the extent a tax-exempt public charity violated this prohibition, it would no longer qualify as tax-exempt, and the IRS was to revoke its exemption.

While simple in theory, in practice, the IRS rarely penalizes churches that violate the campaigning prohibition, and virtually never revokes a church’s tax exemption. And, because no taxpayer has standing to cuhallenge the IRS’s inaction, the IRS has no external imperative to revoke the exemptions of churches that do campaign on behalf of or against candidates for office.

This argment makes the normative case that, notwithstanding the IRS’s administrative discretion and the inability of taxpayers to challenge its nonenforcement in court, the time has come for the IRS to begin enforcing the campaigning prohibition.

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January 15, 2015 in IRS News, Scholarship, Tax | Permalink | Comments (5)

Wednesday, January 14, 2015

Chodorow Presents Pope Francis, the Bible, and Tax Policy Today at Pepperdine

ChodorowAdam Chodorow (Arizona State) presents Pope Francis, the Bible, and Tax Policy at Pepperdine today as part of our Tax Policy Colloquium Series:

  1. What does the Bible actually say, either directly about taxes and tax-like institutions or indirectly about principles that should guide policymakers, regarding an appropriate tax system?
  2. To what extent should the Bible or religious views guide votes or opinions on such secular policy matters?

Biblical Tax Systems and the Case for Progressive Taxation, 23 J.L. & Relig. 53 (2008):

With the political rise of the religious right, American policymakers have increasingly looked to religion for guidance on important policy issues, including questions of distributive justice and how best to allocate tax burdens. While many claim that Judeo-Christian values require progressivity, the examples of taxation found in the sacred texts apparently refute this claim. This article examines four examples of taxation found in the Bible and Talmud to determine whether it is appropriate to infer from them a Judeo-Christian principle of tax fairness that should apply in a modern, secular tax system. I find that, not only do these examples use different methods for allocating tax burdens, making it impossible to identify one principle, but, more important, each example bears the stamp of its religious purpose or historical circumstances, making it inappropriate to rely on these examples as evidence of a divinely-sanctioned principle of tax justice.

Adam's visit is sponsored by Pepeprdine's Diane and Guilford Glazer Institute for Jewish Studies.

Update:  Post-presentation lunch:

Adam

January 14, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Judicial Misconceptions About Domestic Violence and Innocent Spouse Relief

Jacqueline Clarke, (In)equitable Relief: How Judicial Misconceptions About Domestic Violence Prevent Victims From Attaining Innocent Spouse Relief Under I.R.C. Section 6015(f), 22 Am. U. J. Gender Soc. Pol'y & L. 825 (2014):

Although innocent spouse relief has been in existence for a number of years, judges are still grappling with many of the intricacies of the factors promulgated by Revenue Ruling 2003-61. Domestic abuse is a concept not normally addressed by Tax Court judges and tax practitioners alike. Even the U.S. Department of the Treasury, the IRS, and various Tax Court judges have acknowledged that they are not well-versed in the complexities of domestic violence.165 Thus, more needs to be done to ensure that requesting taxpayers who are victims of domestic abuse have the ability to attain equitable relief or, perhaps more significantly, that these individuals are not barred from relief simply because the presiding judge does not understand the intricacies of a relationship plagued by domestic violence. 

January 14, 2015 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, January 13, 2015

Virginia Tax Review Publishes New Issue

Virginia Tax Review (2014)The Virginia Tax Review has published Vol. 34, No. 1 (Summer 2014):

January 13, 2015 in Scholarship, Tax | Permalink | Comments (0)

49th Annual Heckerling Institute on Estate Planning

Heckerling Cover_Page_1Tax Prof speakers at this week's 49th Annual Heckerling Institute on Estate Planning in Orlando:

  • Sam Donaldson (University of Washington), Recent Developments 2014
  • David Herzig (Valparaiso), The Most Important Elements, Clauses and Ideas for Trust Design
  • Susan Gary (Oregon), Restricted Charitable Gifts: Drafting Agreements that Stand the Test of Time
  • Tom Gallinas (Iowa), A Closer Look at Powers of Appointment in the Current Planning Environment
  • Mary Radford  (Georgia State), Case Studies in the Ethical Considerations in Acting as an Executor or Trustee

January 13, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Occupy Wall Street, Distributive Justice, and Tax Scholarship

OccupyPatrick Crawford (Crawford Tax Law Group, Los Angeles), Occupy Wall Street, Distributive Justice, and Tax Scholarship: An Ideology Critique of the Consumption Tax Debate, 12 U. N.H. L. Rev. 137 (2014):

This Article argues that the pro-consumption tax literature is wrong to claim that no legitimate fairness objections to the consumption tax exist. It argues that the persistent and widespread wariness about replacing our current hybrid consumption tax/income tax system with a pure consumption tax is, contrary to what the pro-consumption tax literature asserts, completely justified. In fact, our reservations about the consumption tax’s fairness reflect legitimate concern about the role of capitalist power in America, particularly over the past thirty years. Indeed, the more the nation continues to experience the social welfare effects of increased capitalist power, the more compelling these objections become. History proves these concerns not just legitimate, but paramount. A full account, not a dismissal, of how capitalist power might benefit from a consumption tax is what would be required to meet these fairness objections.

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January 13, 2015 in Scholarship, Tax | Permalink | Comments (0)

Luttmer & Singhal: Tax Morale

Erzo F. P. Luttmer (Dartmouth) & Monica Singhal (Harvard), Tax Morale, 28 J. Econ. Perspectives 149 (Fall 2014):

There is an apparent disconnect between much of the academic literature on tax compliance and the administration of tax policy. In the benchmark economic model, the key policy parameters affecting tax evasion are the tax rate, the detection probability, and the penalty imposed conditional on the evasion being detected. Meanwhile, tax administrators also tend to place a great deal of emphasis on the importance of improving "tax morale," by which they generally mean increasing voluntary compliance with tax laws and creating a social norm of compliance. We will define tax morale broadly to include nonpecuniary motivations for tax compliance as well as factors that fall outside the standard, expected utility framework. Tax morale does indeed appear to be an important component of compliance decisions. We demonstrate that tax morale operates through a variety of underlying mechanisms, drawing on evidence from laboratory studies, natural experiments, and an emerging literature employing randomized field experiments. We consider the implications for tax policy and attempt to understand why recent interventions designed to improve morale, and thereby compliance, have had mixed results to date.

January 13, 2015 in Scholarship, Tax | Permalink | Comments (0)

Pepperdine Tax Policy Workshop Series (Spring 2015)

Here is the schedule for my Spring 2015 Pepperdine Tax Policy Workshop Series:

  • Jan. 14    Adam Chodorow (Arizona State), Pope Francis, the Bible, and Tax Policy
  • Feb. 2     Michael Graetz (Columbia), The Tax Reform Road Not Taken -- Yet
  • Feb. 18   Ed Kleinbard (USC), We Are Better Than This: How Government Should Spend Our Money
  • Mar. 2    Shu-Yi Oei (Tulane), Human Equity? Regulating the New Income Share Agreements
  • Mar. 23  Gregg Polsky (North Carolina), Private Equity Tax Games
  • Apr. 6     Miranda Fleischer (San Diego), Libertarianism and the Charitable Tax Subsidies
  • Apr. 20   Heather Field (UC-Hastings), Aggressive Tax Planning and the Ethical Tax Lawyer

I will of course blog each professor's paper on the day of their presentation.  Southern California professors and practitioners are welcome to attend any of the sessions (11:00 a.m. - 12:30 p.m.) -- just let me know.

Pepperdine Tax Policy Workshop Series (Spring 2014)

Pepperdine 2015 (2)

January 13, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Johnson: The Circular 230 Regulations May Be Invalid

Tax Analysys Logo (2013) Steve Johnson (Florida State), How Far Does Circular 230 Exceed Treasury's Statutory Authority?, 146 Tax Notes 221 (Jan. 12, 2015):

In this report, Johnson discusses the future of Circular 230 and argues that if the approach of recent cases is confirmed by litigation and if Congress chooses not to act, significant portions of the circular may be at risk of invalidation.

January 13, 2015 in Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Armstrong: The Overreaction to Codification of the Economic Substance Doctrine

Monica D. Armstrong (Mercer), OMG! ESD Codified!: The Overreaction to Codification of the Economic Substance Doctrine, 9 Fla. A&M U. L. Rev. 113 (2013):

Section 7701(o) is not inherently flawed as the critics suggest. The decision not to provide further guidance with respect to the application of the economic substance test will not result in taxpayer uncertainty and a halt in normal business practices. If nothing else, it brings about certainty to the taxpayer, as well as to the government and the courts as to how to apply the proper test. Taxpayers engaging in legitimate transactions should feel comfortable continuing with such transactions. The questions that the critics demand from the government such as what constitutes a “meaningful change” and “substantial,” will be answered by the proper authority--the courts.

January 13, 2015 in Scholarship, Tax | Permalink | Comments (0)

Monday, January 12, 2015

The Contemporary Tax Journal Publishes New Issues

Contemporary Tax JournalsThe San Jose State University Masters of Science in Taxation Program in the Lucas Graduate School of Business has published the fourth (Volume 3, No. 2 (Spring 2014)) and fifth (Volume 4, No. 1 (Fall 2014)) issues of The Contemporary Tax Journal.

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

Sunday, January 11, 2015

The 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, with new papers debuting on the list at #3, #4, and #5.  The #1 paper is now #71 in all-time downloads among 10,625 tax papers:

  1. [1587 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [207 Downloads]  The Rise and Fall of the Consumption Tax: A Historical Perspective, by Reuven Avi-Yonah (Michigan)
  3. [154 Downloads]  Important Developments in Federal Income Taxation (2014), by Edward A. Morse (Creighton)
  4. [112 Downloads]  Do Audits Matter?: A Parallax Theory of the Relation between Tax Enforcement and Underreporting, by J. T. Manhire (U.S. Treasury Department)
  5. [110 Downloads]  Thomas Piketty and Inequality: Legal Causes and Tax Solutions, by Paul L. Caron (Pepperdine)

January 11, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, January 10, 2015

Drumbl: Protecting Taxpayers from Tax Preparers

Tax Analysys Logo (2013)Michelle Drumbl (Washington & Lee), When Helpers Hurt: Protecting Taxpayers from Preparers, 145 Tax Notes 1365 (Dec. 22, 2014):

How and whether the tax return preparer industry can or should be regulated is a fiercely debated question and has been the subject of recent litigation. This article explores return preparer regulation as a policy matter. It argues that an extensive regulation scheme will not provide meaningful protection to taxpayers. There are more effective ways to curb unscrupulous return preparation. Nonetheless, there is meaningful expressive value in subjecting return preparers to the ethical standards of Circular 230. Doing so may instill a greater professional pride in those return preparers who are not unscrupulous, and this benefits the system and the taxpayers served.

January 10, 2015 in Scholarship, Tax | Permalink | Comments (1)

Friday, January 9, 2015

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

Kamin: How to Tax the Rich

Tax Analysys Logo (2013) David Kamin (NYU),  How to Tax the Rich, 146 Tax Notes 119 (Jan. 5, 2015):

In this article, Kamin reviews options for increasing tax liabilities for the richest Americans. He concludes that several options that have received considerable attention and support are not viable as a practical matter -- taking into account amounts of revenue raised and administrative considerations. Those options include taxing capital gains as ordinary income, annual wealth taxes, and broad mark-to-market accounting. Kamin identifies more viable options, including substantially expanding transfer taxes, increasing the tax rate on ordinary income, and taxing -- at least partially -- unrealized gains at death or gift, which may be the most promising.

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January 9, 2015 in Scholarship, Tax, Tax Analysts | Permalink | Comments (2)

The Evolution of Legal Careers: The Case of Big Law Associates

Christine Riordan (MIT), The Evolution of Legal Careers: The Case of Big Law Associates:

The legal profession, long an example of a well established professional occupation, has been remade by a combination of technology, which permits outsourcing of work, as well as changing economics within Big Law as customers become more sophisticated and demanding regarding staffing a billing. As a consequence the careers of young associates have been transformed with the probability of making partner diminished. At the same time outsourcing of low level work, such as document review, has the potential for enabling associates to do more interesting work that better develops their skills. This paper, based on interviews with a sample of Big Law associates, will explore the changing nature of legal careers and the implications of these changes for the life chances of young lawyers.

January 9, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Shanske: The Federal Role in Municipal Debt Finance

Darien Shanske (UC-Davis), The Feds Are Already Here: The Federal Role in Municipal Debt Finance, 33 Rev. Banking & Fin. L. 795 (2014):

Should the federal government be involved in the regulation of municipal debt finance? The answer is arguably not. But this theoretical dispute is not the focus of this Article because, in fact, the federal government already regulates municipal debt finance extensively, generally much more extensively than the states regulate their municipalities’ use of debt. The primary source of federal regulation is the securities laws. Less well-known is that federal tax law also serves as an important constraint. This Article surveys and critically evaluates these federal laws, and comes to three tentative conclusions. First, the current federal oversight “system,” unplanned and ad hoc as it is, has been effective. Second, in part because the current system has never been thought of as a comprehensive system, there are low-hanging fruit in terms of making the system work better. To the extent the federal government does not put these reforms in place, states should. Third, even an optimally operating federal overlay does not absolve the states from more careful regulation of the financial affairs of their localities, particularly as to the use of debt. Above all, what the federal government does not — and ought not — do is provide localities with the expertise to use debt optimally; this is another area where the states should focus their reform efforts.

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

Thursday, January 8, 2015

Hasen: Income Taxation and Risk-Taking

David Hasen (Colorado), Income Taxation and Risk-Taking:

The literature on income taxation and risk-taking has tended toward the view that a true, or “normative,” income tax is ineffective at taxing the returns to risk-taking. The theory is that investors increase the size of their portfolios in response to the tax, because the tax causes the government both to absorb a portion of the gains realized from risk-based investment and to subsidize in analogous fashion any losses sustained. When the increased investment makes money, the larger return covers the associated tax liability, and when it loses money, the deduction for the enlarged loss compensates for the excess over the loss that would have been realized in a world without the tax. At the end of the day, the investor is mostly returned to the position he occupied in the non-tax world.

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

Houston Business & Tax Journal Publishes New Issue

HB&TJ The Houston Business & Tax Law Journal has published Vol. 14, Part 1 (2014):

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

Measuring Faculty Scholarly Impact Through 'Citation Wake' Analysis

Citation WakePhys.org, Assessing Scientific Research by 'Citation Wake' Detects Nobel Laureates' Papers:

Ranking scientific papers in order of importance is an inherently subjective task, yet that doesn't keep researchers from trying to develop quantitative assessments. In a new paper, scientists have proposed a new measure of assessment that is based on the "citation wake" of a paper, which encompasses the direct citations and weighted indirect citations received by the paper. [Stefan Bornholdt & David F. Klosik, The Citation Wake of Publications Detects Nobel Laureates' Papers] The new method attempts to focus on the propagation of ideas rather than credit distribution, and succeeds by at least one significant measure: a large fraction (72%) of its top-ranked papers are coauthored by Nobel Prize laureates. ...

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January 8, 2015 in Legal Education, Scholarship | Permalink | Comments (0)

Judge Goldberg and the Federal Tax Law

William D. Elliott, Judge Irving L. Goldberg and the Federal Tax Law, 46 Tex. Tech. L. Rev. 849 (2014):

From 1966 to 1995, Irving Goldberg served as a judge on the United States Court of Appeals for the Fifth Circuit. ... This Article concerns Goldberg's tax opinions. ... Like Henry Friendly of the Second Circuit, Richard Posner of the Seventh Circuit, and a few other circuit judges who have developed a unique reputation and perhaps even a close identity with a certain area of law, Irving Goldberg placed his personal stamp on federal tax law.

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

Shapiro: Anatomy of a Special Tax Break and the Case for Corporate Tax Reform

Robert J. Shapiro (Georgetown), Anatomy of a Special Tax Break and the Case for Broad Corporate Tax Reform:

This essay provides a case study of the difficulties entailed in reforming the corporate tax code by examining the costs and distortions associated with one large special tax preference, Section 199 of the corporate code. Enacted in 2005, this provision provides a special deduction for some of the profits arising from certain designated “domestic production activities.” Our analysis shows that while the provision was originally intended to help manufacturing, it now provides tax benefits for a number of other, selected industries, including the information industry (including film production), mining, and construction. In many cases, eligibility is arbitrary: For example, food processing qualifies but not retail food businesses – unless the food establishment roasts beans used to brew coffee. At the same time, vital areas such as health care, finance, insurance, and educational services receive no benefit, and neither do many labor-intensive industries such as transportation and warehousing, administration and support, retail trade, and accommodations and food services. From 2005 to 2009, for example, Section 199 provided the information and movie industry, on average, 60 times the benefits received by these other vital and job-intensive industries. And within the manufacturing sector, Section 199 provided by far the greatest benefits, relative to the size of manufacturing sub-industries, to beverage and tobacco producers, followed by chemicals, and then by computer and electronic products. Traditional manufacturing industries such as textiles, apparel, wood products, leather products, printing, and furniture cannot claim significant benefits from Section 199. We also show that that while these allocations distort investment, there is no evidence that the provision promotes job creation in those industries that use it most.

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

Hill: Citizens United and § 501(c)(4) Organizations -- Guidance, Compliance, and Enforcement

Frances R. Hill (Miami), Citizens United and Social Welfare Organizations: The Tangled Relationships Among Guidance, Compliance, and Enforcement, 43 Stetson L. Rev. 539 (2014):

This Article explores the roles of the IRS and the Supreme Court in creating the conditions for the redesign of § 501(c)(4) organizations as campaign finance vehicles, which resulted in the current crisis. Part II discusses the long-term failure of the IRS to issue guidance relating to § 501(c)(4), including its failure to issue any guidance in response to Citizens United. Part III discusses the impact of Citizens United on the structure and operation of § 501(c)(4) organizations. Part IV examines the impact of the Court's insistence in Citizens United that regulatory agencies play a limited role in campaign finance regulation and that tests based on facts and circumstances are themselves constitutionally impermissible burdens on political speech. Part V discusses the response of the reconstituted but not yet reformed IRS. Part VI offers a brief conclusion focused on the challenges going forward.

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