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Sunday, March 22, 2015

The IRS Scandal, Day 682

IRS Logo 2Forbes, Al Sharpton, Hillary Clinton, Lois Lerner Share Recordkeeping Tips, by Robert W. Wood:

We may never get the full story of Hillary Clinton’s emails, or Lois Lerner’s for that matter. Both were savvy enough to be selective. One can add Al Sharpton to the clever trio, although his contribution to the game may be more old-fashioned: fires that destroy tax records. In his own low tech way, Rev. Sharpton has managed to keep tax problems under raps that would be catastrophic for mere mortals. 

As Americans look for receipts and pour over their records, some may be  struck by the odd serendipity. Maybe we all will learn that no one in government knows how to use email except Hillary Clinton. Even before we knew that Mrs. Clinton never used the State Department email system, President Obama was adamant that there was no smidgen of corruption at the IRS. Employees were confused. Cincinnati went rogue. Etc.

Yet in recent hearings of the Committee on Oversight & Government Reform, the Treasury Inspector General testified that he is investigating possible criminal activity at the IRS. All this as Mrs. Clinton’s remarkable e-mail drama is acted out–and acted is right. Meanwhile, Rep. Kenny Marchant (R-Tex.) introduced a bill to bar IRS employees from using non-official e-mail for government business. Lois Lerner allegedly also used her personal account to discuss IRS matters.

Oh, texts too (listen up Mrs. Clinton). In 2013, when the IRS targeting scandal was already brewing, Ms. Lerner asked an IT specialist if the IRS saved texts? No, not automatically, he said, but the IT person also said saving them was possible, so be careful. “Perfect,” was Ms. Lerner’s response. IRS Commissioner John Koskinen testified that he was unaware of the instant-messaging system. Of course, he also testified at how hard the IRS looked for Lerner’s emails.

Remember all those many millions of dollars of taxpayer money the IRS spent looking? Yet House Members were recently told by the Inspector General that the IT staff of the IRS said they were never even asked for backup tapes to find Lerner’s emails. Deputy Inspector General Tim Camus said finding the emails was easy. “They were right where you would expect them to be,” he told the Oversight Committee on Feb. 27.

A probe for potential criminal activity related to covering-up Lerner’s emails? The fact that the C word is being used by the Inspector General is remarkable. That isn’t proof, of course, but it is astounding, even if that is as far as it goes. Records reveal that Ms. Lerner received $129,000 in bonuses, averaging $43,000 a year on top of her salary during the time she was presiding over alleged discrimination against conservative nonprofits.

Even before Ms. Lerner became the face of the IRS targeting scandal, there were allegations she had prior history of targeting conservatives. She would become what George Will called the scowling face of the state. She repeatedly refused to testify, yet collects a nice federal pension. Proof is so terribly important.

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March 22, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, March 21, 2015

How Congress Created the TurboTax Disaster

Turbo Tax (2015)Vox, How Congress Created the TurboTax Disaster:

For many taxpayers, the annual refund check from the IRS is one of the year's biggest paydays. But thousands of taxpayers will get a nasty shock this year when the IRS tells them their refund has already been collected by someone else. In the best-case scenario, it will take these unlucky taxpayers months to convince the IRS to send them the refund they're entitled to.

This is not a new problem — I wrote about it last year, in fact. In the 2013 filing season, according to the Government Accountability Office, the IRS blocked $24.2 billion in fraudulent refund requests, while the agency paid out at least $5.8 billion (and possibly a lot more) in refunds that later proved fraudulent.

This year the refund-theft discussion has focused specifically on TurboTax, the nation's most popular tax-prep software. Two former employees of Intuit, the company behind the program, have charged that their bosses turned a blind eye to rampant use of TurboTax for refund theft.

Intuit denies it's done anything wrong. The company says stolen tax refunds are an industry-wide problem, and that Intuit has done more than any of its rivals to help the IRS combat the problem.

Here are the two big things you need to know about the story:

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March 21, 2015 in Tax | Permalink | Comments (0)

Weekly SSRN Tax Roundup

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March 21, 2015 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

The IRS Scandal, Day 681

IRS Logo 2American Center for Law and Justice, IRS Bureaucracy Continues to Target Conservatives’ Constitutional Freedoms:

The new IRS commissioner brought in to clean up the corrupt bureaucracy responsible for targeting grassroots conservative groups and infringing upon ordinary Americans’ constitutional freedoms admits that the targeting has not stopped.

Commissioner John Koskinen, testifying before the House Appropriations subcommittee this week, admitted that nearly a dozen grassroots conservative groups seeking tax-exempt status are still awaiting determination.

One thing is clear – the unelected and corrupt IRS bureaucracy continues to infringe upon our basic freedoms.

Commissioner Koskinen claimed that he has offered a path to tax-exempt status if these groups would agree to limit their overtly political activity. But the standard offered in this so-called compromise is arbitrary and continues to infringe upon fundamental freedoms. The offer asked our clients and other groups to agree to spend no more than 40% of their resources on political activity.

The Washington Times reported with more:

Mr. Koskinen's agency offered groups still awaiting approval a deal that they could get immediate approval if they promised to limit political activity to 40 percent of their budgets. Conservative lawyers, however, argue that the law and regulations suggest groups should be able to spend 49.9 percent of their money on political activity, and so agreeing to the 40-percent level would be ceding some of their rights to the government.

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March 21, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, March 20, 2015

Tulane Hosts 5th Annual Tax Roundtable Today in New Orleans

Tulane (2015)Tulane hosts its 5th Annual Tax Roundtable today:

The Tulane Tax Roundtable brings together tax scholars from around the country, resident Tulane Faculty, and Tulane students for discussion and debate about important tax policy issues of our time. The roundtable showcases the drafts and works-in-progress of its participants and subjects these works to rigorous analysis in a discussant-driven workshop format.

James Alm (Tulane), Using Public Information to Estimate Self-Employment Earnings of Informal Suppliers (with Brian Erard (B. Erard & Associates))
DiscussantSusan C. Morse (Texas)

Steven A. Dean (Brooklyn), SE(c)(3): A Catalyst for Social Enterprise Crowdfunding (with Dana Brakman Reiser (Brooklyn))
Discussant:  Kirk J. Stark (UCLA)

Andrew T. Hayashi (Virginia), Taxing Committed Consumption and the Simple Economics of Paying in Kind
Discussant:  Mirit Eyal-Cohen (Alabama)

Alex Raskolnikov (Columbia), Rational Decisions Under Legal Uncertainty
Discussant:  James Alm (Tulane)

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

Weekly Tax Roundup

Minnesota Symposium: Reforming the IRS

Minnesota LogoMinnesota hosts a Tax Policy Symposium next Friday, March 27,  on Reforming the IRS:

Congress asks the IRS to handle a variety of government functions—not just collecting taxes, but also implementing the Affordable Care Act, monitoring the activities of tax-exempt organizations, and administering refundable tax credits designed to accomplish various social welfare goals, among other myriad tasks. Even beyond the controversy over its scrutiny of conservative political organizations, the IRS faces criticism for its handling of many of its congressionally-assigned functions, from its declining ability to handle routine taxpayer phone calls to its efforts to address fraud in the Earned Income Tax Credit program. Meanwhile, Congress has reduced the IRS’s budget, making it difficult for the IRS to accomplish all of its myriad tasks successfully. But even if Congress gave the IRS better funding, could the IRS accomplish all that Congress asks of it effectively? Or has the IRS reached a point institutionally at which it simply cannot do its many jobs well, irrespective of the funding that Congress provides? If it cannot, then what might IRS reform look like? [The symposium papers will be published in the Spring 2016 issue of the Columbia Journal of Tax Law.]

Keynote Address:   Nina Olson (National Taxpayer Advocate), The IRS and Taxpayer Trust: Recent Research on Promoting Compliance

Panel #1:

  • Steve Johnson (Florida State), Law From the Sublime to the Ridiculous and Most Things in Between: Options for Tax Administration in an Era of Growing Responsibilities for Shrinking Budgets
  • Leandra Lederman (Indiana), Does the IRS Need Further Reform? 
  • Commenters:  Andy Grewal (Iowa), Joe Thorndike (Tax Analysts)
  • Moderator:  Morgan Holcomb (Hamline)

Panel #2:

  • Lloyd Mayer (Notre Dame), The Better Part of Valour is Discretion: Should the IRS Surrender Its Oversight of Tax-Exempt Organizations?
  • Amy Monahan (Minnesota), The IRS as Health Care Agency
  • Commenters:  Paul Caron (Pepperdine), Chris Walker (Ohio State)
  • Moderator:  Claire Hill (Minnesota)

Panel #3:

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

The IRS Scandal, Day 680

IRS Logo 2The Blaze, The IRS Is Quietly Trying to Undo Limits on Political Targeting, Spending on Conferences:

House Republicans on Wednesday accused the Obama administration of pushing to eliminate some of the key reforms Congress has imposed on the IRS, including prohibitions on lavish conferences and a ban on applying extra scrutiny to groups based on their political beliefs.

The proposed IRS budget for 2016 put forward by the Obama administration lays out the government’s vision of how the IRS would operate in the next fiscal year, but it doesn’t include those reforms and others Congress has passed.

That prompted House Republicans to ask why those reforms weren’t picked up by the IRS budget for the coming year. They didn’t get an answer, but stressed that Congress still sees these reforms as important.

“Since the IRS targeting and spending scandals, appropriations bills have included prohibitions against targeting U.S. citizens for exercising their First Amendment rights, targeting groups for regulatory scrutiny based on their ideological beliefs, and making videos without advance approval,” said House Appropriations Committee Chairman Hal Rogers (R-Ky.). ...

The targeting scandal continues to plague the IRS, and has forced the Republican Congress to enact language each year aimed at stopping the IRS from scrutinizing groups depending on their political beliefs. But the IRS has also been wrapped up in the conference scandal, after shelling out more than $800,000 for a lavish event in Nevada. ...

Rep. Ander Crenshaw (R-Fla.), who chairs the subcommittee on financial services, said the proposed elimination of reforms meant to stop these activities adds “insult to injury,” especially since Congress was forced to impose them after several scandals hit the agency. “A provision… that says you cannot target, well, that’s not in the request,” Crenshaw said. 

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March 20, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, March 19, 2015

Schizer Presents Taxes, Subsidies, and Energy Innovation Today at Northwestern

SchizerDavid M. Schizer (Columbia) presents Taxes, Subsidies, and Energy Innovation at Northwestern today as part of its Tax Colloquium Series hosted by Lawrence Zelenak:

Part I outlines the environmental, national security, and economic goals of our energy subsidies. Part II considers how conflicts among these goals, as well as empirical uncertainty, undermine efforts to pursue them effectively. Part III demonstrates why poorly crafted subsidies increase overall demand for energy, and also require the government to pick winners. This Part also shows that the real problem is not so much using subsidies instead of taxes, but using “proxy” policies in lieu of “results-based” policies. Part IV focuses on “demand reduction” subsidies, analyzing challenges in funding energy efficiency and alternative energy. Part V considers “supply enhancement” strategies, exploring problems with subsidizing oil production. Part VI considers how the traditional tax policy issues of distribution, excess burden, and revenue apply to energy subsidies. Part VII is the conclusion.

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

Singhal Presents Firm Misreporting and Limits to Tax Enforcement Today at UCLA

Singhal (2015)Monica Singhal (Harvard) presents Dodging the Taxman: Firm Misreporting and Limits to Tax Enforcement (with Paul Carrillo (George Washington) & Dina Pomeranz (Harvard)) at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh and Alexander Wu:

Reducing tax evasion is a key priority for many governments, particularly in developing countries. A growing literature has argued that the use of third party information to verify taxpayer self-reports is critical for tax enforcement and the growth of state capacity. However, there may be limits to the effectiveness of third party information if taxpayers can substitute misreporting to less verifiable margins. We present a simple framework to demonstrate the conditions under which substitution will occur and provide strong empirical evidence for substitution behavior by exploiting a natural experiment in Ecuador. We find that when firms are notified by the tax authority about detected revenue discrepancies on previously filed corporate income tax returns, they increase reported revenues, matching the third party estimate when provided. Firms also increase reported costs by 96 cents for every dollar of revenue adjustment, resulting in minor increases in total tax collection.

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

Sieg Presents Increasing Property Tax Compliance at Penn

SiegHolger Sieg (Pennsylvania) presented An Experimental Evaluation of Strategies to Increase Property Tax Compliance: Free-riding in the City of Brotherly Love at Pennsylvania yesterday as part of its Tax Law and Policy Workshop Series hosted by Chris William Sanchirico and Reed Shuldiner:

This study evaluates a set of notification strategies intended to increase property tax collection. We develop a field experiment in collaboration with the Philadelphia Department of Revenue to test three of the most commonly suggested hypotheses of tax compliance: deterrence, moral appeal, and peer conformity. Our preliminary findings provide evidence that both moral appeal and peer conformity modestly improve tax compliance, while deterrence notifications are no different from standard notifications.

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

House, Senate GOP Tax Leaders Urge President Obama to Work With Congress on Tax Reform, Rather Than Take Unilateral Executive Action

Congress (2015)Following up on my previous post, President Obama Is 'Very Interested' in Raising Taxes Through 'Executive Action':  House Ways & Means Committee Chair Paul Ryan and Senate Finance Committee Chair Orrin Hatch yesterday sent this joint letter to Treasury Secretary Jack Lew "urging the Administration to tackle unfavorable provisions in the tax code by working with Congress on comprehensive tax reform instead of taking unilateral action":

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March 19, 2015 in Congressional News, Tax | Permalink | Comments (0)

Bankman, Nass & Slemrod: Using the 'Smart Return' to Reduce Tax Evasion

Joseph Bankman (Stanford), Clifford Nass (Stanford) & Joel Slemrod (Michigan), Using the 'Smart Return' to Reduce Tax Evasion:

Tax evasion costs government over 400 billion dollars a year. We suggest enforcement efforts can be strengthened by redesigning the tax return to take advantage of social psychology research, and industry experience with data-driven systems. To illustrate the potential of this approach, in this paper we propose three categories of changes that merit testing through pilot studies. The first involves changing the wording on existing returns to increase the psychological cost of evasion and increase the perceived expectation of detection. The second builds appeals to morality in the return itself through the use of a short phrase containing a "self-relevant" noun. The third uses on-line "conversational agents" to ask adaptive questions.

March 19, 2015 in Scholarship, Tax | Permalink | Comments (1)

March Madness Tax Bracket

Forbes:  Take The Tax Bracket Challenge: Which Is The Best Code Section Of Them All?, by Tony Nitti:

I say screw the NCAA bracket, and let’s fill out a ”Tax Bracket” instead. ... Below is a printable version of a 64-item bracket comprised entirely of authorities from the Code and Regulations that, if completed to completion, will ultimately reveal what is, in your mind, the greatest of all areas of the tax law. 

Blank Bracket

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March 19, 2015 in Tax | Permalink | Comments (0)

Chicago Symposium: Grassroots Innovation and Regulatory Adaptation

Chicago Logo 2Symposium, Grassroots Innovation and Regulatory Adaptation, 82 U. Chi. L. Rev. Dialogue 1-115 (2015):

March 19, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

NY Times: Crowdfunded Entrepreneurs, Tripped Up by the Taxman

Kickstarter LogoNew York Times, Crowdfunded Entrepreneurs, Tripped Up by the Taxman:

Jenny Wecker, a fledgling Salt Lake City entrepreneur, had a hit on her hands at the end of December: She collected $42,000 in pledges from the crowdfunding site Kickstarter for more than 300 orders of a stylish diaper bag she had designed. The project came together in a whirlwind after her husband persuaded her to test a broader market for the bags, which she had been making by hand and marketing on Instagram.

“We didn’t even think twice about how the taxes would affect us,” she said.

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March 19, 2015 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 679

IRS Logo 2Western Journalism, IG Reports: IRS Now Has All It Needs To Turn Over ‘Lost’ Lerner Emails:

Federal investigators now have the capability to turn over tens of thousands of once-lost Lois Lerner emails.

Last month, Deputy Treasury Inspector General Timothy Camus testified before the House Oversight Committee that it had discovered back-up tapes in a storage facility in West Virginia, which contain over 30,000 Lerner emails. He also stated that at the time, he could not turn over the emails to the committee due to a licensing issue with the company that provides the software needed to match the emails.

The Daily Caller reports that Utah Rep. Jason Chaffetz’s office confirmed Monday that the Treasury IG now has the needed software and will be able to provide all the Lerner emails discovered. Chaffetz serves as chair of the House Oversight Committee.

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March 19, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, March 18, 2015

Shanske Presents Local Democracy and Financial Knowledge Today at Toronto

Shanske (2015)Darien Shanske (UC-Davis) presents Local Democracy and Financial Knowledge: The Case for a Local Government Finance Commission at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

The financial crisis of 2008 demonstrated that local governments often do not currently have the expertise to use debt wisely, much less the expertise to reform their use of pensions or to design tax systems that can raise more money with less economic distortion. Yet local governments must do all of these things and more, as higher levels of government continue to devolve responsibilities.

This is not to say that there is not useful expertise that could help local governments, just that there is not generally an institution for aggregating this knowledge and making it available to local decisionmakers in a manner consistent with the norms and goals, both political and economic, of local democracy. There are examples of such mediating institutions, such as North Carolina’s Local Government Commission, but their role – and the reasons for their success – have not yet been adequately theorized.

In short, I will argue that a new state‐level institution can succeed in improving local government financing in a manner consistent with preserving local autonomy if its expertise is used in the first instance to design default rules that are both simple and (mostly) correct. Beyond the default rules there is a place for a more fact‐intensive engagement, but in most cases the default rules should provide a workable options or set of options with which a local government can achieve its goals.

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March 18, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Average Fee for a Professional to Prepare Your Tax Return: $273

Wall Street Journal, What Tax Preparers Are Really Charging for 2014 Returns:

How much will it cost to have a professional prepare your tax return this year?

The national average fee for 2014 returns will be $273, according to a survey by the National Society of Accountants.

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March 18, 2015 in Tax | Permalink | Comments (0)

Doing Your Taxes: Should You Use a CPA or Tax Lawyer?

Shake, Doing Your Taxes: Should You Use a CPA or Tax Lawyer?:

When it comes to getting help with your taxes, there are a variety of options you can turn to depending on your needs and budget. Two of the options are CPAs (Certified Public Accountants) and tax lawyers. When should you consult a tax lawyer versus a CPA? ...

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March 18, 2015 in Tax | Permalink | Comments (2)

House Holds Hearing Today on The Burden of the Estate Tax on Family Businesses and Farms

House LogoThe Subcommittee on Select Revenue Measures of the House Ways & Means Committee holds a hearing today on The Burden of the Estate Tax on Family Businesses and Farms (links to statements and testimony below):

In connection with the hearing, the Joint Committee on Taxation has released History, Present Law, And Analysis Of The Federal Wealth Transfer Tax System (JCX-52-15):

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March 18, 2015 in Congressional News, Tax | Permalink | Comments (1)

GAO: Improper Government Payments Increased 18% in 2014, to $125 Billion; EITC's 27% Error Rate Is Highest of Any Program

GAOGovernment Accountability Office, Government-Wide Estimates and Use of Death Data to Help Prevent Payments to Deceased Individuals (GAO-15-482T):

Government-wide, improper payment estimates totaled $124.7 billion in fiscal year 2014, a significant increase of approximately $19 billion from the prior year’s estimate of $105.8 billion. The estimated improper payments for fiscal year 2014 were attributable to 124 programs spread among 22 agencies.

The increase in the 2014 estimate is attributed primarily to increased error rates in three major programs: the Department of Health and Human Services’ (HHS) Medicare Fee-for-Service and Medicaid programs, and the Department of the Treasury’s Earned Income Tax Credit program. These three programs accounted for $80.9 billion in improper payment estimates, or approximately 65 percent of the government-wide total for fiscal year 2014. Further, the increases in improper payment estimates for these three programs were approximately $16 billion, or 85 percent of the increase in the government-wide improper payment estimate for fiscal year 2014.

The EITC's 27.2% error rate is far greater than any of the listed government programs.

EITC

March 18, 2015 in Gov't Reports, IRS News, Tax | Permalink | Comments (2)

The IRS Scandal, Day 678

IRS Logo 2Wall Street Journal Editorial Report, Post Clinton:

Paul Gigot: Well, just in time for 2016, the Justice Department has announced that it is gearing up to prosecute coordination between candidates and outside groups, a move that senior editorial page writer Collin Levy says should worry Republicans in particular and the super PACs that support them.

So, Collin, why is this important, this announcement, and why did they do it now?

Collin Levy: Well, I think you hit it right on the head. They did it now because the election is heating up. Look, Paul, this is scary because illegal coordination happens when a campaign is directly organizing its message with an outside group, which is then effectively spending money on the campaign’s behalf.

Gigot: And that’s illegal. That’s illegal.

Levy: Yes, that’s illegal. But what’s scary here is all the Justice Department really needs is the allegation that that is happening, and then they can go on a fishing expedition, subpoenaing documents, bank records, all sorts of things, immense numbers of records from campaigns in an effort to find the needle in the haystack.

Gigot: Well, the definition of coordination is pretty slippery. I mean, it’s not—I mean, so people may know each other in an outside group and know somebody on the campaign. They may have worked for them previously. What is illegal is calling them up on the phone and saying: “Hey, now we want you to run a $5 million buy in Iowa to influence this race.” But if it’s just sort of in the ether that, you know, we understand the message, we’ve been paying attention to the newspapers and there’s no active coordination, it’s not illegal. But you’re saying this can become a fishing expedition that can dig into everything inside a campaign and create havoc and with a mere accusation, is that fair?

Levy: Yeah, that’s certainly fair. We saw that happen in Wisconsin with the allies of Scott Walker, who, all of a sudden, had prosecutors literally subpoenaing thousands of pages of documents. The same thing could happen with the Justice Department. The fact that they used the words that they were going to “aggressively pursue” possible coordination offenses here I think with us meant as a scare tactic, too. It was meant to put these campaigns on alert. “Hey, you know, we’re watching you.”

Gigot: And there’s a link here, is there not—and this is really interesting—between the Justice Department figure who’s announced this, Richard Pilger, who runs the campaign crime section, and the IRS figure, Lois Lerner, who ran the tax-exempt section of IRS that had harassed conservative groups. Put that together for us.

Levy: Yeah, that’s right. Back in 2010, Mr. Pilger was emailing with Lois Lerner saying, hey, maybe we should look at the possibility of prosecuting some of these tax-exempt groups for any false statements they make on their applications here. So, you know, you get the real sense that he’s a true believer and I think that’s something we should be very wary of.

Gigot: So, Kim, how should Republican campaigns respond to this?

Kim Strassel: Well, look, you have to step back and put this in context. The IRS and the Justice Department thing, this is all part and parcel. More broadly, too, look at the disclosure laws that the Obama administration has wanted to impose on corporations. This is not necessarily about keeping campaign finance law in good order. This is about shutting people up. It’s about making them not talk. So Republicans—that’s going to be the threat to them. And they’re going to have to, I think, continue operating as they normally do. If the Justice Department comes sniffing, make an issue about this.

Most of the groups, by the way, too, Paul, they have teams of incredibly experienced lawyers who do know all the rules.

Gigot: Right.

Strassel: You know, and are keeping them in check. They have to be doubly careful about that, too.

Dan Henninger: Two words.

Gigot: To lawyer up.

Henninger: Two words. Exactly. This is the Democratic obsession, Citizens United, the Supreme Court case that allowed the Republicans to compete on the basis of money with the Democrats. The Democrats are going to take the Republicans down because of Citizens United. This is the method they’ll use.

Gigot: This could pop up at any time during the election campaign.

Henninger: Just intimidate them.

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March 18, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Tuesday, March 17, 2015

Dharmapala Presents Interest Deductions in a Multijurisdictional World Today at Georgetown

Dharmapala (2015)Dhammika Dharmapala (Chicago) presents Interest Deductions in a Multijurisdictional World (with Mihir A. Desai (Harvard)) at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John BrooksItai Grinberg, and David Schizer:

The tax treatment of interest expenses in a multijurisdictional setting raises numerous complexities. This paper catalogs these difficulties and highlights the particular problems associated with efforts to achieve ownership neutrality among multinational corporations (MNCs) when debt financing is available. We argue that the differential deductibility of debt entailed by various current tax law provisions leads in general to potential distortions in the patterns of asset ownership across MNCs, and that various proposed solutions have significant limitations. We suggest several alternative regimes to address both the ownership distortions that we highlight, as well as other well-established problems of income-shifting through debt. These alternative regimes are extensions to a multinational setting of two general approaches to the neutral treatment of interest expenses - the CBIT (comprehensive business income tax) and ACC (allowance for corporate capital). These regimes – a worldwide debt cap (WDC) and a net financing deduction (NFD) – provide solutions to income-shifting and ownership distortions. However, they have the potential disadvantage of restricting other policy parameters.

March 17, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Leff Presents A New Method for Funding Law School Education Today at William & Mary

LeffBenjamin M. Leff (American) presents The Income-Based Repayment Swap: A New Method for Funding Law School Education (with Heather Hughes (American)) at William & Mary today as part of its Faculty Workshop Series:

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

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March 17, 2015 in Colloquia, Legal Education, Scholarship, Tax | Permalink | Comments (3)

Music Soothes the Savage Tax Beast

Music 2John Prebble (Victoria University of Wellington, Faculty of Law), Music in Lectures and Examinations to Promote Right Brain Activity:

Since 1998, most of John Prebble’s classes in Laws 211 Contract and Laws 365 Elements of Taxation have been accompanied by background music from the Baroque era, approximately 1600 to 1750. The same music was played in 2012 and 2013 as background to classes in Taxn 301, Advanced Domestic Taxation, a course in the Victoria University Business School.

Broadly speaking, most music from the Baroque period is suitable to listen to while studying or in class. People are not entirely certain why this should be, but one plausible explanation is that Baroque music generally has a very regular tempo and, apart from fast movements, about one beat per second. That is said to be approximately the rate of alpha waves in the human brain. There are thought to be two possible benefits.

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March 17, 2015 in Legal Education, Tax | Permalink | Comments (3)

Senate Holds Hearing Today on Building a Competitive U.S. International Tax System

Senate LogoThe Senate Finance Committee holds a hearing today on Building a Competitive U.S. International Tax System (links to statements and testimony below):

  • Orrin Hatch (R-UT), Statement
  • Ron Wyden (D-OR), Statement
  • Rosanne Altshuler (Professor of Economics and Dean of Social and Behavioral Sciences, Rutgers University), Testimony
  • Pamela F. Olson (U.S. Deputy Tax Leader & Washington National Tax Services Leader, PricewaterhouseCoopers), Testimony
  • Stephen E. Shay (Professor of Practice, Harvard Law School), Testimony
  • Anthony H. Smith (Vice President of Tax & Treasurer, Thermo Fisher Scientific), Testimony

In connection with the hearing, the Joint Committee on Taxation has released Present Law And Selected Policy Issues In The U.S. Taxation Of Cross-Border Income (JCX-51-15):

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March 17, 2015 in Congressional News, Tax | Permalink | Comments (0)

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

Jordan M. Barry (San Diego) & Paul L. Caron (Pepperdine), Tax Regulation, Transportation Innovation, and the Sharing Economy, 82 U. Chi. L. Rev. Dialogue 69 (2015):

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

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

March 17, 2015 in Scholarship, Tax | Permalink | Comments (0)

Monroe: Rethinking Partnership Distributions

Andrea Monroe (Temple), Taxing Reality: Rethinking Partnership Distributions, 47 Loy. L.A. L. Rev. 657 (2014):

Partnerships play an increasingly vital role in the federal income tax. Yet partnership taxation is deeply flawed, with complicated provisions that strain the voluntary compliance mechanism on which all federal income tax relies. This article considers one of the most difficult challenges facing partnership taxation: the treatment of distributions.

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March 17, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 677

IRS Logo 2The Daily Caller, No More Excuses: Obama Admin Has What It Needs To Give Up Lerner’s Emails:

Obama administration investigators now have everything they need to provide Congress with Lois Lerner’s emails, The Daily Caller has learned.

Treasury Department deputy inspector general Timothy Camus last testified that his office found more than 30,000 of Lerner’s emails, including emails from 2011 that were on a backup tape at a storage facility in West Virginia that the IRS never went to.

But Camus said that the investigation was on hold because his office was haggling over licensing issues with a company that makes special software that Camus said he needs to “match” the emails on the new tapes with the emails that have already been turned over to the House Oversight Committee. Camus said he just needed to make sure that he wasn’t giving Congress emails that it already had.

The Daily Caller has confirmed that the Treasury inspector general’s office has received the special software and is in the process of using it to match the emails.

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March 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Monday, March 16, 2015

Piketty and Others on Capital in the Twenty-First Century

PikettyThomas Piketty (Paris School of Economics), About Capital in the Twenty-First Century, 105(5) Am. Econ. Rev. 1 (2015):

In this article, I present three key facts about inequality in the long run emerging from this research ... and seek to sharpen and refocus the discussion about those trends. In particular, I clarify the role played by r > g in my analysis of wealth inequality. I also discuss some of the implications for optimal taxation, and the relation between capital-income ratios and capital shares. 

I. What r > g Can and Cannot Explain
[T]he way in which I perceive the relationship between r > g and inequality is often not well captured in the discussion that has surrounded my book. For example, I do not view r > g as the only or even the primary tool for considering changes in income and wealth in the twentieth century, or for forecasting the path of inequality in the twenty-first century. Institutional changes and political shocks— which to a large extent can be viewed as endogenous to the inequality and development process itself—played a major role in the past, and it will probably be the same in the future. In addition, I certainly do not believe that r > g is a useful tool for the discussion of rising inequality of labor income: other mechanisms and policies are much more relevant here, e.g., supply and demand of skills and education.

Piketty 2Wall Street Journal op-ed, Piketty Corrects the Inequality Crowd, by Robert Rosenkranz:

The book’s central proposition, that inequality in capitalist societies will inevitably grow, can be summed up with a simple equation: r>g. That is, the return on capital (r) outpaces the growth rate of the economy (g) over time, leading inexorably to the dominance of inherited wealth. Progressives such as Princeton economist Paul Krugman seized on Mr. Piketty’s thesis to justify policies they have long wanted—namely, very high taxes on the wealthy.

Now in an extraordinary about-face, Mr. Piketty has backtracked, undermining the policy prescriptions many have based on his conclusions. In About Capital in the Twenty-First Century, slated for May publication in the American Economic Review but already available online, Mr. Piketty writes that far too much has been read into his thesis.

Though his formula helps explain extreme and persistent wealth inequality before World War I, Mr. Piketty maintains, it doesn’t say much about the past 100 years. “I do not view r>g as the only or even the primary tool for considering changes in income and wealth in the 20th century,” he writes, “or for forecasting the path of inequality in the 21st century.”  

Instead, Mr. Piketty argues in his new paper that political shocks, institutional changes and economic development played a major role in inequality in the past and will likely do so in the future.

When he narrows his focus to what he calls “labor income inequality”—the difference in compensation between front-line workers and CEOs—Mr. Piketty consigns his famous formula to irrelevance. “In addition, I certainly do not believe that r>g is a useful tool for the discussion of rising inequality of labor income: other mechanisms and policies are much more relevant here, e.g. supply and demand of skills and education.” He correctly distinguishes between income and wealth, and he takes a long historic perspective: “Wealth inequality is currently much less extreme than a century ago.”

Wall Street Journal, Why Thomas Piketty’s Revisions Don’t Fix His Book, by Salim Furth:

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March 16, 2015 in Tax | Permalink | Comments (0)

Final Day for Proposals: Association for Mid-Career Tax Law Professors

Today is the final day to respond to the Call for Proposals issued by the Association for Mid-Career Tax Law Professors (“AMT”):

Mid-CareerAMT is a recurring conference intended to bring together relatively recently-tenured professors of tax law for scholarly discussion. Our inaugural meeting will be held on Thursday and Friday, June 4 & 5, 2015, on the campus of The Ohio State University Moritz College of Law. We anticipate that official proceedings will wrap up by noon on June 5. Thanks to the generous support of Law, Finance and Governance @ Ohio State and The Ohio State University Moritz College of Law, AMT is able to provide attendees with conference meals and refreshments. AMT can commit to ensuring that these meals will not be “lavish or extravagant under the circumstances.” Attendees will be expected to cover their own travel and lodging expenses.

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March 16, 2015 in Conferences, Legal Education, Scholarship, Tax | Permalink | Comments (0)

Kahn: A Tax Audible: Coaches and Buyouts

Jeffrey H. Kahn (Florida State), A Tax Audible: Coaches and Buyouts, 68 Vand. L. Rev. En Banc ___ (2015):

CHarlie StrongAfter Mack Brown resigned, the University of Texas, a school that has one of the premier football programs in the country, looked to hire a new head football coach. The school set its eyes on Charlie Strong. One roadblock was that Strong was still employed as the head football coach of the University of Louisville. In order to be released, Strong’s contract required a buyout payment from Strong to the University of Louisville for $4.375 million. The typical method of handling this has the new university employer reimburse the coach for the buyout or directly pay the buyout to the old university employer. Under those structures, many schools took the position that such payments were includible in the coach’s income for federal tax purposes. The University of Texas, however, accomplished its desired result in a seemingly unique manner that attempted to avoid the income tax issue. In this article, I will explain that this new structure does not improve the prospects for excluding the payment from the coach’s taxable income. However, this does not mean the buyout payment is taxable to the coach. Instead, I will review two independent policy justifications for not taxing the coach regardless of which structure is used.

March 16, 2015 in Scholarship, Tax | Permalink | Comments (0)

Joint Tax Committee: General Explanation of Tax Legislation Enacted in the 113th Congress

Joint Tax CommitteeThe Joint Committee on Taxation has released General Explanation of Tax Legislation Enacted in the 113th Congress (JCS-1-15) (287 pages):

This document, prepared by the staff of the Joint Committee on Taxation in consultation with the staffs of the House Committee on Ways and Means and the Senate Committee on Finance, provides an explanation of tax legislation enacted in the 113th Congress. The explanation follows the chronological order of the tax legislation as signed into law. 

For each provision, the document includes a description of present law, explanation of the provision, and effective date. Present law describes the law in effect immediately prior to enactment and does not reflect changes to the law made by the provision or by subsequent legislation. Reasons for change are included based on Committee report language for provisions reported by a Committee. For provisions enacted in bills that went directly to the House and Senate floors without a Committee report, no reasons for change are included in this document. 

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March 16, 2015 in Congressional News, Tax | Permalink | Comments (0)

The IRS Scandal, Day 676

IRS Logo 2WND, Do U.S. Presidents Really Make 'Enemies Lists'?, by Joseph Farah:

Four years ago, I wrote a column called “Obama’s enemies list” predicting Barack Obama’s Internal Revenue Service would subject his domestic political adversaries to politically motivated audits.

How did I know it was coming?

For one thing, my personal tax return in 2009, Obama’s first year in office, was audited. Every single one of my documented deductions was disallowed. The IRS claimed my receipts for books I had purchased for my work as an author, publisher of books, producer of movies and news executive were not substantive enough. They were all Amazon-generated receipts that included dates, purchase price and the fact that they were books. The IRS insisted the receipts had to include the titles of the books purchased. I didn’t think the IRS had any business knowing what I was reading. I still don’t. Because I read a lot of books, it represented a lot of money – more than $8,000 in what the IRS claimed were overdue taxes, with penalties.

Before having my personal tax returns audited in 2009, I had never before faced one in 40 years of professional life. Since then, I have been audited every year Obama has been in office. That’s either a striking coincidence that defies astronomical odds or a striking indictment of IRS policies under Obama. Think about it: No personal audits for four decades, then five out of five years since Obama took office. I fully expect to be audited again for 2014, 2015 and 2016 – Obama’s last three years in office.

But I also expected it because of what I witnessed in the 1990s when Bill Clinton was president. During his first two years in office, Democrats had control of the House and Senate. But in the 1994 midterm election, Republicans took over the House in a stunning repudiation of Clinton’s attempt to nationalize health care. The White House was shocked and embarked on a campaign to identify its political enemies and neutralize them. I was high on the list of those targets and paid a big price for investigating corruption and uncovering scandals in the Clinton administration.

Long forgotten by the press, which writes first draft of history, is the fact that Clinton’s “enemies,” lots of them, were targeted for IRS audits: They included individuals, corporations and nonprofits.

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March 16, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

TaxProf Blog Weekend Roundup

Sunday, March 15, 2015

The Top 5 Tax Paper Downloads

SSRN LogoThere is quite a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with new papers debuting on the list at #3 and #4:

  1. [336 Downloads]  Why Corporate Tax Reform Can Happen, by Edward Kleinbard (USC)
  2. [223 Downloads]  David Foster Wallace on Tax Policy, How to Be an Adult, and Other Mysteries of the Universe, by Arthur J. Cockfield (Queen's University)
  3. [171 Downloads]  The U.S. Foreign Account Tax Compliance Act: American Legal Imperialism?, by Bruce W. Bean (Michigan State) & Abbey Wright Farnsworth
  4. [168 Downloads]  Cancellation of Debt and Related Transactions, by Douglas A. Kahn (Michigan) & Jeffrey H. Kahn (Florida State)
  5. [147 Downloads]  Inevitable: Sports Gambling, State Regulation, and the Pursuit of Revenue, by Anastasios Kaburakis (St. Louis), Ryan Rodenberg (Florida State) & John Holden (Florida State)

March 15, 2015 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 675

IRS Logo 2National Review, Not My Circus, Not My Monkeys:

[I]t is impossible for any person with a functioning central nervous system to believe that Hillary Clinton is telling the truth about her emails, inasmuch as her statements on the matter are in conflict with established facts and in conflict with each other. They simply are not compatible with reality. ...

It is impossible to believe that the IRS and the White House have been telling the truth about that agency’s campaign of political persecution of conservative groups leading up to the 2012 election. ...

It is also corrosive. At some point, members of the press — including those who work for ideological and partisan outlets such as National Review and the New York Times (one of which is honest about what it is) — have a moral and professional responsibility to acknowledge that lies are lies. ...

Oprah.com recently reminded its readers of one of my favorite phrases: “Not my circus, not my monkeys.” (The original expression is Polish: “Nie mój cyrk, nie moje małpy.”) I may be a little bit (or more than a little bit) sanctimonious about the fact that I am not a Republican, but it does make the process a little more friction-free when it is time to call Republican BS BS. It would be an excellent thing if the Democrats who dominate the major media would develop and exhibit enough independence of mind that they could publicly acknowledge when they — and therefore the country — are being lied to, when they are being actively deceived by people with political power.

Without that, they are the circus — they are the monkeys.

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March 15, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Saturday, March 14, 2015

The IRS Scandal, Day 674

IRS Logo 2Forbes, As Hillary Faces Emailgate, Ex IRS Chief Runs For President, by Robert W. Wood:

As Republicans and Democrats start vying for spots on the 2016 presidential tickets, the presumed Democratic nominee remains Hillary Clinton. Yet she faces what could emerge as a scandal, and like the IRS and its nemesis Lois Lerner, Mrs. Clinton could be undone by emails. The surprise and belated disclosure that Mrs. Clinton used private email rather than State Department email during her term as Secretary of State is at least awkward. ...

With this email gaffe, it could be worth considering dark horse candidates like the head of the IRS. Not the current email-losing-tax-czar Commissioner John Koskinen mind you, but a prior Commissioner of the IRS, Mark Everson. Mr. Everson was head of the IRS for four years under President Bush. Fox’s Neil Cavuto suggested that it would be an unlikely campaign pitch to say “I’m from the IRS and I’m here to help.” ...

But most people in America may not warm to a tax man as President, even without such issues. Mr. Everson’s term at the IRS was not marred in the way of the current IRS Commissioner John Koskinen. For most Americans, the IRS targeting scandal and seeming cover-up of the last two years has damaged greatly the image of an already unattractive agency. Anyone associated with the IRS is likely to be viewed with skepticism.

After the targeting scandal had been underway for over a year, Mr. Koskinen testified that recovery efforts had been thorough, but the tapes and emails just couldn’t be found. As if to goad Republicans, he said that millions in taxpayer money was spent looking. Over 250 IRS employees spent 100,000 hours, costing taxpayers at least $14 million. However, the Treasury Inspector General has revealed that the IT people at the IRS say no one even asked them to recover the emails.

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March 14, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Friday, March 13, 2015

Herzig & Brunson: Using the Tax Law to Combat Racist Fraternities and Sororities

SAESlate:  Subsidized Injustice: Racist Fraternities and Sororities Should Have Their Tax-exempt Status Revoked, by David Herzig (Valparaiso) & Samuel Brunson (Loyola-Chicago):

The video of an inexcusable racist chant by members of the University of Oklahoma chapter of the Sigma Alpha Epsilon fraternity came as a shock to most viewers. The fraternity’s national headquarters acted swiftly to close the chapter, and the university quickly removed the fraternity from its campus. But the discussion seems to end there.

Treating this as an isolated incident, rather than as a symptom of a larger problem, is shortsighted. ... These incidents show structural inequities in the Greek system. ...

As tax law professors, we naturally see solutions through the prism of the tax law.

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March 13, 2015 in Tax | Permalink | Comments (6)

Weekly Tax Roundup

Weekly SSRN Tax Roundup

Weekly Student Tax Note Roundup

WaPo Fact Checker: Ted Cruz’s Claim That the Tax Code Has More Words Than the Bible

CruzWashington Post Fact Checker, Ted Cruz’s Claim That the IRS Tax Code Has More Words Than the Bible:

“On tax reform, we, right now, have more words in the IRS code than there are in the Bible — not a one of them as good.”

–Sen. Ted Cruz (R-Texas), speech at International Association of Fire Fighters legislative conference, March 10, 2015

Comparing the number of words in the U.S. tax code with the number in the Bible is a common theme among conservatives who fault the tax code for being overly burdensome. In fact, the claim has been made in some variation for at least 10 years.

Cruz is correct on the comparison of words in both texts. But regular readers of The Fact Checker know we frown on such counting exercises, like the number of pages in “Romneycare” health-care law in Massachusetts or the number of pages in President Obama’s Affordable Care Act. Such comparisons — in this case, the word count of the evolving tax code of the most industrious country in the world to words in a religious document that was written thousands of years ago — don’t really tell you much of anything.

We will not issue a Pinocchio rating or award a Geppetto Checkmark. But it is worth exploring this word-count comparison and how the tax code’s complexities affect taxpayers. ...

The literally translated King James Version of the Bible contains just over 800,000 words. There are as many as 3.7 million individual words in the IRS tax code. (Another count places it as low as 2.6 million words without substantive words such as “is” and “and.”) This number came from copying the text of the code, pasting it into a Microsoft Word document and using the word count function. ...

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March 13, 2015 in Tax | Permalink | Comments (5)

The IRS Scandal, Day 673

IRS Logo 2Washington Examiner, Politico Sat on Allegations Lois Lerner Had Prior History of Targeting Conservatives:

Politico scored a journalistic coup with its exclusive 2014 profile on Lois Lerner, the former IRS official at the center of the agency's targeting of conservative groups.

But a former Illinois lawmaker who said Politico contacted him repeatedly that year with questions regarding claims he was targeted by Lerner in the mid-1990s has been left wondering why the news group chose to ignore his documented dealings with the former federal official.

"I was shocked," Al Salvi told the Washington Examiner's media desk, describing what he characterizes as several "lengthy" interviews with Politico reporter Rachael Bade.

Lerner went after his 1996 Senate campaign with a lawsuit totaling $1.1 million — an enforcement action that was eventually thrown out of court — when she was working at the Federal Election Commission, according to Salvi.

"I spent something like an hour and a half talking to Politico about this," said Salvi, whose dealings with the FEC are well documented by the federal agency. "And I'm nowhere in the story. They had no intention of using anything I said." ...

And it seems Politico is not the only news organization to ignore Salvi's story, as conservative columnist George Will recently noted. After the IRS hearing and Salvi's Fox News appearance, the Washington Post's George Will in a 2013 column titled "Lois Lerner, the scowling face of the state," repeated the former lawmaker's story.

In another column last week, titled "Rein in the IRS," Will repeated the Salvi story, this time accusing national news organizations of ignoring the serious charge against Lerner. "Roskam's telling of Salvi's story elicited no denial from Lerner," Will wrote. "Neither did the retelling of it in this column. ... No wonder: The story had not been deemed newsworthy by the three broadcast networks' evening news programs, by the New York Times or by the Post."

A Lexis search dated June 4-June 11, 2013, of the Washington Post, the Los Angeles Times, the Chicago Tribune and the New York Times for coverage of the Salvi story produced no results. A similar Lexis search dated March 2-6, 2014, also produced no results.

Similarly, a TV Eyes search dated June 4-June 11 2013, revealed that neither NBC News, nor CBS News nor ABC News covered Roskam's claim during the IRS hearing. The same was found for a TV Eyes search dated March 2-6, 2014, for Will's repeating of Roskam's claim.

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March 13, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Thursday, March 12, 2015

Thomas Presents User-Friendly Taxpaying Today at UCLA

Thomas (2015)Kathleen DeLaney Thomas (North Carolina) presents User-Friendly Taxpaying at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh and Alexander Wu:

Our income tax system is notoriously complex. The sheer volume of the tax code, along with the technical nature of its provisions, means that many individuals don’t fully understand the tax rules that apply to them. This Article refers to this type of tax complexity as “substantive complexity.” Although many commentators have argued for reforms that would simplify the substance of our tax laws, others have argued that substantive complexity is necessary if we want to tax each person according to his or her individual circumstances.

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March 12, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Columbia Journal of Tax Law's Tax Matters: King v. Burwell

Columbia Journal of Tax Law LogoThe Columbia Journal of Tax Law has published a new issue of its Tax Matters feature, with three short pieces by tax practitioners responding to a specific cutting-edge tax law issue posed by a tax academic. This issue's prompt is by David Gamage (UC-Berkeley):

Once again, the U.S. Supreme Court will be deciding the fate of Obamacare—in the case of King v. Burwell. Also, once again, the future of American healthcare reform will turn on how the Supreme Court reviews a provision of Obamacare that was enacted through the tax code.

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March 12, 2015 in Scholarship, Tax | Permalink | Comments (1)

Marian Reviews Sanchirico's International Tax and Ownership Nationality

JotwellOmri Marian (Florida), So Who, at the End of the Day, Owns Google (or Apple, or Microsoft, or Pfizer ... )? (Jotwell) (reviewing Chris William Sanchirico (Pennsylvania), As American as Apple Inc.: International Tax and Ownership Nationality, 68 Tax. L. Rev. ___ (2014)):

Clearly, the taxation of “U.S. Companies” plays a major role in public discourse. Roughly speaking, the two sides of the debate can be outlined as follows: U.S. multinational corporations either pay too much (because our tax system is not competitive compared with the rest of the world), or too little (because our tax system is riddled with loopholes). We need to reform our tax system so “U.S. Companies” are at par with their foreign competitors; or, we need to tighten our tax rules so as to make sure that “U.S. Companies” share the burden. While political views differ, the terms of the debate seem clear. Whichever side of the debate one takes, something must be done about how we tax “U.S. companies.”

Sanchirico, however, questions the core terms of the debate: “When we speak of ‘U.S. multinationals,’ what do we mean by ‘U.S.’? More specifically, to what extent are these ‘U.S.’ companies owned by non-U.S. investors?” Sanchirico’s ultimate answer is quite a shocker: we have no idea what we are talking about when we speak of “U.S. Companies,” at least in terms of who owns these companies. ...

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March 12, 2015 in Scholarship, Tax | Permalink | Comments (0)

Tax Official Dies in Office, Co-Workers Don't Notice for Two Days

BBC News, Finns Miss Death in Tax Office:

A tax office official in Finland who died at his desk was not found by his colleagues for two days.

The man in his 60s died last Tuesday while checking tax returns, but no-one realised he was dead until Thursday.

The head of personnel at the office in the Finnish capital, Helsinki, said the man's closest colleagues had been out at meetings when he died. ...

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March 12, 2015 in Tax | Permalink | Comments (12)

Senate Holds Hearing Today on Protecting Taxpayers from Schemes and Scams During the 2015 Tax Filing Season

Senate LogoThe Senate Finance Committee holds a hearing today on Protecting Taxpayers from Schemes and Scams During the 2015 Tax Filing Season (links to statements and testimony below):

  • Orrin Hatch (R-UT), Statement
  • Ron Wyden (D-OR), Statement
  • Caroline Ciraolo (Acting Assistant Attorney General, Tax Division, U.S. Department of Justice), Testimony
  • Timothy Camus (Deputy Inspector General for Investigations, Treasury Inspector General for Tax Administration, U.S. Treasury Department), Testimony
  • Mike Alley (Commissioner, Indiana Department of Revenue), Testimony
  • John Valentine (Commission Chair, Utah State Tax Commission), Testimony
  • Ellen Klem (Director of Consumer Outreach & Education, Office of the Attorney General, Oregon Department of Justice), Testimony

March 12, 2015 in Congressional News, Tax | Permalink | Comments (0)