TaxProf Blog

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

Sunday, July 23, 2017

Tribute To Erik Jensen

JensenTribute to Erik Jensen, 67 Case W. Res. L. Rev. 637-78 (2017):

Continue reading

July 23, 2017 in Legal Education, Tax | 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. [585 Downloads]  Family Limited Partnerships and Section 2036: Not Such a Good Fit, by Mitchell Gans (Hofstra) & Jonathan Blattmachr (Milbank, New York)
  2. [341 Downloads]  The Front Door Opens Wide for the Backdoor Roth IRA, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  3. [297 Downloads]  The Rise and Fall of the Destination-Based Cash Flow Tax: What Was That All About?, by Daniel Shaviro (NYU)
  4. [207 Downloads]  The Case Against BEPS: Lessons for Coordination, by Mindy Herzfeld (Florida)
  5. [162 Downloads]  Targeting Corporate Inversions — Are We Doing the Right Thing?, by Doron Narotzki (Akron)

July 23, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 22, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Do Taxes Affect Marriage? Lessons From History

Edward G. Fox (NYU), Do Taxes Affect Marriage? Lessons from History:

This Article investigates the effect of taxes on marriage formation using a natural experiment generated by the income tax’s halting movement from individual taxation of married couples to joint taxation. The 1948 Revenue Act was the first to explicitly adopt joint taxation. Under the Act, married couples were taxed like two individuals, except each was assigned half of the couple’s joint income. This income splitting blunted the progressivity of the tax code, usually reducing the couple’s taxes. The 1948 Act, however, only affected common law states. Married couples in community property states in practice already enjoyed joint taxation with income splitting under Poe v. Seaborn (1930). The 1948 Act thus presents an unusually good opportunity to study the impact of taxes on marriage because it offers substantial exogenous state-by-state variation in tax incentives to marry.

Continue reading

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

Going Cashless? Bad for Tax Cheats, Privacy, Poor

Bloomberg, Going Cashless? Bad for Tax Cheats, Privacy, Poor:

Do we need cash? Humans have used all sorts of things to exchange items of economic value -- rare metals, strings of shells and even sunken boulders. Those objects have gotten more ephemeral, with paper money replacing most coins, and digital forms increasingly supplanting paper. Could physical cash go away entirely? Economists see great payoffs in a cashless society: lower transaction costs, new tools to manage economic growth and an end to tax evasion and money laundering. Critics see an end to privacy, frightening new powers for tyrants and costs that would fall disproportionately on the poor. The giant, if unintended, experiment that followed India’s attempt to withdraw 86 percent of cash in circulation showed one thing clearly: The end of cash is not likely to be a neat or simple process.

Continue reading

July 22, 2017 in Tax | Permalink | Comments (2)

Friday, July 21, 2017

Weekly SSRN Tax Article Review And Roundup

This week, David Gamage (Indiana) reviews a new draft article by Regina Herzlinger (Harvard Business School) and Barak D. Richman (Duke Law), Evaluating Changes to the Income Tax Code to Create Consumer-Driven Health Insurance Competition.

Gamage (2017)The intersections between taxation and health policy have become increasingly important to political debates in Washington. A gorilla in the room for most of these discussions is the tax exclusion for employer provided health insurance. This exclusion has been widely criticized. Yet reformers have had little success in attempting to limit this exclusion.

In their new draft article, Herzlinger and Richman (hereinafter “HR”) model how reforming the exclusion for employer provided health insurance might affect employee pay and health care costs. HR argue for making changes to the tax laws surrounding the exclusion so that employees could choose to what extent they want to take advantage of the exclusion or instead receive increased take home pay (which would be taxable). HR estimate that giving workers this option would increase after-tax incomes by $46-48 billion annually, while reducing income inequality and “likely” controlling health care costs.

Continue reading

July 21, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

IRC § 457A, Literal Income And Substitution Effects, And The Kübler-Ross Five Stages Of Taxes

Matt Levine (Bloomberg), Tax Bills and Libor Witnesses:

There is a widespread belief that taxes discourage economic activity. If you tax cigarettes, that will reduce smoking; if you tax labor income, that will reduce work; if you tax capital gains, that will reduce savings; if you tax estates, that will reduce death. This is standard Econ 101 reasoning, but that doesn't mean that it's universally valid. You can't rule out the possibility that someone, somewhere, will think "Higher taxes? That just means that I need to work more hours to pay them!" That someone is literally Steven A. Cohen:

Mr. Cohen, who ran SAC Capital before it pleaded guilty to criminal insider-trading charges in 2013, is nearing a launch of a new firm to manage as much as $20 billion, The Wall Street Journal earlier reported.

He has set that target, which would exceed the $16 billion managed at peak by SAC, partly because he wants to generate income to help pay the large tax bill, a person close to him said.

The "large tax bill" is the one that is coming due soon on offshore deferred compensation: Hedge fund managers used to be able to defer that income indefinitely, but Congress closed that loophole in 2008, and gave the managers until next year to pay taxes on previously deferred compensation....

Another widespread belief about taxes is that they encourage wasteful gamesmanship and structuring to avoid them. (That's how the offshore compensation came into being in the first place.) And that is still true. Here is a wonderful quote from a tax lawyer in his role as spiritual counselor:

“These are smart, aggressive people who don’t want to pay more than they have to and writing a huge check can be quite demoralizing," said Jonathan Brenner, a tax partner at Caplin & Drysdale. “Most recognize they’ve had a good run and now have to pay the piper, though not after first asking six different ways if there’s some silver bullet” to eliminate or reduce the taxes.

Continue reading

July 21, 2017 in Tax | Permalink | Comments (3)

Thimmesch:  Online Shopping And Tax Privacy

Adam Thimmesch (Surly Subgroup): Online Shopping and Tax Privacy

The privacy implications of online commerce are complicated and fascinating. On the one hand, it allows individuals to protect their privacy by shopping for sensitive items without the knowing glances of store clerks, fellow patrons, or those passing by. On the other hand, it creates a digital trail that can connect them to a particular vendor or purchase in perpetuity. This can occur with respect to items that are politically, medically, or sexually sensitive and with respect to items that they’d just prefer to keep a secret. (For example, if you forget to browse in private mode, you might find that your wife’s Facebook feed now includes ads for the items that you were searching out for her birthday. Woops. Sorry dear.)

Continue reading

July 21, 2017 in Tax | Permalink | Comments (0)

Thursday, July 20, 2017

Schizer:  Border Adjustments And The Conservation Of Tax Planning

David M. Schizer (Columbia), Border Adjustments and the Conservation of Tax Planning, 155 Tax Notes  1451 (June 5, 2017):

In this article, Schizer argues that U.S. corporate and shareholder taxes need to be reformed, and the corporate rate should be much lower. In reforming this dysfunctional regime, according to Schizer, Congress should keep both of these taxes as a form of built-in redundancy; if one tax is avoided, the other can still be collected.

Continue reading

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

10 Things To Know About Tax Practice

Above the Law: 10 Things to Know About Tax Practice:

Today’s topic: tax law.

1. What do you do in a typical day?

A typical day usually begins with reading daily tax publications. There are always many changes and developments to keep up with in tax law. It’s a challenge to stay on top of new regulations, IRS guidance, and other changes, but it also presents an opportunity for younger lawyers to know as much about a specific issue as more experienced lawyers.

Junior associates often spend a fair amount of time researching discrete issues. Although more senior lawyers spend less time on research, tax lawyers throughout their careers devote more of their time to research than lawyers in other practice areas. Despite the thousands of pages in the Internal Revenue Code and Treasury Regulations, there are still a lot of unanswered questions about how the tax rules apply to any given situation. Associates at large firms may also spend time reviewing tax disclosures in securities offerings, reviewing and negotiating the tax representations and other tax-related provisions in merger or other acquisition agreements, reviewing and negotiating the tax provisions in loan agreements, or drafting tax opinions.

As tax lawyers gain experience, they usually become more involved in tax structuring for joint ventures, acquisitions, dispositions, investment funds, or financial products, and provide more expert advice directly to clients on discrete tax issues. 

2. Who do you work with?

...

July 20, 2017 in Tax | Permalink | Comments (1)

Ventry:  Lawyers As Whistleblowers

Dennis J. Ventry, Jr. (UC-Davis), Stiches for Snitches: Lawyers as Whistleblowers, 50 U.C. Davis L. Rev. 1455 (2017):

This Article challenges the prevailing wisdom that ethics rules forbid lawyers from blowing the whistle on a client’s illegal conduct. While a lawyer is not free to disclose confidential information in every jurisdiction for every legal violation, the ethics rules in all jurisdictions permit disclosure of confidential information pertaining to a client’s illegal activities under certain conditions. Proving the lie of the prevailing wisdom, this Article examines a high profile case in the state of New York that ruled a lawyer whistleblower violated the state’s ethics rules by revealing confidential information to stop his employer-client from engaging in a tax fraud of epic proportions. The Article argues that the court undertook a deficient analysis of New York ethics rules pertaining to permissive disclosure of confidential client information. Even if the whistleblower had violated his ethical obligations, the New York False Claims Act (the statute under which he brought his action) expressly protects disclosure of confidential employer information made in furtherance of the statute. In addition to New York’s statutory shield, federal courts across the country have developed a public policy exception safeguarding whistleblowers for disclosing confidential information that detects and exposes an employer’s illegal conduct.

Continue reading

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

Wednesday, July 19, 2017

Liscow & Woolston:  How Income Taxes Should Change During Recessions

Zachary D. Liscow (Yale) & William A. Woolston (Stanford), How Income Taxes Should Change During Recessions, 70 Tax L. Rev. ___ (2017):

This paper offers recommendations for how the design of labor income taxes should change during recessions, based on a simple model of a recessionary economy in which jobs are rationed and some employees value working more than others do. The paper draws two counter-intuitive conclusions for maximizing social welfare.

Continue reading

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

Tax Court Denies Billionaire's $33m Charitable Deduction; Did University Of Michigan 'Rent Its Brand To Brazen 10:1 Tax Avoidance Scheme'?

Michigan LogoForbes, Billionaire Miami Dolphins Owner Gets Shut Out At Tax Court:

Billionaire Stephen Ross, owner of the Miami Dolphins, who thanks to a $200 million donation (largest in the history of the school) was described as Leader, Visionary, Philanthropist, Wolverine by the Universtiy of Michigan. ... Mr. Ross got his start in real estate based on his knowledge of federal tax garnered as a tax attorney for Coopers and Lybrand. ... I have to wonder whether the name of his flagship Related Companies is a tax geek joke.

Forbes, Billionaire Stephen Ross And The Ten For One Charitable Deduction:

The brazenness of the charitable plan with the University of Michigan designed to benefit Wolverine Billionaire Stephen Ross revealed in the Tax Court RERI Holdings I  decision is stunning.

The bare bones of the plan are that RERI, whose principal investor was Mr. Ross, bought an asset (call it "the thing") which it donated to the University of Michigan toward a $5 millon pledge that Mr. Ross had made.  Under the gift agreement UM had to hold onto "the thing" for two years, then sell it.  The amount that UM received would be credited to Mr. Ross's pledge. Round numbers RERI acquired "the thing" for $3 million.  When it came time to sell it UM had it appraised at $6 million.  UM sold it to a partnership for $2 million under pressure from Mr. Ross who threatened to count that amount towards his pledge, if they ended up getting less.  How large was the charitable deduction taken by RERI, of which Ross was the principal investor? That would be $33,019,000.

Mr. Ross is a prominent philanthropist.  It is tough to characterize this particular transaction as philanthropic as the claimed tax savings dwarf the amount out of pocket or the amount netted by the University of Michigan.  You have to wonder to what extent University development officers knew what was going on. Was University of Michigan seeking charitable donations or renting its brand to a tax avoidance scheme?

Continue reading

July 19, 2017 in Celebrity Tax Lore, Legal Education, New Cases, Tax | Permalink | Comments (0)

Davis:  The Tax-Immigration Nexus

Tessa R. Davis (South Carolina), The Tax-Immigration Nexus, 94 Denv. L. Rev. 195 (2017):

Tax and immigration law have a shared interest in defining community. In order to implement a tax, we must know who belongs to the taxable community. At the same time, immigration law must define and administer the requirements for membership in the national community. Despite the differing objectives of tax and immigration law — raising revenue and deciding who may enter, remain, and become a citizen in the United States — each of these regimes uses a concept of citizenship to define their respective communities.

Starting from this common thread of the relevance of citizenship to both immigration and tax law, this Article draws upon social theory on citizenship to explore the many links between these seemingly disparate areas of law. Examination of these connections — what this Article calls the tax-immigration nexus — reveals that both areas of law draw upon the other to define citizenship. The interplay of tax and immigration citizenship yields important insights for tax law and policy.

Continue reading

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

Tuesday, July 18, 2017

Panama Papers Update: Pakistani Corruption Case Hinges On A Font (#FontGate)

CalibriBBC News: Pakistani Corruption Case Hinges on a Font

Doubt has been cast on a key document at the centre of a corruption inquiry in Pakistan because of the use of a particular typeface. And Twitter users are poking fun at Prime Minister Nawaz Sharif and his daughter Maryam Nawaz using the hashtag #FontGate.

Continue reading

July 18, 2017 in Tax | Permalink | Comments (0)

Reforming U.S. Corporate Taxes

Veronique de Rugy (Mercatus Center), Reforming US Corporate Taxes:

The United States has fallen far behind other developed countries when it comes to corporate tax reform. In contrast to other developed nations, the United States has declined to reform the way it taxes corporations. Consequently, it now has the highest statutory corporate income tax rate of the G20 countries. The federal government needs to lower the corporate income tax rate-a reform that will improve the competitiveness of American businesses and encourage economic growth.

MC

Continue reading

July 18, 2017 in Tax, Think Tank Reports | Permalink | Comments (9)

Monday, July 17, 2017

Brooks Reviews Christians' BEPS And The New International Tax Order

Jotwell (Tax) (2016)Kim Brooks (Schulich School of Law), What’s Up: BEPS and the New International Tax Order (JOTWELL) (reviewing Allison Christians (McGill), BEPS and the New International Tax Order, 2017 BYU L. Rev. ___ (2017):

It’s easy to underestimate the value of a good “what’s up” article. If you’ve been doing that, then you should take a look at BEPS and the New International Tax Order for a reminder of their value.

“What’s up” articles are the salve of the academy. They take a rapidly changing field of inquiry or policy space or legal doctrine and they encapsulate the state of play in a way that brings out and makes assessable the highlights.

Continue reading

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

Seattle Lawmakers Pass Tax On Highest Earners; Mayor Eager To Be Sued

TaxReuters: Seattle Lawmakers Pass Tax on Highest Earners; Mayor Eager to be Sued 

Seattle's city council unanimously passed a pioneering income tax on the city's highest earners on Monday, a measure that has become a clarion call for Democrats there even though it is likely to face a swift legal challenge over violating state law.

The measure created a 2.25 percent tax rate on individuals earning above $250,000 and married couples jointly earning above $500,000. The tax will add roughly $140 million in new annual revenue and affect fewer than 20,000 residents in the city of more than 660,000, supporters say.

The proposal has become a rallying cry for Democrats and activists in the liberal-leaning city who used local opposition to Republican President Donald Trump to advance long sought-after local policies.

Continue reading

July 17, 2017 in Tax | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, July 16, 2017

Tax Court Denies Business Expense Deductions To Minister/Author Due To Lack Of Profit Motive

Tax Court (2017)Forbes, IRS Rejects Minister Tax Write-Offs For Lack Of Profit Motive:

The U.S. Tax Court has agreed with the IRS that a minister and author could not deduct business expenses. Why? He was not engaged in a trade or business for profit. To top it off, the reverend also wasn't allowed any deductions under the more liberal hobby loss rules, because he had no gross income from these activities. The case is Lewis v. Commissioner, involving a minister and author named Willie Lewis. He occasionally performed weddings, attended meetings, and conducted seminars. On his 2011 tax return, he claimed business expenses from these activities. The IRS said no, assessed more taxes, and added penalties. So Mr. Lewis went to Tax Court.

Continue reading

July 16, 2017 in New Cases, Tax | 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 new papers debuting on the list at #3 and #5:

  1. [552 Downloads]  Family Limited Partnerships and Section 2036: Not Such a Good Fit, by Mitchell Gans (Hofstra) & Jonathan G. Blattmachr (Milbank, New York)
  2. [276 Downloads]  The Rise and Fall of the Destination-Based Cash Flow Tax: What Was That All About?, by Daniel Shaviro (NYU)
  3. [244 Downloads]  The Front Door Opens Wide for the Backdoor Roth IRA, by Philip Manns (Liberty) & Timothy Todd (Liberty)
  4. [191 Downloads]  The Case against BEPS: Lessons for Coordination, by Mindy Herzfeld (Florida)
  5. [138 Downloads]  Taxation, Competitiveness, and Inversions: A Response to Kleinbard, by Michael Knoll (Pennsylvania)

July 16, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, July 15, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Financial Times:  Ten Ways HMRC Can Tell If You’re A Tax Cheat

HMRCFinancial Times: Ten Ways HMRC Can Tell if You’re a Tax Cheat:

HMRC has come under intense pressure to show it can be tough on tax evasion. Here are 10 ways, some high-tech, some very traditional, that HMRC can use to check if you are cheating.

Continue reading

July 15, 2017 in Tax | Permalink | Comments (0)

Tax Low To Get High: Governments Should Keep Weed Taxes Down

National Post op-ed:  Tax Low to Get High: Governments Should Keep Weed Taxes Down, by Arthur Cockfield (Queen’s University):

With the introduction of draft legislation to legalize marijuana by July 2018, the Liberal government is moving forward on its election promise. But as lawmakers polish the legislation to promote the best policy outcomes, they face a key challenge — they must ensure that any new tax measures encourage marijuana producers, distributors and sellers to become tax-compliant.

In terms of tax policy, Finance Minister Bill Morneau has wisely urged his provincial counterparts to keep taxes low on legal pot. As discussed in a report by the Office of the Parliamentary Budget Officer, if taxes are too high, then consumers will continue to use the black market. That’s a problem given more than 300 organized crime groups in Canada currently generate roughly $7 billion a year in illegal weed.

Continue reading

July 15, 2017 in Tax | Permalink | Comments (1)

Friday, July 14, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new work by Itai Grinberg (Georgetown), The New International Tax Diplomacy, 104 Geo. L.J. 1137 (2016).

Glogower (2016)Itai Grinberg’s fascinating and important new work addresses the thorny question of how best to coordinate and implement international tax norms.

International tax avoidance by multinationals has generated public attention across the globe, and ushered in a new era of cross-border coordination in the area of international tax law, most prominently through the OECD’s Base Erosion and Profit Shifting (BEPS) project.  Grinberg’s new work identifies, and evaluates, the BEPS project’s increasing reliance on the institutional and procedural frameworks used for coordinating international financial law, and considers the consequences of this approach for the overall success of the BEPS project.

Continue reading

July 14, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Tesla’s Sales Stall In Hong Kong As Tax Breaks End. Could The U.S. Be Next?

TeslaWashington Post: Tesla’s Sales Stall in Hong Kong as Tax Breaks End. Could the U.S. be Next? 

Tesla’s sales appear to be stalling in Hong Kong.

According to data from the city’s transportation department that was analyzed and first reported by the Wall Street Journal, not a single newly purchased Tesla model was registered in April after the government in March announced changes to the tax benefits customers can get from buying the electric cars. ...

Continue reading

July 14, 2017 in Tax | Permalink | Comments (0)

Thursday, July 13, 2017

Ranking The States By Fiscal Condition

George Washington Seeks To Hire A Junior Tax Prof

George Washington Law Logo (2016)George Washington seeks to hire a Tax Prof with 0-2 years of experience.  For more information or to apply, email Faculty Appointments Committee Chair Catherine Ross or Faculty Appointments Committee Member (and Tax Prof) Karen Brown.

July 13, 2017 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (0)

Google Wins $1.3 Billion French Tax Case

Wednesday, July 12, 2017

Colinvaux:  Donor Advised Funds — Charitable Spending Vehicles For 21st Century Philanthropy

Roger Colinvaux (Catholic), Donor Advised Funds: Charitable Spending Vehicles for 21st Century Philanthropy, 92 Wash. L. Rev. 39 (2017):

The donor advised fund (DAF) is changing longstanding giving norms in United States philanthropy. DAF contributions now account for around 8.4% of giving by individuals in the U.S. Over half of those contributions go to national DAF sponsors that have relationships with large commercial investment firms like Fidelity, Vanguard, and Schwab. This Article seeks to advance the understanding of the donor advised fund and to address two of the main policy questions: whether to require a mandatory distribution of funds by DAFs and their sponsoring organizations and how to respond to the increased use of DAFs for noncash charitable contributions.

Continue reading

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

Netanya Hosts 4th International Roundtable Today On Taxation And Tax Policy

Tuesday, July 11, 2017

Oh:  Will Tax Reform Be Stable?

Jason S. Oh (UCLA), Will Tax Reform Be Stable?, 165 U. Pa. L. Rev. 1159 (2017) (review by Leigh Osofsky (Miami) here):

Stability is essential to any reform’s success, yet it is hardly guaranteed. This is particularly true in tax policy, where Congress persistently tinkers. This Article offers a novel approach to studying the stability of reform proposals in taxation. Any reform proposal can be decomposed into its constituent policies. I show that politically extreme policies are more likely to be reversed than are moderate ones. This basic intuition allows one to decompose any tax reform proposal into stable and unstable pieces.

Continue reading

July 11, 2017 in Scholarship, Tax | Permalink | Comments (0)

WSJ:  In Face-off With IRS, The Boston Bruins Win Big

BruinsFollowing up on last month's post, The Boston Bruins (And Other Pro Sports Teams) Can Deduct 100% Of Meal Expenses At Away Games:  Wall Street Journal Tax Report, In Face-off With IRS, the Boston Bruins Win Big:

The Boston Bruins ruled the world of professional hockey six years ago when they last won the Stanley Cup. But the team’s victory last week over the Internal Revenue Service will likely resonate far beyond the rink.

In Jacobs v. Commissioner, [148 T.C. No. 24 (June 26, 2017),] the owners of the National Hockey League’s Bruins argued the team should be able to deduct 100% of the cost of certain meals they provided to players and staff. Under current law, only 50% of the cost of many business meals is tax-deductible.

Continue reading

July 11, 2017 in Celebrity Tax Lore, New Cases, Tax | Permalink | Comments (0)

Cotropia & Rozema:  Who Benefits From Repealing Tampon Taxes?

Christopher Anthony Cotropia (Richmond) & Kyle Rozema (Chicago), Who Would Benefit from Repealing Tampon Taxes? Empirical Evidence from New Jersey:

Many state and local governments exclude some medical products from the sales tax base, including some that are primarily used by men such as hair growth products. However, tampons and other menstrual hygiene products are subject to sales taxes in most states. A recent social movement advocates for the repeal of these “tampon taxes” on the grounds that tampon taxes (a) create an unequal tax burden between men and women because only menstruating women must pay a tax on products that men do not use, and (b) decrease the affordability of these necessary products, particularly for lower income women. To date, however, no empirical research has documented the extent that repealing tampon taxes would benefit women by lowering consumer prices, and how any tax benefit is distributed among women of different socio-economic backgrounds. It is possible that eliminating tampon taxes would lead to an increase in before-tax retail prices such that consumer prices for the products do not decrease by the full size of the repealed tax. This would imply that consumers and producers share the benefit of the tax repeal.

Continue reading

July 11, 2017 in Scholarship, Tax | Permalink | Comments (1)

Norway’s ‘Voluntary’ Tax Plan Brings In Just $1,325

NorwayBloomberg, Norway’s ‘Voluntary’ Tax Plan Brings In Just $1,325:

Eager to pay more taxes? Then look no further than Norway.

Hammered by the opposition for slashing taxes and going on a spending spree with the country’s oil money, the center-right government has hit back with a bold proposal: voluntary contributions.

Launched in June, the initiative has received a lukewarm reception, with the equivalent of just $1,325 in extra revenue being collected so far, according to the Finance Ministry.

Continue reading

July 11, 2017 in Tax | Permalink | Comments (4)

Monday, July 10, 2017

NY Times:  Supreme Court May Use Tax Case To Narrow Definition Of 'Obstruction'

NY Times Dealbook (2013)New York Times DealBook:  What Constitutes Obstruction? A Tax Case May Narrow the Definition, by Peter J. Henning (Wayne State):

Prosecutors have enormous discretion in the American criminal justice system, aided greatly by catchall provisions in statutes.

Congress often adopts broadly worded laws to catch a wide range of conduct, especially for white-collar crimes, and regularly tacks on a section to catch actions that might otherwise slip through the cracks.

Over the past few years, the Supreme Court has shown a conspicuous concern when the Justice Department seemed to push the envelope of what constitutes a crime in a way that could reach ostensibly innocent acts, or at least conduct that does not deserve the severe punishment meted out under federal law.

Last week, the justices agreed to review the conviction of Carlo J. Marinello II for obstructing the administration of the tax laws, presenting another opportunity to cut back on the scope of white-collar prosecutions under a catchall section.

Continue reading

July 10, 2017 in New Cases, Tax | Permalink | Comments (1)

Call for Papers: University of North Carolina Tax Symposium

North Carolina Tax SymposiumThe University of North Carolina Kenan-Flagler School of Business has issued a call for papers for its Twenty-First Annual Tax Symposium to be held April 21-22, 2018. The symposium "is designed to bring together leading tax scholars from economics, accounting, finance, law, political science, and related fields." The deadline for the call for papers is December 15, 2017:

Continue reading

July 10, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, July 9, 2017

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. [431 Downloads]  Family Limited Partnerships and Section 2036: Not Such a Good Fit, by Mitchell Gans (Hofstra) & Jonathan G. Blattmachr (Milbank, New York)
  2. [258 Downloads]  The Rise and Fall of the Destination-Based Cash Flow Tax: What Was That All About?, by Daniel Shaviro (NYU)
  3. [194 Downloads]  A Taxonomy for Tax Loopholes, by Heather Field (UC-Hastings)
  4. [152 Downloads]  Why Don't White Supremacists Pay Taxes?, by Eric Franklin Amarante (UNLV)
  5. [145 Downloads]  The Case against BEPS: Lessons for Coordination, by Mindy Herzfeld (Florida)

July 9, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The Sermon On The Mountain Of Cash: Using Tax Law To Curtail The Prosperity Gospel And Prevent Opportunists From 'Preying' On Vulnerable Parishioners

Jacob M. Bass, The Sermon on the Mountain of Cash: How to Curtail the Prosperity Scheme and Prevent Opportunists from “Preying” on Vulnerable Parishioners, 37 B.C.J.L. & Soc. Just. 147 (2017):

Many televangelists in the United States preach the “prosperity gospel,” a doctrine which teaches that a religiously faithful person who continually donates money to church ministries can expect God to grant material improvements to their finances, health, and relationships. Americans who participate in prosperity gospel churches often donate thousands of dollars to these churches, despite their difficulty financing such large donations and the lack of the promised material improvement to their lives. Televangelists who preach the prosperity gospel secretly use these donations to finance their extravagant lifestyles, instead of using the funds to support the faithful masses who continue to donate. The U.S. Constitution’s Free Exercise Clause makes it difficult to regulate this religiously-based scheme.

Continue reading

July 9, 2017 in Scholarship, Tax | Permalink | Comments (2)

Saturday, July 8, 2017

This Week's Ten Most Popular TaxProf Blog Posts

NY Times:  Uber Improperly Reduced Drivers' Pay By $200m By Withholding New York State Taxes That Should Have Been Paid By Passengers

UberNew York Times, How Uber’s Tax Calculation May Have Cost Drivers Hundreds of Millions:

Drivers’ trip receipts contain signs that the ride-hailing service deducted hundreds of millions of dollars from drivers’ earnings in New York to pay state taxes.

Continue reading

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

Friday, July 7, 2017

Weekly SSRN Tax Article Review And Roundup

This week, Erin Scharff (Arizona State) reviews a recently posted article by Manoj Viswanathan (Hastings), The Hidden Costs of Cliff Effects in the Internal Revenue Code.  

Scharff (2017)Early on in my federal income tax class, I usually spend a bit of time with my students on the idea of the marginal tax rate.   The point I stress to them is that even as you earn more money and your tax rate goes up, you still take home more money working an additional hour than not working that hour.  I sometimes get the sense many of my students hadn’t understood that prior to my class.  

Of course, there’s a caveat to this simple marginal tax story:  the high marginal rates that result from cliff effects, particularly those in tax and spending programs aimed at addressing low-income Americans.  While I usually talk about these cliff effects when discussing the Earned Income Tax Credit, Manjoj Viswanathan’s recent work reminds me that these income-based cliff effects are pervasive in the Code.

Continue reading

July 7, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Tax Reform Is Hard (#TRIH)

With the looming deadline on both the debt ceiling and the tax reconciliation bill (not to be confused with the ACHA reconciliation instructions), taxes and, hopefully, tax reform are moving to the top of the legislative agenda.   The rhetoric of tax reform is heating up.  Yesterday Paul Ryan tweeted:

Screen Shot 2017-07-06 at 9.43.05 AM

Speaker Ryan is not the only member of GOP leadership discussing tax reform.  News last week broke that Steve Bannon wants to raise the top bracket rate to a number that has ”a 4 in front of it”. So, the GOP continues to a least float the idea of substantive tax reform measures.  

I don't want to get too carried away about tax reform. Despite my optimism for "reform season," others does not seem to have the same zeal. First there is no "plan" to discuss.  Second, the House Appropriations Bill (which I wrote about at Surly) does not seem to be too keen on the chances of real reform measures.  For example, the Appropriations Bill addresses estate tax regulations and ACA penalties.  If the estate tax and the ACA are on the chopping block, then why worry about the measures in the Appropriations Bill?

Continue reading

July 7, 2017 in Congressional News, Political News, Tax, Tax Analysts, Tax Policy in the Trump Administration, Tax Profs | Permalink | Comments (1)

National Taxpayer Advocate Blog: Private Debt Collection Program

Taxpayer Advocate (2016)National Taxpayer Advocate Blog: Private Debt Collection Program

Since 2004, when Internal Revenue Code (IRC) § 6306 was enacted as part of the American Jobs Creation Act, the IRS has had the statutory authority to outsource the collection of tax debt. The IRS exercised this authority in its prior private debt collection program from about 2006 to 2009, but the program was ended due to concerns about its return on investment. Congress amended the statute in 2015, and the IRS is now required to outsource collection of “inactive tax receivables.” Even with this Congressional mandate, as I explained in my 2016 Annual Report to Congress, and my recently released Fiscal Year 2018 Objectives Report to Congress, I believe the IRS has overstepped its statutory authority in implementing its current Private Debt Collection (PDC) initiative.

Continue reading

July 7, 2017 in Tax | Permalink | Comments (0)

Thursday, July 6, 2017

Manhire Presents The Action Principle In Market Mechanics Today At University Of Warsaw

Manhire (2017)Tax Prof Jack Manhire (Texas A&M) presents his theory of market mechanics to physicists, economists, and mathematicians today at the 13th Econophysics Colloquium at the University of Warsaw:

This paper explores the possibility that asset prices, especially those traded in large volume on public exchanges, might comply with specific physical laws of motion and probability. The paper first examines the basic dynamics of price displacements in financial markets and finds one can model this dynamic as a harmonic oscillator at local “slices” of elapsed time via a homogeneous coordinate system. Based on this finding, the paper theorizes that price displacements are constrained, meaning they have extreme values beyond which they cannot go for defined periods.

Continue reading

July 6, 2017 in Conferences, Scholarship, Tax | Permalink | Comments (1)

SSRN Tax Professor 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 June 1, 2017) 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.)

69,648

Reuven Avi-Yonah (Mich.)

12,832

2

Michael Simkovic (USC)

36,521

Lily Batchelder (NYU)

9116

3

Paul Caron (Pepperdine)

33,215

Michael Simkovic (USC)

4082

4

D. Dharmapala (Chicago)

30,984

D. Dharmapala (Chicago)

4063

5

Louis Kaplow (Harvard)

28,232

Michael Graetz (Columbia)

3343

6

Vic Fleischer (San Diego)

23,802

Richard Ainsworth (BU)

3040

7

James Hines (Michigan)

22,930

Ed Kleinbard (USC)

2834

8

Ed Kleinbard (USC)

22,677

David Weisbach (Chicago)

2521

9

Richard Kaplan (Illinois)

22,126

Dan Shaviro (NYU)

2433

10

Ted Seto (Loyola-L.A.)

22,033

David Gamage (Indiana)

2404

11

Richard Ainsworth (BU)

21,058

Louis Kaplow (Harvard)

2226

12

Katie Pratt (Loyola-L.A.)

20,284

William Byrnes (Texas A&M)

2065

13

David Weisbach (Chicago)

19,398

Robert Sitkoff (Harvard)

1943

14

Robert Sitkoff (Harvard)

18,988

Paul Caron (Pepperdine)

1818

15

Brad Borden (Brooklyn)

18,342

Jeff Kwall (Loyola-Chicago)

1694

16

Carter Bishop (Suffolk)

18,148

Darien Shanske (UC-Davis)

1691

17

Francine Lipman (UNLV)

17,733

Omri Marian (UC-Irvine)

1648

18

Chris Sanchirico (Penn)

17,610

Francine Lipman (UNLV)

1600

19

Jen Kowal (Loyola-L.A.)

17,525

Jordan Barry (San Diego)

1599

20

Dan Shaviro (NYU)

17,320

Brian Galle (Georgetown)

1535

21

Bridget Crawford (Pace)

17,202

Bridget Crawford (Pace)

1529

22

Dennis Ventry (UC-Davis)

16,539

Steven Bank (UCLA)

1466

23

David Walker (BU)

15,674

Brad Borden (Brooklyn)

1403

24

Steven Bank (UCLA)

14,834

Vic Fleischer (San Diego)

1392

25

Gregg Polsky (Georgia)

13,972

Christopher Hoyt (UMKC)

1388

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.

Continue reading

July 6, 2017 in Scholarship, Tax, Tax Prof Rankings | Permalink | Comments (0)