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Sunday, March 1, 2015

The 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 paper returning to the list at #5:

  1. [285 Downloads]  Why Corporate Tax Reform Can Happen, by Edward Kleinbard (USC)
  2. [193 Downloads]  David Foster Wallace on Tax Policy, How to Be an Adult, and Other Mysteries of the Universe, by Arthur J. Cockfield (Queen's University)
  3. [163 Downloads]  Fiscally Transparent Entities: Eligibility for Tax Treaty Benefits, by Sumeet Khurana & Ashish Karundia
  4. [143 Downloads]  Taxation and Surveillance -- An Agenda, by Michael Hatfield (University of Washington)
  5. [132 Downloads]  Tax Regulation, Transportation Innovation, and the Sharing Economy, by Jordan M. Barry (San Diego) & Paul L. Caron (Pepperdine)

March 1, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The Godliest (Utah) and Godless (Vermont) States

The IRS Scandal, Day 661

IRS Logo 2Press Release, Judicial Watch Sues IRS for Records on Destroyed Hard Drives of Lois Lerner, Other IRS Officials:

Judicial Watch announced today that on February 18, 2015, it filed a Freedom of Information Act (FOIA) lawsuit against the U.S. Internal Revenue Service (IRS) seeking “any and all records related to the destruction of damaged hard drives from IRS employee computers from January 1, 2010, to the present.” The suit was filed in U.S. District Court for the District of Columbia (Judicial Watch v Internal Revenue Service (No 1:15-cv-00237)). The lawsuit is part of an investigation into the Obama IRS’ claim that the emails of Lois Lerner and other IRS officials, who are being investigated for abuses of Obama’s political opponents, were contained on hard drives that were subsequently damaged and destroyed.

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March 1, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, February 28, 2015

The IRS Scandal, Day 660

IRS Logo 2Wall Street Journal, GOP Lawmakers Seek to Jump-Start Long-Running IRS Investigation:

The new Republican-controlled Congress is trying to pump fresh life into a long-running probe of alleged targeting of conservative groups by the Internal Revenue Service.

Seeking to jump-start the stalled inquiry, GOP lawmakers raised concerns at a House hearing on Thursday night about possible IRS wrongdoing during the course of the probe.

The hearing by the Oversight and Government Reform Committee revealed few new details, however, and Democrats accused Republicans of airing the allegations prematurely, before all the evidence has been gathered.

Still, the hearing signaled more problems for the beleaguered tax agency, which has faced GOP ire for several years over its treatment of politically-active conservative groups, among other issues.

Witnesses appearing before the committee cited the IRS’s possibly incomplete or incorrect responses to officials’ demands for computer backup tapes containing missing IRS emails. The missing emails belonged to Lois Lerner, a now-retired IRS official who has been a focus of Republican concerns.

Forbes, New IRS Scandal Hearings Reveal 32,000 More Emails, Possible Criminal Activity, by Robert W. Wood:

In new Hearings of the Committee on Oversight & Government Reform on February 26, 2015, J. Russell George, the Treasury Inspector General, said he is investigating possible criminal activity at the IRS. The hearings also revealed the fact that investigators have recovered another 32,000 emails relating to Lois Lerner. However, how many of them are duplicates of those previously recovered is not yet clear.

But in what was the most disturbing revelation, House Member attendees were told that the IRS had not even asked for the backup tapes when the ‘hard drive crash’ excuse was first used. That contradicted the prior testimony of IRS Commissioner John Koskinen. He had testified to the effect that recovery efforts had been thorough, and that the tapes couldn’t be accessed.

It now appears that no one may have asked. Rep. John Mica, R-Fla., said, “It looks like we’ve been lied to, or at least misled.” ... Several Oversight Committee Members questioned how diligent the IRS had been, given how quickly the investigators now were able to find them. Yet an IRS statement repeats the tax agency’s full cooperation. It has not been inexpensive. The IRS claims to have spent $20 million responding to congressional inquiries, producing documents and providing agency officials to testify at hearings.

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February 28, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, February 27, 2015

How to Tell If You’re a Jerk at Work

The JerkFollowing up on my previous post, Are You a Jerk at Work?:  Wall Street Journal, How to Tell if You’re a Jerk at Work, by  Daniel Ames (Columbia Business School) & Abbie Wazlawek (Columbia Business School):

Self-awareness is crucial in the workplace. It can also be dauntingly hard to get.

Knowing your own strengths and limitations, and how others see you and your behavior, has been linked to a range of positive outcomes. But when it comes to understanding how others see us, many of us are in the dark.

One example comes from our own research where we’ve asked negotiators at the end of a deal-making session to classify themselves as having been underassertive, overassertive or appropriately assertive. We also asked them the same question about their counterparts. When we compare how people categorize themselves with how their counterparts categorize them, the correspondence is disturbingly low—not much better than flipping a coin.

Assertiveness

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February 27, 2015 in Legal Education, Tax | Permalink | Comments (1)

Weekly Tax Roundup

Weekly SSRN Tax Roundup

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February 27, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Republicans Name Keith Hall CBO Director, Replacing Doug Elmendorf

Hall 2Wall Street Journal, GOP Leaders Name Keith Hall as CBO Director:

Congressional Republican leaders named Keith Hall to a four-year term as the next director of the Congressional Budget Office, the influential nonpartisan budget scorekeeper for Congress.

Mr. Hall, a former White House economist who served as commissioner of the Bureau of Labor Statistics, will replace Doug Elmendorf starting April 1, GOP leaders said Friday.

Mr. Hall, who has served as chief economist of the International Trade Commission since September, headed the BLS, one of the government’s main economic-data-gathering agencies, from 2008 to 2012. He served as the chief economist for the White House Council of Economic Advisers from 2005 to 2008.

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February 27, 2015 in Congressional News, Tax | Permalink | Comments (0)

Brunson: Unilaterally Enforcing Foreign Tax Judgments

Samuel D. Brunson (Loyola-Chicago), Accept This as a Gift: Unilaterally Enforcing Foreign Tax Judgments, 146 Tax Notes 541 (Jan. 26, 2015):

Current U.S. law treats foreign tax judgments differently than other foreign civil judgments, prohibiting U.S. courts from recognizing and enforcing the former, even though they recognize and enforce the latter. In this article, Brunson argues that there is no compelling reason for this different treatment and that it is ultimately detrimental to the government’s revenue collection. As long as the revenue rule continues to prevent the United States from enforcing foreign tax judgments, the nation cannot enlist foreign help in reducing the foreign tax gap; other countries will only collect U.S. tax judgments if the United States reciprocally collects their tax judgments. The revenue rule also allows foreign persons to hide their assets in the United States, effectively turning the United States into a tax haven. For the sake of reducing the international tax gap and for the sake of international tax justice, the United States must revoke the revenue rule.

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

Four Tax Profs Are Among Dozens of Florida Dean Applicants

Florida Logo (GIF)After last year's failed dean search at the University of Florida College of Law (which included two tax profs among the four finalists):  pursuant to the state open records law, Florida has released the application letters and CVs of dozens of applicants, including four Tax Profs:

(Hat Tip: Dan Filler.)

February 27, 2015 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 659

Thursday, February 26, 2015

Weisbach Presents The New View, the Traditional View, and Capital Gains Taxes on Stock Today at UCLA

WeisbachDavid Weisbach (Chicago) presents The New View, the Traditional View, and Capital Gains Taxes on Stock at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh and Alexander Wu:

The sale of stock cum dividend generates a gain to the seller and a dividend and capital loss to the buyer. The longer the time between the gain from sale cum dividend and the loss from disposition of the stock ex dividend, the greater then net effective tax due to the time value of money. Payment of a dividend prior to the original sale avoids these offsetting capital gains and losses and, therefore, can lower overall taxes. Neither the new view nor the traditional view models of the corporate tax incorporate this effect. This paper modifies new and traditional view models and shows that the combination of dividend and capital gains taxes can generate incentives to pay dividends sooner rather than later, contrary to the conclusions of either view. It also considers how clientele effects may change these incentives, sometimes creating incentives to pay dividends after sales and sometimes before.

February 26, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

American Taxation Association 2015 Midyear Meeting

ATA LogoThe three day 2015 Midyear Meeting of the American Taxation Association kicks off today in Washington, D.C. The full program is here.

February 26, 2015 in Conferences, Tax | Permalink | Comments (0)

WSJ: Greece Struggles to Get Citizens to Pay Their Taxes

GreeceWall Street Journal, Greece Struggles to Get Citizens to Pay Their Taxes:

Of all the challenges Greece has faced in recent years, prodding its citizens to pay their taxes has been one of the most difficult.

At the end of 2014, Greeks owed their government about €76 billion ($86 billion) in unpaid taxes accrued over decades, though mostly since 2009. The government says most of that has been lost to insolvency and only €9 billion can be recovered.

Billions more in taxes are owed on never-reported revenue from Greece’s vast underground economy, which was estimated before the crisis to equal more than a quarter of the country’s gross domestic product.

The International Monetary Fund and Greece’s other creditors have argued for years that the country’s debt crisis could be largely resolved if the government just cracked down on tax evasion. Tax debts in Greece equal about 90% of annual tax revenue, the highest shortfall among industrialized nations, according to the Organization for Economic Cooperation and Development.

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February 26, 2015 in Tax | Permalink | Comments (1)

Senate Holds Hearing on The Coming Debt Crisis

Senate LogoThe Senate Budget Committee held a hearing yesterday on The Coming Crisis: America’s Dangerous Debt (with links to testimony):

February 26, 2015 in Congressional News, Tax | Permalink | Comments (0)

SSRN Tax Faculty Rankings

SSRN LogoSSRN has updated its monthly rankings of 750 American and international law school faculties and 3,000 law professors by (among other things) the number of paper downloads from the SSRN database.  Here is the new list (through February 1, 2015) of the Top 25 U.S. Tax Professors in two of the SSRN categories: all-time downloads and recent downloads (within the past 12 months):

 

 

All-Time

 

Recent

1

Reuven Avi-Yonah (Mich.)

43,558

Reuven Avi-Yonah (Mich.)

6709

2

Paul Caron (Pepperdine)

27,757

Ed Kleinbard (USC)

5297

3

Michael Simkovic (Seton Hall)

25,790

Michael Simkovic (Seton Hall)

4130

4

Louis Kaplow (Harvard)

23,537

Gregg Polsky (N. Carolina)

2871

5

D. Dharmapala (Chicago)

21,636

Paul Caron (Pepperdine)

2764

6

Vic Fleischer (San Diego)

20,533

D. Dharmapala (Chicago)

2740

7

James Hines (Michigan)

20,367

Richard Ainsworth (BU)

2285

8

Ted Seto (Loyola-L.A.)

19.573

Omri Marian (Florida)

1886

9

Richard Kaplan (Illinois)

19,347

Robert Sitkoff (Harvard)

1823

10

Ed Kleinbard (USC)

17,263

David Gamage (UCBerkeley)

1728

11

Katie Pratt (Loyola-L.A.)

16,879

Katie Pratt (Loyola-L.A.)

1708

12

Dennis Ventry (UC-Davis)

15,558

Dan Shaviro (NYU)

1575

13

Carter Bishop (Suffolk)

15.551

Jeff Kwall (Loyola-Chicago)

1569

14

Jen Kowal (Loyola-L.A.)

15,027

DIck Harvey (Villanova)

1495

15

Richard Ainsworth (BU)

14,908

Louis Kaplow (Harvard)

1466

16

David Weisbach (Chicago)

14,832

Jen Kowal (Loyola-L.A.)

1464

17

Chris Sanchirico (Penn)

14,724

Brad Borden (Brooklyn)

1395

18

Robert Sitkoff (Harvard)

14,609

Chris Sanchirico (Penn)

1302

19

Brad Borden (Brooklyn)

14,469

Vic Fleischer (San Diego)

1301

20

Francine Lipman (UNLV)

14,311

James Hines (Michigan)

1279

21

Bridget Crawford (Pace)

14,208

Francine Lipman (UNLV)

1243

22

David Walker (BU)

14,139

Ted Seto (Loyola-L.A.)

1131

23

Dan Shaviro (NYU)

12,815

Carter Bishop (Suffolk)

1120

24

Herwig Schlunk (Vanderbilt)

12,662

Steve Willis (Florida)

1086

25

Wendy Gerzog (Baltimore)

11,926

Christopher Hoyt (UMKC)

1085

Note that this ranking includes full-time tax professors with at least one tax paper on SSRN, and all papers (including non-tax papers) by these tax professors are included in the SSRN data.

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February 26, 2015 in Legal Education, Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)

Dexter: A Tax Expenditure Approach to Reparations

Bobby L. Dexter (Chapman), The Hate Exclusion: Moral Tax Equity for Damages Received on Account of Race, Sex, or Sexual Orientation Discrimination:

Scholars on both sides of the reparations literature divide commonly contemplate some form of federal monetary outlay. At the same time, given both the absence of such an outlay and the dire prognosis that such largesse is forthcoming, tax scholars rarely contribute to traditional reparations literature. With this Article, Professor Dexter introduces the federal income tax arena as fertile ground for the resolution of longstanding differences in the reparations debate and brings a novel and possibly controversial perspective to traditional tax expenditure analysis. In addition to highlighting the various political and administrative merits of a tax expenditure approach to reparations, he argues that allowing the exclusion of damages received on account of specific forms of discrimination – even if suffered at the hands of a private actor – would offer immediate and precisely-targeted reparational relief not only to those suffering the modern day impact of slavery and race discrimination under federal imprimatur but also to those impacted by the United States’ documented history of hostility with respect to women and sexual minorities. The narrow tailoring of relief combined with the moral force of the unclean hands theory of exclusion, he reasons, neutralizes arguments advanced in traditional reparations literature regarding excessive act, wrongdoer, and victim attenuation.

February 26, 2015 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 658

IRS Logo 2Washington Free Beacon, Lois Lerner Received $129K in Bonuses:

Former IRS official Lois Lerner received $129,300 in bonuses between 2010 and 2013, records obtained through the Freedom of Information Act show.

Over a three-year period, Lerner, the head of the tax-exempt division at the heart of the IRS targeting scandal, received a 25 percent retention bonus—averaging $43,000 a year—on top of her regular salary.

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February 26, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, February 25, 2015

Tax Prof Brant Hellwig Named Dean at Washington & Lee Law School

HellwigContinuing the stunning series of developments over the past week at Washington & Lee Law School (links below):

Brant Hellwig Named Next Dean of W&L Law:

Washington and Lee University President Kenneth P. Ruscio has announced the appointment of Brant Hellwig, professor of law at Washington and Lee University and an expert in the field of federal taxation, as dean of the W&L School of Law, effective July 1, 2015.

Hellwig succeeds Nora V. Demleitner, who announced earlier this week she would step down as dean at the end of the academic year.

Hellwig joined the W&L law school faculty in 2012. He teaches a variety of tax courses, including Federal Income Taxation of Individuals, Partnership Taxation, Corporate Taxation, and Estate and Gift Taxation. His scholarship in the field is similarly broad, ranging from the income tax treatment of deferred compensation arrangements to the estate tax treatment of closely held business entities employed as trust substitutes.

Update:  Above the Law, Formerly Top 30 Law School Enters Full-On Meltdown

February 25, 2015 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (1)

Field Presents Aggressive Tax Planning and the Ethical Tax Lawyer Today at Toronto

Field (2015)Heather Field (UC-Hastings) presents Aggressive Tax Planning and the Ethical Tax Lawyer at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

[H]ow should a tax planner, who wants to engage in “permissible tax planning” but not cross the line over into “unethical loophole lawyering,” exercise her discretion and judgment? This paper seeks to answer this question by drawing on both (a) the extensive literature on lawyering and professionalism and (b) the social science literature regarding factors that contribute to biased decision-making and unintentional lapses in judgment. The explicit incorporation of these strands of literature into the discourse on tax ethics helps each tax planner operationalize, on an individual basis and in a way that aligns with her values, both the general and tax-specific rules of professional conduct. The existing tax ethics literature primarily focuses either on how to comply with the rules governing practice or on how the rules should be improved. Thus, this paper contributes to the literature by focusing on the issues that the rules leave to the discretion of the tax practitioner (rather than on the issues that the rules address) and by approaching the discussion from a lawyering perspective20 (rather than from a policymaking perspective).

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February 25, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

President Obama Nominates Cono Namorato to be Assistant Attorney General for the Tax Division

ConoPresident Obama yesterday nominated Cono R. Namorato to be Assistant Attorney General for the Tax Division of the Department of Justice:

Cono R. Namorato is currently a Member of the law firm Caplin & Drysdale, a position he has held since 2006 and previously from 1978 to 2004. From 2004 to 2006, Mr. Namorato served as Acting Deputy Commissioner for certain designated matters and as Director of the Office of Professional Responsibility for the Internal Revenue Service (IRS) in the Department of the Treasury. Before beginning his career at Caplin & Drysdale, Mr. Namorato held various positions within the Tax Division of the Department of Justice (DOJ), including Deputy Assistant Attorney General from 1977 to 1978, Assistant Chief and then Chief of the Criminal Section from 1973 to 1977, and Supervisory Trial Attorney and Trial Attorney from 1968 to 1973. Mr. Namorato began his career in 1963 as a Special Agent for the Criminal Investigation Division of the IRS in the Brooklyn District.

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February 25, 2015 in Tax | Permalink | Comments (2)

Senate Holds Hearing on Tax Reform, Growth and Efficiency

Senate LogoThe Senate Finance Committee held a hearing yesterday on Tax Reform, Growth and Efficiency:

In connection with the hearing, the Joint Committee on Taxation released Economic Growth And Tax Policy (JCX-47-15):

This document ... includes an overview of economic growth and the impact that taxes may have on economic growth.

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February 25, 2015 in Congressional News, Tax | Permalink | Comments (0)

Tuesday, February 24, 2015

Hickman Presents Treasury's Retroactivity Today at Chicago

Hickman 2014 2Kristin Hickman (Minnesota) presents Treasury's Retroactivity at Chicago today as part of its Public Law & Legal Theory Workshop Series:

In Bowen v. Georgetown University Hospital, the Supreme Court described retroactivity as "not favored in the law" and generally rejected allowing federal administrative agencies to adopt regulations "altering the past legal consequences of past actions."  Unlike most regulatory agencies, Treasury and the IRS are expressly authorized by Congress to adopt regulations with precisely such primary retroactive effect.  Specifically, IRC § 7805(b) grants Treasury and the IRS the power to backdate tax regulations under a variety of circumstances.  Preliminary analysis shows that Treasury and the IRS utilize this authority regularly with little judicial oversight for abuse of discretion.  Using empirical data, this article will explore more fully Treasury and IRS utilization of the authority to adopt retroactively effective regulations interpreting the Internal Revenue Code.

February 24, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Leff Presents A New Method for Funding Law School Education Today at Georgetown

LeffBenjamin M. Leff (American) presents The Income-Based Repayment Swap: A New Method for Funding Law School Education (with Heather Hughes (American)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John BrooksItai Grinberg, and David Schizer:

The high cost of legal education and corresponding student debt levels is a subject of robust debate. Yet too few critics of degree cost show creativity in thinking about the optimal mechanism for funding a legal education. The traditional model for financing a legal education is that students borrow with (mostly) fixed-rate loans repayable soon after graduation. The federal government supplements loans with income-based repayment and loan forgiveness programs to protect students who have borrowed more than they can afford to pay back. The reach of these programs has expanded dramatically in recent years, with the programs covering 1.3 million graduates owing around $72 billion as of the first quarter of 2014, with every indication that those figures will grow dramatically unless the programs are modified. A significant segment of those who depend on income-based repayment and loan forgiveness programs will be law students, because those are among the students with the highest levels of qualifying debt.

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February 24, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (3)

Sugin Presents Invisible Taxpayers Today at NYU

SuginLinda Sugin (Fordham) presents Invisible Taxpayers at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Viard:

The invisibility of taxpayers in the legal system creates a substantial problem for tax justice, both substantive and procedural. The courts’ application of standing doctrine, as well as its conceptualization of tax expenditures as not involving state action, has narrowed the opportunity for judicial review for tax-reducing actions taken by both Congress and the IRS. These developments fail to protect individuals, even when they have substantial individual rights claims under the Constitution.

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February 24, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

IRS Audits of High-Income Households Drop to 6-Year Low

AuditUSA Today,  IRS Audit Rate for Individuals Drops:

Your chances of facing an IRS audit rate dropped to the lowest level in at least a decade in 2014 and are expected to fall further this year, according to new data USA TODAY obtained from the nation's tax agency.

The audit rate, the percentage of individuals' tax returns IRS revenue agents examined either in person or via correspondence, fell to 0.86% last year, the data show. That represents the lowest rate since at least fiscal year 2005. After rising steadily from 2005-10, the number of IRS audits for individual taxpayers fell 21.4% during the succeeding five years, the data show.

The IRS audited slightly more than 1.2 million individuals last year, down more than 162,000 from 2013, and a drop of nearly 339,000 from 2010.

Bloomberg, IRS Audits of High-Income Households Drop to 6-Year Low:

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February 24, 2015 in IRS News, Tax | Permalink | Comments (0)

Borden: Tax Revenue Effects of REIT Spinoffs

Bradley T. Borden (Brooklyn), Counterintuitive Tax Revenue Effect of REIT Spinoffs, 146 Tax Notes 381 (Jan. 19, 2015):

Several reports have attacked REIT spinoffs because they erode the corporate tax base, apparently reducing government tax revenues. This article uses a very simple example to illustrate that multiple variables can affect the tax-revenue effect of a REIT spinoff and shows that under some assumptions the tax-revenue effect of a REIT spinoff can actually be positive.

February 24, 2015 in Scholarship, Tax | Permalink | Comments (0)

What’s Worse: Being A Tax Lawyer Or An Accountant?

TaxAbove the Law, What’s Worse: Being A Lawyer Or An Accountant?:

When I practiced law, I used to look forward to tax season. It was the one time of the year where I felt like accountants had it worse than lawyers. Which got me to thinking — which career is worse: lawyers or accountants? Which will disappear sooner? Who’s more boring? ... If you’ve got any good evidence or anecdotal war stories, speak up in the comments sections and let us know what you think. 

February 24, 2015 in Tax | Permalink | Comments (1)

The IRS Scandal, Day 656

IRS Logo 2Washington Times, White House That Promised Transparency Refuses to Cooperate With IRS Probe:

The White House told Congress last week it refused to dig into its computers for emails that could shed light on what kinds of private taxpayer information the IRS shares with President Obama’s top aides, assuring Congress that the IRS will address the issue — eventually. The tax agency has already said it doesn’t have the capability to dig out the emails in question, but the White House’s chief counsel, W. Neil Eggleston, insisted in a letter last week to House Committee on Ways and Means Chairman Paul Ryan that the IRS would try again once it finishes with the tea party-targeting scandal.

“It is my understanding that in May 2014, Commissioner Koskinen responded to this request by indicating that the IRS would be able to address new topics such as these following its completion of document productions already in progress,” Mr. Eggleston wrote in a Feb. 17 letter. “To the extent that the committee continues to have an oversight interest in this matter, I encourage you to continue working with the IRS to address those questions.”

But IRS Commissioner John Koskinen’s letter last year didn’t say that. Instead Mr. Koskinen said the IRS was logistically incapable of performing the search because it would have required combing through 90,000 email accounts. ...

The White House didn’t assert any privileges in refusing Mr. Ryan’s request last week, instead insisting the IRS would work on it, so there was no need for the president to get involved. That conflicts with Mr. Koskinen’s 2014 letter making clear he didn’t think such a search was feasible from his end. ...

Any official requests for private taxpayer information made by the White House are supposed to be personally signed by the president, and Congress’s Joint Committee on Taxation is supposed to be notified of the request. The JCT issues an annual report on all requests for IRS information, and those reports don’t show any such requests from the president during Mr. Obama’s time in office.

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February 24, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (8)

Monday, February 23, 2015

Ventry & Borden: Probability, Professionalism, and Protecting Taxpayers

Dennis J. Ventry, Jr. (UC-Davis) & Bradley T. Borden (Brooklyn), Probability, Professionalism, and Protecting Taxpayers, 68 Tax Law. 83 (2014):

This Article — the first in a three-part series — analyzes the affirmative and disciplinary duties imposed on tax lawyers that require them to make probability assessments about the merits of a client’s tax position or tax-favored transaction and to reflect those estimates with numerical precision. It describes how the Treasury, Congress, and the American Bar Association (often in concert, occasionally at odds) forged this obligatory standard of care over the last three decades with the shared goal of facilitating accurate advice, accurate reporting positions, and compliance with the law. The resulting regulatory standard of care (which swept aside the old regime of self-regulation) assists tax lawyers in avoiding flawed methodological processes and in minimizing psychological biases and misaligned incentives that can distort professional judgment. In this way, the standard of care for tax lawyers — particularly its emphasis on improving accuracy and reducing errors by updating subjective beliefs with new, relevant information — reflects a branch of probabilistic decision theory known as Bayesian reasoning.

February 23, 2015 in Scholarship, Tax | Permalink | Comments (0)

IRS Review of Vanguard's Tax Structure at Heart of Whistleblower's $1 Billion Tax Claim

VanguardFollowing up on my previous posts (links below):  Philadelphia Inquirer, IRS Continues to Review Vanguard's Tax Structure:

The Internal Revenue Service and the Securities and Exchange Commission are still reviewing allegations that Vanguard Group Inc.'s unusual business structure operates in violation of federal tax law, according to attorneys for former Vanguard tax lawyer David Danon, who brought the allegations to the agencies' attention in 2013.

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February 23, 2015 in Tax | Permalink | Comments (0)

Op-eds on Death and Dying

Two powerful op-eds on death and dying:

February 23, 2015 in Legal Education, Tax | Permalink | Comments (0)

The IRS Scandal, Day 655

IRS Logo 2Forbes, Remember IRS Stonewalling When Filing Your Taxes, by Robert W. Wood:

You have to file a tax return, and you have to be careful. You have to sign it under penalties of perjury. And you have to maintain receipts, logs and proof. And doubts are usually going to be resolved against you. It is understandable that some taxpayers are going to think about these things when they trudge through their returns and get ready to file. And they may think about the IRS stonewalling too. Is the playing field level?

Much ink has been spilled over the dog at my homework excuses emanating from many in our government. When the IRS targeting scandal was uncovered 2 years ago, many Democrats said there was never a smidgen of corruption. Many continue to say that the IRS did its best, no one hid anything, crashes happen, etc. Besides, they will note, these conservative organizations have too much power anyhow. So if the IRS had rogue agents, or if someone did get a little confused about the law down at the IRS in Cincinnati, where’s the harm?

They say it was a ‘witch hunt’ that went on way too long. If so, it is no one’s fault but the government’s, including IRS Chief John Koskinen. Rather than transparency, we had obstructionism at every turn. Commissioner Koskinen recently had a chance to apologize for gaffes and untimely notification of Congress that the tax agency had lost thousands of emails sought by investigators.

At a hearing Rep. Jim Jordan, R-Ohio, noted a letter that Mr. Koskinen sent the Senate Finance Committee saying the IRS had handed over everything. Curiously, the letter didn’t even mention that the former Exempt Organizations chief Lois Lerner’s emails had been lost. Mr. Koskinen defended his actions: “Absolutely not. We waited six weeks to tell while trying to find as many of the emails as we could. We gave you all of Ms. Lerner’s emails we had. We couldn’t make up Lois Lerner emails we didn’t have.” ...

David Axelrod, formerly an Obama Administration senior adviser, said that he is proud of the fact that President Obama has never been involved in a major scandal through six years in office. Yes, you heard right. Of course, other observers might say that the IRS scandal certainly seems to qualify as a scandal. Heck, perhaps Benghazi and Fast & Furious were too?

Indeed, in the case of the IRS, as long as Mr. Axelrod was going to give the party line, perhaps Mr. Axelrod might have better used a well-worn phrase: ‘not a smidgen’ of scandal corruption. 

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February 23, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, February 22, 2015

A Taxing Oscars: $160,000 Swag Bags and Tax Incentives for Best Picture Nominees

IRS, Gift Bag Questions and Answers:

Q: What are the federal income tax consequences to a person who accepts a gift bag in recognition of involvement in an awards show?
A: In general, the person has received taxable income equal to the fair market value of the bag and its contents and must report that amount on his or her federal income tax return. ...

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February 22, 2015 in Celebrity Tax Lore, Tax | Permalink | Comments (0)

800,000 HealthCare.gov Users in 37 States Received Wrong Tax Information From Government, Leading to 'Mayhem' This Tax Filing Season

HealthNew York Times, Tax Error in Health Act Has Impact on 800,000:

About 800,000 taxpayers who enrolled in insurance policies through HealthCare.gov received erroneous tax information from the government and were urged on Friday to hold off on filing tax returns until the error could be corrected.

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February 22, 2015 in IRS News, Tax | Permalink | Comments (0)

The 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 #1:

  1. [246 Downloads]  Why Corporate Tax Reform Can Happen, by Edward Kleinbard (USC)
  2. [170 Downloads]  David Foster Wallace on Tax Policy, How to Be an Adult, and Other Mysteries of the Universe, by Arthur J. Cockfield (Queen's University)
  3. [145 Downloads]  Fiscally Transparent Entities: Eligibility for Tax Treaty Benefits, by Sumeet Khurana & Ashish Karundia
  4. [133 Downloads]  Taxation and Surveillance -- An Agenda, by Michael Hatfield (University of Washington)
  5. [122 Downloads]  Inevitable: Sports Gambling, State Regulation, and the Pursuit of Revenue, by Anastasios Kaburakis (St. Louis), Ryan M. Rodenberg (Florida State) & John T. Holden (Florida State)

February 22, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 654

IRS Logo 2The American Spectator, The Real ‘Dirty Dozen’ at the IRS: For Some Reason, It Fails to Include Itself on its List of Abusers, Scammers, and Cheats:

The IRS just released its “dirty dozen” list of tax scams and schemes for the American people to avoid. In addition to normal phishing and identity theft, a slew of new phone scams around the nation has caught many taxpayers off guard. Plus, unscrupulous return preparers take advantage of confused Americans, especially given that 60 percent of taxpayers need assistance figuring out all those documents, tables, and exemptions. The list also warns the less honest among us to avoid hiding money offshore, in abusive tax shelters, or with false documents. Additionally, it urges people not to falsify income or claim too much in fuel tax credits, either.

But there is an even more concerning “dirty dozen” list that the IRS wants the public to forget.

It’s been almost two years since the news broke that the IRS had been targeting Tea Party, pro-Israel, and other conservative groups — and a scandal erupted. Here are just a select few ways the IRS has mismanaged its problems and shown itself to be incompetent and untrustworthy:

1. Internal emails show these groups were targeted because IRS employees thought them “icky.”

2. Other emails showed that Lois Lerner was conspiring with the Department of Justice to prosecute conservative groups on trumped-up charges.

3. Lerner herself refused to testify to investigating committees and was held in contempt.

4. That didn’t stop her from defending herself to Politico magazine and complaining about being “harassed” for her role.

5. Then, the IRS claimed it had lost the most crucial batch of Lerner’s emails.

6. Oh yeah, and her Blackberry was destroyed too.

7. Six months later, the Tax Inspector General may have found those lost emails. (Still no word yet on what was in them.)

Scandal events aside, the IRS showed its general incompetence in many other ways.

8. IRS workers campaigned for political candidates while on the job.

9. The agency awarded bonuses to its own employees who owed taxes.

10. Guess who was audited ten times more often than the average taxpayer? Supporters of the Tea Party.

11. The IRS illegally shared confidential, protected information with the FBI, the White House, and more.

12. And it has the nerve to constantly ask for a raise.

It all adds up to an agency that doesn’t merit the trust of taxpayers.

For at least three years, the IRS has egregiously wronged this nation — including at least one person on a director level. Yet, it still hasn’t apologized or come clean.

But despite all the excuses and diversions offered by the IRS, the American people are still saying what Senator Ron Johnson expressed: “I smell a rat. I smell a number of rats, and that’s what we are going to get to the bottom of.”

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February 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, February 21, 2015

Vanguard Tax Whistleblower's First Day in Court

VanguardFollowing up on my previous posts (links below):  Philadelphia Inquirer, Vanguard Whistleblower's First Day in Court:

Last Friday Feb. 13, New York Superior Court Judge Joan Madden held a previously-delayed hearing, in Courtroom 351 of Manhattan's state courthouse way downtown, so she could grill lawyers for both sides on Vanguard Group Inc.'s motion to dismiss former Vanguard tax lawyer David Danon's whistleblower lawsuit, which challenges the legal and expense structure the Malvern investment giant has used over its 40-year history.

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February 21, 2015 in Tax | Permalink | Comments (1)

Uber, Lyft, and the IRS

LogoSan Francisco Chronicle, Here’s Why Uber and Lyft Send Drivers Such Confusing Tax Forms:

Uber and Lyft say their drivers are independent contractors, not employees. But when it comes to income-tax reporting, they are treated as neither.

Traditional employers send employees, and the Internal Revenue Service, Form W-2, which shows their wages, deductions and other information.

Freelancers and independent contractors typically get Form 1099-MISC (for miscellaneous income) from any person or company that paid them more than $600 the past year.

But people who earn money through Uber, Lyft, Airbnb, Task Rabbit and a number of other companies in the sharing economy often get neither form. If they get anything, it’s usually Form 1099-K, a relatively new and confusing document used mainly to report credit and debit card payments and online transactions. ...

If Einstein couldn’t understand the tax system, it’s easy to see why entrepreneurs in the on-demand economy are befuddled. Many are self-employed for the first time and unaware of the need to keep careful records and make estimated tax payments four times a year. They’ve never filed a Schedule C, or paid self-employment taxes. Getting a 1099-K adds to the confusion.

The law that created Form 1099-K was passed in 2008, before most sharing-economy companies were started. Congress saw it as a way to unearth income that was not being reported to the IRS.

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February 21, 2015 in IRS News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 653

IRS Logo 2The Maddow Blog, GOP’s Gowdy Eyes New Conspiracy Theory Panel:

[T]he notion that the Obama presidency has featured “six years of scandal” seems bizarre. David Axelrod boasted this week, accurately, “I’m proud of the fact that basically you have had an administration in this place for six years in which there hasn’t been a major scandal. And I think that says a lot about the ethical strictures of this administration.”

This seemed like a fair thing to brag about, though some congressional Republicans appear to have a very different perspective.

At a Republican Party fundraising breakfast in his district on Wednesday, Representative Trey Gowdy suggested that the congressional GOP needed to investigate the IRS’s scrutiny of political groups with the same intensity that it was investigating the 2012 attacks in Benghazi.

>“I’m glad that the speaker of the House convened a select committee on Benghazi,” said Gowdy, a former prosecutor who chairs that panel. “I think it makes every bit as much sense to convene a select committee on the IRS. Now that we have the Senate, the Senate has tools the House doesn’t have in terms of getting e-mails and cooperation. It has nothing to do with politics. Do you really want an IRS targeting you based on your political beliefs?”

Gowdy, the head of the eighth Benghazi committee, went on to tell Dave Weigel that “the same reasons for a select committee exist” in the IRS story as Benghazi, “or maybe even greater.” He also complained about “Fast and Furious” and Solyndra because, well, he was apparently on a roll. ...

At a certain level, there’s a kernel of truth to the far-right congressman’s argument: select committees to investigate the IRS and Benghazi are equally sound. Which is to say, both ideas are equally ridiculous.

The IRS “scandal” turned out not to be a scandal at all, and after a year and a half of investigation from congressional Republicans, literally none of the GOP’s allegations turned out to be true. Even by Congress’ standards, the very idea of creating another select committee to investigate another discredited controversy is absurd.

Part of the underlying trouble here is a falsification problem. Republicans are certain the president is up to no good, and when there’s no evidence to support their assumptions, they convince themselves that this proves how corrupt Obama is – the rascally president must be hiding the proof of his misdeeds.

So they keep looking, which leads them to find nothing, which leads them to believe they better keep looking.

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February 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, February 20, 2015

Burman Presents Taxes and Inequality in a Changing Economy Today at Florida

BurmanLeonard Burman (Director, Urban-Brookings Tax Policy Center; Professor of Public Administration and International Affairs, Syracuse University Maxwell School), delivers the Fifth Annual Ellen Bellet Gelberg Tax Policy Lecture at Florida today on Taxes and Inequality in a Changing Economy: (webcast):

Rising economic inequality is arguably the economic challenge that will define the United States in the 21st century. Technology, which historically made workers more productive and boosted wages, is increasingly substituting for low- and middle-class labor. As a result, virtually all of the gains from rising productivity have accrued to households at the top of the income distribution. Median wages have been stagnant for a generation and there’s no sign that trend will abate any time soon. This lecture discusses historical trends in economic inequality, its likely causes, and the role of the tax system in mitigating income disparities. [The lecture is based on Taxes and Inequality, 66 Tax L. Rev. 563 (2014).]

February 20, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Weekly Tax Roundup

Weekly SSRN Tax Roundup

Tax Profs Remember Marvin Chirelstein

ChirelsteinFollowing up my posts (here and here) on the February 16 death of Yale/Columbia tax legend Marvin Chirelstein: below the fold are remembrances of Marvin from these Tax Profs (and others):

  • Joe Bankman (Stanford)
  • Paul Caron (Pepperdine)
  • Bill Clinton (Former U.S. President)
  • Mark Cochran (St. Mary's)
  • Steve Cohen (Georgetown)
  • Cliff Fleming (BYU)
  • Will Foster (Arkansas-Fayetteville)
  • Michael Graetz (Columbia)
  • Calvin Johnson (Texas)
  • Richard Kaplan (Illinois)
  • Ed Kleinbard (USC)
  • Michael Knoll (Pennsylvania)
  • Al Lauber (Judge, U.S. Tax Court)
  • Michael Livingston (Rutgers-Camden)
  • Jim Maule (Villanova)
  • Philip Oliver (Arkansas-Little Rock)
  • Alex Raskolnikov (Columbia)
  • David Schizer (Columbia)
  • Dan Shaviro (NYU)
  • George Yin (Virginia)

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February 20, 2015 in Legal Education, Obituaries, Tax | Permalink | Comments (1)

Chapman Symposium: Business Tax Reform

Chapman Logo (2014)Symposium, Business Tax Reform: Emerging Issues in the Taxation of U.S. Entities, 18 Chap. L. Rev. 1-314 (2014):

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February 20, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 652

IRS Logo 2The Daily Mail, Longtime Presidential Adviser David Axelrod Claims 'There Hasn't Been a Major Scandal' in the Obama White House – And Draws a Mix of Applause and Laughter:

Longtime Obama administration political insider David Axelrod claimed on Monday that the Obama administration hasn't been tainted by a smidgen of scandal.

The surprising boast came during a Q&A at the University of Chicago Institute of Politics, an organization he founded and leads.

'I'm proud of the fact that basically you have had an administration in place for six years in which there hasn’t been a major scandal,' Axelrod said. 'And I think that says a lot about the ethical strictures of this administration.'

Audio and video of Axelrod's remarks indicate the audience's first reaction to his insistence that Obama has presided over a scandal-free government was a chorus of laughs – before friendly attendees quickly drowned them out with applause.

Conservatives have made a parlor game out of cataloging the Obama White House's scandals, with tallies running into the dozens and some organized alphabetically.

The Internal Revenue Service, Americans' most feared and loathed government agency, has had a bumper crop of scandals since Obama took office.

In May 2013 an inspector general report found that the agency spent more than $4.1 million on a single conference in California that included six-figure fees for speakers and expensive video production for a corny Star-Trek themed humor video.

The General Services Administration was caught in a similar conference scandal later that year over an $823,000 in Las Vegas training conference held in 2010. It featured mind-readers, a clown and lavish hotel suites with jacuzzis. The GSA administration resigned over the flap.

Also in May 2013, the IRS was plunged into scandal over news that its Tax-Exempt Organizations section was subjecting Tea Party groups and conservative-oriented charities to intrusive screening and years-long delays before granting them tax-exempt status – while liberal groups were often given a pass.

The IRS later claimed to Congress that years worth of emails belonging to retired official Lois Lerner, who is thought to be responsible, were destroyed in a hard drive crash.

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February 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, February 19, 2015

Gamage Presents Analyzing the Optimal Choice of Tax Instruments Today at Northwestern

Gamage (2014)David Gamage (UC-Berkeley) presents Analyzing the Optimal Choice of Tax Instruments: The Case for Levying (all of) Labor-Income Taxes, Value-Added Taxes, Capital-Income Taxes, and Wealth Taxes, 68 Tax L. Rev. ___ (2014), at Northwestern yesterday as part of its Tax Colloquium Series hosted by Lawrence Zelenak:

Economics-oriented analyses of tax policy have primarily focused on the problems of labor-to-leisure and saving-to-spending distortions. By implication, this prior literature has thus generally treated: (a) labor-income taxes and (b) consumption taxes, as being essentially equivalent. Similarly, this prior literature has generally treated: (i) capital-income taxes and (ii) wealth taxes, as being essentially equivalent. Based on these notions of equivalency, the dominant view about the policy implications that follow from these economic analyses has been that neither capital income nor wealth should be taxed.

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February 19, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Winer Presents The Tension Between Tax Design and the Political Economy of Taxation Today at UCLA

WinerStanley Winer (Carleton University) presents On the Tension Between Tax Design and the Political Economy of Taxation at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh and Alexander Wu:

Background paper:  Wealth Transfer Taxation: An Empirical Investigation, 21 Int'l Tax & Pub. Fin. 720 (2014):   We present an empirical model of wealth transfer taxation in the revenue systems of the G7 countries - Canada, France, Germany, Italy, Japan, the U. K. and the U. S. - over the period from 1965 to 2009. Our model emphasizes the influences of population aging and of the stock of household wealth in an explanation of the past and likely future of this tax source. Simulations with the model using U.N. demographic projections and projections of household wealth suggest that even in France and Germany where reliance on wealth transfer taxation has been increasing for part of the period studied, wealth transfer taxes can be expected to wither away as population aging deepens over the next three decades. Our results indicate that recent tax designs that rely upon the taxation of wealth transfers to preserve equity in the face of declining taxation of capital incomes may be, in this respect, politically infeasible for the foreseeable future. We conclude by using the case of wealth transfer taxation to raise the general question of the extent to which the consistency of a proposed reform with expected political equilibria ought to play a role in the design of a normative policy blueprint.

February 19, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Council of Economic Advisers: Business Tax Reform and Economic Growth

CouncilWhite House, Economic Report of the President (Together With the Annual Report of the Council of Economic Advisers (Feb. 2015) (419 pages):

Chapter 5, Business Tax Reform and Economic Growth (39 pages):

This chapter reviews the role of productivity in long-run growth and summarizes the international context for business tax reform. It then describes the President’s approach to business tax reform and examines how that approach can increase productivity and output. The chapter concludes with a consideration of alternative approaches to reform.

Figure 5-2

Figure 5-4

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February 19, 2015 in Tax | Permalink | Comments (2)