TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Monday, February 20, 2017

Sixth Circuit Reverses IRS, Tax Court:  'Citizens Can't Comply With Tax Laws They Can’t See'

CaligulaSumma Holdings v. Commissioner, No. 16-1712 (Feb. 16, 2017):

Caligula posted the tax laws in such fine print and so high that his subjects could not read them. Suetonius, The Twelve Caesars, bk. 4, para. 41 (Robert Graves, trans., 1957). That’s not a good idea, we can all agree. How can citizens comply with what they can’t see? And how can anyone assess the tax collector’s exercise of power in that setting? The Internal Revenue Code improves matters in one sense, as it is accessible to everyone with the time and patience to pore over its provisions.

In today’s case, however, the Commissioner of the Internal Revenue Service denied relief to a set of taxpayers who complied in full with the printed and accessible words of the tax laws. The Benenson family, to its good fortune, had the time and patience (and money) to understand how a complex set of tax provisions could lower its taxes.

Continue reading

February 20, 2017 in IRS News, New Cases, Tax | Permalink | Comments (0)

Hawaii Seeks To Hire A Tax Prof

Hawaii LogoThe University of Hawaii Law School invites applications from entry level and lateral candidates for a tenure-track or tenured tax position beginning in the 2017-18 academic year:

We are seeking applicants with the ability and interest to teach in the area of federal taxation and preferably also trusts and estates. ...

Continue reading

February 20, 2017 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

Florida Names Fred Murray Professor Of Tax Practice

Muray (2018)Dean Laura Rosenbury has announced that Fred Murray will join the faculty of the University of Florida Levin College of Law as a full-time Professor of Tax Practice:

Since 2007, Professor Murray has been at Grant Thornton LLP, where he serves as a Managing Director, International Tax Services. In addition, he has taught International Tax as an adjunct Professor of Law in the LL.M. program at the Georgetown University Law Center since 2005. Professor Murray started his career as a tax lawyer at Chamberlain, Hrdlicka in Houston, Texas, where he was a partner, before he left to serve as Special Counsel (Legislation) to the Chief Counsel for the Internal Revenue Service from 1992 to 1996. Professor Murray also has served as a Deputy Assistant Attorney General in the Tax Division of the U.S. Department of Justice, as General Counsel and Director of Tax Affairs of the Tax Executives Institute, and as Vice President for Tax Policy at the National Foreign Trade Council.

Continue reading

February 20, 2017 in Legal Education, Tax, Tax Prof Moves | Permalink | Comments (0)

TaxProf Blog Weekend Roundup

Sunday, February 19, 2017

Bill Gates:  Robots That Displace Workers Should Be Taxed

Quartz, The Robot That Takes Your Job Should Pay Taxes, Says Bill Gates:

Robots are taking human jobs. But Bill Gates believes that governments should tax companies’ use of them, as a way to at least temporarily slow the spread of automation and to fund other types of employment.

Continue reading

February 19, 2017 in Celebrity Tax Lore, Tax | Permalink | Comments (1)

Bob Jones University Regains Tax-Exempt Status 34 Years After It Was Stripped By IRS, Supreme Court Due To Interracial Dating Ban

Bob JonesGreenville News, Bob Jones University Regains Nonprofit Status 17 Years After It Dropped Discriminatory Policy:

In a move that’s been more than two years in the making, Bob Jones University announced Wednesday it would regain its federal tax-exempt status on March 1, more than three decades after the IRS stripped its nonprofit status following a landmark U.S. Supreme Court ruling.

Continue reading

February 19, 2017 in 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 #2:

  1. [2,131 Downloads]  Problems with Destination-Based Corporate Taxes and the Ryan Blueprint, by Reuven S. Avi-Yonah (Michigan; moving to UC-Irvine) & Kimberly A. Clausing (Reed College)
  2. [1,019 Downloads]  The Known Unknowns of the Business Tax Reforms Proposed in the House Republican Blueprint, by Michael J. Graetz (Columbia)
  3. [677 Downloads]  A Guide to the GOP Tax Plan — The Way to a Better Way, by David A. Weisbach (Chicago)
  4. [326 Downloads]  Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing, by Lily L. Batchelder (NYU)
  5. [274 Downloads]  How Donald Trump can Keep His Campaign Promises, Grow the Economy, Cut Tax Rates, Repatriate Offshore Earnings, Reduce Income Inequality, Keep Jobs in the United States, and Reduce the Deficit, by David S. Miller (Proskauer, New York)

February 19, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, February 18, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Michael Jackson Estate's $700 Million Tax Court Thriller Turns On Value Of Star's Name At Time Of Death

ThrillerWall Street Journal, Michael Jackson’s Estate Faces Demand for Big Tax Payment: Dispute With IRS Centers on Valuation of the Singer’s Name and Likeness Rights at Time of His Death:

When pop star Michael Jackson died in 2009, weeks before a planned comeback tour, how much was the man in the mirror worth? The answer is far from black and white.

After coming to agreements on the value of some of the King of Pop’s more concrete assets in a legal fight that began four years ago, the estate’s executors are facing off with the Internal Revenue Service in U.S. Tax Court on Monday, primarily over the valuation of the singer’s name and likeness rights at the time of his death.

Depending on the outcome of the case, the estate could be on the hook for more than $500 million in taxes and $200 million in penalties, according to the IRS’s notice to the estate of its deficiency.

Continue reading

February 18, 2017 in Celebrity Tax Lore, New Cases, Tax | Permalink | Comments (1)

IRS Suspends Guidance Due To Trump Executive Order

Sam Brunson (Loyola-Chicago), The (Near) Future of Treasury Regulations:

Today’s Tax Notes reports [No Substantive IRS Guidance Coming for a While, Official Says] that the IRS has announced that it will not release pretty much any new formal guidance (including revenue rulings and revenue procedures) for the foreseeable future. [Fn: It will continue to release routine guidance, like updated interest rates and updated mileage allowances.]

Why not? A confluence of an Executive Order and a January 20 memorandum. The EO, Reducing Regulation and Controlling Regulatory Cost, requires that, for every new regulation issued, two existing regulations be eliminated.

Continue reading

February 18, 2017 in IRS News, Tax | Permalink | Comments (2)

NY Times Special Tax Section

Friday, February 17, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses how a dentist kept adequate records to beat the IRS's claim that he did not materially participate in his real estate business:

KristanPart-time dentist, full-time record-keeper beats IRS.

Beyond Flossing. A California man seemed to have a pretty good deal going. He had a dental practice with his dentist wife and had a pretty good six-figure joint income. Yet somehow it didn’t satisfy. He wanted a real estate career.

He still kept up a part-time dental practice, but he threw himself into real estate. He spent a lot of time on it. The couple owned for rental properties that he managed, and he also worked as a broker. The rental properties generated a taxable loss, and the IRS said that he couldn’t deduct them under the “passive loss rules.”

Rental real estate losses are automatically passive for most taxpayers, deductible only to the extent of other “passive” income or when the property is sold. A special rule applies to “real estate professionals.” They get to determine whether rental losses are “passive” using the same “material participation” standards that apply to other businesses — primarily based on hours worked in the activity.

Continue reading

February 17, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, David Gamage (Indiana) reviews a new piece by Michael Graetz (Columbia), The Known Unknowns of the Business Tax Reforms Proposed in the House Republican Blueprint, Columbia Law and Economics Working Paper No. 557.

Gamage (2017)How should we evaluate the House Republicans’ proposals for adopting a destination-based cash-flow tax (“DBCFT”)?  This is among the most important tax policy question currently facing the United States.  Yet this question is difficult to analyze, in part, because of uncertainty about what the proposed DBCFT might turn out to be if implemented.

To survey this quagmire, Graetz offers what is essentially just a list of questions, presented on PowerPoint slides printed to PDF.  Nevertheless, I found Graetz’s work to be by far the most helpful document for understanding the House Republicans’ DBCFT proposal that has been made available to date.

To highlight just a couple points raised by Graetz’s list of questions: 

Continue reading

February 17, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Hickman Presents Restoring The Lost Anti-Injunction Act At BYU

Hickman (2017)Kristin Hickman (Minnesota) presented Restoring the Lost Anti-Injunction Act (with Gerald Kerska (J.D. 2017, Minnesota)) yesterday at BYU as part of its Faculty Workshop Series:

Should Treasury regulations be eligible for pre-enforcement review? The D.C. Circuit’s recent decision in Florida Bankers Association puts its interpretation of the Anti-Injunction Act at odds with both general administrative law norms in favor of pre-enforcement review of final agency action and also the Supreme Court’s interpretation of the nearly identical Tax Injunction Act in Direct Marketing Association v. Brohl. In fact, cases interpreting the Anti-Injunction Act more generally are fragmented and inconsistent.

Continue reading

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

Thursday, February 16, 2017

Book Presents Taxpayer Rights, Behavioral Economics And The EITC Today At Indiana

BookLeslie Book (Villanova) presents Thinking About Taxpayer Rights and Behavioral Economics to Improve Administration of the EITC (with David Williams (Chief Tax Officer, Intuit)) at Indiana-Bloomington today as part of its Tax Policy Colloquium Series hosted by Leandra Lederman:

The IRS is a reluctant but key player in delivering social benefits to the nation’s working poor. Yet it administers one of the nation’s largest anti-poverty programs: the earned income tax credit (EITC). The EITC is generally praised for its role in reducing poverty and incentivizing low-wage work. While the credit has generally received bipartisan support, the IRS continues to face strong criticism over EITC compliance issues.

The IRS has generally focused on tax return characteristics in identifying and preventing erroneous EITC claims. We believe that shifting the focus from tax return characteristics to taxpayer characteristics may offer additional opportunities to improve EITC compliance (and perhaps other areas where there is systemic noncompliance).

Continue reading

February 16, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Grewal:  Can Congress Get President Trump’s Tax Returns?

Trump Tax ReturnsFollowing up on my previous post, George K. Yin (Virginia), Congress Already Has The Power To Obtain And Release Trump’s Tax Returns: Andy Grewal (Iowa), Can Congress Get President Trump’s Tax Returns?, Yale J. on Reg.: Notice & Comment (Feb. 13, 2017):

The statutory authority for any congressional requests would probably come from Sections 6103(f)(1) & (2) of the tax code. Under (f)(1), some committees of Congress can request disclosure of Trump’s returns and can examine those returns privately. Under (f)(2), a non-partisan career official, the Chief of Staff of the Joint Committee on Taxation (JCT), may also request and privately examine those returns. Professor Yin argues that information obtained through Section 6103(f) can be subsequently disclosed to the public, when public disclosure serves a legitimate legislative purpose. ...

Continue reading

February 16, 2017 in Scholarship, Tax | Permalink | Comments (2)

Schizer:  The Charitable Deduction And The Exemption For Endowment Income

David M. Schizer (Columbia), Subsidies and Nonprofit Governance: Comparing the Charitable Deduction with the Exemption for Endowment Income:

Charitable subsidies are supposed to encourage positive externalities from charity. In principle, the government can pursue this goal by evaluating specific charitable initiatives and deciding how much each should receive. But this Article focuses on two income tax rules that leave the government very little discretion about which charities to fund: the deduction for donations to charity (“the deduction”) and the exemption of a charity’s investment income (“the exemption”). Under each rule, as long as charities satisfy very general criteria, federal dollars flow automatically. While both of these sibling subsidies delegate key decisions to private individuals, they create very different incentives and effects. This Article breaks new ground by showing their different effects on the governance of nonprofits.

Continue reading

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

John Plecnik Discusses His Tax Scholarship

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

Wednesday, February 15, 2017

The Tax Lawyer Publishes New Issue

The Tax Lawyer (2013)The Tax Lawyer has published Vol. 70, No. 1 (Fall 2016):

Continue reading

February 15, 2017 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

Jones Day Is #1 U.S. Law Firm Brand, Supplanting Skadden

Jones DayAmerican Lawyer, Big Law Brand Survey Shows Client-Led Shakeup:

In a sign of a legal market where competition for work is stiffer than ever, a survey of legal buyers’ preferred Big Law brands has a new No. 1 for the first time in its six-year history.

Jones Day topped the Acritas U.S. Law Firm Brand Index, released Monday, after finishing in second place for the previous five years to the same firm: Skadden, Arps, Slate, Meagher & Flom. This year, Skadden ranked second and the top five was rounded out, in order, by the newly re-branded Baker McKenzie, Latham & Watkins and DLA Piper.

The survey, which had 765 in-house respondents at the senior level, tracks six metrics, such as consideration for top-level deals and litigation, aimed at ranking the firms viewed most favorably and hired most often by large company legal services purchasers.

Here are the Top 10 (the full Top 20 are here):

Jones Day 2

Continue reading

February 15, 2017 in Legal Education, Tax | Permalink | Comments (1)

Morse & Osofsky:  Regulating By Example

Susan C. Morse (Texas) & Leigh Osofsky (Miami), Regulating by Example,  35 Yale J. on Reg. ___ (2017):

Agency regulations are full of examples. Regulated parties and their advisors parse the examples to develop an understanding of the applicable law and to determine how to conduct their affairs. However, neither the legal nor theoretical literature contains any study of regulatory examples or explains how they might be interpreted. This Article fills this gap.

Continue reading

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

Tuesday, February 14, 2017

Toder Presents Taxing Entrepreneurial Income Today At Georgetown

Toder (2017)Eric Toder (Tax Policy Center) presents Taxing Entrepreneurial Income at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks and Itai Grinberg:

This paper applies the Schumpeterian view of entrepreneurship to estimate the tax rate on entrepreneurial income under alternative assumptions about the pattern of returns from innovations, the tax rules applied to different types of income (wages, interest, capital gains, dividends, corporate profits), and the effects of taxes on the market value of successful enterprises. We model the tax rate on entrepreneurial income as the tax burden on an individual who establishes a new firm and then sells her interest in the business once it becomes an established enterprise. The paper finds the effective tax rate on entrepreneurial income depends on both the tax rate imposed on the entrepreneur’s income during the firm’s growth phase and on the effects of the tax system on the price at which the entrepreneur can cash in her investment when the firm reaches maturity.

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

Siri For Tax Lawyers, Accountants, And Students

AiliraAustralian Business Review, Tax Agents’ Future Questioned as AI Finds Answers in Seconds:

It’s Siri for lawyers and accountants. Ask “Ailira” a question about Australian tax law and she will scan through millions of uploaded documents and use her artificial intelligence nous to deliver an answer.

Ailira, or “Artificially Intelligent Legal Information Resource Assistant” is so clever at tax that her creator believes she could help prompt the end of human tax agents. And within two months, she will answer questions in other areas of Australian law.

Ailira is the brainchild of Adelaide-based tax lawyer Adrian Cartland. The story goes that with no professional tax background, his girlfriend Sarah, a speech pathology student, scored 73 per cent on a first-year university tax exam with just 30 minutes’ training and Ailira at her side.

“Your tax agents will probably be gone within five years,” said a confident Mr Cartland, who added that their demise was ­already happening with the Australian Taxation Office pushing to automate tax returns, technology issues not withstanding.

Continue reading

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

Call For Business Tax Papers:  Oxford University Symposium

OxfordThe Oxford University Centre for Business Taxation has issued a call for papers for its annual symposium:

The 11th Annual Academic Symposium will take place between 26 and 28 June 2017.  A call for papers will be issued in due course. The symposium will be held at Saïd Business School, Park End Street, Oxford.

The call for papers is now live. If you wish to make a submission the deadline is Monday 27 February 2017. Papers will be selected, and invitations extended, by Monday 27 March 2017.

Continue reading

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

Blank, Osofsky & Zelenak On Tax Simplexity

Joshua D. Blank (NYU) & Leigh Osofsky (Miami), Simplexity: Plain Language and the Tax Law, 66 Emory L.J. 189 (2017):

In recent years, federal government agencies have increasingly attempted to use plain language in written communications with the public. The Plain Writing Act of 2010, for instance, requires agencies to incorporate “clear and simple” explanations of rules and regulations into their official publications. In the tax context, as part of its “customer service” mission, the Internal Revenue Service bears a “duty to explain” the tax law to hundreds of millions of taxpayers who file tax returns each year. Proponents of the plain language movement have heralded this form of communication as leading to simplicity in tax compliance, more equitable access to federal programs, and increased open government.

This Article casts plain language efforts in a different light. As we argue, rather than achieving simplicity, which would involve reform of the underlying law, the use of plain language to describe complex legal rules and regulations often yields “simplexity.”

Continue reading

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

NY Times:  Haunted By Student Debt Past Age 50

New York Times editorial, Haunted by Student Debt Past Age 50:

The experience of being crushed by student debt is no longer limited to the young. New federal data shows millions of Americans who are retired or nearing retirement face this burden, as well as the possibility of having their Social Security benefits garnished to make payments.

Americans age 60 and older are the fastest-growing age group of student loan debtors. Older debtors, many of whom live hand-to-mouth on fixed incomes, are more likely to default. When that occurs with federal loans, as happens with nearly 40 percent of such borrowers who are 65 and over, the government can seize a portion of their Social Security payments — even if it pushes them into poverty. About 20,000 Americans over the age of 50 in 2015 had their Social Security checks cut below the poverty line because of student loans, with poverty-level benefits falling even further for 50,000 others, according to a recent report by the Government Accountability Office.

A report issued last month by the Consumer Financial Protection Bureau shows that the number of Americans aged 60 and older with student loan debt has grown fourfold over the last decade, to 2.8 million in 2015 from about 700,000 in 2005 [Snapshot of Older Consumers and Student Loan Debt]. ...

Continue reading

February 14, 2017 in Legal Education, Tax | Permalink | Comments (13)

The IRS Scandal, Day 1377:  Republicans Still Want IRS Chief's Head

IRS Logo 2Washington Examiner, Republicans Still Want IRS Chief's Head:

Ways and Means Committee Chairman Kevin Brady, R-Texas, became the latest GOP lawmaker to call for IRS Commissioner John Koskinen's head.

"Frankly, in my view, he's the most corrupt IRS commissioner that I've ever dealt with," Brady said on Monday. He "continues … to mislead Congress, and until he's removed, I don't think the IRS will ever regain its credibility.

Continue reading

February 14, 2017 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Monday, February 13, 2017

Christians Presents Human Rights At The Borders Of Tax Sovereignty Today At NYU

Christians (2017)Allison Christians (McGill) presents Human Rights at the Borders of Tax Sovereignty at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Rosanne Altshuler:

Tax scholarship typically presumes the state' s power to tax and therefore rarely concerns itself with analyzing which relationships between a government and a potential taxpayer normatively justify taxation, and which do not. This paper presents the case for undertaking such an analysis as a matter of the state' s obligation to observe and protect fundamental human rights.

It begins by examining existing frameworks for understanding how a taxpayer population is and ought to be defined. It then analyzes potential harms created by an improperly expansive taxpayer category, and those created by excluding from consideration those beyond the polity even if directly impacted by the tax regime. It concludes that a modified membership principle is a more acceptable framework for normative analysis of the jurisdiction to tax, even while acknowledging the overwhelming weight of existing perceptions about the bounds of the polity and the state-citizen relationship as significant barriers to acceptance.

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

Polsky Presents Elite Tax Professionals Behaving Badly Today At UC-Irvine

Polsky (2015)Gregg Polsky (Georgia) presents Elite Tax Professionals Behaving Badly: The Sad and Sordid Management Fee Waiver Saga at UC-Irvine today as part of its Tax Law and Policy Colloquium Series hosted by Omri Marian:

For at least the past 15 years, many private equity fund managers have used a technique—known as a management fee waiver—to try to claim what is effectively their weekly paycheck as a capital gain. Recently, the Treasury and IRS explained that, at least in the government’s view, the vast majority of fee waivers do not actually provide the claimed tax result. Recent reports of significant audit activity relating to fee waivers suggest that the fee waiver saga may finally be coming to an end, but not before billions of tax revenues that are beyond the statute of limitations have been lost forever.

Continue reading

February 13, 2017 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Marriage Penalty Relief After Obergefell

Mitchell Engler (Cardozo) & Edward Stein (Cardozo), Not Too Separate or Unequal: Marriage Penalty Relief after Obergefell, 91 Wash. L. Rev. ___ (2016):

Joint tax returns have generated controversy for many years. Married couples with the same joint income pay the same tax under our current system regardless of the earnings distribution between the spouses. This approach primarily rests on the idea that married couples share resources and operate as a single economic unit. Critics typically challenge this assumption and lament how marriage might significantly change a couple’s taxes. Depending on their earnings breakdown, a couple’s taxes could be reduced (a marital bonus for uneven earners) or increased (a marital penalty for even earners). These possibilities exist because the joint brackets are typically larger – but not twice as large – as the unmarried brackets.

Continue reading

February 13, 2017 in Scholarship, Tax | Permalink | Comments (1)

Call For Tax Papers:  First Mid-Atlantic Junior Faculty Forum

Richmond (2017)Mid-Atlantic Junior Faculty Forum: Call for Papers:

The University of Richmond School of Law invites submissions for the inaugural Mid-Atlantic Junior Faculty Forum. This workshop will be held on Wednesday, May 10 and Thursday, May 11, 2017 in Richmond, Virginia.

Continue reading

February 13, 2017 in Conferences, Legal Education, Scholarship, Tax | Permalink | Comments (0)

Mini-Symposium:  The Future Of Tax Administration And Enforcement

Christopher J. Walker (Ohio State), Surly Subgroup Mini-Symposium on The Future of Tax Administration and Enforcement, Yale J. on Reg.: Notice & Comment (Feb. 11, 2017):

Continue reading

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

TaxJazz: The Tax Literacy Project

Tax JazzMarjorie Kornhasuer (Tulane), TaxJazz: The Tax Literacy Project:

TaxJazz provides individuals with non-partisan, non-technical, accessible tax information to help people participate in discussions about tax policy and problems facing the nation. TaxJazz already addresses basic tax questions, such as: Why do we have taxes? Are there any legal constraints on taxation? What can be taxed? How do we decide what is a fair tax? It plans to add material on particular tax issues and provisions.

Continue reading

February 13, 2017 in Tax | Permalink | Comments (0)

ACTEC Law Journal Exclusive Review

ACTECThe American College of Trust and Estate Counsel Law Journal will be conducting exclusive reviews over the next few weeks. Any contribution submitted to the ACTEC Law Journal between February 13, 2017 and February 28, 2017 will be evaluated for publication purposes within four (4) business days of submission.  By submitting an article or essay, the author agrees to immediately accept a publication offer with the ACTEC Law Journal should one be extended. 

Continue reading

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

TaxProf Blog Weekend Roundup

Sunday, February 12, 2017

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 #5:

  1. [2,001 Downloads]  Problems with Destination-Based Corporate Taxes and the Ryan Blueprint, by Reuven Avi-Yonah (Michigan; moving to UC-Irvine) & Kimberly Clausing (Reed College)
  2. [619 Downloads]  A Guide to the GOP Tax Plan — The Way to a Better Way, by David Weisbach (Chicago)
  3. [292 Downloads]  Accounting for Behavioral Considerations in Business Tax Reform: The Case of Expensing , by Lily Batchelder (NYU)
  4. [279 Downloads]  Destination-Based Cash-Flow Taxation: A Critical Appraisal, by Wei Cui (British Columbia)
  5. [235 Downloads]  How Donald Trump can Keep His Campaign Promises, Grow the Economy, Cut Tax Rates, Repatriate Offshore Earnings, Reduce Income Inequality, Keep Jobs in the United States, and Reduce the Deficit, by David S. Miller (Proskauer, New York)

February 12, 2017 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

Saturday, February 11, 2017

This Week's Ten Most Popular TaxProf Blog Posts

Rochester B-School Prof Sentenced To Prison For Hiding Assets In Swiss Accounts, Evading Taxes

FBARFollowing up on my previous post, University Of Rochester B-School Professor Pays $100 Million FBAR Penalty Over Swiss Accounts:  U.S. Department of Justice Press Release, Former University Business Professor Sentenced to Prison for Hiding Over $220 Million in Offshore Banks; Evaded More Than $18 Million in Federal and State Taxes Over 15 Years:

A now retired business school professor, who amassed a $220 million fortune in secret foreign accounts, was sentenced to seven months in prison today for conspiring to defraud the United States and to submit a false expatriation statement to the Internal Revenue Service (IRS), announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia. He also has been assessed and paid a $100 million civil penalty for his concealment of these accounts.

“For 15 years, Dan Horsky stashed assets and hid income offshore in secret bank accounts,” said Acting Deputy Assistant Attorney General Goldberg. “That scheme came to an abrupt end when IRS special agents came knocking on his door. The days of hiding behind shell corporations and foreign bank secrecy laws are over. Now is the time for accountholders to come in, accept responsibility, and help ensure that the lawyers, financial advisers and other professionals who actively facilitated offshore evasion also are held accountable.”

Continue reading

February 11, 2017 in Tax | Permalink | Comments (1)

College Endowment Returns Sink To Their Lowest Level Since The Financial Crisis

Washington Post, College Endowment Returns Sink to Their Lowest Level Since the Financial Crisis:

University endowments posted the lowest investment returns since the 2008 financial crisis, yet schools upped their spending in fiscal 2016, according to a survey released Tuesday by CommonFund and the National Association of College and University Business Officers.

Endowments have been on shaky ground coming out of the recession. Average annual returns have volleyed since plummeting 18.7 percent in 2009. In the 12 months ending June 30, endowments at 805 colleges and universities recorded a negative 1.9 percent return, compared to 2.4 percent growth the prior fiscal year, according to the survey.

Continue reading

February 11, 2017 in Tax | Permalink | Comments (5)

Syracuse Law Dean, Raised By Adoptive White Parents, Had To Learn To Be Black; He Foresaw Legal Ed Crisis 'Long Before Other Deans Knew What Hit Them'

BoiseFollowing up on my previous post, Syracuse Dean (And Tax Prof) Craig Boise: 'The Only Harley-Riding, Piano-Playing, Calf-Roping Law Dean In The Country':

Syracuse Post-Standard, SU Law School Dean Craig Boise: Ex-Cop, Classical Pianist Who Had to Learn to be Black:

Craig Boise was a rookie Kansas City police officer in 1986, working in the predominantly black inner city.

He learned how to be black. He had to talk differently. The food and music were new. He was introduced to a new way of shaking hands — grabbing the thumbs, hands at an angle, then kind of snapping each other's fingers as you pull away. He started peppering his conversations with "brother" and "sister."

The fact that Boise actually was black didn't help. Up till then, he didn't know it. At birth, he was adopted by white parents who thought he was Native American. ...

Continue reading

February 11, 2017 in Legal Education, Tax, Tax Profs | Permalink | Comments (2)

Friday, February 10, 2017

Weekly Tax Highlight And Roundup

This week, Joe Kristan (CPA & Shareholder, Roth & Company (Des Moines, Iowa); Editor, Tax Update Blog) discusses how the EITC can be used to purchase drugs:

KristanEarned income credit helps poor man pay for his pharmaceuticals.

IRS 1, Grandma 0. A poor unemployed father was having difficulty financing his medication. But as a President once said, “when somebody hurts, Government has got to move.” Through the magic of the earned income tax credit, this poor man filed his tax return, moving the IRS to send a check that was used to pay for his medication.was

Unfortunately, the medication was recreational. 

The man was unemployed and living at his mother’s with his wife and kids. Grandma was working as a nurse’s aide to support the whole bunch. Judge Holmes takes up the story (as I normally do, I abbreviate the taxpayer’s name, here as “S.”):

Continue reading

February 10, 2017 in Tax, Weekly Tax Roundup | Permalink | Comments (0)

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new article by Chris Sanchirico (Penn), Business Investment in the Tax Reform Blueprint

Glogower (2016)Since its release last June, the business tax provisions of the GOP House’s tax reform plan (“the reform plan”) have garnered intense interest, and improbably trending hashtags.  Much of the focus has centered on the border adjustment, which taxes imports but exempts exports, and its implications for the dollar and trade agreements.  (For example, Problems with Destination-Based Corporate Taxes and the Ryan Blueprint, by Reuven Avi-Yonah (Michigan/UC-Irvine) and Kimberly Clausing (Reed)).  Sanchirico’s new work, in contrast, examines two other related provisions in the reform plan: immediate expensing for business investments, and disallowance of a deduction for a business’ net interest expenses.

The conventional wisdom, as reflected in the reform plan, is that businesses would prefer the reform package of expensing plus interest non-deductibility to current law, which generally allows accelerated depreciation and interest deductions. Sanchirico’s work challenges this assumption, as well as the related arguments that the reform package will incentivize investment and encourage more efficient investment and financing decisions. 

Continue reading

February 10, 2017 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Tax Policy In The Trump Administration

Brunson & Herzig:  Treasury Department Should Create Blacklist Of What Constitutes Prohibited Discrimination By Religious Organizations

Samuel D. Brunson (Loyola-Chicago) & David Herzig (Valparaiso), A Diachronic Approach to Bob Jones: Religious Tax Exemptions after Obergefell, 92 Ind. L.J. ___ (2016):

In Bob Jones v. U.S., the Supreme Court held that an entity may lose its tax exemption if it violates a fundamental public policy, even where religious beliefs demand that violation. In that case, the Court held that racial discrimination violated fundamental public policy. Could the determination to exclude same-sex individuals from marriage or attending a college also be considered a violation of fundamental public policy? There is uncertainty in the answer. In the recent Obergefell v. Hodges case that legalized same-sex marriage, the Court asserted that LGBT individuals are entitled to “equal dignity in the eyes of the law.” Constitutional law scholars, such as Lawrence Tribe, are advocating that faith groups might lose their status, citing that this decision is the dawning of a new era of constitutional doctrine in which fundamental public policy will have a more broad application.

Continue reading

February 10, 2017 in IRS News, Scholarship, Tax | Permalink | Comments (3)

Winners Of The 16th Annual Law Student Tax Challenge

LST 2ABA Tax Section, Winners in J.D. and LL.M. Divisions of Law Student Tax Challenge Chosen:

J.D. Division
1st Place:  Tyler Johnson & Anna Peckjian (Northwestern)
2nd Place:  Joshua Jacobson & George Gray (Florida)
3rd Place:  Nicholas Bjornson & Brian Lynn (Kansas)
Best Written Submission:  Joshua Jacobson & George Gray (Florida)

LL.M. Division

Continue reading

February 10, 2017 in ABA Tax Section, Tax | Permalink | Comments (1)

Yin:  Congress Already Has The Power To Obtain And Release Trump’s Tax Returns

Trump Tax ReturnsWashington Post op-ed: Congress Has the Power to Obtain and Release Trump’s Tax Returns, by George K. Yin (Virginia):

Though our new president may not realize it, Congress has the power to obtain his tax returns and reveal them to the public without his consent, including returns under audit. As just urged by Rep. Bill Pascrell Jr. (D-N.J.), legislators seeking information on President Trump’s possible conflicts of interest should immediately exercise this authority rather than wait for the passage of new veto-proof legislation — a highly uncertain prospect — that would have the same effect.

The ability of Congress to disclose confidential tax information was added to the law almost 100 years ago. Since the Civil War, when it began requiring taxpayers to submit private information to the government to comply with the tax laws, Congress has struggled to balance the privacy interests of taxpayers with the public’s right to know. Eventually, Congress decided that tax information should remain confidential except in two situations. First, it authorized the president to determine whether any tax information could be disclosed. And, in 1924, it gave the same power to certain congressional committees [George K. Yin, Protecting Taxpayers From Congressional Lawbreaking].

Continue reading

February 10, 2017 in Tax | Permalink | Comments (7)

Thursday, February 9, 2017

Walker Presents The Practice And Tax Consequences Of Nonqualified Deferred Compensation Today At Duke

Walker (2016)David Walker (Boston University) presents The Practice and Tax Consequences of Nonqualified Deferred Compensation at Duke today as part of its Tax Policy Workshop Series hosted by Lawrence Zelenak:

Although nonqualified deferred compensation plans lack explicit tax preferences afforded qualified plans, it is well understood that nonqualified deferred compensation results in a joint tax advantage when employers earn a higher after-tax return on deferred sums than employees could achieve on their own. Several commentators have proposed tax reform aimed at leveling the playing field between cash and nonqualified deferred compensation, but reform is not easily achieved. This Article examines the stakes.

Continue reading

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

Florida Names Mindy Herzfeld Professor Of Tax Practice And International Tax Program Director

FMDean Laura Rosenbury has announced that Mindy Herzfeld (right) will join the faculty of the University of Florida Levin College of Law as a Professor of Tax Practice and Director of the LL.M. in International Tax Program:

Since 2014, Professor Herzfeld has been a Contributing Editor for Tax Analysts, authoring weekly columns on international tax policy developments and cross-border transactions in Tax Notes International. Prior to that, Professor Herzfeld worked as an international tax advisor for Deloitte Tax LLP, based in its Washington D.C. and New York offices. She began her career at Weil Gotshal & Manges in New York City and has also worked as tax counsel at Ford Motor Company. Professor Herzfeld received her J.D. from Yale Law School and her LL.M. in Taxation from Georgetown University Law Center. She has published over 100 articles in Tax Notes International and Tax Notes, many of which have been cited in law review articles by the leading international tax scholars, in Congressional Research Service Reports and in Treasury Department studies.

Continue reading

February 9, 2017 in Legal Education, Tax | Permalink | Comments (0)

Number Of Americans Renouncing Their U.S. Citizenship Hit All-Time High In 2016 (Up 26% From 2015)

International Tax Blog, 2016 Fourth Quarter Published Expatriates — New Annual Record:

Today the Treasury Department published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) during the fourth quarter of 2016. The number of published expatriates for the quarter was 2,365, bringing the total number of published expatriates in 2016 to 5,411.  The total for the year breaks last year’s record number of 4,279 published expatriates.  The number of expatriates for 2016 is a 26% increase over 2015 and a 58% increase over 2014 (2,999).

Expats

Continue reading

February 9, 2017 in Tax | Permalink | Comments (6)