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Sunday, December 21, 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, with new papers debuting on the list at #4 and #5. The #1 paper is now #78 in all-time downloads among 10,599 tax papers:

  1. [1449 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [255 Downloads]  Piketty in America: A Tale of Two Literatures, by Joseph Bankman (Stanford) & Daniel Shaviro (NYU)
  3. [180 Downloads]  Corporate Inversions and the Unbundling of Regulatory Competition, by Eric L. Talley (UC-Berkeley)
  4. [154 Downloads]  The Rise and Fall of the Consumption Tax: A Historical Perspective, by Reuven Avi-Yonah (Michigan)
  5. [153 Downloads]  Corporate Inversions -- Background, Causes, and Policy Options, by J. Richard (Dick) Harvey (Villanova)

December 21, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 591

IRS Logo 2Daily Caller:  Obama Admin Releases ONE PERCENT Of Its Documents About IRS-White House Coordination:

The Treasury Department released four new redacted pages of documents about the White House’s role in the Internal Revenue Service targeting scandal, bringing the total number of pages released up to 31 — a whole one percent of the total number of pages.

A federal court judge in the advocacy firm Cause of Action’s lawsuit against the Treasury inspector general set Jan. 30 as a starting date to begin briefings on whether or not the firm can get at the documents.

The Cause of Action federal court case for the documents was successful, thanks to the Freedom of Information Act. But the Justice Department began trying to delay the release of the documents by a matter of two weeks. Treasury Secretary and former Obama White House chief of staff Jacob Lew then seized the documents.

Lew is arguing that because the White House and IRS illegally exchanged confidential taxpayer information, then releasing the documents would be an illegal disclosure of confidential taxpayer information.

As The Daily Caller reported, at least some of the confidential taxpayer information the IRS’ Lois Lerner dished out went to senior White House domestic policy adviser Jeanne Lambrew.

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December 21, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, December 20, 2014

Uber's Growing Tax Problems

UberForbes:  Uber's Growing Tax Problems, by Robert W. Wood:

Uber’s latest $1.2 billion in financing and $40 billion valuation make it a valuation darling, but it’s PR problems are, well, huge. It seems often to ruffle rather than smooth feathers. As it fights regulatory and public relations battles, are tax authorities going to crack down too? It isn’t just the ubiquitous IRS that may want to hitch a ride to cash in. Consider state tax agencies and even some foreign ones.

It is a tech company, it claims, and just takes a fee for putting passengers and drivers together. Clearly, these drivers aren’t employees of the car services–er tech company–at least on paper. Besides, neither the company nor the drivers are likely to even think there is an employment or agency relationship viz. third parties. Or is there?

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December 20, 2014 in Tax | Permalink | Comments (1)

The IRS Scandal, Day 590

IRS Logo 2The Blaze:  The IRS Must Be Put Down Like a Rabid Dog, by John Linder (former Member, U.S. House of Representatives, 1993-2011):

Since it was first disclosed that the IRS abused the taxpayers and the law, the Democrat refrain has been, “…it is clear that there was no White House involvement…” Well, now it is clear that there was White House involvement, but it is against the law to disclose it.

A watchdog group, Cause of Action, filed a Freedom of Information Act request for email between the IRS and the White House. They have been informed by the Treasury Department that 2,509 such emails exist, but: “These pages consist of return information protected by 26 U.S.C. § 6103 and may not be disclosed absent an express statutory exception. Because no such exception exists here, we are withholding those.”

So, it is a felony to disclose the information that the IRS disclosed to the White House unless Congress passes a statutory exemption that will not become law unless this president, who broke the law, agrees to sign the statute so that we can see how he broke the law. Fat chance!

That, dear reader, is why the much talked about tax reform in the new Congress will fail. Any tax reform that leaves a corrupt system in place will be abused again by future administrations as unscrupulous as the Obama administration. ...

[T]he IRS will be put down like a rabid dog. No agency of government should have the power to abuse our personal information for political gain, which the IRS has proven its willing to do.

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December 20, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, December 19, 2014

Weekly Tax Roundup

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

Taxation and Income Inequality: How Ferris Bueller’s Pals Grew Up to Run the Government

Fox News op-ed:  Taxation and Income Inequality: How Ferris Bueller’s Pals Grew Up to Run the Government, by Gregg Jarrett:

FerrisA year ago, [President Obama] vowed to dedicate the remainder of his term to fighting "income inequality." 

It has a lovely, populist ring to it. But he conveniently overlooks the evidence that his policies of raising taxes on income, capital gains, dividends and small businesses appear to have exacerbated the divide. Real median household income has decreased under his stewardship, even as the economy has rebounded from the financial panic and ensuing recession, albeit at a lethargic pace.

The reason is plain: income inequality is a symptom, not an illness. Persistent unemployment and anemic economic growth are what plague the U.S. economy and the upward mobility of Americans. 

Confiscating wealth by tax and then spending the revenue recklessly in a vain attempt to redistribute income is a fatuous invention that punishes the successful. At the same time it rewards the unsuccessful by perpetuating a culture of dependence and entitlement. 

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December 19, 2014 in Tax | Permalink | Comments (3)

Johnson: Reflections on Home Concrete -- Writing Tax Regulations and Interpreting Tax Statutes

Steve R. Johnson (Florida State), Reflections on Home Concrete: Writing Tax Regulations and Interpreting Tax Statutes, 13 Fla. St. U. Bus. Rev. 77 (2014):

United States v. Home Concrete & Supply, LLC is the Supreme Court's most recent foray into the thicket of the validity of Treasury tax regulations. The decision disappointed some because the Court avoided many significant issues raised by commentators or briefed by the parties.

Nonetheless, Home Concrete gives us much to digest. Some reactions to the decision appear below. They are grouped under four headings: (1) litigation balance between the government and taxpayers, (2) retroactivity, (3) deference doctrine, and (4) statutory interpretation. These considerations are developed below after a brief description of the Home Concrete decision.

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

The IRS Scandal, Day 589

IRS Logo 2Forbes:  20 Facts About IRS Targeting, Those Emails And The White House, by Robert W. Wood:

The IRS scandal started 587 days ago in May 2013, but it actually goes back years earlier. President Obama’s testy “not even a smidgen of corruption” remark to Fox News in February 2014 showed fatigue. There was simply no evidence that the IRS was used for political targeting, he made clear. Maybe, but here are 20 things every American taxpayer should know about it: ...

What will item 21 be? Or 22 or 23? You don’t have to be a conspiracy theorist searching for a grassy knoll or second shooter to want to know. Whether the explanation is a spontaneous demonstration from a youtube video, conclusive evidence that some folks down at the IRS were confused, or something else, we should know. If those IRS employees were truly  self-starters, free-thinkers who were targeting without direction from their bosses, perhaps they shouldn’t get bonuses, not big ones anyhow.

Besides, computer crashes don’t mean anything, even if it was a full year into the federal investigation when the IRS revealed that all those emails from the key two year period had been long gone for some time. Now, they are back and we may soon be able to see them, as well as the even more important communications between the IRS and DOJ.

Everyone may have had the best of intentions here. No one may have intended any breach of law. And maybe the IRS should not have to administer our insanely complex tax law, but it does. And without regard to political party, every American should want to get to the bottom of this once and for all.

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December 19, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, December 18, 2014

Schizer: Limiting Tax Expenditures

David Schizer (Columbia), Limiting Tax Expenditures, 68 Tax L. Rev. ___ (2014):

The federal government devotes over a trillion dollars each year to tax provisions that pursue “nontax” goals. Scaling back these tax expenditures should be a high priority. Yet one-size-fits-all limits are often proposed, and are not good policy. Each tax expenditure generates its own mix of positive externalities and private benefits (or “programmatic benefits”). To choose the right limit, we should consider what programmatic benefits we would lose. The goal should be to reap programmatic benefits at lower cost. Different strategies are appropriate for each tax expenditure, including: tightening the definition of favored conduct; focusing on claimants who are easiest to motivate; favoring claimants who use the subsidy more effectively; calibrating how much favored activity we subsidize; and changing the government agency that administers the subsidy. We also should account for excess burden and distribution. Does repeal or a limit influence labor or savings decisions? Does it affect planning and administrative costs? Does it bring is closer to the distribution we want?

In addition to proposing this three-part framework for limiting tax expenditures, which focuses on programmatic benefits, excess burden, and distribution, this Article also analyzes seven different limits. They have very different effects. For example, a “cap” eliminates the subsidy for high levels of favored activity. In contrast, a “floor” disallows the subsidy for low levels. “Haircuts,” “maximum fractions,” and “phaseouts” preserve the subsidy for both high and low levels of favored activity, but in weakened form. Each limit offers a different mix of strengths and weaknesses, making it a better fit for some tax expenditures than others.

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

Sanchirico Presents Two Tax Papers in Italy

SanchiricoChris Sanchirico (Pennsylvania) presents two papers at the 10th Annual Conference of the Italian Society of Law and Economics at the University of Rome:

As American as Apple Inc.: International Tax and Ownership Nationality, 68 Tax L. Rev. ___ (2014):

The ownership nationality of large US multinational companies plays an implicit but important role in the current debate over how such companies should be taxed. This paper identifies that role and investigates what is actually known about where these companies’ shareholders reside. 

Self-Constructed Assets and Efficient Tax Timing:

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

What The Next Generation Of Economists Is Working On

538 (2015)FiveThirtyEight, What The Next Generation Of Economists Is Working On:

The new economists are heading east this winter.

Every January, soon-to-be economics doctorates invade a city, in search of employment; this year it’s Boston. The American Economics Association’s Annual Meeting is the discipline’s cattle call.

Hundreds of wide-eyed, besuited, name-tagged graduate students will spend the first weekend of the new year racing from hotel room to hotel room, giving half-hour job interviews about their research papers, what they’re interested in teaching about and future projects. If they’re lucky, they’ll get a callback — typically a “flyout” to an office or campus. Hirers include central banks, investment banks, consultancies, corporations, government agencies, nonprofits, think tanks and universities across the world — from Aarhus to Zhongnan.

Job Openings for Economists — known affectionately, or not, as JOE — lists 1,217 open positions, as I write.

So what do all these young men and women do, exactly — what are their academic interests, and what is their research about? Let’s preview the next generation of economists.

I visited the job candidate websites of top economics Ph.D. programs [Berkeley, Caltech, Chicago, Columbia, Harvard, Michigan, Minnesota, MIT, Northwestern, NYU, Penn, Princeton, Stanford, UCLA, UCSD, Wisconsin, and Yale] to canvas the interests of the graduating class. There are 308 candidates listed by the 17 schools I looked at — an average of about 18 candidates a school. I recorded their primary field — the main subset of economics in which they work. I also recorded the title of their job market paper. In many academic job markets, including economics, a candidate submits to a potential employer a curriculum vitae, letters of reference and a job market paper. The last is important, and is meant to showcase the candidate’s research interests and skills. In many ways it’s the culmination of their doctoral work.

These are the fields in which this year’s economist crop works. I’ve included just those fields that appeared at least twice.

Econ

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December 18, 2014 in Tax | Permalink | Comments (0)

WSJ: How Google, GE and U.S. Firms Play the Tax ‘Audit Lottery'

Wall Street Journal, How Google, GE and U.S. Firms Play the Tax ‘Audit Lottery’:

Buried deep in American companies’ securities filings is an indicator for how aggressively they are working to shield their income from the IRS and other tax authorities.

The obscure entry—under the heading “uncertain tax positions” or “unrecognized tax benefits”—is where companies account for tax breaks that push the envelope. And they are adding up.

Exxon Mobil reported that it had $7.8 billion of these uncertain tax positions outstanding as of Dec. 31, including $1.5 billion from 2013 alone. Pfizer reported $6.1 billion, including $1.2 billion from 2013. Google reported $3.1 billion at the end of September, up from $2.6 billion at the end of 2013.

WSJ

All told, companies in the S&P 500 had amassed $188 billion in unrecognized tax benefits by the end of their 2013 fiscal years—$21 billion of which was related to that year’s taxes, according a Wall Street Journal analysis of figures from Calcbench Inc., a financial data provider. The companies have added between $19 billion and $22 billion of new uncertain tax positions each year since 2010.

Accounting rules define these tax benefits as ones that tax authorities have strong grounds to reject, by the companies’ own analysis. Seeking those breaks is perfectly legal, and since companies have already lowered their profit numbers as if the taxes had been paid, there’s little risk in rolling the dice. A win down the road will boost profits, while a loss typically does no additional damage. Either way, companies often get to use the disputed cash in the meantime. ...

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December 18, 2014 in Tax | Permalink | Comments (2)

Kwall & Wilbur: The Outer Limits of Realization

Florida Tax ReviewJeffrey L. Kwall (Loyola-Chicago) & Katie K. Wilbur (Varnum, Grand Rapids, MI), The Outer Limits of Realization: Weiss v. Stearn and Corporate Dilution, 16 Fla. Tax Rev. ___ (2014):

The Supreme Court’s 1924 Weiss v. Stearn decision involved a classic case of corporate dilution. In that case, a corporation (“Oldco”) transferred its business to a new corporation (“Newco”) in a transaction where the Oldco shareholders surrendered all their stock for 50% of the stock of Newco (and cash). The transaction diluted the proprietary interest of the Oldco shareholders from 100% to 50%. Because the Oldco shareholders surrendered control of the enterprise, the 50% interest they received in Newco was fundamentally different from the 100% interest they had owned in Oldco. Nevertheless, the Court held that the receipt of the Newco shares was not a taxable event (a “realization event”) to the Oldco shareholders. The Court reached this result by ignoring the dilution that occurred in the case.

In 1991, the Supreme Court resurrected the Weiss v. Stearn decision in the Cottage Savings case. There, the Court relied on Weiss v. Stearn to establish that the exchange of property triggers a realization event only if the property received is “materially different” from the property surrendered. Once again, the Court ignored the dilution that occurred in Weiss v. Stearn. As a result, Supreme Court jurisprudence sheds no light on the question of whether corporate dilution can trigger realization.

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

GAO: IRS Needs to Strengthen its Oversight of Charities

GAOGovernment Accountability Office, Better Compliance Indicators and Data, and More Collaboration with State Regulators Would Strengthen Oversight of Charitable Organizations (GAO-15-164):

IRS oversight of charitable organizations helps to ensure they abide by the purposes that justify their tax exemption and protects the sector from potential abuses and loss of confidence by the donor community. In recent years, reductions in IRS's budget have raised concerns about the adequacy of IRS oversight.

GAO was asked to review IRS oversight of charitable organizations. In this report, GAO (1) describes the charitable organization sector, (2) describes IRS oversight activities, (3) determines how IRS assesses its oversight efforts, and (4) determines how IRS collaborates with state charity regulators and U.S. Attorneys to identify and prosecute organizations suspected of engaging in fraudulent (or other criminal) activity.

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December 18, 2014 in Gov't Reports, Tax | Permalink | Comments (0)

The IRS Scandal, Day 588

IRS Logo 2Washington Times editorial:  Obama’s IRS Faces Scrutiny With Republican-led Congress:

The corruption of the Internal Revenue Service is still under investigation, but the public has learned a lot already: The IRS targeted conservative and tea party groups for extra scrutiny and harassment, Lois G. Lerner tried to hide behind the Fifth Amendment to avoid prosecution for violating the rights of taxpayers, and the president of the United States assured one and all that there was not even a “smidgen of corruption” at the agency when he knew better.

What the public did not know until recently was that the White House requested and received from the IRS the tax records of 2,500 taxpayers for White House inspection. President Obama is not the first president to try to use the IRS against his enemies, but he is the first to do it wholesale. President Kennedy shared tax information with The Washington Post about Sen. Barry Goldwater and senior members of his 1964 presidential campaign team. They were subjected to grueling audits. President Nixon tried to get the IRS to go after his enemies when he faced impeachment. ...

To argue that this is part of a cover-up is to argue the obvious. The arrogance of a government that abuses the rights of its citizens, ignoring specific laws to do so, must be held to account like everyone else, and if justice is done a flurry of subpoenas for a number of White House and IRS officials will follow soon after the Christmas holidays. Congress has disregarded oversight duties in this matter, and soon there will be a new Congress and the 114th Congress will have an opportunity to take these duties seriously.

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December 18, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Wednesday, December 17, 2014

Tax as a Percentage of GDP: 1965 to 2013

December 17, 2014 in Tax | Permalink | Comments (0)

Madison: The Tax Consequences of Services Provided by Single People in a Relationship

Allen D. Madison (South Dakota), The Taxation of Gratuitous Services Gone Out of 'Control', 45 U. Mem. L. Rev. 115 (2014):

How does the IRS’s ruling that both parties to an exchange of services are subject to income tax apply in the dating context? When meeting, dating, living together, or potentially raising a child together, single people provide services for each other. Most are unaware that potential tax liability lurks behind their performance and receipt of services. This article proposes a framework for determining when a service is gratuitous and thus subject to income tax and then applies that framework to the four potential phases of singlehood.

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

Morse: Important Developments in Federal Income Taxation (2014)

Edward A. Morse (Creighton), Important Developments in Federal Income Taxation (2014):

This outline, prepared for the 52nd Annual Great Plains Tax Institute in Omaha, Nebraska (December 4-5, 2014) covers significant developments in federal income taxation along with a few other interesting or noteworthy tax topics. It is not intended to provide exhaustive coverage, but it offers a selective treatment of items likely to interest practitioners and advisors within a broad range of professional practices. Coverage in this outline generally includes events from the prior Institute through December 1, 2014.

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

Crane Reviews Halperin & Warren, Understanding Income Tax Deferral

JotwellCharlotte Crane (Northwestern), Keeping Us Honest About the Timing Flaws in the Income Tax (Jotwell) (reviewing Daniel I. Halperin (Harvard) & Alvin C. Warren Jr. (Harvard), Understanding Income Tax Deferral):

The recent attempt of Halperin and Warren to lay out with some precision what is at stake in the various phenomena loosely called “deferral” is a welcome contribution and should become a go-to primer. The essay includes the math critical to the analysis, but in a way that does not require the reader to be able to reproduce it in order to get the full message. It is also a useful review of the literature produced by tax academics in law schools (significantly by Halperin and Warren themselves) that connects the relatively simple financial principles regarding the time value of money with the on-the-ground tax policy debates in which they properly appear.

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

Shaviro: The Case for 1986-Style Corporate Tax Reform

Tax Analysys Logo (2013)Daniel N. Shaviro (NYU), Evaluating the Case for 1986-Style Corporate Tax Reform, 145 Tax Notes 1267 (Dec. 15, 2014):

Shaviro explores the relationship between taxing corporate income at the entity level and the difficulties in evaluating whether a corporate rate cut would be desirable without significant structural changes.

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

The IRS Scandal, Day 587

IRS Logo 2Forbes:  Did You Hear The One About Lois Lerner Walking Into A Bar?, by Peter J. Reilly:

Judicial Watch has come out with the latest in the perennial never ending IRS scandal.  It has managed to pry loose from the Justice Department e-mails that show that Lois Lerner, who was imported into the IRS from the Federal Election Commission, met with the Justice Department to discuss whether people who had lied on their exemption applications about political activities should be prosecuted.  The Justice Department is not releasing further documents which would explain why it did not prosecute anybody.  As I’ve been following this drama, I’ve often found myself looking at it from a different angle than everybody else, which is what makes me think of this as a story about Lois Lerner walking into a bar.

The IRS is tasked with a pretty big job having to collect over $2 trillion dollars.  Since Congress has decided to use Title 26( Internal Revenue Code) as its go to title to encourage or discourage this that and the other thing, the IRS gets diverted quite a bit from its core mission of collecting revenue.  To work for the IRS as a revenue agent, the education requirement is a bachelors degree with 30 hours in accounting.  So your core enforcement people in the IRS are accountants.  Task twenty odd thousand accountants with collecting $2 trillion dollars and a bunch of miscellaneous stuff, some of the miscellaneous stuff is going to slide by.  So it is understandable that they did not do such a hot job on squelching 501(c)(4) organizations that were engaging in political activity.

Then along comes Lois Lerner who is not a career IRS employee.  She is excited about violations of the campaign financing laws and now can put numerous minions into zealously scrutinizing applications, thinking up more and more devious ways in which 501(c)(4) status can be abused.  None of the thing that my father always told me about how to behave in a bar was to never talk about religion or politics.  Lois Lerner apparently could talk of nothing other than politics and that may be what is behind this mess.  That’s why Lois Lerner walking into the IRS is like her walking into a bar.  It was not good for Lois Lerner and it was not good for the bar.ot being a career IRS employee, she did not have IRS culture embedded in her. ...

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December 17, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, December 16, 2014

Johnston: How Google and Apple Make Their Taxes Disappear

Newsweek:  How Google and Apple Make Their Taxes Disappear, by David Cay Johnston (Syracuse):

Google AppleAround the world, countries are desperately seeking ways to stop multinational companies from earning profits within their borders without paying taxes on them, while stashing trillions in tax havens like the Cayman Islands. The British government, after a search, says it knows how to tax the profits Google earns in the United Kingdom. Its solution is simple and elegant, and it probably won’t change a damn thing.

The proposal has come because Britain and many other countries are tired of getting just the table scraps after companies enjoy what tax lawyers call Dutch Sandwiches washed down with a Double Irish. Those are popular names for tax strategies that let companies earn profits in countries with high taxes, but report profits where little or no tax is paid, such as Ireland. The people charged with enforcing tax laws say that is cheating, and some officials and pundits in Europe have invoked what President Ronald Reagan said in a 1983 radio address about tax cheats: “When they do not pay their taxes, someone else does—you and me.”

Four years ago, Bloomberg News reporter Jesse Drucker revealed how Apple, Google, Microsoft and other big companies duck taxes on European profits, which set off ongoing coverage of the issue in Europe, where most individuals and small businesses are heavily taxed. Google pays as little as 2.4 percent tax on its offshore earnings, compared with the official 35 percent tax rate on American profits and the 28 percent rate in Britain, its second largest market. Google’s worldwide pretax profits grew 72 percent from 2009 to 2013, but profits booked offshore grew more than five times faster, from $7.7 billion to $38.9 billion.

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December 16, 2014 in Tax | Permalink | Comments (3)

Barry & Caron: Tax Regulation, Transportation Innovation, and the Sharing Economy

Jordan M. Barry (San Diego) & Paul L. Caron (Pepperdine), Tax Regulation, Transportation Innovation, and the Sharing Economy, 81 U. Chi. L. Rev. Dialogue ___ (2015):

Many emerging companies’ business models center on helping consumers to share assets in new ways. This “sharing economy” has already experienced tremendous growth and attracted considerable investment capital and talent. Yet, as is often the case with economic innovations, existing regulatory structures have hindered the growth of the sharing economy, reducing its popularity and slowing its development.

This Article explores the tension between innovation and regulation, both in general and in a specific context: the intersection of the transportation sector of the sharing economy and the qualified transportation fringe benefit rules of Internal Revenue Code Section 132. We illustrate how regulators’ legitimate concerns combine with the uncertainty surrounding new ways of doing business to create regulatory environments that place new industries at a disadvantage. We also argue that two of the most common approaches that regulators adopt to foster new industries – expanding regulation to encourage new industries and restricting regulation to spur innovation – are both flawed. In tax and other areas of law, these approaches tend to operate cyclically, with each coming into fashion for a time until its flaws are deemed unbearable and it gets replaced by the other. This cycle will continue until someone comes up with a better innovation.

December 16, 2014 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 586

IRS Logo 2Wall Street Journal op-ed:  Congress Can Pry Open a Clammed-Up IRS, by Charles Lipson (University of Chicago, Department of Political Science):

The agency pleads that it can’t share the documents that it may have shared illegally because that would be illegal.

The White House and IRS are entangled in a sticky court case with major political ramifications. It concerns allegations that the IRS illegally shared private taxpayer information with the White House related to conservative individuals or organizations. The Treasury Department said this month that although it has found a cache of documents that may be pertinent, it is not allowed by law to release them. The question now is who can find out whether the Obama White House has in effect weaponized the IRS, turning it into an agency that targets Americans out of favor with the administration.

Most likely, for reasons outlined below, Congress will have to be the one to find out. While we are far from knowing if any violations of the law have occurred, this is a serious issue. Misuse of the IRS was an article in Richard Nixon ’s impeachment—and he was only accused of trying to politicize the tax agency. ...

Treasury has clammed up again, trying to keep its contacts with the White House secret and reiterating that it is exempt from disclosure. The administration has offered a bizarre rationale: It would be illegal to turn over documents the IRS shared illegally since it is illegal for the IRS to share the files with anyone, including the court.

There still is a wide gap between our knowing that there is a cache of “responsive documents” and anyone establishing a direct connection between White House political operatives and the IRS. However revealing the documents may be, they would need to be followed up by interviews and depositions, which may lead to more documents. Only a thorough investigation can accomplish that.

A politicized Justice Department cannot be trusted to conduct an impartial investigation or to appoint a reliable outside prosecutor. This means that any serious inquiry is up to Congress.

Republican leaders are understandably cautious about this approach. When they take control of Congress in January, their overriding goal is to establish a track record for governing, not a pattern of investigating the Obama administration’s past transgressions. But this case should be an exception. Any White House interference with the IRS is a fundamental assault on the rule of law and the disinterested application of the tax code. If allowed to stand, it will serve as a pernicious precedent for future administrations. 

Congress should proceed carefully but steadily. ... If the documents show repeated, politicized contacts between the IRS and the White House—and only then—the House and Senate should vote to establish a joint congressional committee to investigate. ... The heavy lifting, particularly taking depositions under oath, should be done behind closed doors, beginning with lower-level people who might have seen unauthorized documents or their political uses. Give them transactional immunity and make clear they face serious legal peril if they fail to testify fully and truthfully. Then follow the chain of testimony up the organizational chain. A well-conducted investigation would either clear the White House’s senior political aides or implicate them in serious wrongdoing. 

The search for the truth here ought to be a bipartisan issue. It may yet become one as Democrats back away from the Obama White House.

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December 16, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (7)

Monday, December 15, 2014

Brookings Hosts Conference Today on The Long Run Outlook for the Federal Budget

BrookingsThe Brookings Institution hosted a conference today on The Long Run Outlook for the Federal Budget: Do We Know Enough to Worry?:

Other commentators:

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

Elkins Presents The Achilles Heel of Corporate Taxation Today at Hebrew University

Elkins (2015)David Elkins (Netanya) presents The Achilles Heel of Corporate Taxation at Hebrew University of Jerusalem today as part of its Tax Colloquium Series:

A great deal of the complexity and inconsistency of the corporate tax structure can be traced to a 1921 decision in which the Supreme Court refused to bifurcate the amount paid for shares and to consider part of that amount as consideration for the right to participate in the distribution of already accumulated earnings. Although the government won that case, it turned out to be one of its most pyrrhic victories, as the consequent misallocation of basis created perhaps the most basic corporate tax shelter. Congress, instead of attacking the root of the problem by providing for bifurcation, chose to make it inconvenient for taxpayers to exploit what it viewed as an isolated glitch in the system (and in the process created a great deal of collateral damage). The Commissioner, with some degree of success, tends to look askance at corporations that engage in legitimate self-help by withdrawing profits before selling their shares. Bifurcation would contribute to the equity, efficiency, and simplicity of the corporate tax structure by equalizing the tax treatment of the various methods by which corporate shareholders realize their right to capital and earnings.

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

Tobin: The IRS and a Crisis of Confidence -- A New Regulatory Approach for a New Era

Florida Tax ReviewDonald B. Tobin (Dean, Maryland), The Internal Revenue Service and a Crisis of Confidence: A New Regulatory Approach for a New Era, 16 Fla. Tax Rev. 429 (2014):

The Internal Revenue Service is not usually thought of as the agency charged with enforcing the nation’s campaign finance laws. It has found itself, however, at the center of a firestorm over both its involvement and its ineptitude in enforcing certain rules that regulate the campaign activities of tax-exempt organizations. For historical, legal, and practical reasons, the Internal Revenue Code regulates the political activity of tax-exempt groups, in some instances providing for disclosure of campaign donors and expenditures, and in other instances limiting the amount of political activity engaged in by tax-exempt organizations. As campaigns become more sophisticated and complicated, pressure is placed on the rules regulating the political activity of tax-exempt organizations. The current structure regulating the political activity of tax-exempt organizations is unworkable, and the recent crisis resulting from the IRS’s use of partisan criteria to determine what applications for exempt status should come under further inquiry highlights the breakdown in the current regulatory regime.

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

NY Times: Should U.S. Expand, Jack Up $500k Price of VIP Passport Program?

New York Times:  Some of the Rich Collect Art. Others Collect Passports., by Robert Frank (CNBC):

VIP 2Along with stock and real estate portfolios, the global rich are now buying a new form of economic security: passport portfolios.

Wealthy investors from around the world are increasingly shopping for visas or citizenship in other countries, hoping for a personal hedge against their own volatile governments or economies. A vast majority are new millionaires and billionaires from emerging-market countries, especially China, Russia and nations in the Middle East. Often, they’re shopping for passports or entree into Europe, the United States, Canada and Australia.

Experts estimate that these “economic citizens” are spending $2 billion a year on second or third passports and visas. Demand is so strong that governments around the world have started an arms race of sorts for V.I.P. visas, offering ever-faster residencies and passports for ever-higher prices. Over the past year, Australia [$4.15 million], Canada, Britain [$3.14 million] and several other European countries have raised the prices or investment requirements of their so-called golden visas and created a new fast lane for citizenship. ...

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December 15, 2014 in Tax | Permalink | Comments (0)

Average American's Wealth Down 40% Since 2007, Inequality Has Widened Across Racial Lines

Pew Research Center, Wealth Inequality Has Widened Along Racial, Ethnic Lines Since End of Great Recession:

The Great Recession, fueled by the crises in the housing and financial markets, was universally hard on the net worth of American families. But even as the economic recovery has begun to mend asset prices, not all households have benefited alike, and wealth inequality has widened along racial and ethnic lines.

Pew 1

The wealth of white households was 13 times the median wealth of black households in 2013, compared with eight times the wealth in 2010, according to a new Pew Research Center analysis of data from the Federal Reserve’s Survey of Consumer Finances. Likewise, the wealth of white households is now more than 10 times the wealth of Hispanic households, compared with nine times the wealth in 2010. ...

Pew 3The current gap between blacks and whites has reached its highest point since 1989, when whites had 17 times the wealth of black households. The current white-to-Hispanic wealth ratio has reached a level not seen since 2001. ...

Leaving aside race and ethnicity, the net worth of American families overall — the difference between the values of their assets and liabilities — held steady during the economic recovery. The typical household had a net worth of $81,400 in 2013, according to the Fed’s survey — almost the same as what it was in 2010, when the median net worth of U.S. households was $82,300 (values expressed in 2013 dollars).

The stability in household wealth follows a dramatic drop during the Great Recession. From 2007 to 2010, the median net worth of American families decreased by 39.4%, from $135,700 to $82,300

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December 15, 2014 in Tax | Permalink | Comments (12)

The IRS Scandal, Day 585

IRS Logo 2San Diego Union-Tribune:  Is AG Ignoring Lessons From IRS Scandal?:

A Virginia-based conservative group filed a federal First Amendment lawsuit this week accusing California Attorney General Kamala Harris of engaging in the kind of activity that was the subject of the recent scandal involving the Internal Revenue Service. Are state officials trying to chill the speech of conservative nonprofits?

“Not only did IRS employees improperly target groups based on politics, but they also improperly demanded a host of details about the groups’ activities, according to a report on the abuses by a Treasury Department inspector general,” according to a Washington Post report about the federal scandal. The IRS even demanded information about some of these groups’ smallest donors.

Now the Americans for Prosperity Foundation is saying the state of California is improperly demanding information about its donors – and is threatening unusually harsh penalties if the group doesn’t comply. One other conservative group has filed a separate lawsuit against the attorney general, which is now in the Ninth Circuit. ...

Harris has long been touted as a rising national political star. If so, then she ought to learn some lessons from a scandal that gave the IRS such a black eye.

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December 15, 2014 in IRS News, IRS Scandal, Law Firm Tax Rankings, Tax | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, December 14, 2014

Top 5 Tax Paper Downloads

SSRN LogoThere is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5. The #1 paper is now #97 in all-time downloads among 10,578 tax papers:

  1. [1340 Downloads]  A Compendium of Private Equity Tax Games, by Gregg D. Polsky (North Carolina)
  2. [397 Downloads]  Obama Care Fails the Origination Clause: Why Sissel and Hotze Should Be Reversed, by Steven J. WIllis (Florida) & Hans G. Tanzler (Florida)
  3. [231 Downloads]  Piketty in America: A Tale of Two Literatures, by Joseph Bankman (Stanford) & Daniel Shaviro (NYU)
  4. [206 Downloads]  A Conceptual Framework for the Regulation of Cryptocurrencies, by Omri Marian (Florida)
  5. [168 Downloads]  Corporate Inversions and the Unbundling of Regulatory Competition, by Eric L. Talley (UC-Berkeley)

December 14, 2014 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 584

IRS Logo 2Las Vegas Review-Journal editorial:  IRS Defies Order to Turn Over Tax Documents:

Back in February, President Barack Obama said the apparent targeting of conservative organizations by the IRS was not illegal or politically motivated, but rather the result of “some bone-headed decisions,” and that “not even a smidgen of corruption” was at play. A few months — and developments — later, however, the president’s words are even less believable than they were then.

First, nonprofit watchdog group Cause of Action filed a Freedom of Information Act request for documents from the IRS indicating that the agency had been sharing individuals’ private tax data with the White House. (The group was trying to obtain information proving the existence of an independent investigation into alleged unauthorized access to the Koch brothers’ tax returns by former White House senior economics adviser Austan Goolsbee.) When the agency dragged its feet and ultimately denied the request, Cause of Action sued. A judge ruled in Cause of Action’s favor, ordering the IRS to turn over all of the documents by December 1.

Despite the court order, however, the IRS has continued to stonewall, refusing to share the requested records. While the Treasury Inspector General for Tax Administration (TIGTA) claimed initially that the IRS would comply and turn over more than 2,000 pages of documents, it abruptly reneged, saying in a letter to Cause of Action on December 1 that, yes, they did indeed have 2,043 pages of documents relating to the FOIA request, but that Cause of Action couldn’t see them due to federal privacy laws.

So, if you’re keeping score at home, the IRS claimed that turning over the documents would be an invasion of privacy — despite the fact that the agency already invaded that privacy by having the documents in the first place.

These new developments highlight a very cozy and, in all likelihood, very much illegal relationship between the Obama administration and the IRS. We still don’t know the full extent and depth of the IRS targeting scandal, but this case could provide evidence of coordination. For now, we are left with a ton of questions:

What, exactly, was the White House doing with more than 2,000 pages of documents containing private tax data of various Americans? Is the IRS helping the Obama administration go after the “dark money” groups the president and his party have long condemned? And what are we to make of the fact that as many as 30,000 supposedly destroyed emails from former IRS Exempt Organizations Director Lois Lerner have suddenly turned up — emails from January 2009 through June 2011, the time period during which the IRS was ramping up its conservative targeting efforts?

Does the IRS just have really bad luck with computers? Are those in charge of finding the emails incompetent? Or is there something more coordinated and corrupt going on? And, if so, how much did President Obama know about it?

When President Obama took office, he swore that his would be “the most transparent” presidency in history, but his administration’s hostility regarding actual transparency, as well as the free press, remains alarming and unacceptable. All of the requested IRS records need to be made public, and if the Obama administration and the IRS won’t do it, then the Republican-led Congress needs to push for hearings to get to the bottom of the matter.

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December 14, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, December 13, 2014

Life and Death in the Federal Income Tax Class

TedTheodore Eisenberg, Henry Allen Mark Professor of Law at Cornell, died suddenly of a heart attack on February 23, 2014 at the age of 66 (remembrance here).  I was a student of Ted's in his bankruptcy class, and I later convinced him to participate in our law school rankings symposium at Indiana.  Although Ted was primarily known for his empirical research in bankruptcy, civil rights, and the death penalty, he also taught federal income tax.  Here is an excerpt from a student evaluation in Ted's federal income tax class as a visiting professor at Harvard Law School from In Memoriam: Theodore Eisenberg [1947-2014], 100 Cornell L. Rev. 1, 3 (2014):

Thank you, Professor Eisenberg, for making a course I feared taking since day one of HLS enjoyable. Really enjoyable. There were days when I thought, My god, it can’t be, I like tax. Prof. Eisenberg is the best teacher I’ve had at HLS. An unpretentious, patient, searching attitude and a brilliant teaching style. I can’t say enough in favor of this unique, witty, and motivating professor. Profs at HLS should be required to take lessons from Eisenberg on how to teach a law school class. Made a class of 150 seem like a class of 15. A great communicator. I’m not afraid of tax anymore. EISENBERG IS A GOD. HLS does not deserve him. But HLS stu- dents do. 

TyreUNLV, Q&A: New Grad Tyre Graym:

You've had significant health issues during your studies. Did that influence the direction you wanted to take with your degree?
I suffered from focal segmental glumerulosclerosis, which is a chronic kidney disease. On Sept. 11, 2012, while sitting in Professor (Francine) Lipman’s federal income tax course, I received the call I had been waiting to get for about three years: A kidney was available and I needed to rush to the hospital. At 4 a.m. on the next day, I received a kidney transplant. ...

My long-term goals include establishing a nonprofit that will provide legal advice to people who are candidates for transplant and major medical procedures. I believe that I can and will be able to raise awareness about kidney disease and organ donation.  I am here today because of the selfless act of another. If through my efforts, I can do the same for one other person, my time on this earth will have been well spent.

December 13, 2014 in Legal Education, Tax | Permalink | Comments (0)

NY Times: Life Insurers Use State Laws to Avoid $100 Billion in U.S. Taxes

New York Times DealBook, Life Insurers Use State Laws to Avoid as Much as $100 Billion in U.S. Taxes:

Some companies have been called economic traitors for seeking to lower their tax bills by moving overseas. But life insurers are accomplishing the same goal without leaving the country, saving as much as $100 billion in federal taxes, much of it in the last several years.

The insurers are taking advantage of fierce competition for their business among states, which have passed special laws that allow the companies to pull cash away from reserves they are required to keep to pay claims. The insurers use the money to pay for bonuses, shareholder dividends, acquisitions and other projects, and because of complicated accounting maneuvers, the money escapes federal taxation.

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December 13, 2014 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 583

IRS Logo 2The Blaze:  Did the IRS Share Confidential Taxpayer Data With the White House? It May Take Several More Months to Find Out:

A government watchdog group has been forced to ask a federal court to insist that the government hand over thousands of documents that could show the IRS gave confidential taxpayer information to the White House.

The Treasury Inspector General for Tax Administration, an internal oversight arm of the Treasury Department, indicated last month it was willing to hand over up to 2,500 documents that could show the IRS improperly shared this information with the Obama administration.

TIGTA had collected these documents after Austan Goolsbee, the former chair of the White House’s Counsel of Economic Advisers, implied that Koch Industries doesn’t pay any corporate income tax, which raised questions about how Goolsbee would know that.

But last week, TIGTA told Cause of Action, the group seeking those documents, that it could not hand them over after all. TIGTA said the rules of the tax code would prevent it from making them public. TIGTA said the documents contain confidential taxpayer data that cannot be released.

As a result, Cause of Action filed a new motion in the U.S. District Court for the District of Columbia that asks the court to dispute TIGTA’s decision. That motion indicates a resolution of the fight could still take several months.

Under Cause of Action’s proposed motion, the group would file a motion for summary judgment in late January, TIGTA would file its own arguments in late February, and all replies would be due by early April.

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December 13, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, December 12, 2014

Pepperdine Survived Today's Rain

The view from the law school atrium (via Al Sturgeon):

Rainbow Law School

The view from the pool (via Marcelo Ferreira):

Pool

December 12, 2014 in Legal Education, Tax | Permalink | Comments (1)

WSJ: Bonus Depreciation Fails to Boost Jobs, Capital Investment

Wall Street Journal, A Tax Break Fails to Produce Jobs:

With Congress poised to extend a raft of tax breaks, consider this: One such break has helped AT&T and Verizon slash their recent tax bills by billions of dollars without leading to the intended increase in investment or jobs.

The measure, known as “bonus depreciation,” lets companies offset their income with investments they have made more quickly. It was enacted in 2008 as part of the economic stimulus package with the goal of giving companies an incentive to build more factories or upgrade more equipment, creating jobs and giving a boost to sluggish economic growth in the process.

But that isn’t how it has worked, at least at AT&T and Verizon, whose vast networks of towers and cables make them two of the country’s biggest investors in infrastructure.

AT&T estimated its federal tax bill last year at $3 billion, down from about $5.9 billion in 2007, before the tax relief was enacted. Verizon estimated that it would get $197 million back last year, compared with a 2007 bill of $2.6 billion.

Meanwhile, the companies have kept their capital spending relatively flat since the stimulus was adopted, and their employee count has dropped by more than 100,000 people, a fifth of their combined work forces.

WSJ

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December 12, 2014 in Scholarship, Tax | Permalink | Comments (2)

Weekly Tax Roundup

Weekly SSRN Tax Roundup

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December 12, 2014 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

The Burger King Inversion: A 'Whopper of a Tax Dodge'

Whopper-Tax-DodgeBlog of the Legal Times, Tax Group Calls Burger King Merger 'Whopper of a Tax Dodge':

Burger King Worldwide Inc. will save hundreds of millions of dollars in U.S. taxes by merging with a Canadian coffee and doughnut chain, according to a new report from a tax advocacy group that called the deal a "'whopper' of a tax dodge." [Americans for Tax Fairness, Whopper of a Tax Dodge: How Burger King’s Inversion Could Shortchange America]

The Miami-based fast-food giant will create a parent company in Canada for it and Tim Hortons Inc. through its acquisition of the business. The deal, considered a major tax-lowering corporate inversion by its critics, is set to close on Friday, creating the new Restaurant Brands International Inc. in Canada, according to Burger King and Tim Hortons.

The transaction will allow Burger King to sidestep $400 million to $1.2 billion in U.S. taxes from 2015 to 2018, the Americans for Tax Fairness analysis shows. In announcing the merger in August, Burger King chief executive officer Daniel Schwartz said the move wouldn't bring "meaningful" tax savings.

December 12, 2014 in Tax | Permalink | Comments (2)

The IRS Scandal, Day 582

IRS Logo 2Columbus Dispatch editorial: ‘Lost’ IRS Emails Might Reveal Truth:

It’s unsurprising that the “lost” email messages of former IRS official Lois Lerner, the disappearance of which conveniently coincided with her being investigated for the improper targeting of conservative groups, have been located by the Treasury Department’s inspector general.

Tech experts, as well as common sense, suggested from the outset that it was implausible that the emails just happened to vanish when they did, and were unrecoverable.

But that was the administration’s story, and it was sticking to it — at least until after the midterm elections.

The inspector general reported that 30,000 of Lerner’s emails have been recovered from the period of January 2009 to June 2011, the critical time when she and her colleagues were going after nonprofit groups whose ideology they didn’t like.

The content of the emails is unknown; investigators have said it might take months to sift through them.

For those who have lost track: Politically active conservative groups had their applications for nonprofit status delayed leading up to the 2012 elections and were asked improper questions about their affiliations, beliefs and even the content of their prayers. Some cried foul, but largely were ignored for months.

The Internal Revenue Service denied the targeting until after the election, and only when it became clear the issue wasn’t going away.

In May 2013, Lerner staged a limited confession in response to a planted question at a conference, in apparent attempt to limit the damage.

President Barack Obama at first expressed anger and vowed to get to the bottom of the issue ... until he felt it had blown over enough to dismiss the whole affair as a “phony scandal” without a “ smidgen” of corruption involved.

Meanwhile, IRS Commissioner John Koskinen, appointed about a year ago, went before Congress insisting that the agency had bent over backward to recover Lerner’s emails, but “confirmed that backup tapes from 2011 no longer existed because they have been recycled, pursuant to the IRS normal policy.”

Not only would that have violated standard government records policy, according to testimony from the head of the National Archives, it turned out not to be true.

In light of all this, it’s alarming that after extracting the Lerner emails from the recovered files, the IG plans to send them to the IRS for redactions of confidential information. That would be the definition of allowing the fox to guard the henhouse.

It’s good news that the American public might finally get some answers in this investigation.

But it’s another dismaying example of how the administration that promised to be the “most transparent in history” has routinely misled, delayed and obfuscated in an effort to make its actions look better, especially before an election.

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December 12, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, December 11, 2014

Avi-Yonah: Why AMT and No AMxT? A Comment on Hines and Logue

Reuven S. Avi-Yonah (Michigan), Why AMT and No AMxT? A Comment on Hines and Logue:

In Understanding the AMT, and Its Unadopted Sibling, the AMxT,  Jim Hines and Kyle Logue propose an interesting new theory about why the US has an Alternative Minimum Tax (AMT). The function of the AMT, they propose, is to enable Congress to adopt a progressive rate schedule and to accommodate heterogeneous preferences for tax expenditures. Hines and Logue write that "By taxing a broad definition of income, the AMT makes it possible to have a tax system that both encourages certain activities with generous tax preferences and maintains a semblance of distributional equity." This rationale, they suggest, also favors the adoption of an Alternative Maximum Tax (AmXT), which would cap tax liabilities of individuals with very few preference items and thereby afford Congress greater flexibility in designing the income tax. This analysis is certainly novel, since most of the existing tax literature is opposed to the AMT. The problem, however, is that Hines and Logue have no explanation why Congress adopted the AMT but not the AMxT. When a novel theory explains part but not all of the observed phenomena, it behooves us to take another look at the theory. The following suggests another explanation for the AMT, which I believe is more consistent with Congress’ intent. It also suggests a reason to retain the AMT even if Congress does not adopt the AMxT.

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

Geier Publishes Free Income Tax Textbook

CALIDeborah H. Geier (Cleveland State) has published a free eLangdell textbook, U.S. Federal Income Taxation of Individuals (CALI 2014):

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

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

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

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December 11, 2014 in Book Club, Tax, Teaching | Permalink | Comments (2)

IRS Is Big Loser in Government Funding Bill

Wall Street Journal, Funding Bill: The Losers:

House and Senate negotiators unveiled Tuesday evening a $1.1 trillion agreement to fund the U.S. government for the next fiscal year, and some federal government agencies, their staffs and the people they serve got some bad news. ...

The 3.1% reduction in the budget of the Internal Revenue Service — bringing its funding below its 2008 level — comes amid Republican outrage over allegations IRS officials targeted conservative political groups for extra scrutiny of their filings for non-profit status.

Losers

Mother Jones, Rich People Cheer As Republicans Cut IRS Budget, by Kevin Drum

December 11, 2014 in IRS News, Tax | Permalink | Comments (1)

Luxembourg Roiled by Leak of Secret Tax Deals for Disney, Koch Brothers

LuxLuxembourg Tax Deals for Disney, Koch Brothers Empires Revealed:

A new leak of confidential documents expands the list of big companies seeking secret tax deals in Luxembourg, exposing tax-saving maneuvers by American entertainment icon The Walt Disney Co., politically controversial Koch Industries Inc. and 33 other companies. 

December 11, 2014 in Tax | Permalink | Comments (3)

Yin: The IRS's Misuse of Scarce Compliance Resources in the Exempt Organization Area

George K. Yin (Virginia), The IRS's Misuse of Scarce Compliance Resources in the Exempt Organization Area:

This paper briefly explains why the IRS’s adoption of an abbreviated application form (Form 1023-EZ) for organizations seeking recognition of their tax exemption under section 501(c)(3) results in a misuse of scarce compliance resources in the exempt organization area.

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

The IRS Scandal, Day 581

IRS Logo 2Forbes:  Obama Justice Department Was Involved In IRS Targeting, Lerner Emails Reveal, by Robert W. Wood:

Sadly, the 18 month investigation into the IRS targeting of conservative groups isn’t over, and it may be worse than anyone thought. A federal judge has broken loose more emails that the DOJ had surely hoped would never surface. The picture it reveals isn’t pretty. The documents prove that Lois Lerner met with DOJ’s Election Crimes Division a month before the 2010 elections.

It has to be embarrassing to the DOJ, which may not be the most impartial one to be investigating the IRS. In fact, the DOJ withheld over 800 pages of Lerner documents citing “taxpayer privacy” and “deliberative privilege.” Yet these internal DOJ documents show Ms. Lerner was talking to DOJ officials about prosecuting tax-exempt entities (yes, criminally!) two years before the IRS conceded there was inappropriate targeting. ...

[I]t is getting harder and harder to simply accept President Obama’s ‘no smidgen of corruption’ remark made to Fox News in February, no matter how sincere and forthright his delivery.

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December 11, 2014 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)