Monday, December 2, 2013
Martin Lobel (Lobel Novins & Lamont, Washington, D.C.), Eliminate the Corporate Income Tax and Level the Playing Field, 141 Tax Notes 967 (Dec. 2, 2013):
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Wednesday, November 27, 2013
Irwin J. Katz has posted several of his tax papers on bepress:
- Did Zarin Have a Tufts Day at a Casino Made Out of Kirby Lumber?, 26 U.C. Davis L. Rev. 261 (1993)
- The Deductibility of Educational Costs: Why Does Congress Allow the IRS to Take Your Education So Personally?, 17 Va. Tax Rev. 1 (1997)
- It's a Wonderful Life Insurance Policy: Determining the Correct Theory to Tax the Employee in Employer-Pay-All Equity Split-Dollar Life Insurance Arrangements, 53 Tax L. Rev. 143 (2000)
- Double Deductions, or Nothing: Why the Vindication of Beulah Crane Poster Child of Greedy Taxpayers Should Inspire Closing the Tax Trap Left Open After Tax Shelters Were Shut Down: And Other Crane Footnotes Revealed (2010)
- The Untold Story of Crane v. Commissioner Reveals an Inconvenient Tax Truth: Useless Depreciation Deductions Cause Global Basis Erosion to Bait a Hazardous Tax Trap for Unwitting Taxpayers, 30 Va. Tax Rev. 559 (2010)
- An Offer in Compromise You Can’t Confuse: It is not the Opening Bid of a Delinquent Taxpayer to Play Let’s Make a Tax Deal with the Internal Revenue Service, 81 Miss. L.J. 1673 (2012)
- The William O. Douglas Tax Factor: Where Did the Spin Stop and Who Was He Looking Out For?, 3 Charlotte L. Rev. 133 (2012)
Thursday, April 18, 2013
In 2011, in Mayo Foundation for Medical Education and Research v. United States, the Supreme Court held that general authority Treasury regulations adopted using notice-and-comment rulemaking carry the force of law and thus are eligible for Chevron deference. In the wake of Mayo, courts and scholars are now struggling with its implications for whether temporary Treasury regulations and IRB guidance documents (revenue rulings, revenue procedures, and notices) that lack notice and comment but are enforceable through civil penalties are likewise eligible for Chevron deference and, relatedly, whether these formats are in fact subject to APA notice-and-comment rulemaking requirements. Currently prevailing judicial tests for evaluating these questions do not offer clear or easy answers for the tax context. Ultimately, both questions turn on whether the agency actions in question carry “the force of law.” The purpose of this Article is to take a step back from existing doctrinal standards and to sort through the basic administrative law principles and Supreme Court precedents that drive those standards in an effort to develop a coherent approach to Treasury and IRS rulemaking and judicial review thereof.
Wednesday, March 27, 2013
Philip Sancilio (J.D. 2013, Columbia), Clarifying (or Is It Codifying?) The “Notably Abstruse”: Step Transactions, Economic Substance, and the Tax Code, 113 Colum. L. Rev. 138 (2013) (Second Place, 2012 Tannenwald Writing Competition):
The economic substance and step transaction doctrines are two specific examples of courts’ general willingness to sometimes look past transactions’ technical form and impose taxes based on their underlying substance. As judicial creations, the two doctrines served as complements and functional equivalents. However, they also generated a wide variety of vague, overlapping, and conflicting formulations.
In 2010, Congress incorporated the economic substance doctrine into the Internal Revenue Code by defining its content and tying it to a heightened strict liability penalty. When it did so, Congress did not address when the doctrine is available. Instead, it left that determination to the preexisting common law and articulated a functional definition of the doctrine to which its new statutory scheme applies. However, the definition of the codified economic substance doctrine creates uncertainty by encompassing some, but not all, of the various formulations of the step transaction doctrine. Terminological messiness that used to have little effect beyond confusing dicta could now control the imposition of statutory requirements and heightened liability.
After laying out the doctrinal background, this Note applies the definition of the newly codified economic substance doctrine to the various formulations of the step transaction doctrine and demonstrates problematic inconsistency in the results. It then traces that inconsistency to the uncertain relationship between the doctrines and argues for conceptual clarification. Finally, it proposes that the codified economic substance doctrine should apply first and that the step transaction doctrine should stand behind it as a backstop.
Thursday, July 19, 2012
Erik W. Stanley (Senior Legal Counsel, Alliance Defense Fund), LBJ, the IRS, and Churches: The Unconstitutionality of the Johnson Amendment in Light of Recent Supreme Court Precedent, 24 Regent U. L. Rev. 237 (2012):
Part I of this Article examines the history of church tax exemption and demonstrates that exemption for churches is an unbroken practice with an extremely long historical pedigree. Thus it should not be lightly cast aside, and any threat to its existence should be taken seriously. Part I also traces the history of the restrictions on church tax exemption added by Congress in 1934 and 1954, including the history of the Johnson Amendment and the suspect circumstances surrounding its passage.
Part II analyzes the history of IRS enforcement of the Johnson Amendment, discussing the uneven and sporadic nature of that enforcement. The IRS’s vague and uneven enforcement scheme has resulted in a pervasive and palpable chill on the speech of pastors and churches as they have self-censored in order to avoid potential Johnson Amendment violations and the extreme consequences associated with such violations.
Part III builds on the prior two points and analyzes the Johnson Amendment in light of the recent Supreme Court cases of Citizens United v. FEC, Arizona Christian School Tuition Organization v. Winn, and Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC. The Article concludes that these cases provide important indications that the Johnson Amendment is an unconstitutional violation of the Free Speech and Free Exercise Clauses of the First Amendment, and that it cannot be justified by reliance on tax subsidy theories of regulation.
It is not the goal of this Article to repeat the work of legal scholars who have analyzed the Johnson Amendment from various angles. The great weight of that legal scholarship leans decidedly in favor of the conclusion that the Johnson Amendment is unconstitutional as a violation of the First, Fifth, and Fourteenth Amendments of the United States Constitution as well as the Federal Religious Freedom Restoration Act. Rather, this Article offers a fresh look at the Johnson Amendment in light of recent Supreme Court precedent that has direct bearing on its constitutionality. This precedent—when viewed in light of the history of church tax exemptions, Congress’s adoption of the Johnson Amendment, and the IRS’s enforcement of the Johnson Amendment—demonstrates that the pastors who participated in Pulpit Freedom Sunday were justified in challenging the Johnson Amendment and should not have long to wait before it is declared unconstitutional or repealed.
Friday, September 23, 2011
The U.S. government gives away more than $1 trillion a year in tax breaks — subsidies for individuals and companies that are often substitutes for direct government spending. Once written into the tax code, they tend to stick around.
This chart shows the 172 tax breaks currently on the books and the year
each one was first reported by the U.S. Treasury:
Wednesday, July 27, 2011
This paper analyzes the impact of GAAP-mandated adjustments to deferred tax accounts when corporate income tax rates change. Using hand-collected data from the tax footnotes of the Fortune 50, we estimate that a reduction in the corporate tax rate from 35% to 30% would substantially affect the accounting earnings, capital, and effective tax rate of many companies. For the 18 publicly-traded Fortune 50 companies with a net deferred tax asset position, the total drop in accounting earnings would be $12 billion, with the banking industry experiencing some of the largest earnings decreases. For the 31 publicly-traded Fortune 50 companies with a net deferred tax liability position, the total jump in accounting earnings would be $28 billion, with the energy industry enjoying many of the largest increases. Although these large, one-time adjustments to the deferred tax accounts do not affect cash taxes paid, users of the financial statements should be aware that the deferred tax accounts may be significantly altered if and when tax rates change and that these effects will be reflected in net income.
Monday, February 14, 2011
- Accounting Today, Twitter Wants Big Tax Breaks
- Just Means, Twitter's San Francisco Shenanigans
- San Francisco Chronicle, Tax Break to Twitter Makes Sense
- San Francisco Examiner, Legislation Offers Tax Break to Keep Twitter in San Francisco
- TG Daily, Extortionist Twitter Demands Massive Tax Breaks
Sunday, November 28, 2010
The President’s Economic Recovery Advisory Board (PERAB) recently recommended allowing small businesses to expense their inventory and exclude their customer receivables from tax. The PERAB proposals are a tax shelter or subsidy that are better than no tax. Investing with deducted or excluded funds is economically equivalent to an exemption of profit from tax, and when the interest deduction is taken into account, the result is a negative tax.
Records to reflect inventory and receivables are easy to maintain and are getting cheaper with the availability of computerized accounting. Every business knows how much its customers owe it, and no business has lost money reflected in valuable inventory it still has on hand. The PERAB proposal is prone to abuse as dentists and lawyers seek shelter. Indeed it would always be open to abuse.
Thursday, September 16, 2010
Thursday, August 5, 2010
Congress seems intent on taxing the labor component of carried interests as ordinary income. If that must be done, it should be simple and accurate. The method of taxation provided for under the current legislative proposal is neither.
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Monday, May 4, 2009
Last Spring, I ran a series of posts on Structuring a Tax Policy Workshop Series -- spawned by Leandra Lederman's decision to start a tax workshop series at Indiana-Bloomington -- with contributions from those schools with such a series (Boston College, Columbia, Connecticut, Loyola-L.A., Michigan, NYU, Northwestern, Penn, Toronto, and UCLA), as well as Neil Buchanan's thoughts on the "Best Practices" emerging from these contributions (and Roberta Mann's "Collector's Edition" -- a Word document with all of the entries in the series).
Below the fold, Leandra offers her thoughts on the first year of Indiana-Bloomington's Tax Policy Colloquium Series.
Monday, May 5, 2008
- Best Practices (Neil Buchanan)
Neil Buchanan (George Washington) offers some concluding thoughts on our series on how to best structure a tax policy workshop series:
This series of posts describing different law schools' tax policy workshops has been extremely valuable. A number of similarities across schools have emerged; yet it is also interesting to see how many seemingly small decisions must be made in structuring a workshop. Paul Caron has asked me to distill some "best practices" from what we've read here and from my own experiences presenting papers at workshops. This is an especially pertinent inquiry for me, because it is quite possible that we will be starting a tax policy workshop at GW as early as Fall 2009.
Like many readers of TaxProf, I have been an avid participant in the tax policy workshop series around the country. I have presented works-in-progress at Loyola-L.A., Michigan, NYU (twice), and Toronto; and I have attended workshops at Columbia and NYU regularly. When I was in my final semester of the JD program at Michigan in Spring 2002, the tax faculty there (Reuven Avi-Yonah, Jim Hines, and Kyle Logue) inaugurated Michigan's tax policy workshop. Being enrolled in that workshop was such a positive experience for me that it convinced me to focus my future scholarship entirely on tax policy. It is a very positive development that ever more law schools are creating these workshops, both for the benefit of tax scholars and for students who might be inspired to become tax scholars.
Friday, May 2, 2008
We have generally had seven authors in a semester, with a class discussion of the next paper in the alternate weeks. The author sessions are in the late afternoon and are open not only to our law school and university faculty, but to the other tax faculty and interested others in the Chicago area.
So far, we have opted for a broad range of authors with a broad range of topics and methods, rather than trying to have any particular focus. The emphasis of the colloquium, as well as the other invited speakers programs maintained by the Graduate Tax Program, has been on exposing the students to the full variety of scholarly and professional pursuits that can emerge from and feed into tax expertise they are developing.
Thursday, May 1, 2008
Kirk Stark, co-host of UCLA's Colloquium on Tax Policy and Public Finance, continues our series on how to best structure a tax policy workshop series:
We started the UCLA Colloquium on Tax Policy and Public Finance in January 2004. From the outset, one of our main objectives was to bring in speakers from a wide range of fields in the hopes of contributing to a dialogue on tax policy that transcends the usual disciplinary boundaries of academia.
Toward that end, we have hosted 56 speakers from several areas of study, including law, government, economics, political science, history and sociology. We also wanted to take advantage of the law school's proximity to other schools and departments here on the UCLA campus. While the workshop is organized each Spring by two of us here in the law school (alternately including Eric Zolt, Kirk Stark, Steve Bank and -- before he left for better weather -- Victor Fleischer), we've been fortunate to have other UCLA faculty regularly involved as well. Most notably, we've benefited greatly from the regular attendance of Al Harberger from our economics department. Al has attended nearly every session since January 2004 and on more than one occasion has graced our whiteboard with his famous triangles.
Wednesday, April 30, 2008
We've just started a tax policy colloquium at Columbia, so our experience is limited to one year. Both students and faculty participate. To give students some basic understanding of what's about to come, we spend the first two classes lecturing on key tax policy concepts. We also assign a fair bit of "Taxing Ourselves" by Slemrod & Bakija (now in 4th edition). After that, it's a different presenter every week, with students writing short response papers and getting a final grade based on these papers and on their participation in the discussion. It took a considerable effort to convince students to ask questions, but we managed to succeed after two or three sessions. We kept separate queues for students and professors, and alternated between the two queues. This way students were certain to ask their questions, but could also listen how the discussion unfolded among academics. We thought about arranging papers thematically, but it was just too hard given the presenters' timing preferences. We also didn't give systematic feedback to the students, but responded to informal inquiries about the quality of their response papers and in-class questions. I would say that our format is really a faculty workshop with student participation. As long as students understand what they are signing up for (we made sure they did), they end up pretty satisfied with the experience.
Tuesday, April 29, 2008
Dave Rifkin (Attorney-Advisor to Tax Court Judge Juan F. Vasquez; Adjunct Professor, Georgetown), a former student participant in NYU's Colloquium Series on Tax Law and Public Finance, continues our series on how to best structure a tax policy workshop series:
Part I: When I attended NYU's Graduate Tax Program, I took the Tax Policy Colloquium (then taught by David Shaviro and the late David Bradford). Sometimes I found the papers to be accessible and interesting; other times I felt that I didn't have a sufficient knowledge of, or experience with, tax to comment on them critically. There were some papers that I understood the substance of but could not appreciate why they were important.
Daniel N. Shaviro, co-convenor of NYU's Colloquium Series on Tax Law and Public Finance, continues our series on how to best structure a tax policy workshop series:
NYU had the first tax policy colloquium, for which I must thank John Sexton, our dean at the time when I was considering moving from Chicago to NYU. John put me in touch with David Bradford and suggested that we introduce a colloquium along the lines of the Dworkin-Nagel law and philosophy colloquium at NYU. Ours remains fairly unique among tax colloquia that I have attended, in that we don’t have the author present the paper but plunge right into directed discussion in the public afternoon session (which comes after a two-hour morning session with the students followed by lunch with the speaker).
Done right in circumstances where it’s feasible, I believe this is the best approach, but there are a number of preconditions for it to be feasible. The conveners (there really have to be at least 2 for it to work well) have to be ready, willing, and able to take on all topics. They have to have enough time (which depends in part on the teaching credits they get) to be able to spend a great deal of time thinking about the issues. They have to spend enough time with the author in advance of the session, in a collegial spirit that avoids being either too deferential or too confrontational, to make the public discussion a shared enterprise based on having cleared away all initial misunderstandings. And they have to have a sufficiently large and lively audience, with a culture of participation, so that the audience doesn’t sit there thinking: “Why do we need to listen to these guys again instead of hearing the author, who is here just for the day?” When I am the discussion leader (I take turns with my partner), then even if I have lots of things to say I try to keep in mind the maxim “Jason Kidd, not Stephon Marbury.” In other words, try to facilitate discussion not dominate it, and get things to the audience fairly swiftly but having suggested guidelines that will shape what comes next.
Monday, April 28, 2008
The James Hausman Tax Law and Policy Workshop began at the Faculty of Law of the University of Toronto in the fall of 2004. The primary motivation behind the workshop is to increase the profile and circulation of innovative and emerging tax research at the law school and, to the extent possible through this type of forum, the broader tax community. A number of secondary motivations surrounding the workshop include: (a) promoting the pedagogical value of exposing all interested students to the latest tax research; (b) generating useful feedback for our invited guests in the form of written student comments; and (c) solidifying the desirability of the law school for JD and graduate students who are interested in studying tax law and policy. The primary motivation of the workshop — to increase and profile and circulation of innovative and emerging tax research at the law school — in my view has been and remains dominant as we approach its fifth year.
While the workshop is open to all members of the law school community (and beyond), it is offered for credit to a limited number of upper year JD and graduate students (maximum enrollment is 10), all of whom must have taken at least the introductory income tax course, and are encouraged to take additional tax courses as well. The workshops are usually held every two to three weeks throughout the year. Students enrolled in the workshop for credit prepare short written responses to the papers that are presented, and produce a longer tax policy paper at the end of the course on a topic of their own choosing. In keeping with the primary motivation of the workshop, there has not been a preoccupation with an overall theme or with establishing a logical course of development from one workshop to the next; instead, the workshop strives simply to attract those who are doing important and influential work in tax law and policy to Toronto. We are extraordinarily grateful to the friends and family of James Hausman who continue to honour his life and work by providing financial support to the workshop. Without them, the workshop would not be possible.
We all suggest Colloquium speakers, participate in the weekly Colloquium discussions, host the visiting speakers, and organize a faculty dinner for each speaker. Other Loyola faculty (tax and nontax, full-time and adjunct) and professors from other Southern California schools also attend the Colloquium. The Colloquium is open to Tax LLM students and JD students who have completed Income Tax I, but enrollment is limited. Interested students must submit an application (cover letter, resume, and transcript) to Katie and Ted. (Last fall, we selected a dozen students for the Colloquium.)
Sunday, April 27, 2008
Bryan Camp (Texas Tech) offers his perspective as the convenor of a non-tax workshop series at Texas Tech, as part of our series on how to best structure a tax policy workshop series:
I LOVE colloquia! We did them at my undergrad (Haverford), and I did several in my grad work in history. I run one here at Texas Tech every other year, ostensibly on the topic of slave law, but more abstractly on consideration of a lawyer's proper role in an immoral legal system. From this experience I offer several ideas:
Saturday, April 26, 2008
Jim Repetti and Diane Ring, co-hosts of Boston College's Tax Policy Workshop Series, continue our series on how to best structure a tax policy workshop series:
The Boston College Law School Tax Policy Workshop Series involves guest speakers presenting their papers to faculty from BC and other Boston area schools, BC alumni who are tax practitioners or government policymakers, and students who have a strong interest in tax.
Papers for each workshop are emailed to participants at least one week in advance. We limit the number of attendees to 20 and seat everyone around one large table in order to maintain an informal and relaxed atmosphere. After lunch is served, the presenter speaks for about one half hour followed by discussion and questions for another hour.
This was our first year running the workshop. We had had a great time, learned a lot, and enjoyed the company of wonderful guest speakers. Even our non-tax faculty have commented how much they have enjoyed the workshops!
Friday, April 25, 2008
Ruth Mason, host of UConn's Tax Lecture Series, continues our series on how to best structure a tax policy workshop series:
Established in 2006, the University of Connecticut Tax Lecture Series is not a formal course. Instead, throughout the year, we have invited three to four tax faculty members from other schools, aiming for two lectures in the fall and two in the spring. Lectures are open to the whole law school community, and student participation has been fairly active, in part because the tax faculty strongly encourages our students to attend, and the paper is available at least a week in advance of the lecture. I also ask the students in my classes who will attend the lectures to write out questions in advance of the lecture, which I think has contributed to the high quality of the discussion. Additionally, when a lecture touches on other areas of law, I usually contact the relevant faculty member. So, for example, when Michael Tumpel of Johannes Kepler University in Linz talked about indirect taxation in the European Union, I contacted my colleague Willajeanne McLean, who teaches EU law. She asked her students to attend the lecture, which produced an informed audience. Since the lecture series is not a formal course, the students do not have the benefit of the kind of advanced discussion that takes place at NYU or Indiana.
Michael Knoll, Chris Sanchirico, and Reed Shuldiner, co-hosts of Penn's Tax Policy Workshop Series, continue our series on how to best structure a tax policy workshop series:
At Penn, we have been running our tax policy workshop since 2002. Each year, we invite roughly half as many academic speakers as there are class sessions. That generally means we have only five or six paper presentations. The week before each speaker's presentation one of us presents a lecture on the topic area of the speaker's paper. Before attending that preparatory lecture the students have read a set of background materials. The readings are intended to situate the speaker’s paper within the existing literature or introduce the students to some of the tools used by the speaker. We find that providing both background readings and a preparatory lecture for each speaker greatly raises the level of student interest and the quality of student questions and comments at the speaker's presentation.
Thursday, April 24, 2008
Our Tax Policy Workshop is loosely modeled on NYU's, except that the authors get to present their own papers. It is attended by students and faculty from law, economics and business. The speaker presents for about half an hour and then we have an open discussion. Two recent innovations have been to enforce a rule that students get to speak first (otherwise faculty tend to dominate the discussion), and to have a preparatory session with students the week before the speaker presentation (so that we only have six or seven presenters each year other than thirteen). Over the years since 2002, we have been able to hear many of the top names in the field, including both lawyers and economists. We try not to have too many repeat players, so as to open the opportunity to as wide a field as possible. I think we all feel the series has been a successful contribution to the intellectual life of the law school and to our students, including both the JDs and the tax LLM students (for whom it is a required course).
Wednesday, April 23, 2008
Leandra Lederman (Indiana) kicks off what I hope will be an extended discussion about how to best structure a tax policy workshop series:
Paul asked me to kick off a discussion about tax workshop series in which students participate; Indiana-Bloomington recently considered and adopted a proposal for a Tax Policy Colloquium, which we will launch next spring. Like colloquia at other schools, it will be structured as a class for students in which faculty will also participate. I proposed the colloquium partly because Indiana-Bloomington recently adopted a strategic plan that highlights the importance of scholarship and has among its goals (1) the inclusion of students in our intellectual community by bringing faculty scholarship into the classroom, and (2) the development of forums for intensive intellectual exchange within the faculty. My colleague Ajay Mehrotra plans to run the colloquium in alternate years. It will be open to our full faculty, and we will also invite our adjunct tax faculty, tax faculty from the Kelley School of Business, and faculty in other schools on campus who are interested in tax policy issues.
Indiana does not have a tax LL.M. program, so the colloquium will be structured with that in mind. Students will be required to write a short reaction paper in response to each paper that is presented in the colloquium, and, as is customary, those reaction papers will be shared with the presenters. Income Tax will be a prerequisite, and we are planning to experiment with an invitation/permission-of-the-instructor format, in order to recruit students with the interest and commitment necessary to make the colloquium a success. We also concluded that it would be best to have speakers only in alternate weeks so that we can first discuss the speaker’s paper as a class, to help prepare the students for the discussion with the speaker.
Perhaps the trickiest issue about a course like this is to balance pedagogical needs with the needs of presenters. With respect to the pedagogical component, I plan to encourage students to ask their questions first and faculty to hold their questions until students have had a chance to participate. In addition, I intend to try, as much as possible, to select papers that will be accessible to the students. For example, many individual federal income tax topics would be a natural fit, particularly for early in the semester. Ajay and I have also discussed assigning background reading to familiarize the students with the relevant literature. With respect to the presenters, for their experience to be a really good one, I think faculty participation is essential. Before proposing the colloquium, I ascertained that Ajay; Bill Popkin; and our Assistant Dean for Research, Archana Sridhar, who is a tax specialist, would all be interested in participating on a regular basis, and at least a few other faculty would be interested in attending periodically. To involve as many interested faculty as possible, we will try to select some papers that fit within their areas of interest, such as business tax papers that will interest Kelley School faculty, so long as the topics will be reasonably accessible to the students.
I have no doubt that this will be a learning process, but it is one that my colleagues and the students I have talked to are excited about. I look forward to hearing from others and learning from their experiences.