TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, June 23, 2017

Today's Law, Society & Taxation Panel

L&SToday's Law, Society, and Taxation panel at the 2017 Law & Society Association Annual Meeting in Mexico City (program here):

Tax Administration and Tax Compliance (David Elkins (Netanya), Chair/Discussant)

  • Richard Beck (New York Law School), Foreign Information Reporting Initiatives
  • Andy Grewal (Iowa), Some Reservations About Treasury's Reserved Powers
  • Ausher Kofsky (Western New England), Congress Should Empower the U.S. Tax Court with Concurrent Jurisdiction Over the Trust Fund Recovery Penalty of 26 U.S.C. § 6672
  • Shu-Yi Oei (Tulane), The Law of the Leak

June 23, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Retired U.S. Tax Court Judge Sentenced To 34 Months In Jail For Tax Fraud Committed While She Sat On The Court

TCKFollowing up on my previous posts (links below): Minnesota Lawyer, Former Tax Judge Sentenced to Prison for Tax Fraud:

Former Minnesota Tax Court Judge Diane Kroupa is headed to prison for — wait for it — tax fraud. So is her husband, who received a shorter sentence.

Kroupa, 61, was sentenced to 34 months and Robert Fackler, 63 was sentenced to 24 months. They must pay $457,104 in joint restitution.

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June 23, 2017 in Tax | Permalink | Comments (0)

Thursday, June 22, 2017

Elaine Wilson Wins Faculty Scholarship Award

WilsonWest Virginia Record, Wilson Wins WVU Law's 2017 Faculty Scholarship Award:

West Virginia University College of Law has selected its 2017 Facility Significant Scholarship Award recipient, an in-house honor that recognizes work addressing significant public issues.  

Elaine Wilson, a WVU tax professor and president of the West Virginia Tax Institute, won for her article titled Cooperatives: The First Social Enterprise. It examines the issues of “charitable values and economic benefit within the corporative business model,” the WVU announcement said. She joined the university's faulty in 2012. Her work will be published in DePaul Law Review in the coming months.

“I was surprised, especially because of the talent (here) – there’s a lot of really great scholars who are doing really interesting work and competition is stiff," Wilson told The West Virginia Record.

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June 22, 2017 in Legal Education, Tax, Tax Profs | Permalink | Comments (0)

Morse Reviews Johnson's Seminole Rock in Tax Cases

Jotwell (Tax) (2016)Susan Morse (Texas), The Tax Court: “Insubordinate” or “Prescient” on Auer/Seminole Rock Deference? (JOTWELL) (reviewing Steve Johnson (Florida State), Seminole Rock in Tax Cases, Yale J. Reg. Notice & Comment (2016)):

Auer/Seminole Rock or “ASR” deference is a hot topic right now in administrative law. ASR gives agencies deference when agencies interpret their own regulations, such as in litigation briefs or in guidance. If you want to know how ASR deference works in the tax context, and in particular in the Tax Court, read Steve Johnson’s work. This includes his 2013 article and his entry in the Yale Journal of Regulation’s recent online symposium on ASR deference. ...

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June 22, 2017 in Scholarship, Tax | Permalink | Comments (0)

Today's Law, Society & Taxation Panels

L&SToday's Law, Society, and Taxation panels at the 2017 Law & Society Association Annual Meeting in Mexico City (program here):

Economic Justice and Taxation of Wealth (Lisa Philipps (Osgoode Hall), Chair/Discussant)

  • Jennifer Bird-Pollan (Kentucky), Comparative Wealth Transfer Taxation
  • Neil Buchanan (George Washington), Economic Justice and Taxation
  • Montano Cabezas (Georgetown), Migration and Taxation in the Public Imagination
  • Ari Glogower (Ohio State), Progressive Taxation of Income and Wealth

International Aspects of Taxation (Heather Field (UC-Hastings, Chair/Discussant)

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June 22, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Shanske:  Interpreting State Fiscal Constitutions

Darien Shanske (UC-Davis), Interpreting State Fiscal Constitutions: A Modest Proposal, 69 Rutgers L. Rev. ___ (2017):

The fiscal constitutions of many states limit the ability of governments to raise taxes. These same constitutions typically do not impose similar limits on the ability of governments to impose a fee, say a building permit fee. But what if a locality chose to levy a gigantic building permit fee and used the proceeds to fund general services? Such a fee would – and should – be considered a “hidden tax” and thus subject to the same limitations as ordinary taxes.

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June 22, 2017 in Scholarship, Tax | Permalink | Comments (0)

Wednesday, June 21, 2017

Today's Law, Society & Taxation Panels

L&SToday's Law, Society, and Taxation panels at the 2017 Law & Society Association Annual Meeting in Mexico City (program here):

Critical Tax Theory (Jennifer Bird-Pollan (Kentucky), Chair/Discussant)

  • Leo Martinez (UC-Hastings), U.S. Taxation and Latinos
  • Kerry Ryan (Saint Louis), Hitting Pause on Expanding the Childless Worker EITC
  • Camille Walsh (University of Washington), Taxpayers, Schools, and Race in the Early 20th Century: Separate and Double Taxation

Law & Society Tax Scholarship, Illustrative Examples (Neil Buchanan (George Washington), Chair/Discussant)

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June 21, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Marian Reviews Blank's The Timing Of Tax Transparency

Jotwell (Tax) (2016)Omri Marian (UC-Irvine), Is Tax Transparency A Panacea For Popular Discontent With the Tax Ssytem? (JOTWELL) (reviewing  Joshua D. Blank (NYU), The Timing of Tax Transparency, 90 S. Cal. L. Rev. 449 (2017)):

Tax transparency is all the rage these days. The brouhaha around the disclosure (or, in one instance, the non-disclosure) of presidential candidates’ tax returns during the 2016 presidential campaign brought the matter of tax transparency to the front and center of public discourse in the United States. Around the world, recent revelations that multinational corporations dramatically reduced their tax bills by securing secretive rulings from tax authorities, and that billionaires are able to use intricate offshore shell structures to evade taxation, are causing major popular uproar and a demand for increased transparency on tax matters. The demand is heard by intergovernmental as well as national bodies. For example, the Organisation for Economic Co-operation and Development (OECD) recently adopted country-by-country reporting standards, which would require multinational corporations to disclose to tax authorities their activities and tax payments in each country in which they operate. Remarkably, some countries have announced they are considering making the reports public. Another example is Luxembourg, which—responding to international criticism—recently announced it will start publishing redacted versions of advance tax agreements with taxpayers. This represents a dramatic shift in Luxembourg’s usual secretive tax stance.

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June 21, 2017 in Scholarship, Tax | Permalink | Comments (0)

Journal of Tax Administration Publishes New Issue

JATAThe Journal of Tax Administration has published a new issue (Vol. 3, No. 1 (2017)):

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June 21, 2017 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, June 20, 2017

Hatfield:  Cybersecurity And Tax Reform

Michael Hatfield (University of Washington), Cybersecurity and Tax Reform, 93 Ind. L.J. ___ (2017):

The IRS collects information on more Americans and handles more money than any other agency. The cybersecurity risks are high. This Article takes seriously both the challenges and the agency's limitations in solving those problems through technological advances. This Article describes the cybersecurity problem as a legal problem for Congress to address rather than merely a digital problem for IRS technicians. By legislation, Congress defines what information is tax relevant, and then the IRS digitally collects, stores, and process the information. Over the years, without any regard for information security, Congress has designed a tax system that requires the IRS to collect more information than it can now protect. But there is ample flexibility for Congress to reform tax law to decrease the information held by the IRS and increase the likelihood the IRS can defend it. This Article explores specific ways in which the tax laws and its administration could be changed to simplify the information needs of the IRS, making its information system both a less appealing and a more defensible cyberattack target. In short, if the tax law were simpler in specific ways, the information technology needs at the IRS would be simpler, and adequate cybersecurity for it would be easier.

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June 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

Thomas Reviews Hayashi's The Tax Effects Of Refund Anticipation Loans

Jotwell (Tax) (2016)Kathleen DeLaney Thomas (North Carolina), Are Tax-Time Financial Products Good for the Poor? (JOTWELL) (reviewing  Andrew Hayashi (Virginia), The Effects of Refund Anticipation Loans On the Use of Paid Preparers and EITC Take-up (2016)):

The conventional wisdom about refund anticipation loans, at least among many academics, is that they are predatory lending products that benefit big businesses at the expense of the poor. Andrew Hayashi turns this notion on its head in his insightful paper, The Effects of Refund Anticipation Loans on the Use of Paid Preparers and EITC Take-up. 

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June 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

Pareja:  The Problem With Using Advanceable, Income-Based Tax Credits To Subsidize Health Insurance

Affordable Care ActMary Leto Pareja (New Mexico), Inviting Everyone to the ACA (Risk) Pool Party: The Problem with Using Advanceable, Income-Based Tax Credits to Subsidize Health Insurance, 20 Fla. Tax Rev. 551 (2017):

The year 2014 marked the first opportunity for American taxpayers to receive subsidized health insurance through the Affordable Care Act’s (“ACA”) new Premium Tax Credit (“PTC”). About 4.8 million people enrolled in an ACA plan in 2014 were eligible, and nearly 97% of these claimants were approved for advance payments of the PTC.

The year 2015 marked the first tax return where taxpayers received the unpleasant surprise that they must repay excess credits due to reconciliation. Advance PTC estimates turned out to be highly inaccurate, with only 8% of claimants receiving accurate advance payments. A majority, 51%, had to repay some or all of the advance payments.

These figures reveal systemic problems in the PTC’s design. While the PTC’s function is to entice the uninsured to purchase insurance (and dive into insurance risk pools), reconciliation lurks as a financial danger for those who make the plunge. A shark is swimming in the pool.

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June 20, 2017 in Scholarship, Tax | Permalink | Comments (0)

Monday, June 19, 2017

Herzfeld:  The Case Against BEPS

BEPS (2017)Mindy Herzfeld (Florida), The Case Against BEPS : Lessons for Coordination:

In 2013 the OECD, at the behest of the G20, embarked upon an ambitious project of coordinating and harmonizing countries’ international tax rules under the guise of curtailing multinational companies’ cross-border tax planning, generally referred to as base erosion and profit shifting, or BEPS. The project was finalized with great fanfare in October 2015. But the proclamations of success masked real underlying differences between participant countries. I argue that the project suffered from a number of flaws that that largely precluded effective coordination, as a result of which the project’s recommendations largely gloss over key differences in participants’ goals and commitments while doing nothing to solve the systemic problems it was seeking to address. For example, while a key stated goal of the project was to align the taxation of profits with value creation, there was no attempt made to define the location of value creation, nor to address the fact that this principle is fundamentally at odds with the arm’s length principle that serves as the backbone of transfer pricing rules.

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June 19, 2017 in Scholarship, Tax | Permalink | Comments (0)

Hayashi Reviews Batchelder's Accounting For Behavioral Considerations In Business Tax Reform

Jotwell (Tax) (2016)Andrew Hayashi (Virginia), Do Taxes Motivate Corporate Managers? (JOTWELL) (reviewing Lily Batchelder (NYU), Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing (2017)):

Tax scholarship is interdisciplinary. To evaluate tax policy it helps to know at least a little about economics, a little about philosophy, something about budget processes, and a lot about the dizzying creativity of the marketplace in exploiting loopholes and facilitating tax-advantaged transactions. In her recent article Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing, Lily Batchelder shows us that we must add financial accounting and firm (and corporate managers’) behavioral considerations to the mix.

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June 19, 2017 in Scholarship, Tax | Permalink | Comments (1)

Independent Accountant Confirms Financial Viability Of Florida's Graduate Tax Program

Florida Logo (GIF)Following up on my previous posts on Florida Law Prof Robert Rhee's remarkable critique of its graduate tax program (my perspective is here) and Dean Laura Rosenbury's ambitious plan to become a Top 35 law school (links below):  an independent accountant has issued an in-depth report on the finances of Florida's graduate tax program.  The report takes a detailed look at revenues and expenses, including the 10% overhead charge paid to the university and the method of allocating faculty compensation to the program.  As Dean Rosenbury notes in an email to the Florida tax community, the report "puts to rest concerns about the program's financial viability so long as we maintain or increase student enrollment."

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June 19, 2017 in Legal Education, Tax | Permalink | Comments (2)

TaxProf Blog Weekend Roundup

Sunday, June 18, 2017

As More States Kill Their Estate Taxes, Will The Push To Repeal The Federal Estate Tax Become Irresistible?

Wall Street Journal Tax Report, Why More States Are Killing Estate Taxes:

WSJ 2Want proof taxes can actually go down? In the past three years, nine states have eliminated or lowered their estate taxes, mostly by raising exemptions.

And more reductions are coming. Minnesota lawmakers recently raised the state’s estate-tax exemption to $2.1 million retroactive to January, and the exemption will rise to $2.4 million next year. Maryland will raise its $3 million exemption to $4 million next year. New Jersey’s exemption, which used to rank last at $675,000 a person, rose to $2 million a person this year. Next year, New Jersey is scheduled to eliminate its estate tax altogether, joining about a half-dozen others that have ended their estate taxes over the past decade.

This tax-cutting trend has been fueled by competition between the states for affluent and wealthy taxpayers. Such residents owe income taxes every year, but some are willing to move out of state to avoid death duties that come only once. Since the federal estate-and-gift tax exemption jumped to $5 million in 2011, adjusted for inflation, state death duties have stood out. ...

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June 18, 2017 in Tax | Permalink | Comments (2)

The Top Five New Tax Papers

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 #3:

  1. [223 Downloads]  Can New York Publish President Trump's State Tax Returns?, by Daniel Hemel (Chicago)
  2. [166 Downloads]  A Taxonomy for Tax Loopholes, by Heather Field (UC-Hastings)
  3. [163 Downloads]  The Rise and Fall of the Destination-Based Cash Flow Tax: What Was That All About?, by Daniel Shaviro (NYU)
  4. [137 Downloads]  Shareholder Wealth Effects of Border Adjustment Taxation, by Fabio B. Gaertner (Wisconsin), Jeffrey L. Hoopes (North Carolina) & Edward L. Maydew (North Carolina)
  5. [133 Downloads]  Why Don't White Supremacists Pay Taxes?, by Eric Franklin Amarante (UNLV)

June 18, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, June 17, 2017

This Week's Ten Most Popular TaxProf Blog Posts

12th Annual Junior Tax Scholars Workshop Concludes Today At Toronto

TorontoPanel #5:  Inequality

Daniel Hemel (Chicago), Gambling for Good
Commentators: Rebecca Morrow (Wake Forest), Erin Scharff (Arizona State)

Zach Liscow (Yale), How to Structure Transfers to Low-Income Americans
Commentators:  Andrew Hayashi (Virginia), Emily Satterthwaite (Toronto)

Goldburn Maynard (Lousiville), The Cold of Tax Justice
Commentators:  Allen Madison (South Dakota), Gabriel Shobe (BYU)

Orly Mazur (SMU), Taxing the Robot
Commentators:  Tessa Davis (South Carolina), Ari Glogower (Ohio State)

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June 17, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Friday, June 16, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new work by Heather M. Field (UC-Hastings), A Taxonomy for Tax Loopholes, 55 Hous. L. Rev. __ (forthcoming 2018). 

Glogower (2016)Heather Field’s new work introduces a taxonomy of different types of “tax loopholes,” to guide policymakers and the public, and to promote analytic rigor in the public discourse over tax policy. 

Field first demonstrates that the term has no independent and consistent meaning, other than as a vague pejorative (except when used by some advisors and clients proud to “beat the system”). This nebulous terminology, Field argues, impedes meaningful tax policy analysis, and the prospects for tax reform.  In order to bridge the gap between loophole rhetoric and substantive tax policy analysis, Field subsequently introduces a taxonomy of loopholes, divided along two axes.  First, tax loopholes may be categorized by reference to their normative policy objections. 

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June 16, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

12th Annual Junior Tax Scholars Workshop Kicks Off Today At Toronto

TorontoPanel #1:  The Family Unit

Christine Allie (Widener), Negating the Cost of “I Do”: Ending the U.S. Tax Code’s Family Penalty Through Permissive Joint Filing
Commentators:  Kathleen Delaney-Thomas (North Carolina), Sloan Speck (Colorado), 

Tessa Davis (South Carolina), Freezing the Future: Fertility, Choice, and Taxing State of the Art Reproductive Technologies
Commentators:  Pippa Browde (Montana), Erin Scharff (Arizona State)

Khrista Johnson (Pepperdine), The Offshore Whistle During Divorce: An Examination of the Whistleblower Program and Innocent Spouse Relief
Commentators:  Gabriel Schobe (BYU), Genevieve Tokić (Northern Illinois)

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June 16, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Thursday, June 15, 2017

Lawsky:  Formalizing The Tax Code

Sarah B. Lawsky (Northwestern), Formalizing the Code, 70 Tax L. Rev. ___ (2017):

The Internal Revenue Code is notoriously complex, both substantively and structurally. This article examines one source of structural complexity in the Internal Revenue Code: dependency among sections that stems from defined terms. In particular, the article examines what it terms the problem of “definitional scope”: when the structure of the Code leaves unclear to what a term refers. The article uses the problem of definitional scope as a case study to suggest that those who draft tax legislation should formalize proposed statutory language — translate it into logical terms — prior to its enactment.

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June 15, 2017 in Scholarship, Tax | Permalink | Comments (1)

Kleinbard:  Business Taxes Reinvented — The Dual Business Enterprise Income Tax

Edward Kleinbard (USC), Business Taxes Reinvented: The Dual Business Enterprise Income Tax:

This short overview and accompanying term sheet summarize the key features of a proposed comprehensive business tax environment termed the Dual Business Enterprise Income Tax (the Dual BEIT). The term sheet format is a useful mode of presentation for capturing in one accessible document the major policy recommendations of the Dual BEIT (or any other comprehensive tax reform proposal).

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June 15, 2017 in Scholarship, Tax | Permalink | Comments (0)

Nick Mirkay Leaves Creighton For Hawaii

A Tax Dead on Arrival: Classical Liberalism, Inheritance, And Social Mobility

Åsbjørn Melkevik (Harvard), A Tax Dead on Arrival: Classical Liberalism, Inheritance, and Social Mobility:

Historically, it is safe to say that very few laws did as much to stoke inequality as laws touching descents and hereditary transmissions. This paper attempts to see if the classical liberal tradition can endorse inheritance taxation so as to further fair equality of opportunity, as well as to lessen inequality of undeserved wealth. It argues that fair equality of opportunity is a necessary feature of market societies to make sure that they remain competitive.

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June 15, 2017 in Scholarship, Tax | Permalink | Comments (1)

Wednesday, June 14, 2017

Pepperdine On Skid Row

URMOne of the great joys of my first two weeks as dean has been learning more about the incredible work being done by so many people at Pepperdine. Today, my wife, daughter, and I had the privilege of spending part of the day at our Legal Aid Clinic and Low Income Taxpayer Clinic at the Union Rescue Mission on Skid Row in downtown Los Angeles. Pepperdine faculty members and clinic directors Brittany Stringfellow Otey and Isai Cortez gave us an inspiring tour of the facilities and introduced us to current Pepperdine law students who are working at the clinics over the summer.  Our Director of Clinical Education Jeff Baker joined us for a wonderful lunch at mission-driven HomeGirl Cafe before our trek back to Malibu.

Students

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June 14, 2017 in Legal Education, Tax | Permalink | Comments (0)

Avi-Yonah & Mazzoni:  The Trump Tax Reform Plan — Implications For Europe

Reuven S. Avi-Yonah (Michigan) & Gianluca Mazzoni (S.J.D. 2017, Michigan), The Trump Tax Reform Plan: Implications for Europe:

On April 26, 2017, the Trump administration unveiled a one page tax reform outline (the “Trump Plan”) that differs significantly from the tax reform plan proposed in June, 2016 by the House Republicans (the “House Blueprint”). The two most important changes are deleting both the cash flow element and the destination based element of the House Blueprint. These changes have significant implications for European foreign direct investment (FDI) into the US and for US FDI into Europe.

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June 14, 2017 in Tax, Tax Policy in the Trump Administration | Permalink | Comments (0)

Shaviro:  The Rise And Fall Of The Destination-Based Cash Flow Tax

Daniel Shaviro (NYU), The Rise and Fall of the Destination-Based Cash Flow Tax: What Was that All About? (Presentation Slides):

These slides, prepared for the keynote address at the Nordic Tax Research Council Annual Conference in Haikko Borga, Finland, on June 1, 2017, offer background regarding the reasons for the rise and fall of the destination-based cash flow tax (DBCFT) as an apparently live legislative option. They place this saga in the broader context of the U.S.'s being the only major country without a value-added tax (VAT).

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June 14, 2017 in Scholarship, Tax | Permalink | Comments (0)

Del Wright Leaves Valparaiso For UMKC

WrightDel Wright (Valparaiso) has accepted a lateral offer to join the University of Missouri Kansas City Law School faculty. Del's recent publications include:

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June 14, 2017 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (2)

Weidner:  Sarbanes-Oxley And The New FASB Rules On Accounting For Leases

Donald J. Weidner (Florida State), New FASB Rules on Accounting for Leases: A Sarbanes-Oxley Promise Delivered, 72 Bus. Law. 367 (2017):

Congress responded to the financial accounting scandals of the new millennium by enacting the Sarbanes-Oxley Act of 2002, which required the Securities and Exchange Commission (“SEC”) to study filings by issuers and report on the extent of off-balance sheet arrangements, particularly those involving leases. In 2005, the SEC reported that there “may be approximately $1.25 trillion in non-cancellable future cash obligations committed under operating leases that are not recognized on issuer balance sheets, but are instead disclosed in the notes to the financial statements.” Accordingly, the SEC Report requested the Financial Accounting Standards Board (“FASB”) to craft new rules to record more lessee liabilities on the balance sheet. In 2016, the FASB issued sweeping new rules that affect virtually every firm that leases assets “such as real estate, airplanes, and manufacturing equipment.” In a dramatic change in approach, every lease for more than 12 months will be capitalized and recorded on the lessee’s balance sheet as reflecting both a “right of use asset” and a corresponding liability.

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June 14, 2017 in Scholarship, Tax | Permalink | Comments (0)

Tuesday, June 13, 2017

Billion Dollar Blind Spot: How the U.S. Tax Code's Small Business Expenditures Impact Women Business Owners

BillionCaroline Bruckner (Kogod Tax Policy Center), Billion Dollar Blind Spot: How the U.S. Tax Code's Small Business Expenditures Impact Women Business Owners:

In 1976, the U.S. Census Bureau (Census) released its first ever report on the state of women's business ownership in the United States that counted 402,025 women-owned U.S. firms representing only 4.6% of all firms and 0.3% of all U.S. business receipts, as of 1972. Today, women-owned firms have increased to 11.3 million businesses representing 38% of all U.S. firms.

During this period of extraordinary growth, Congress has acted to promote women's business ownership by passing legislation designed to eliminate discriminatory lending practices and promote federal contracting and counseling opportunities for women business owners. At the same time, Congress has also worked to enhance the U.S. tax code (the "Code") to aid small businesses with tax expenditures that will cost U.S. taxpayers more than $255 billion in the next five years under current law.

However, at no point have policymakers looked at whether this will be money well spent when it comes to women business owners and the challenges they have growing their receipts and accessing capital.

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June 13, 2017 in Tax, Think Tank Reports | Permalink | Comments (0)

How Tax Policy Favors Robots Over Workers, And What To Do About It

Ryan Abbott (University of Surrey) & Bret N. Bogenschneider (University of Surrey), How Tax Policy Favors Robots over Workers and What to Do About It:

In an article forthcoming in the Harvard Law and Policy Review [Should Robots Pay Taxes? Tax Policy in the Age of Automation] we argue that existing tax policies encourage automation, even when a human worker would otherwise be more efficient than a machine. That’s because automating lets firms avoid wage taxes, which fund social benefit programs like Medicare, Medicaid, and Social Security. Only with human workers are firms responsible for paying taxes on wages to the federal government (and sometimes additional wage taxes at the state or local level) based on an employee’s salary.

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June 13, 2017 in Scholarship, Tax | Permalink | Comments (2)

Avi-Yonah:  Territoriality And The Original Intent Of Subpart F

Reuven S. Avi-Yonah (Michigan), Territoriality and the Original Intent of Subpart F:

On April 26, 2017, President Trump issued a one-page tax reform outline that included “territoriality,” i.e., exempting from tax dividends from the non-Subpart F income of controlled foreign corporations. Territoriality is also included in the House GOP “Better Way” Blueprint and was supported by the Obama Administration and in bipartisan legislation introduced in 2016 by Senators Rob Portman (R-OH) and Chuck Schumer (D-NY). Thus, of all the current tax reform proposals, it may have the best chance of being enacted, especially given that it is linked with imposing some tax on the past offshore earnings of US multinationals.

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June 13, 2017 in Scholarship, Tax | Permalink | Comments (0)

Monday, June 12, 2017

Marian Presents The Making Of International Tax Law: Empirical Evidence From Natural Language Processing Today In Germany

Marian (2016)Omri Marian (UC-Irvine) presents The Making of International Tax Law: Empirical Evidence from Natural Language Processing (with Elliott Ash (Princeton)) at the University of Heidelberg today:

We offer the first attempt at empirically testing the level of transnational consensus on the legal language controlling international tax matters. We also investigate the institutional framework of such consensus-building. We build a dataset of 4,052 bilateral income tax treaties, as well as 16 model tax treaties published by the United Nations (UN), Organisation for Economic Co-operation and Development (OECD) and the United States. We use natural language processing to perform pair-wise comparison of all treaties in effect at any given year. We identify clear trends of convergence of legal language in bilateral tax treaties since the 1960s, particularly on the taxation of cross-border business income.

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June 12, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

People Are Bothered By Economic Unfairness, Not Economic Inequality

Nature: Why People Prefer Unequal Societies, by Christina Starmans (Yale), Mark Sheskin (Yale) & Paul Bloom (Yale):

There is immense concern about economic inequality, both among the scholarly community and in the general public, and many insist that equality is an important social goal. However, when people are asked about the ideal distribution of wealth in their country, they actually prefer unequal societies. We suggest that these two phenomena can be reconciled by noticing that, despite appearances to the contrary, there is no evidence that people are bothered by economic inequality itself. Rather, they are bothered by something that is often confounded with inequality: economic unfairness. Drawing upon laboratory studies, cross-cultural research, and experiments with babies and young children, we argue that humans naturally favour fair distributions, not equal ones, and that when fairness and equality clash, people prefer fair inequality over unfair equality. Both psychological research and decisions by policymakers would benefit from more clearly distinguishing inequality from unfairness.

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June 12, 2017 in Scholarship, Tax | Permalink | Comments (9)

Water And Taxes

Dave Owen (UC-Hastings), Water and Taxes, 50 UC Davis L. Rev. 1559 (2017) (reviewed by David Gamage (Indiana) here):

This article considers how water consumption in the United States is and should be taxed. It reviews the few federal and state tax code provisions that directly target water use and the somewhat larger number of provisions with indirect implications for water policy. It also draws upon existing literature on tax policy, water law, and water economics to evaluate whether taxation of water consumption makes sense.

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June 12, 2017 in Scholarship, Tax | Permalink | Comments (1)

Tulane Seeks To Hire A Tax Prof

Tulane (2015)Tulane University School of Law invites applications for several faculty positions beginning in the 2018-19 academic year:

Both lateral and entry-level candidates are welcome to apply. Although all subject areas will be considered, we are especially interested in candidates interested in teaching tax courses. Applicants must possess a J.D. or equivalent degree and have strong academic credentials. We are especially committed to a diverse faculty, staff, and student body. Applications from women, minorities, persons with disabilities, and others whose background, experience, and viewpoints contribute to the diversity of our institution are encouraged.

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June 12, 2017 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, June 11, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Erin Scharff (Arizona State) reviews a new working paper by Jay Soled (Rutgers) and James Alm (Tulane), W(h)ither the Tax Gap?, 92 Wash. L. Rev. 521 (2017).

Scharff (2017)In their thoughtful new article, W(h)ither the Tax Gap?, Jay Soled and James Alm make a persuasive case that several economic trends are likely to narrow the tax gap in the near future.  As they note, such progress on tax compliance could play a significant role in closing the deficit. 

In particular, Soled and Alm highlight three trends that they suggest make it more likely that tax authorities will be able to improve compliance in the coming years.  First, the increasing reliance on electronic payments makes it more difficult for would-be tax cheats to hide income.  These days, even taxicabs, convenience stores, and valet attendants accept credit cards.  (Not to accuse all of these occupations of cheating, but those paid in cash can more easily hide their earnings.)  Second, as Soled and Alm observe, as the use of cash declines, “[t]hose who use cash, especially large denomination notes, will likely be flagged as potential tax evaders.”

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June 11, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

The Top Five New Tax Papers

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:

  1. [220 Downloads]  Can New York Publish President Trump's State Tax Returns? , by Daniel Hemel (Chicago)
  2. [198 Downloads]  Recent Developments in Federal Income Taxation: The Year 2016 , by Martin J. McMahon Jr. (Florida) & Bruce A. McGovern (South Texas)
  3. [156 Downloads]  A Taxonomy for Tax Loopholes , by Heather Field (UC-Hastings)
  4. [133 Downloads]  Why Don't White Supremacists Pay Taxes?, by Eric Franklin Amarante (UNLV)
  5. [130 Downloads]  Shareholder Wealth Effects of Border Adjustment Taxation, by Fabio B. Gaertner (Wisconsin), Jeffrey L. Hoopes (North Carolina) & Edward L. Maydew (North Carolina)

June 11, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, June 10, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Keith Fogg Leaves Villanova For Harvard

FoggT. Keith Fogg Named Clinical Professor of Law:

Keith Fogg, an expert in tax law and procedure and director of Harvard Law School’s Federal Tax Clinic at the Legal Services Center, has been named clinical professor of law at Harvard Law School.

For more than 30 years, Fogg worked in the Office of Chief Counsel of the Internal Revenue Service. He joined the faculty of Villanova Law School, and has been a visiting professor at Harvard Law School. He developed a course for the Georgetown LL.M. program, Federal Taxation of Bankruptcy and Workouts, which he taught there for 15 years as an adjunct. He has also taught as an adjunct professor at William and Mary and University of Richmond law schools and as a visiting professor at University of Arizona.

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June 10, 2017 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (1)

Friday, June 9, 2017

Tax Policy In The Trump Administration

Bach:  (Re)Viewing The American Social Welfare State

Florida Tax Review  (2015)Wendy A. Bach (Tennessee), Poor Support/Rich Support: (Re)Viewing the American Social Welfare State, 20 Fla. Tax. Rev. ___ (2017):

Since at least the 1970s a variety of scholars have redefined the U.S. social welfare state to include not only traditional benefit programs (for example Food Stamps and social security) but also a variety of tax benefits that are “hidden” or “submerged” forms of “welfare for the wealthy.” Including these benefits in the overall picture of U.S. social welfare provision reveals a system that is both larger in size than popularly believed and that, in addition to providing some support for the poor, distributes significant benefits regressively, to households with substantial wealth. Although a variety of scholars and policy analysts have described these outcomes, scholars have yet to focus on the ways in which structural inequality is written directly into the means of administration of U.S. social welfare programs. This article is the first to turn to those questions and to systematically demonstrate that those who are economically (and disproportionately racially) disadvantaged are offered a social welfare state that is meager, punitive and tremendously risky for those who receive its benefits.

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June 9, 2017 in Scholarship, Tax | Permalink | Comments (0)

Thursday, June 8, 2017

Glogower:  Taxing Capital Appreciation

Ari D. Glogower (Ohio State), Taxing Capital Appreciation, 70 Tax L. Rev. ___ (2016):

The realization rule — which defers tax on asset gains and losses until a disposition — is a well-known flaw in the income tax. Tax scholars have long recognized that the rule causes inequity, inefficiency, complexity, and revenue loss; allows wealthy taxpayers to avoid the income tax; and distorts the taxation of corporations and capital gains. The realization rule was a problem in the past, and a greater problem now, as financial innovations increase the opportunities for abuse and the need for reform. Prior proposals have generally favored replacing the realization rule with an accrual method accounting for the timing of gains and losses, through mark-to-market taxation, which taxes observed changes in asset value, formulaic taxation, which taxes deemed changes in asset value, or a combination thereof in a mixed regime. While these proposals have attracted much academic interest, they have not gained political traction, due to concerns of administrative feasibility, taxpayer liquidity, behavioral distortions, and public acceptance. This Article first introduces a framework for evaluating realization rule reform proposals, based on the rule’s harms and justifications, and demonstrates that none of the prior proposals adequately satisfies the framework’s criteria. It then introduces a new approach to taxing capital appreciation, “Deferred Tax Accounting,” which integrates accrual principles within the current realization system.

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June 8, 2017 in Scholarship, Tax | Permalink | Comments (0)

Tax Profs Remember Bill Andrews

AndrewsFollowing up my post on the May 20 death of Harvard tax legend Bill Andrews: below the fold are remembrances of Bill from these Tax Profs:

  • Alice Abreu (Temple)
  • Huge Ault (Boston College)
  • Reuven Avi-Yonah (Michigan)
  • Jennifer Bird-Pollan (Kentucky)
  • Paul Caron (Pepperdine)
  • Alan Feld (Boston University)
  • Cliff Fleming (BYU)
  • Susan Morse (Texas)

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June 8, 2017 in Legal Education, Obituaries, Tax | Permalink | Comments (0)

76 Countries, But Not The U.S., Sign OECD BEPS Convention To Curb International Tax Avoidance

OECD Logo (2015)OECD, Ground-Breaking Multilateral BEPS Convention Signed at OECD Will Close Loopholes in Thousands of Tax Treaties Worldwide:

Ministers and high-level officials from 76 countries and jurisdictions have signed today or formally expressed their intention to sign an innovative multilateral convention that will swiftly implement a series of tax treaty measures to update the existing network of bilateral tax treaties and reduce opportunities for tax avoidance by multinational enterprises. The new convention will also strengthen provisions to resolve treaty disputes, including through mandatory binding arbitration, thereby reducing double taxation and increasing tax certainty.

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June 8, 2017 in Tax | Permalink | Comments (0)

Wednesday, June 7, 2017

Soled & Alm:  W(H)Ither the Tax Gap?

Jay A. Soled (Rutgers) & James Alm (Tulane), W(H)Ither the Tax Gap?:

For decades, policy makers and politicians have railed against the “tax gap,” or the difference between what taxpayers are legally obligated to pay in taxes and what they actually pay in taxes. To close the gap, Congress has instituted numerous reforms, with varying degrees of success. Notwithstanding these efforts, the tax gap has largely remained intact, and, if anything, its size has gradually grown over the last several decades.

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June 7, 2017 in Scholarship, Tax | Permalink | Comments (2)