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Friday, June 6, 2014

9th Annual Junior Tax Scholars Workshop Kicks Off Today at American

American Logo (2014)Panel #1:  Financial Innovation

Randle Pollard (Indiana, Kelley School of Business), Feeling Insecure – A State View of Whether Investors in Municipal General Obligation Bonds Have a Mere Promise to Pay or a Binding Obligation
Commentators:  Phil Hackney (LSU), Susan Morse (Texas)

Omri Marian (Florida), Designing a Regulatory System for Bitcoin Era
Commentators:  Andrew Blair-Stanek (Maryland), Jason Oh (UCLA)

Ben Leff (American), Income-Based Repayment Swap
Commentators:  Emily Cauble (DePaul), David Kamin (NYU)

Panel #2:  Uncertainty and Time

Jake Brooks (Georgetown), The Case for Incrementalism in Tax Reform
Commentators: Andy Grewal (Iowa), Leigh Osofsky (Miami)

David Kamin (NYU), Fiscal Policy in an Uncertain World
Commentators:  Andrew Blair-Stanek (Maryland), David Gamage (UC-Berkeley)

Rebecca Morrow (Wake Forest), Keep them Guessing: A Defense of Impermanent, Automatically-Expiring and Short-Term Tax Policies
Commentators:  Mirit Eyal-Cohen (Alabama), Itai Grinberg (Georgetown)

Jason Oh (UCLA), Estimating Uncertainty and the Politics of Tax Law
Commentators: Andrew Hayashi (Virginia), Tracey Roberts (Seattle)

Panel #3:  Optimal Tax

Andrew Hayashi (Virginia), Cash Taxes and Consumption Commitments
Commentators:  Susan Morse (Texas), Jason Oh (UCLA)

David Gamage (UC-Berkeley), Optimal Tax II
Commentators: Jake Brooks (NYU), Emily Satterthwaite (Toronto)

Panel #4:  International Tax

Micah Burch (Sydney), Extranational Income
Commentators:  Omri Marian (Florida), Rebecca Morrow (Wake Forest)

Itai Grinberg (Georgetown), Putting International Tax in Its International Economic Law Context
Commentators: David Herzig (Valparaiso), Emily Satterthwaite (Toronto)

Panel #5:  Marriage and Family

Tessa Davis (Tulane), Taxing Modern Families: Mapping the Families of Tax
Commentators: Ben Leff (American), Randle Pollard (Indiana, Kelley School of Business)

David Herzig (Valparaiso), Marriage Pluralism: Taxing Marriage After Windsor
Commentators: Tessa Davis (Tulane), Khrista Johnson (Pepperdine)

Prior Junior Tax Scholars Workshops:

June 6, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Thursday, June 5, 2014

Blair-Stanek: Intellectual Property Law Solutions to Tax Avoidance

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

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

Morriss: Law, Economics, and Religion

Andrew P. Morriss (Dean, Texas A&M), On the Usefulness of a Flat Economics to the World of Faith, 11 Econ. J. Watch 194 (2014):

DollarIs economics unduly flat? Perhaps, sometimes. But part of the power of economics comes from the parsimony of its approach to human nature. If and when we search for more complex approaches, we will need to understand the tradeoffs involved in choosing between that power and simplicity and the alternatives. Rather than deepening our economics with faith, it may be that we are better off using a relatively flat economics to enrich religious understandings.

(Hat Tip: Greg McNeal.)

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

Galle: How Do Nonprofit Firms Respond to Tax Policy?

Brian D. Galle (Boston College), How Do Nonprofit Firms Respond to Tax Policy?:

We investigate the effects of variations in the value of the charitable contribution deduction on nonprofit firm behavior, including exploring for the first time the effects of the tax-price of giving on fundraising and returns to fundraising. We find that a one-percent increase in tax subsidies drives a 1.7-percent increase in fundraising, and decreases average returns to fundraising by two percent. We also find that tax subsidies deliver less than a dollar of value, net of fundraising, for each dollar foregone by the government, and that program-related expenditures are largely unresponsive to subsidies, at least in the short run. We argue that these results may imply that the charitable contribution deduction is less effective than prior research has suggested. For example, we argue our results are consistent with the hypothesis that subsidies trigger a destructive arms’ race for donor funds. The modest elasticity of real charitable output to tax price implies that tax subsidies may simply crowd out other revenue sources, such that the efficacy of the subsidy depends on the relative efficiency of these alternative sources.

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

Standing in the Shadow of Tax Exceptionalism

Lynn D. Lu (CUNY), Standing in the Shadow of Tax Exceptionalism: Expanding Access To Judicial Review of Federal Agency Rules, 66 Admin. L. Rev. 73 (2014):

As the U.S. Supreme Court recently confirmed, regulation of behavior through the tax code is "nothing new." Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2596 (2012). From the individual mandate’s "shared responsibility payment" to the income-tax deduction for charitable donations, tax provisions raise or lower the cost of particular conduct. In doing so, tax rules, like all administrative rules, reflect normative values and protect important public interests. Yet the need for swift and certain collection of revenue has historically excused tax regulation from general administrative law principles that promote government accountability in the implementation of federal mandates.

This Article explores one critical instance in which tax exceptionalism swallowed the rule of government accountability to insulate much federal agency rulemaking from judicial oversight in all administrative arenas: constitutional standing doctrine. Under current standing doctrine, a wide range of regulatory stakeholders lacks access to federal court review of agency rules that adversely affect their concrete interests. Where such stakeholders are members of historically or politically marginalized populations, the lack of access to judicial review exacerbates process defects that limit their participation in rulemaking decisions. The result is an imbalance in regulatory influence between entities subject to the burdens of regulation and those who stand to benefit from the enforcement of regulatory mandates.

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

Wednesday, June 4, 2014

Fahey: The Movement to Destroy the Income Tax and the IRS

Diane L. Fahey (New York Law School), The Movement to Destroy the Income Tax and the IRS: Who Is Doing It and How They Are Succeeding, 15 Fla. Tax Rev. 157 (2014):

Florida Tax ReviewThe passage of the Sixteenth Amendment to the United States Constitution in 1913 enabled the federal government to enact an income tax. Until 1941, only a small number of Americans paid the income tax; however, when the United States entered World War II, the income tax was expanded so that most citizens paid something. After the war ended, the federal income tax remained in place as a mass tax. Further, as the tax was expanded it became a major source of revenue for the federal government during and after World War II, thereby enabling the federal government to grow in size and power.

However, from the time the income tax was enacted, there has been a movement to undermine the income tax by financial elites who not only stand to benefit enormously but who are philosophically offended at both the idea of being subject to an income tax and an expanded and powerful federal government. The wealthy who were dismayed by the federal government’s increasingly prominent role in the lives of ordinary Americans recognized that reducing the federal government’s access to funds would reduce its influence and power. This movement has used a several-pronged approach: (1) attack the legitimacy of the federal government itself, and (2) attack the income tax and attack the manner in which the tax is collected.

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June 4, 2014 in Scholarship, Tax | Permalink | Comments (3)

Warren: Credit v. Deduction of Foreign Taxes of a Multinational Corporation

Alvin C. Warren (Harvard), The Relationship between a Credit and a Deduction for the Foreign Taxes of a Multinational Corporation:

A credit for foreign taxes paid by a multinational company is usually described as fundamentally different from a deduction for foreign taxes. The credit has been criticized for eliminating the taxpayer's incentive to reduce foreign taxes, whereas a deduction is said to maintain that incentive. On the other hand, the credit is traditionally defended as a method of eliminating double taxation of cross-border income, whereas the deduction is often criticized for producing multiple levels of taxation (and is therefore not an acceptable method of dealing with double taxation under the standard international tax treaties). The argument of this note is that a credit and a deduction for foreign taxes paid by a multinational company are not as different as the foregoing assertions would suggest. Indeed, credits and deductions can be interchangeable, with the distinction only a matter of labels or nominal tax rates.

June 4, 2014 in Scholarship, Tax | Permalink | Comments (0)

McGeorge Symposium: The State and Future of Legal Education

McGeorgeSymposium, The State and Future of Legal Education, 45 McGeorge L. Rev. 1-160 (2013):

June 4, 2014 in Legal Education, Scholarship | Permalink | Comments (3)

Sullivan: How Will Japan Pay for a Lower Corporate Rate?

Tax Analysys Logo (2013)Martin A. Sullivan (Tax Analysts), How Will Japan Pay for a Lower Corporate Rate?, 74 Tax Notes Int'l 788 (June 2, 2014):

Japanese Prime Minister Shinzo Abe's second term began in December 2012. In the first 12 months, prices on the previously moribund stock market soared 63 percent. In the following six months, they have dropped by 10 percent. ... The rise and fall are largely explained by Abenomics.

TNIThe prime minister's radical break from Japan's previous economic policies has three components, referred to as the three arrows. The first arrow is an enormous expansion of the money supply by the Bank of Japan. The second arrow is a big boost in government spending. By all accounts, both of these measures have been successful in providing short-term stimulus to the economy. ...

But Japan's miraculous made-in-Tokyo recovery is now stalled by a lack of progress on the third arrow of Abe's program: promised but unspecified structural, supply-side reforms like reduced regulation of the labor market, reductions in trade barriers and other protections of favored industries, and a reduction in the corporate tax rate, currently the second highest in the world after the United States. The government's fiscal and economic blueprint, due later this month, is expected to offer proposals on these issues. ...

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June 4, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (1)

Tuesday, June 3, 2014

Graetz: The Tax Reform Road Not Taken -- Yet

Michael J. Graetz (Columbia), The Tax Reform Road Not Taken -- Yet, 67 Nat'l Tax J. 419 (2014):

National Tax Journal Logo (2013)The United States has traveled a unique tax policy path, avoiding value added taxes (VATs), which have now been adopted by every OECD country and 160 countries worldwide. Moreover, many U.S. consumption tax advocates have insisted on direct personalized taxes that are unlike taxes used anywhere in the world. This article details a tax reform plan that uses revenues from a VAT to substantially reduce and reform our nation’s tax system. The plan would (1) enact a destination-based VAT; (2) use the revenue produced by this VAT to finance an income tax exemption of $100,000 of family income and to lower income tax rates on income above that amount; (3) lower the corporate income tax rate to 15 percent; and (4) protect low and-moderate-income workers from a tax increase through payroll tax credits and expanded refundable child tax credits. This revenue and distributionally neutral plan would stimulate economic growth, free more than 150 million Americans from having to file income tax returns, solve the difficult problems of international income taxation, and remove the temptation for Congress to use tax benefits as if they are solutions to the nation’s pressing social and economic problems.

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

Mayer & Ganahl: Taxing Social Enterprise

Lloyd Hitoshi Mayer (Notre Dame) & Joseph R. Ganahl (J.D. 2013, Notre Dame), Taxing Social Enterprise, 66 Stan. L. Rev. 387 (2014):

The fairly strict divide in the United States between for-profit and nonprofit forms presents a quandary for many entrepreneurs who want to combine doing good with doing well. On the one hand, for-profits offer great flexibility and access to capital and so attract entrepreneurs who would like to take advantage of the ability of for-profits to scale up rapidly to meet growing demand. At the same time, however, for-profit forms also limit entrepreneurs’ ability to engage in philanthropy, due to the fiduciary duties managers owe to the equity holders. On the other hand, nonprofits offer their founders the freedom to prioritize public benefit but limit both their access to capital, in large part due to the bar on equity financing for a nonprofit, and their flexibility in addressing changing societal needs as a result of constraints in the law designed to deter nonprofits from straying into activities unrelated to their narrow primary mission. Hybrids — low-profit limited liability companies, benefit corporations, and other related forms — have been touted as the “both-and” solution to this problem by marrying the capital and innovation that results from the ability to generate a profit for investors with the public benefit goals that characterize most nonprofits.

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

Zelinsky: The Minnesota Snowbird Tax and Double Taxation of Dual Residents

Florida Tax ReviewEdward A. Zelinsky (Cardozo), Apportioning State Personal Income Taxes to Eliminate the Double Taxation of Dual Residents -- Thoughts Provoked by the Proposed Minnesota Snowbird Tax, 15 Fla. Tax Rev. 533 (2014):

As a matter of both tax policy and constitutional law, it is time to apportion state personal income taxes to eliminate the double taxation of dual residents. Individuals who, for income tax purposes, are residents are two or more states should be taxed along the lines recently proposed by Minnesota Governor Mark Dayton for “snowbirds”: As to income with respect to which a state has source jurisdiction, that state should tax such income. As to income which two or more states tax only on the basis of residence, such states should apportion, based on the dual resident’s relative presence in each state of residence. This apportioned approach would eliminate the double taxation of dual residents’ income and would comport better with modern patterns of residence and mobility.

While Minnesota’s legislature did not adopt the Dayton proposal, that proposal should provoke reconsideration of the conventional understanding of personal residence for state income tax purposes. The traditional understanding can cause double taxation when an individual is deemed to be a resident of two or more states, each entitled to tax this dual resident’s entire income. As a matter of tax policy and constitutional law, the formula advanced by Governor Dayton for Minnesota snowbirds is the proper way to tax all dual residents. As to income with respect to which a state has source jurisdiction because the income arises within the state’s geographic boundaries, that state should tax that income, whether or not the taxpayer is a resident of such state. As to income with respect to which two or more states have only residence-based jurisdiction to tax, the states of residence should tax on a proportionate basis, based on the part of the year the dual resident spends in each state. In practice, the income apportioned between states of residence under this approach will typically be dual residents’ intangible investment income such as dividends and interest. To eliminate double residence-based taxation of such income, the Dayton formula should, both as a matter of tax policy and of constitutional law, apply to all individuals who are, for tax purposes, residents of two or more states.

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

Monday, June 2, 2014

Jones: The IRS Should Reevaluate its Floundering ADR Program

Tax Analysys Logo (2013)Ken Jones (Sutherland Asbill & Brennan, Washington, D.C.), Appeals Arbitration: Not a Compelling Litigation Alternative, 143 Tax Notes 1059 (June 2, 2014):

IRS Appeals announced its initial arbitration program in 2000, and after 14 years, there apparently have been only a few cases resolved by binding arbitration. Appeals arbitration has failed to become popular in the tax controversy marketplace, and there are some likely reasons for the program's lack of success. ... I offer my observations about the arbitration program, why it has not been embraced by taxpayers as a viable alternative to litigation, and why Appeals should reevaluate the role of binding arbitration -- and, indeed, all of its alternative dispute resolution (ADR) tools -- to determine whether they are meeting the needs of the taxpayers and the IRS.

June 2, 2014 in IRS News, Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Sunday, June 1, 2014

Legal Education, Religious and Secular: The Trinity Western University Controversy and Beyond

Carissima Mathen (University of Ottawa, Faculty of Law) & Michael Plaxton (University of Saskatchewan, College of Law), Legal Education, Religious and Secular: TWU and Beyond:

TrinityThere has been a vigorous argument in Canada over whether a private Christian educational institution, Trinity Western University (TWU), should be able to open an accredited law school. TWU has come under scrutiny for requiring faculty, students and staff to sign a Community Covenant [FAQ] promising not to engage in a set of biblically prohibited activities, including sexual contact outside of heterosexual marriage. Arguing that the Covenant is discriminatory, many oppose the law school. Their objections have precipitated debates in both academic and regulatory settings.

This paper does not engage with the various constitutional and human rights issues at stake in the TWU controversy. Instead, it engages in a broader discussion of Canadian legal education – its existing conventions, animating aims, and relationship to the legal profession. Though we have deep concerns about the TWU Covenant, and its effect on gay and lesbian students, we also have concerns about the way in which some of the objections to TWU’s law school have been framed. In criticizing TWU, secular law schools and academics should be wary of setting out standards that, in their own institutions, they do not purport to observe.

Prior TaxProf Blog coverage:

June 1, 2014 in Legal Education, Scholarship | Permalink | Comments (2)

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 on SSRN, with a new paper debuting on the list at #5:

  1. [298 Downloads]  The New Flat Tax: A Modest Proposal for a Constitutionally Apportioned Wealth Tax, by John Thomas Plecnik (Cleveland State)
  2. [285 Downloads]  Just Say No: Corporate Taxation and Corporate Social Responsibility, by Reuven S. Avi-Yonah (Michigan)
  3. [195 Downloads]  Carried Interest for the Common Man, by Richard Winchester (Thomas Jefferson)
  4. [193 Downloads]  The Real Problem with Carried Interests, by Heather M. Field (UC-Hastings)
  5. [158 Downloads]  Avoidance, Evasion, and Taxpayer Morality, by Allison Christians (McGill)

June 1, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, May 31, 2014

Today's Law, Society & Taxation Panels

Law & SocietyToday's Law, Society, and Taxation panels at the 2014 Law & Society Association Annual Meeting in Minneapolis:

  • Panel #11:  Social Policy, Human Needs, and Tax Law
  • Panel #12:  Politics, Substance, and Taxation
  • Author Meets Readers: Ajay Mehrotra (Indiana), Making the Modern American Fiscal State

Today's paper presenters, topics, and abstracts are below the fold:

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May 31, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Friday, May 30, 2014

Weekly SSRN Tax Roundup

May 30, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Weekly Student Tax Note Roundup

Today's Law, Society & Taxation Panels

Law & SocietyToday's Law, Society, and Taxation panels at the 2014 Law & Society Association Annual Meeting in Minneapolis:

  • Panel #6:  Comparative Issues in Taxation
  • Panel #7:  Corporate Taxation
  • Panel #8:  Rules Versus Standards in Taxation
  • Panel #9:  Businesses and Taxation
  • Panel #10:  The Administration of Tax Systems

Today's paper presenters, topics, and abstracts are below the fold:

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May 30, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Thursday, May 29, 2014

Today's Law, Society & Taxation Panels

Law & SocietyToday's Law, Society, and Taxation panels at the 2014 Law & Society Association Annual Meeting in Minneapolis:

  • Panel #1:  The Theory of Taxation
  • Panel #2:  Nonprofits and TaxationPanel #3:  Higher Education, Sports, and Taxation
  • Panel #4:  From Local to Global Issues in Taxation
  • Panel #5:  International Taxation

Today's paper presenters, topics, and abstracts are below the fold:

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May 29, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Hackney: Why Section 501(C)(6) Trade Associations Are Undeserving of Tax Exemption

Philip Hackney (LSU), Taxing the Unheavenly Chorus: Why Section 501(C)(6) Trade Associations Are Undeserving of Tax Exemption, 92 Denv. U. L. Rev. ___ (2014):

Our federal, state, and local governments provide a subsidy that enhances the political voice of business interests. This article discusses the federal subsidy for business interests provided through the Internal Revenue Code (“Code”) and argues why we should end that subsidy. Under the same section that provides exemption from income tax for charitable organizations, the Code also exempts nonprofit organizations classified as “business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues.” Theory supporting tax exemption states that we should subsidize nonprofit organizations that provide goods or services that are undersupplied by the market. A charitable organization that assists the poor is a classic example of a service undersupplied by the market. Business interest group services, however, are found in abundance. Data shows that there is a significant bias in the interest group system in favor of business interests and away from interests such as labor, the poor, and the environment. Tax-exemption at federal, state, and local levels likely fosters at least some of this bias in our democracy. Rather than enhancing a pluralistic society, as some argue is a prime benefit of our tax-exempt system, tax-exemption for business interest groups enhances the voice of the powerful and detracts from the voice of the weak. Thus, because business interests experience little in the way of market failure and tax-exemption for such groups likely leads to a bias in our democratic system I argue we should end exemption for nonprofit business interests.

May 29, 2014 in Scholarship, Tax | Permalink | Comments (0)

A Case for Simpler Gain Bifurcation for Real Estate Developers

Florida Tax ReviewBradley T. Borden (Brooklyn), Nathan Brown (Proskauer Rose, Boca Raton) & John Wagner II (Williams Parker Harrison Dietz & Getzen, Sarasota), A Case for Simpler Gain Bifurcation for Real Estate Developers, 15 Fla Tax Rev. ___ (2014):

This Article examines the judicially-sanctioned bifurcation of real estate developers’ gain. The Article recognizes that even though some commentators oppose granting favorable tax treatment to capital gains, the law most likely will not change. With that in mind, the Article examines the all-or-nothing approach of characterizing gain from the sale of real estate as either capital gain or ordinary income. The Article rejects the all-or-nothing approach of characterizing income under the current statutory system. Instead, it embraces gain bifurcation in the second-best setting that taxes capital gains and ordinary income differently. Illustrating the policy justification for gain bifurcation and judicially-sanctioned bifurcation structures, the Article recommends that lawmakers should more fully embrace gain bifurcation for real estate developers by creating a simple statutory election for bifurcating gain that would enhance equity, accuracy, and transparency of gain bifurcation. Although the Article limits its analysis to real estate developers, the idea of gain bifurcation, once improved in this area, could be a catalyst for exploring bifurcation in other areas.

May 29, 2014 in Scholarship, Tax | Permalink | Comments (0)

Fordham Symposium: The Legal Profession's Monopoly on the Practice of Law

Fordham LogoSymposium, The Legal Profession's Monopoly on the Practice of Law, 82 Fordham L. Rev. 2563-3090 (2014):

May 29, 2014 in Legal Education, Scholarship | Permalink | Comments (2)

Sullivan: Lessons From the Last War on Inversions

Tax Analysys Logo (2013)Martin A. Sullivan (Tax Analysts), Lessons From the Last War on Inversions, 2014 WTD 101-4 (May 26, 2014):

Martin A. Sullivan looks at the history of anti-inversion legislation in Congress, starting with Democratic efforts in 2002 and culminating in the enactment of section 7874 in 2004.

Sullivan 2

May 29, 2014 in Scholarship, Tax, Tax Analysts | Permalink | Comments (0)

Clausing: Lessons for International Tax Reform from the U.S. State Experience Under Formulary Apportionment

Kimberly A. Clausing (Reed College), Lessons for International Tax Reform from the US State Experience Under Formulary Apportionment:

This work undertakes a comprehensive analysis of the US state experience under formulary apportionment of corporate income. While formulary apportionment eliminates the possibility of shifting income across states through accounting strategies that manipulate where income is booked, it may heighten the tax responsiveness of formula factors. The present analysis uses the substantial variation in corporate tax policy decisions of US states over the period 1986 to 2012 to understand the consequences of formulary apportionment better. It examines the effects of policy choices regarding tax rates, formula weights, and other parameters on economic activity, estimating the tax sensitivity of employment, investment, and sales. With the inclusion of adequate control variables, results indicate that economic activity has not been particularly sensitive to US state corporate tax policy choices, especially in recent years. Still, tax policy choices have important effects on corporate tax revenues. These results suggest important lessons regarding possible international adoption of formulary apportionment.

May 29, 2014 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, May 28, 2014

Blank & Mason Present U.S. National Report on Exchange of Information Today at Annual Congress of European Association of Tax Law Professors

EATLP Logo (2013)Joshua D. Blank (NYU) & Ruth Mason (Virginia) present United States National Report on Exchange of Information at the 2014 Annual Congress of the European Association of Tax Law Professors today in Istanbul, Turkey:

The United States recently has taken an aggressive stance towards non-reporting of offshore income and attendant offshore tax evasion. This National Report discusses administrative and legal mechanisms, including the Foreign Account Tax Compliance Act (FATCA), available to the United States to secure offshore tax information. It also discusses the legal regimes under which the United States shares tax information with partner jurisdictions.

See also Joshua D. Blank (NYU) & Ruth Mason (Virginia), Exporting FATCA, 142 Tax Notes 1245 (Mar. 17, 2014).

Update #1:  Tracy Kaye (Seton Hall), Leandra Lederman (Indiana), and Stephen Mazza (Kansas) at the conference:

Photo 2

Update #2:  Joshua Blank (NYU), Tracy Kaye (Seton Hall), Ruth Mason (Virginia), Leandra Lederman (Indiana), Tsilly Dagan (Bar-Ilan), and Steven Mazza (Kansas) at the conference:

EATP

May 28, 2014 in Colloquia, Scholarship, Tax | 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:

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.

May 28, 2014 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, May 27, 2014

Blank Presents Reconsidering Corporate Tax Privacy Today at Bocconi University

BlankJoshua D. Blank (NYU) presents Reconsidering Corporate Tax Privacy, 11 N.Y.U. J. L. & Bus. ___ (2014), at Bocconi University today in Milan, Italy, hosted by Carlo Garbarino.

For over a century, politicians, government officials and scholars in the United States have debated whether corporate tax returns, which are currently subject to broad tax privacy rules, should be made publicly accessible. Throughout this age-old debate, participants have speculated about how corporate managers and the IRS might behave differently if they knew that the public could observe corporations’ tax returns and how investors and the general public would respond if they had access to this information. There is, however, another, unexplored perspective: how could seeing other corporations’ tax returns affect how corporate managers engage in tax planning and tax return preparation for their own corporations?

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

The (Non)Finality of Supreme Court Opinions

New York Times:  Final Word on U.S. Law Isn’t: Supreme Court Keeps Editing, by Adam Liptak:

The Supreme Court has been quietly revising its decisions years after they were issued, altering the law of the land without public notice. The revisions include “truly substantive changes in factual statements and legal reasoning,” said Richard J. Lazarus, a law professor at Harvard and the author of a new study examining the phenomenon. [The (Non)Finality of Supreme Court Opinions, 128 Harv. L. Rev. ___ (2014):

Hiding in plain sight at the top of a Supreme Court opinion when first issued is a formal notice that “this opinion is subject to formal revision.” Readers have long assumed that any such revisions are both rarely made and entirely nonsubstantive in nature. Neither is true. Apart from the anticipated routine proofreading corrections of typographical errors, misspellings, and incidental grammatical mistakes, which are many, the Justices routinely correct mistakes in majority and separate opinions relating to the arguments of the parties, record below, historical facts, relevant statutes and regulations, opinions of their colleagues, and Court precedent. The Justices also, even more significantly, sometimes change their initial reasoning in support of their legal conclusions. To all these ends, they sometimes add, delete, and substitute words, phrases, and sentences. Unaware of the existence and degree of such changes, the public routinely refers to versions of opinions of the Court and of Justices that, while superseded, are nonetheless perpetuated through lower court opinions, websites, and even leading academic casebooks.

This article is the first to explore the Court’s practice of revising its opinions after initial publication, which one Justice privately referred to as “a strange and reverse basis” and a Court official described as “completely at odds with general publishing practices.” The article examines the depth and breadth of the practice since the Court’s first opinions through present days. It describes both the institutional reasons for the practice, which one Justice privately speculated extended to each Justice’s natural inclination to “rush to judgment” and “to get ‘on the scoreboard’” as soon as “all the votes are in” and possibly “to guard against any last minute shifting of a vote.” The article also describes how the Court’s related procedures for revision have shifted over time to become increasingly less transparent and potentially lacking in the degree of procedural fairness and rigor appropriate for opinions of the Court and of the Justices. The article recommends that the Court amend its current practices to provide at the very least for after-the-fact disclosure of changes made both to increase transparency and to provide, indirectly, some check against unnecessary substantive changes. The article further recommends that the Court consider the possibility of providing prior notice as well in certain circumstances.]

[M]ost changes are neither prompt nor publicized, and the court’s secretive editing process has led judges and law professors astray, causing them to rely on passages that were later scrubbed from the official record. The widening public access to online versions of the court’s decisions, some of which do not reflect the final wording, has made the longstanding problem more pronounced.

May 27, 2014 in Legal Education, Scholarship | Permalink | Comments (1)

Blank Presents In Defense of Individual Tax Privacy at the University of Milan

Blank Joshua D. Blank (NYU) presented In Defense of Individual Tax Privacy, 61 Emory L.J. 265 (2011), at the University of Milan’s Department of International, Legal, Historical and Politcal Studies yesterday in Milan, Italy, hosted by Giuseppe Marino:

The debate over whether tax privacy—a set of statutory rules that prohibits the federal government from publicly releasing any taxpayer’s tax return— promotes individual tax compliance is as old as the income tax itself. It dates back to the Civil War and resurfaces often, especially when the government seeks innovative ways to collect tax revenue more effectively. For over 150 years, the tax privacy debate has followed predictable patterns. Both sides have fixated on the question of how a taxpayer would comply with the tax system if he knew other taxpayers could see his personal tax return. Neither side, however, has addressed the converse question: How would seeing other taxpayers’ returns affect whether a taxpayer complies? This Article probes that unexplored question and, in doing so, offers a new defense of individual tax privacy: that tax privacy enables the government to influence individuals’ perceptions of its tax-enforcement capabilities by publicizing specific examples of its tax-enforcement strengths without exposing specific examples of its tax enforcement weaknesses. Because salient examples may implicate well-known cognitive biases, this strategic-publicity function of tax privacy can cause individuals to develop an inflated perception of the government’s ability to detect tax offenses, punish their perpetrators, and compel all but a few outliers to comply. Without the curtain of tax privacy, by contrast, individuals could see specific examples of the government’s tax-enforcement weaknesses that would contradict this perception. After considering this new defense of individual tax privacy in the context of deterrence and reciprocity models of taxpayer behavior, I argue that the strategic-publicity function of tax privacy likely encourages individuals to report their taxes properly and that it should be exploited to enhance voluntary compliance.

The commentators were Giuseppe Zizzo (Bocconi University) and Andrea Pedroli (Università della Svizzera italiana).

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

Sunday, May 25, 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 #4 and #5:

  1. [281 Downloads]  The New Flat Tax: A Modest Proposal for a Constitutionally Apportioned Wealth Tax, by John Thomas Plecnik (Cleveland State)
  2. [262 Downloads]  Just Say No: Corporate Taxation and Corporate Social Responsibility, by Reuven S. Avi-Yonah (Michigan)
  3. [207 Downloads]   It's Time for the Supreme Court to Address the Economic Substance Doctrine, by Andy Grewal (Iowa)
  4. [176 Downloads]  The Real Problem with Carried Interests, by Heather M. Field (UC-Hastings)
  5. [175 Downloads]  Carried Interest for the Common Man, by Richard Winchester (Thomas Jefferson)

May 25, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Friday, May 23, 2014

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

May 23, 2014 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Alm & Soled: Improving Tax Basis Reporting For Passthrough Entities

Tax Analysys Logo (2013)James Alm (Tulane) & Jay Soled (Rutgers), Improving Tax Basis Reporting For Passthrough Entities, 143 Tax Notes 809 (May 19, 2014) :

Tax basis reporting is a notoriously complex enterprise, and taxpayer compliance is lackluster at best. One area of the law in which basis reporting remains absent is for passthrough entity investments, such as partnerships and S corporations. As a result, many taxpayers do not know the basis they have in their passthrough investments. These taxpayers must therefore estimate the tax basis they have in those investments, often producing inflated basis figures and, as a byproduct, smaller taxable gains and larger taxable losses. In light of its proven track record in the area of marketable securities (where third-party tax basis reporting has recently become mandatory), Congress should make third-party tax basis reporting for passthrough entities a similar reality. Mandating passthrough entity basis reporting would greatly simplify the compliance process, alleviate the IRS's burdensome task of trying to detect basis misreporting, and produce billions of dollars in revenue without raising taxes.

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

Thursday, May 22, 2014

Rosenbloom, Noked & Helal: A Proposal for an International Tax Cooperation Forum

Florida Tax ReviewH. David Rosenbloom (NYU), Noam Noked (Harvard) & Mohamed S. Helal (Harvard), The Unruly World of Tax: A Proposal for an International Tax Cooperation Forum, 15 Fla. Tax Rev. 57 (2014):

International cooperation in tax policy is deeply fractured. Inconsistencies, loopholes and ineffective mechanisms—that could be avoided if efficient collaboration between countries existed—have created significant inefficiency losses for decades. This paper focuses on the institutional infrastructure underlying international cooperation in tax issues and argues that the current forums in which international cooperation in tax issues occurs do not provide an adequate platform in which countries with similar interests can effectively promote collaborative effort. To facilitate cooperation, this paper puts forward a proposal to create a new institution that is currently missing from the international tax policy-setting arena: an informal forum for coordination between countries that share similar interests in tax policy, inspired by the model of “Like Minded Groups” in international organizations. This forum will enable countries that share similar interests to cooperate and reach understandings about necessary policy changes. We mention two major projects that this forum could promote—efforts to curtail tax evasion and efforts to harmonize different aspects of tax policy. We argue that this model might have significant advantages in promoting cooperation, reducing the “competitiveness” threat, pushing forward policies and overcoming external and domestic pressures. Due to the current challenges in the field of tax policy, and the difficulties in forming cooperation within the current institutional framework, the proposed model is worth serious discussion and consideration.

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

Buckles: Obedience Norms and the Overseers of Charities

Johnny Rex Buckles (Houston), How Deep Are the Springs of Obedience Norms that Bind the Overseers of  Charities?, 62 Cath. U. L. Rev. 913 (2013):

This Article explores whether and how the exercise of discretion by charity fiduciaries in recasting a charity’s direction is, and should be, limited. Analyzing this basic issue raises additional, difficult inquiries: If the law does limit the ability of charity fiduciaries to determine the charitable paths of their entities, what standards govern the exercise of fiduciary discretion? To what extent does , and should, the law treat fiduciaries of charitable trusts dissimilarly from those who govern charitable nonprofit corporations? What role should governmental actors play in monitoring these decisions by charity managers? If governmental actors should assume some monitoring role, should their review of fiduciary decisions be ex ante or ex post? Which governmental actors should be involved? Can donors and other stakeholders sufficiently protect their interests absent a strong supervisory role by the government? ...

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

Aprill: Nonprofits and Political Activity: Lessons from England and Canada

TaxSymposiumHeaderEllen P. Aprill (Loyola-L.A.), Nonprofits and Political Activity: Lessons from England and Canada, 142 Tax Notes 1114 (Mar. 10, 2014) (Symposium on Tax Reform in a Time of Crisis):

In the recent debate about nonprofit organizations and political activity, little attention has been paid to what we can learn from the approach of other countries. This piece compares U.S. rules with those of Canada and England, in the context of both their nonprofit rules applicable to political activity and their campaign finance laws. As the piece explains, England and Canada, like the U.S., prohibit direct or indirect campaign intervention by charities. These countries, however, differ from the U.S. and each other in the amount of lobbying and other non-campaign political engagement permitted by charities. England and Canada do not limit noncharitable nonprofits from engaging in any type of political activity under their nonprofit or tax laws. Both countries, however, regulate elections and campaign finance in general more stringently than does the U.S.

May 22, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Rostain & Regan: Lawyers, Accountants, and the Tax Shelter Crisis

ConfidenceTanina Rostain (Georgetown) & Milton C. Regan Jr. (Georgetown), Confidence Games: Lawyers, Accountants, and the Tax Shelter Crisis (MIT Press, 2014):

For ten boom-powered years at the turn of the twenty-first century, some of America’s most prominent law and accounting firms created and marketed products that enabled the very rich—including newly minted dot-com millionaires—to avoid paying their fair share of taxes by claiming benefits not recognized by law. These abusive domestic tax shelters bore such exotic names as BOSS, BLIPS, and COBRA and were developed by such prestigious firms as KPMG and Ernst & Young. They brought in hundreds of millions of dollars in fees from clients and bilked the U.S. Treasury of billions in revenues before the IRS and Justice Department stepped in with civil penalties and criminal prosecutions. In Confidence Games, Tanina Rostain and Milton Regan describe the rise and fall of the tax shelter industry during this period, offering a riveting account of the most serious episode of professional misconduct in the history of the American bar.

Rostain and Regan describe a beleaguered IRS preoccupied by attacks from antitax and antigovernment politicians; heightened competition for professional services; the relaxation of tax practitioner norms against aggressive advice; and the creation of complex financial instruments that made abusive shelters harder to detect. By 2004, the tax shelter boom was over, leaving failed firms, disgraced professionals, and prison sentences in its wake. Rostain and Regan’s cautionary tale remains highly relevant today, as lawyers and accountants continue to face intense competitive pressure and regulators still struggle to keep pace with accelerating financial risk and innovation.

May 22, 2014 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Wednesday, May 21, 2014

Silver: Globalization and the Monopoly of ABA-Approved Law Schools

Carole Silver (Northwestern), Globalization and the Monopoly of ABA-Approved Law Schools: Missed Opportunities or Dodged Bullets?, 82 Fordham L. Rev. 2869 (2014):

As the market for lawyers and for law itself has responded to global forces, legal education also is becoming accustomed to working within a global context. U.S. law schools routinely look beyond the country’s borders to attract new students and opportunities. As with law firms and business generally, it no longer is sufficient to be domestic only; in order to gain prestige and to effectively compete in the U.S. market, schools must have a credible claim to being globally connected, if not global themselves. But despite the reorientation of law schools toward globalization, the regulatory regime in which U.S. law schools operate has not made a parallel shift toward embracing a global framework. Rather, it continues to maintain a distinctly U.S.-centric approach. The article offers a case study of globalization’s role in the fragmentation of power, and explores the resulting tensions.

May 21, 2014 in Legal Education, Scholarship | Permalink | Comments (0)

Harvard Symposium: Class in America

JOLSymposium, Class in America, 51 Harv. J. on Legis. 89-170 (2014):

May 21, 2014 in Conferences, Scholarship, Tax | Permalink | Comments (1)

Davis: Taxing Modern Families

Tessa Davis (Tulane), Taxing Modern Families Part I: Mapping the Families of Tax:

The Tax Code contains not one, but two conceptions of family. Existing scholarship does not address this puzzle but instead takes one of two views on the family — either the family is a tool for avoiding taxes or it is a source of discrimination. Current scholars, motivated by the discrimination concern, reject the relevance of kinship to tax and argue for an increasing focus on the individual. This Article takes a different approach. Utilizing the status/contract distinction familiar to family law scholars, it explains the puzzle of the multiple families in the Code, identifying the two families of the Code and their respective functions. Specifically, this Article shows that when we convey benefits through the Code we understand family as broad and contract-based. On the other hand, when our goal is to root out or head off tax gaming and avoidance, we constrict our notion of family to that of the nuclear, status-based family. Current reform proposals undervalue the importance of family to the prevention of avoidance and evasion, make targeting beneficial provisions more difficult, and inhibit the challenging work of reforming the Code to be both administratively feasible and non-discriminatory. Contrary to the current scholarship, this Article argues we should neither cut kinship from the Code nor rely exclusively upon the contract family. Instead, this Article creates a framework for modernizing the tax treatment of the family that utilizes kinship and both the status and contract families to maintain fairness and administrability, testing that framework on the § 32 Earned Income Tax Credit.

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

Schumacher: Magnifying Tax Deterrence by Prosecuting Professionals

Scott A. Schumacher (University of Washington), Magnifying Deterrence by Prosecuting Professionals, 89 Ind. L.J. 511 (2014):

This article examines the recent series of criminal prosecutions against tax professionals and offshore bankers. These criminal cases, brought against the largest Swiss bank (UBS), the oldest Swiss bank (Wegelin), one of the largest accounting firms in the world (KPMG), as well as numerous lawyers and accountants, was a dramatic shift for the U.S. Department of Justice. After decades of tolerating abusive tax shelters and tax haven banks, the Government changed its policy. However, rather than indicting the individuals and corporations who invested in tax shelters or hid money in offshore accounts, the Justice Department indicted the lawyers, accountants, and bankers who advised them. This article will analyze those prosecutions from a theoretical, historical, and practical perspective, and will examine the impact the new prosecution policy will have on the legal professional, the tax system, and international relations.

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

Monahan Presents The Law and Politics of Public Pensions Today at ALI Annual Meeting

ALIAmy B. Monahan (Minnesota), co-recipient of the American Law Institute's 2013 Young Scholars Medal for "early-career law professors whose work is relevant to the real world and has the potential to influence improvements in the law," will present The Law and Politics of Public Pensions at ALI's 2014 Annual Meeting today in Washington, D.C. She will be introduced by Goodwin Liu, California Supreme Court Justice and Chair of our Young Scholars Medal Committee.

(Hat Tip: Francine Lipman.)

May 21, 2014 in Conferences, Legal Education, Scholarship, Tax | Permalink | Comments (0)

AALS Call for Papers: IRS Oversight of Tax-Exempt Organizations

AALS 2014The AALS Section on Nonprofit and Philanthropy Law and the AALS Section on Taxation (Co-Sponsor) have issued a Call for Paper Proposals for a 2015 Annual Meeting Section Panel on IRS Oversight of Charitable and Other Exempt Organizations – Broken? Fixable?:

Proposed papers might address: the role of the IRS in overseeing specific aspects of tax-exempt nonprofit organizations, such as political activity or governance; the relative strengths and weaknesses of IRS oversight compared to oversight by other actors, including state attorneys general and private, self-regulating bodies; the effect of the late-1990s reorganization of the IRS on its ability to oversee tax-exempt nonprofit organizations; or the overlapping jurisdictions of the IRS with other federal agencies that oversee aspects of nonprofit organizations, such as the Federal Election Commission, the Federal Trade Commission, and the Department of Education.

Panelists will be a mix of presenters chosen through this call for paper proposals and solicited panelists with relevant expertise. Presenters will have the opportunity to publish their papers in the faculty-edited Pittsburgh Tax Review. To facilitate such publication, panelists will be expected to have a completed draft by the January 3, 2015 panel presentation and a final draft by February 28, 2015. 

To submit your proposal, please email a short description (no more than 750 words) of your paper to Lloyd Hitoshi Mayer, Chair of the Section on Nonprofit and Philanthropy Law, and Miranda Fleischer, Chair of the Section on Taxation. The deadline for proposals is Friday, August 15, 2014. The Executive Committees of the sponsoring sections will select the papers to be presented by mid-September. Please be aware that pursuant to AALS rules, only full-time faculty members of AALS members law schools are eligible to submit a paper proposal in response to a section’s call for papers. However, fellows from AALS member law schools are also eligible to submit a paper proposal if they include a CV with their proposal. Faculty at fee-paid law schools, international, visiting, and adjunct faculty members, graduate students, and non-law school faculty are not eligible to submit.

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

Tuesday, May 20, 2014

Miller & Maine: The Fundamentals of Wealth Transfer Tax Planning

John A. Miller (Idaho) & Jeffrey A. Maine (Maine), The Fundamentals of Wealth Transfer Tax Planning: 2013 and Beyond, 2013 BYU L. Rev. 879:

On January 1, 2013 Congress avoided the tax part of the so called “fiscal cliff” when it passed the American Taxpayer Relief Act of 2012 (ATRA). Among its many impacts this law prevented the application of a number of sunset provisions that would have dramatically altered the operation of the federal wealth transfer taxes. Instead Congress made permanent two significant transfer tax provisions introduced as temporary measures in 2010: the indexed basic exclusion amount and the deceased spousal unused exclusion amount. The latter provisions are sometimes referred to as the portability rules. ATRA also introduced a new maximum transfer tax rate of 40%. In addition ATRA made permanent a deduction for state death taxes and prevented the return of the state death tax credit. Thus, the main transfer tax emphasis of the actions taken by Congress in ATRA was to stabilize the wealth transfer tax system in a fashion that eliminates or reduces its planning impact on most taxpayers while also permanently establishing a significant new planning tool for the wealthy, the deceased spousal unused exclusion (DSUE) amount.

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May 20, 2014 in Scholarship, Tax | Permalink | Comments (0)

Infanti: LGBT Families, Tax Nothings

Anthony C. Infanti (Pittsburg), LGBT Families, Tax Nothings, 17 J. Gender Race & Just. 35 (2014):

The federal tax laws have never been friendly territory for LGBT families. Before the enactment of the federal Defense of Marriage Act (DOMA), the federal tax laws turned a blind eye to the existence of LGBT families by tacitly embracing state law discrimination against same-sex couples. When it enacted DOMA in 1996, Congress ensured that it would be able to continue to turn a blind eye to LGBT families even if one or more states were to legally recognize families headed by same-sex couples. In a real sense, LGBT families have been, and continue to be, tax outlaws.

This overt discrimination has not, however, proven to be an insurmountable hurdle for enterprising LBGT families wishing to obtain (at least in some measure) the same tax treatment as “traditional” families. The federal income tax laws provide tax benefits to relationships of dependency in many (though not all) of the same circumstances in which they afford benefits to married different-sex couples. These relationships of dependency are typically between the taxpayer, in the role of parent or caregiver, and a child or other person who cannot care for himself/herself. Often, the only means for same-sex couples to avoid otherwise discriminatory and burdensome tax consequences is for one spouse to qualify as the “dependent” of the other.

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May 20, 2014 in Scholarship, Tax | Permalink | Comments (0)

Cowan: Tax Consequences of Faculty Teaching Courses for Free

Mark J. Cowan (Boise State University, Department of Economics), Assignment of Income at the Ivory Tower: Relaxing the Tax Treatment of Services Donated to Charities by their Employees, 40 J.C.& U.L. 1 (2014):

When a faculty member donates time to a college or university by, for example, teaching a summer course for no compensation, the federal income tax treatment of the donation can take one of two forms. One possibility is that the donation will have no tax consequences. The faculty member realizes no income from the donation and gets no charitable deduction. A second possibility is that the faculty member will be required to recognize taxable income equal to the value of the services provided and then may (subject to certain limits) be allowed a charitable contribution deduction. In many cases, the income and deduction do not fully offset, resulting in negative tax consequences for the faculty member. This second possibility occurs when the faculty member directs where the funds saved by the donation are used within the institution. Since faculty members normally would prefer to control the specific use of the saved funds, many donations would result in negative tax consequences sufficient to stifle the donation in the first place. This Article argues that the tax law should be clarified and relaxed to allow faculty members (and other employees of charitable organizations) to donate time to their employer institutions on a tax-free basis in more situations than is currently the case. Alternatively, the Article suggests ways for charities to encourage donations of time by employees, even in the absence of a favorable law change.

May 20, 2014 in Scholarship, Tax | Permalink | Comments (8)

Todres: Tax Shelters and Tax Malpractice

Jacob L. Todres (St. John's), Bad Tax Shelters -- Accountability or the Lack Thereof: Ten Years of Tax Malpractice:

In the 1990’s and early 2000’s the tax landscape in the United States was overrun by an epidemic of tax shelters that was unprecedented. The shelters were designed and sold by seemingly reputable large accounting and law firms. The same shelters were sold to many taxpayers. They became generic, off-the-shelf, products. However, the tax shelters had no business substance. The shelters were eventually found to be invalid by the courts. In light of the invalidity of the shelters, the large fees paid for the shelters and the large damages caused by participating in the invalid shelters, there were predictions that many malpractice suits against the sellers of the shelters would ensue.

For this article I attempted to determine whether the predicted wave of tax malpractice suits occurred and what impact, if any, resulted in the area of tax malpractice litigation.

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May 20, 2014 in Scholarship, Tax | Permalink | Comments (0)

Monday, May 19, 2014

Preserving Wealth and Inheritance Through Medicaid Planning for Long-Term Care

John A. Miller (University of Idaho College of Law), Sean Bleck (Isenhour Bleck, Seattle) & Barbara Isenhour (Isenhour Bleck, Seattle), Preserving Wealth and Inheritance Through Medicaid Planning for Long-Term Care, 17 Mich. St. U. J. Med. & L. 153 (2013):

Medicaid 2In this article we explain the rules and planning techniques relevant to obtaining government funding for the long term health care of an elderly client. This is called Medicaid Planning. Medicaid planning poses particular challenges because it involves both a federal law template and a state law implementation system. In our article we use the law of the State of Washington to make our analysis concrete and specific, but most of the techniques and strategies that we describe are available in any state because federal law imposes the basic structure of Medicaid.

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

Fogg & Zuraw: Financial Disability for All

Keith Fogg (Villanova) & Rachel E. Zuraw (Office of Staff Counsel, U.S. Court of Appeals for the Fourth Circuit), Financial Disability for All, 62 Cath. U. L. Rev. 965 (2013):

The Internal Revenue Code has four discreet sections that allow late filing of claims and other documents under the circumstances described in those sections. The IRS has promulgated a procedural regulation that allows it to permit late elections under prescribed circumstances. Neither the Code sections nor the Regulation cover all of the circumstances in which taxpayers have a good excuse for missing a time frame. The current provisions have developed in an ad hoc manner. More ad hoc development of this area is possible as equitable tolling litigation seeks to open up time frames under the Code despite the efforts of the IRS to argue the tax code is exceptional.

Rather than continue down the path of ad hoc allowance of late claims and certain other late actions, this Article recommends the creation of a statute that would apply to all situations. The recommendation draws from the current provisions allowing late action and from principles developed in equitable tolling litigation. It proposes a transparent system under which the IRS would make a determination whether the late action qualified and that determination would be subject to judicial review under an abuse of discretion standard.

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