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Wednesday, February 18, 2015

Schmalbeck: Ending the Sweetheart Deal Between Big-Time College Sports and the Tax System

NCAA LogoRichard Schmalbeck (Duke), Ending the Sweetheart Deal between Big-Time College Sports and the Tax System:

This paper was prepared for the annual conference of the National Center for Philanthropy and Law, held at the NYU Law School, held October 24-25, 2013. The overall topic was “Tax Issues Affecting Colleges and Universities,” and I was asked to address specifically those issues relating to athletics. This paper considers two specific issues that have in common only that they involve college sports, and are plagued by egregiously bad, (in this case, egregiously generous), tax treatment: the failure of the IRS to regard any part of the revenue from college sports as unrelated business income, and the choice by Congress to allow taxpayers to deduct 80% of contributions that they make to colleges or their “booster clubs,” even when those contributions entitle the donors to special privileges in purchasing tickets to college athletic events.

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February 18, 2015 in Scholarship, Tax | Permalink | Comments (2)

Call for Papers: International Energy Taxation

Call for papers:  International Taxation in the Energy Sector:

Oil, Gas and Energy Law Intelligence invites submissions for a special issue on International Taxation in the Energy Sector. ... Submissions of relevant tax articles are invited for inclusion in this special tax issue. It is intended that the majority of papers will cover international taxation, but country specific tax issues related to the energy sector will also be welcomed. Potential topics related to these international tax issues could include:

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February 18, 2015 in Conferences, Scholarship, Tax | Permalink | Comments (0)

Drexel Symposium: ERISA at 40

Drexel LogoSymposium, ERISA at 40: What Were They Thinking?, 6 Drexel L. Rev. 257-587 (2014)

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

The IRS Scandal, Day 650

IRS Logo 2Bayou Buzz, Attorney General: Final Report On IRS Probe To Come Out Soon:

Attorney General Eric Holder said on Tuesday he expects the Justice Department to soon release a list of final recommendations stemming from its probe into whether the Internal Revenue Service wrongfully targeted conservative groups.

"I am satisfied with the progress that the criminal division has done; the civil rights division as well," Holder told reporters at a press conference. "I expect that we will have some final recommendations coming up relatively soon.

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February 18, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (4)

Tuesday, February 17, 2015

Death of Marvin Chirelstein

ChirelsteinColumbia Law School, Marvin A. Chirelstein: Revered Professor and Leading Scholar of Federal Taxation, Corporate Law, and Contracts:

Columbia Law School Professor Emeritus Marvin A. Chirelstein, a leading scholar of federal taxation, corporate law, and contracts whose textbooks are still used by students across the country, died on Feb. 16. He was 86.

Chirelstein first joined Columbia Law School in 1954 to work on the Federal Income Tax Project under Dean William C. Warren. He then joined the government as an attorney in the U.S. Department of the Treasury and later taught at Rutgers School of Law and Yale Law School. Chirelstein returned to Columbia Law School as a visiting professor in 1981 and became a full-time faculty member in 1984. Two years later, he was named the first Isidor and Seville Sulzbacher Professor of Law, an appointment announced by then-Columbia University President Michael I. Sovern ’55.

In addition to being a highly sought after academic expert on taxation, contracts, and corporate law, Chirelstein was a beloved professor who once taught a seminar on the legal side of one of his favorite sports: boxing. A music lover who played the violin, he was known for his dry sense of humor and quiet wit and was adored by students. Two of his textbooks, Concepts and Case Analysis in the Law of Contracts and Federal Income Taxation: A Law Student’s Guide to the Leading Cases and Concepts, have guided generations of future lawyers through the complexities of the law. A third, Cases and Materials on Corporate Finance, opened the way to interdisciplinary analysis of corporate law.

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February 17, 2015 in Legal Education, Obituaries, Tax | Permalink | Comments (4)

Peroni Presents Getting Serious About Cross-Border Earnings Stripping Today at Minnesota

Peroni (2015)Robert Peroni (Texas) presents Getting Serious About Cross-Border Earnings Stripping: Establishing an Analytical Framework today at Minnesota as part of its Perspectives on Taxation Lecture Series hosted by Kristin Hickman:

Earnings stripping the U.S. corporate tax base is a major objective of U.S. corporations that engage in “inversion” transactions to become a subsidiary in a foreign-parented group. Prof. Peroni will discuss how the earnings stripping problem extends beyond corporate inversions to U.S. subsidiaries of foreign-parent groups regardless of how the groups were formed, and also how this problem is independent of the debate over whether the U.S. should adopt a territorial approach. He will share his theoretical framework, developed with Steve Shay (Harvard) and Cliff Fleming (BYU), for analyzing earnings stripping and identifying the scope of an appropriate response. He will also address these issues in context of international tax reform more broadly.

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

Rosenzweig: Does Punishment Work (At Least In International Tax)?

Jotwell Adam Rosenzweig (Washington University), Does Punishment Work (At Least In International Tax)? (Jotwell) (reviewing Niels Johannesen (University of Copenhagen) & Gabriel Zucman (UC-Berkeley & London School of Economics), The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown, 2014 Am. Econ. J. Econ. Policy 65):

The best way to describe the project is to quote the abstract:

During the financial crisis, G20 countries compelled tax havens to sign bilateral treaties providing for exchange of bank information. Policymakers have celebrated this global initiative as the end of bank secrecy. Exploiting a unique panel dataset, our study is the first attempt to assess how the treaties affected bank deposits in tax havens. Rather than repatriating funds, our results suggest that tax evaders shifted deposits to havens not covered by a treaty with their home country. The crackdown thus caused a relocation of deposits at the benefit of the least compliant havens.

This paper provides an extremely important and timely contribution to the international tax literature. Anecdotal evidence about the effectiveness of punishment has been mixed to date, and there has been little empirical data directly on the question. Further, the question taps into a larger debate over the underlying, root causes of tax competition more generally. By providing empirical data directly on this question, Johannesen and Zucman move the debate forward in an extremely valuable way.

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

2015 Tannenwald Tax Writing Competition

Tannenwald (2013)The Theodore Tannenwald, Jr. Foundation for Excellence in Tax Scholarship and American College of Tax Counsel are sponsoring the 2015 Tannenwald Tax Writing Competition:

Named for the late Tax Court Judge Theodore Tannenwald, Jr., and designed to perpetuate his dedication to legal scholarship of the highest quality, the Tannenwald Writing Competition is open to all full- or part-time law school students, undergraduate or graduate. Papers on any federal or state tax-related topic may be submitted in accordance with the Competition Rules.


  • 1st Place:  $5,000, and publication in the Florida Tax Review
  • 2nd Place:  $2,500
  • 3rd Place:  $1,500

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February 17, 2015 in Legal Education, Tax, Teaching | Permalink | Comments (0)

Does the U.S. System of Taxation on Multinationals Advantage Foreign Acquirers?

Andrew Bird (Carnegie Mellon), Alexander Edwards (Toronto) & Terry J. Shevlin (UC-Irvine), Does the U.S. System of Taxation on Multinationals Advantage Foreign Acquirers?:

The ability for deferral of home country taxation on multinationals’ foreign earnings within the U.S. tax code creates an incentive for firms to avoid or delay repatriation of earnings to the U.S. Consistent with this incentive, prior research has documented a substantial lockout effect resulting from the current U.S. worldwide tax and financial reporting systems. We hypothesize and find that U.S. domiciled M&A target firms with more locked-out earnings are more likely to be acquired by foreigner acquirers, compared to domestic acquirers as a result of this tax advantage. The effect is economically significant; a standard deviation increase in our proxy for locked-out earnings is associated with a 14% relative increase in the likelihood that an acquirer is foreign. We also examine the impact of the home country tax system of the foreign acquirers. Because multinationals facing territorial tax systems are able to shift income to save taxes to a greater extent than firms domiciled in worldwide countries, the tax advantages for a foreign firm acquiring a U.S. target with locked-out earnings are potentially greater when the foreign firm operates under a territorial tax system. We find that foreign acquirers of U.S. target firms with locked-out earnings are more likely to be residents of countries that use territorial tax systems.

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

The IRS Scandal, Day 649

IRS Logo 2Breitbart,  House Republicans To Pressure Senate Judiciary Members To Oppose Loretta Lynch Nomination:

More than 20 House Republicans have already signed on to a letter that Rep. Jim Bridenstine (R-OK) is circulating—and planning to send to the Senate Judiciary Committee later this week—calling on Senate Republicans to block the nomination of U.S. Attorney Loretta Lynch to replace Eric Holder as Attorney General of the United States in committee, Breitbart News has learned exclusively. ...

“We appreciate Ms. Lynch for her many years of outstanding service to our nation,” the House Republicans write. “Nonetheless, having observed her nomination hearing testimony, we can only conclude that she has no intention of departing in any meaningful way from the policies of Attorney General Eric Holder, who has politicized the Department of Justice and done considerable harm to the administration of justice.” ...

They cite specific concerns with Lynch’s ... unwillingness to support the appointment of a truly independent special prosecutor to oversee the investigation of the IRS scandal. “When given chances to differentiate herself from Attorney General Holder, she chose not to,” the House Republicans write. ...

[W]hen asked whether, unlike Attorney General Holder, she would appoint a special prosecutor to investigate the targeting of conservative groups by the Internal Revenue Service, she deflected the question, saying “[m]y understanding is that that matter has been considered and that the matter has been resolved to continue with the investigation as currently set forth.

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February 17, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Monday, February 16, 2015

Call for Proposals: Association for Mid-Career Tax Law Professors

The Association for Mid-Career Tax Law Professors (“AMT”) has issued a  Call for Proposals:

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

Villanova Seeks to Hire Lawyer to Teach Online Courses in Graduate Tax Program

VillanovaVillanova seeks to hire a tax practitioner to teach online courses in its Graduate Tax Program and coordinate faculty coverage of online tax classes:

Teaching responsibilities include teaching multiple online sections of classes in the Graduate Tax Program. In addition, this position will coordinate class coverage with adjuncts or other faculty teaching in the online curriculum. The person will also work closely with full-time faculty in the Graduate Tax Program and instructional designers involved in assisting with the development and maintenance of courses in the online curriculum.

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February 16, 2015 in Legal Education, Tax, Tax Prof Jobs | Permalink | Comments (1)

Eleven Law Schools Offer Online Tax LL.M.s

Online DegreeThe National Jurist reports that eleven law schools now offer tax or tax-related online LL.M.s:

Boston University
Western Michigan-Cooley

Estate Planning
John Marshall
Western New England

International TaxThomas Jefferson

Employee BenefitsJohn Marshall

February 16, 2015 in Legal Education, Tax | Permalink | Comments (1)

Benefit Corporations: The Latest Development in the Evolution of Social Enterprise

Mystica M. Alexander (Bentley University), Benefit Corporations—The Latest Development in the Evolution of Social Enterprise: Are they Worthy of a Taxpayer Subsidy?, 38 Seton Hall Legis. J. 219 (2014):

Benefit CorporationThe purpose of this Article is twofold: (1) placing the Benefit Corporation within the historical context of the social enterprise movement in the United States, and (2) considering whether Benefit Corporations should qualify for the preferred tax treatment given to nonprofit organizations. Part II of this Article explores the evolution of the social enterprise movement and the path leading to the hybrid entity’s rise in the United States. Part III provides a closer look at the legal requirements imposed on Benefit Corporations. Part IV outlines the requirements that must be met for a nonprofit organization to qualify for tax benefits and the rationale behind such benefits. Part V addresses whether the tax benefits made available to nonprofit organizations should be extended to Benefit Corporations. This Article concludes that although the Benefit Corporation represents a natural progression in the evolution of social enterprise, its organizational and operational structure does not provide sufficient grounds for extending special tax treatment to these organizations.

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

Yin: Goodbye to Tax Notes?

Yin (2015)TaxProf Blog op-ed:  Goodbye to Tax Notes?, by George K. Yin (Virginia):    

In Goodbye to Tax Notes, Michael Graetz bids adieu to one of my favorite sources of tax information because of dramatic changes in their subscription practices. He states that “there are many alternative sources of information and new outlets to publish the kinds of short articles that Tax Notes contains.” He mentions SSRN, ITPF, Paul Caron’s blog, and other possibilities. While I and my school are not happy with the subscription changes, I am not sure there are good alternatives available and would be happy to learn otherwise.

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

The IRS Scandal, Day 648

IRS Logo 2New York Post editorial, Let’s See Her E-mails:

It’s been nearly two years since Lois Lerner planted a question at an American Bar Association gathering to slip in the fact that the IRS had singled out Tea Party groups for special scrutiny. ...

Contrary to earlier assertions by the IRS, the Lois Lerner ­e-mails Congress sought were not lost forever. Sen. Ron Johnson (R-Wisc.), who chairs the Senate’s Homeland Security and Government Affairs Committee, says authorities have now managed to recover roughly 16,000 Lerner e-mails. ...

We prefer the way the senator put it on Fox News: “I smell a rat. I smell a number of rats, and that’s what we are going to get to the bottom of.”

We’re as curious as anyone about why the IRS told us the Lerner e-mails were gone forever. But what we really want to know is this: What the heck is in them?

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February 16, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, February 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 a new #1 paper and new papers debuting on the list at #3, #4, and #5:

  1. [149 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)
  2. [121 Downloads]  Taxation and Surveillance -- An Agenda, by Michael Hatfield (University of Washington)
  3. [116 Downloads]  Fiscally Transparent Entities: Eligibility for Tax Treaty Benefits, by Sumeet Khurana & Ashish Karundia
  4. [108 Downloads]  Inevitable: Sports Gambling, State Regulation, and the Pursuit of Revenue, by Anastasios Kaburakis (St. Louis), Ryan M. Rodenberg (Florida State) & John T. Holden (Florida State)
  5. [97 Downloads]  Tax Regulation, Transportation Innovation, and the Sharing Economy, by Jordan M. Barry (San Diego) & Paul L. Caron (Pepperdine)

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

The IRS Scandal, Day 647

IRS Logo 2Government Executive, IRS Chief Refuses to Apologize to Lawmakers on Missing Emails:

Internal Revenue Commissioner John Koskinen late Wednesday turned aside a demand that he apologize for untimely notification of Congress that the tax agency had lost thousands of emails sought by investigators probing political targeting allegations.

At a hearing on agencies perpetually on the Government Accountability Office’s high risk-list, Rep. Jim Jordan, R-Ohio, confronted Koskinen on a letter he sent to the Senate Finance Committee last March in which he said the Internal Revenue Service had completed its submission of all requested emails on handling of nonprofits’ applications -- without mentioning that some from former Exempt Organizations chief Lois Lerner had been lost.

“Will you admit that, like Lois Lerner and [former Commissioner] Doug Shulman, you misled this committee, this Congress and, more importantly, the American people,” Jordan asked. “Have you withdrawn the letter to Senate Finance?”

Koskinen replied, “Absolutely not. We waited six weeks to tell while trying to find as many of the emails as we could. We gave you all of Ms. Lerner’s emails we had.  We couldn’t make up Lois Lerner emails we didn’t have.”

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

Saturday, February 14, 2015

America’s New Aristocracy: The Hereditary Meritocracy

EconomistThe Economist, America’s New Aristocracy: As the Importance of Intellectual Capital Grows, Privilege Has Become Increasingly Heritable:

When the robber barons accumulated fortunes that made European princes envious, the combination of their own philanthropy, their children’s extravagance and federal trust-busting meant that Americans never discovered what it would be like to live in a country where the elite could reliably reproduce themselves. Now they are beginning to find out, because today’s rich increasingly pass on to their children an asset that cannot be frittered away in a few nights at a casino. It is far more useful than wealth, and invulnerable to inheritance tax. It is brains.

Intellectual capital drives the knowledge economy, so those who have lots of it get a fat slice of the pie. And it is increasingly heritable. Far more than in previous generations, clever, successful men marry clever, successful women. Such “assortative mating” increases inequality by 25%, by one estimate, since two-degree households typically enjoy two large incomes. Power couples conceive bright children and bring them up in stable homes—only 9% of college-educated mothers who give birth each year are unmarried, compared with 61% of high-school dropouts. They stimulate them relentlessly: children of professionals hear 32m more words by the age of four than those of parents on welfare. They move to pricey neighbourhoods with good schools, spend a packet on flute lessons and pull strings to get junior into a top-notch college.

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February 14, 2015 in Legal Education, Tax | Permalink | Comments (15)

Weekly SSRN Tax Roundup

The IRS Scandal, Day 646

IRS Logo 2Forbes, Lois Lerner's Old IRS Team Looking Anti-tech, by Peter J. Reilly:

Pretty much everybody is mad at Lois Lerner, but it may be time to ease up on the people who used to work for her issuing rulings on whether organizations should be tax exempt.  I have a hunch that the budget cuts must have hurt them a lot in the technology area.  Maybe that’s not it, but I have noted a kind of anti-tech trend in their rulings.  Just a trace of paranoia too as they worry about open source software aiding our enemies.

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February 14, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Friday, February 13, 2015

Lawsky Presents Statutory Reasoning at Northwestern

LawskySarah B. Lawsky (UC–Irvine) presented Statutory Reasoning at Northwestern yesterday as part of its Tax Colloquium Series hosted by Lawrence Zelenak:

Sarah Lawsky examines the structure of statutory reasoning after ambiguities are resolved and the meaning of the statute’s terms established. For statutory reasoning is not best understood as merely deductive.  And while statutory reasoning can be fruitfully modeled using formal logic, standard formal logic is not the best approach for modeling statutory reasoning. Rather, this paper argues, using the Internal Revenue Code and accompanying regulations, judicial decisions, and rulings as its primary example, that at least some statutory reasoning is best characterized as defeasible reasoning—reasoning that may result in conclusions that can be defeated by subsequent information—and is best modeled using default logic.

February 13, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Weekly Student Tax Note Roundup

February 13, 2015 in Scholarship, Tax, Weekly Student Tax Note Roundup | Permalink | Comments (0)

Tahk: The Tax War on Poverty

Susannah Camic Tahk (Wisconsin), The Tax War on Poverty, 56 Ariz. L. Rev. 791 (2014):

In recent years, the war on poverty has moved in large part into the tax code. Scholarship has started to note that the tax laws, which once exacerbated the problem of poverty, have become increasingly powerful tools that the federal government uses to fight against it. Yet questions remain about how this new tax war on poverty works, how it is different from the decades of non-tax anti-poverty policy and how it could improve. To answer these questions, this Article looks comprehensively at the provisions that make up the new tax war on poverty. First, this Article examines each major piece of the tax war on poverty. The Article looks at its mechanics of each, its political history and its effectiveness at addressing poverty. Second, this Article analyzes the tax war on poverty as a whole, identifying commonalities across its different provisions and highlighting its distinctive features. Third, this Article proposes ways that the tax war on poverty could be more effective. In particular, this Article examines how tax lawmakers and tax lawyers could approach this task. In so doing, this Article conceptualizes tax law as the new poverty law and proposes a growing role for public-interest tax lawyers.

February 13, 2015 in Scholarship, Tax | Permalink | Comments (0)

Robinson: Skin in the Game -- Invisible Taxpayers, Invisible Citizens?

Mildred Robinson (Virginia), Skin in the Game: Invisible Taxpayers, Invisible Citizens?, 59 Vill. L. Rev.729 (2014):

This essay was the basis for the Rev. Dr. Martin Luther King, Jr. Memorial Lecture at the Villanova University School of Law on January 27, 2014. It examines economic justice from a tax perspective.

“Skin in the game” – some thing that the interested party has at risk – has become a part of everyday American political discourse. Personal financial risk – some personal stake – is demanded of all “players.” The implications are clear: no skin, no play. The requirement for “skin in the game” in the context of ongoing fiscal debate along with the “concern” that in 2011 almost fifty percent of Americans paid no federal income tax is the latest version of the ongoing “cut-taxes/reduce governmental size” wrangling. It is also another play on the high political salience of the federal income tax as an institution.

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February 13, 2015 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 645

IRS Logo 2U.S. Senate Committee on Homeland Security & Governmental Affairs Press Release, Chairman Asks IRS Commissioner Questions Raised by New Lerner E-mail Information:

Chairman Ron Johnson (R-Wis.) wrote to IRS Commissioner John Koskinen Tuesday  with questions raised by new information that has emerged about missing e-mails from former IRS official Lois Lerner. 

Senator Johnson’s staff of the Senate Homeland Security and Governmental Affairs Committee (HSGAC) learned last week that the Treasury Inspector General for Tax Administration (TIGTA), an independent investigative agency, has recovered as many as 80,000 missing IRS e-mails, more than double the number that TIGTA investigators were estimating in November. The recovered files represent about 16,000 unique e-mails, TIGTA investigators told the senator’s staff. TIGTA is now finished identifying missing emails and must compare them to e-mails already turned over by the IRS, but “it is possible that a large number of these e-mails have not yet been produced to Congress,” Johnson’s letter said.

The IRS became embroiled in controversy after Lerner, who oversaw the agency’s office in charge of administering nonprofit status to groups, admitted that the IRS gave heightened scrutiny to conservative groups. Members of Congress, investigating whether a powerful federal agency discriminated among citizens on the basis of their political beliefs, were told by the IRS in 2014 that it had lost e-mails sent or received by Lerner over a period of more than two years and that it had failed to tell Congress about the loss in a timely way. The IRS said it went to “great lengths” to recover the emails but could not do so.

The revelation from TIGTA means that the e-mails the IRS could not originally recover off backup tapes may now be found. “Accordingly,” reads Senator Johnson’s letter, “I respectfully request your assistance in better understanding the IRS’s document retention and production process.”

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February 13, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Thursday, February 12, 2015

Seto Presents Preference-Shifting and Optimal Tax Theory Today at UCLA

Seto (2014)Theodore P. Seto (Loyola-L.A.) presents Some Implications of Preference-Shifting for Optimal Tax Theory at UCLA today as part of its Colloquium on Tax Policy and Public Finance hosted by Jason Oh and Alexander Wu:

This paper is part of a larger project: to explore the extent to which the claims of optimal tax theory are sensitive to the assumptions that underlie them. The paper focuses on two canonical assertions of the standard model: (1) that taxes produce deadweight loss (Harberger 1964), and (2) that 100 percent of all taxes are borne by human beings, the only question being which. The assumption it relaxes is the standard welfarist assumption that preferences are fixed and exogenous and reflect welfare. Although this assumption is not widely accepted in other social sciences, economists generally treat situations in which it does not hold (situations involving “internalities”) as limited exceptions, and therefore of limited interest.

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

The Tax Lawyer Publishes New Issue

The Tax Lawyer (2013)The Tax Lawyer has published Vol. 68, No. 1 (Fall 2014):

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February 12, 2015 in ABA Tax Section, Scholarship, Tax | Permalink | Comments (0)

2015 National Tax Moot Court Competition Results

Moot CourtHere are the results of the 2015 National Tax Moot Court Competition sponsored by the Florida Bar Tax Section:

  1. Charleston
  2. Liberty
  3. Baltimore
  4. Florida

Best Brief:  Texas Tech (runner-up: Suffolk)

Best Oralist:  Hank Young (Charleston)

For more, see Charleston Law Wins the National Tax Moot Court Competition for the 4th Year in a Row:

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February 12, 2015 in Legal Education, Tax | Permalink | Comments (0)

BRICS and the Emergence of International Tax Coordination

BRICSBRICS and the Emergence of International Tax Coordination (IBFD 2015) (Yariv Brauner (Florida) & Pasquale Pistone (WU Vienna), eds.):

The BRICS have been all the rage from the beginning of the millennium. This book focuses on the shift of power in the global economy from the traditionally dominant nations that comprise the OECD, or, even more narrowly, the G7, to emerging economies, perhaps led by the BRICS. The remodeling of the power structure shaping the global economy and global economic governance more generally is possibly being paralleled by a corresponding reformatting of international taxation. The dominance of the richest countries in the world over the international tax regime that had evolved over the second part of the 20th century is being defied as the 21st century progresses. Emerging economies, within and outside the OECD, assert their newly found power to acquire voice and influence on the international tax agenda.

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February 12, 2015 in Book Club, Scholarship, Tax | Permalink | Comments (0)

Loving v. IRS: The IRS's Achilles' Heel for Regulated Tax Advice?

Jamie Patrick Hopkins (The American College), Loving v. IRS: The IRS's Achilles' Heel for Regulated Tax Advice?, 34 Va. Tax Rev. 191 (2014):

In an attempt to regulate the multi-billion dollar tax preparer industry — which employs hundreds of thousands of employees — the Internal Revenue Service (Service) began developing rules pertaining specifically to non-professional tax return preparers, previously unregulated by the Service. However, the Service’s attempt to expand its regulatory reach over non-professional tax return preparers was short-lived. It resulted in a severely damaging decision in Loving v. IRS, in which the court concluded that the Service had only limited statutory authority to regulate non-professional tax preparers. While the Service focused its attention on additional ways to rein in tax return preparers, tax professionals took notice of the Loving I and II decisions as they might apply in a broader context, and an important question arose: to what extent can the Service regulate those tax professionals, such as lawyers and certified public accountants (CPAs), if the tax professional only provides tax advice or mere tax preparation services but does not “represent” taxpayers before the Service? Not more than six months later this question was partially answered in another landmark decision in Ridgely v. Lew in which Loving II was applied not only to non-professional tax preparers, but to tax professionals as well, further crippling the ability of the Service to regulate tax professionals and the tax preparation industry. Following Ridgely, the Service is left with one final beacon of hope to regulate tax professionals, 31 U.S.C. § 330(d), which the Service believes empowers it with the ability to regulate written tax advice provided by all tax practitioners. However, if the statutory analysis used in Ridgely and Loving is applied to 31 U.S.C. § 330(d), a reasonable interpretation might limit the Service’s ability to regulate written tax advice only to those situations in which a tax practitioner is practicing as a representative before the Service. 

February 12, 2015 in IRS News, Scholarship, Tax | Permalink | Comments (0)

Zolt: Politics and Taxation

Eric M. Zolt (UCLA), Politics and Taxation: An Introduction, 67 Tax L. Rev. 453 (2014):

This essay provides some observations about the relationship of politics and taxation and reviews the articles and commentaries that were prepared for the Third Annual NYU/UCLA Tax Policy Conference on Politics and Taxation held in Los Angeles on October 18, 2013. Understanding the relationship between politics and taxation is important for several reasons. First, it may help explain why countries adopt different taxing and spending patterns. It may also explain why the frequency, success and stability of tax reform efforts vary among countries. Finally a better understanding of politics and taxation may provide insights into such questions on how institutions shape policy outcomes and how tax policy may contribute to successful democratic governments.

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

Gerzog: What's Wrong with a Federal Inheritance Tax?

Wendy C. Gerzog (Baltimore), What's Wrong with a Federal Inheritance Tax?, 49 Real Prop. Tr. & Est. L.J. 163 (2014):

Scholars have proposed a federal inheritance tax as an alternative to the current federal transfer tax system, but there are serious flaws with that idea. Those problems include: (1) different tax rates and exemptions based on the decedent’s relationship to the beneficiary; (2) the lack of a tax on lifetime gratuitous transfers, including gifts with retained interests or control; (3) the persistence of most current valuation distortion abuses; and (4) significantly decreased compliance rates and increased administrative costs inherent in a system that taxes transferees on transactions that may be largely unmonitored.

This article reviews common characteristics of existing inheritance tax systems in our U.S. states and internationally, particularly in Europe. In addition, the article analyzes the novel Comprehensive Inheritance Tax (CIT) proposal of Professor Batchelder [What Should Society Expect from Heirs? The Case for a Comprehensive Inheritance Tax, 63 Tax L. Rev. 1 (2009)] that combines some elements of existing inheritance tax systems with some features of the current transfer tax system and delivers the CIT through the federal income tax system.

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

Tax Rates and Corporate Decision Making

John Graham (Duke), Michelle Hanlon (MIT), Terry Shevlin (UC-Irvine) & Nemit Shroff (MIT), Tax Rates and Corporate Decision Making:

We provide evidence consistent with many firms exhibiting behavioral biases (heuristics, salience) when incorporating taxes into their decision processes. For example, we find that many firms employ the more salient average tax rate (i.e., the GAAP effective tax rate) to evaluate incremental decisions rather than the more theoretically correct marginal tax rate. We estimate that behavioral biases that influence firms to use the average tax rate for decision-making lead to deadweight losses that average $10 million for poor capital structure decisions and $25 million for suboptimal acquisitions, and also reduce the responsiveness of corporate investment to growth opportunities.

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

The IRS Scandal, Day 644

Wednesday, February 11, 2015

Kleinbard: Why Corporate Tax Reform Can Happen

Edward Kleinbard (USC), Why Corporate Tax Reform Can Happen:

This brief essay explains in an informal way to nonspecialists what the stakes are for corporate tax reform and why such reform is more politically feasible than most observers believe. The essay emphasizes the central importance of international tax design as the largest conceptual impediment, but demonstrates that a framework has emerged that can serve as the basis for constructive negotiations. The essay further offers a novel strategy for dealing with the problem that a large fraction of U.S. business income is earned by unincorporated businesses.

February 11, 2015 in Scholarship, Tax | Permalink | Comments (1)

Givati: A Theory of Line Drawing in Tax Law

Yehonatan Givati (Hebrew University of Jerusalem, Faculty of Law), Walking a Fine Line: A Theory of Line Drawing in Tax Law, 34 Va. Tax Rev. ___ (2015):

In many contexts, U.S. tax law grants a favorable tax treatment to transactions of one type and an adverse treatment to transactions of another type. The task of tax authorities is to draw lines in legally gray areas, distinguishing between economically similar transactions that should receive different treatment. Despite tax law’s propensity for line drawing, the manner in which tax authorities draw legal lines has received little attention. This Article aims to fill this gap by providing guidance to tax authorities on how to select the best line drawing instrument in a given situation. First, the Article demonstrates that tax authorities employ four different line drawing instruments: rulemaking, adjudication, private letter ruling and licensing. Second, the Article develops a theory of line drawing in tax law, which identifies three criteria by which tax authorities should choose line drawing instruments: the ideal policy, the effect on taxpayers, and the effect on tax authorities. Finally, the Article applies this theory of line drawing to explain line drawing instruments currently in use.

February 11, 2015 in Scholarship, Tax | Permalink | Comments (0) Obama's Loophole Logic

FactCheck, Obama's Loophole Logic:

The White House is claiming that the top 1 percent of all earners would pay 99 percent of the capital gains tax increase proposed by the president. But that claim rests on some debatable logic.

According to the Obama administration’s way of figuring, a lot of Americans would suddenly enter the top 1 percent only after they die.

An independent analysis by the Urban-Brookings Tax Policy Center estimates that the top 1 percent of earners would bear 58 percent of the increase, not 99 percent. By the TPC’s figuring, the Obama proposal would affect not only the rich, but a good many middle-income taxpayers as well. ...

Which view is right? That depends on what one considers to be “income,” as we shall explain in a moment.

Our Conclusion

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February 11, 2015 in Tax, Think Tank Reports | Permalink | Comments (0)

Mormann: Beyond Tax Credits -- Smarter Tax Policy

Felix Mormann (Miami), Beyond Tax Credits – Smarter Tax Policy for a Cleaner, More Democratic Energy Future, 31 Yale J. on Reg. 303 (2014):

Solar, wind, and other renewable energy technologies have the potential to mitigate climate change, secure America’s energy independence, and create millions of green jobs. In the absence of a price on carbon emissions, however, these long-term benefits will not be realized without near-term policy support for renewables. Mounting federal debt in excess of $16 trillion, meanwhile, urges careful review of all public expenditures. This Article proposes policy reform to simultaneously promote fiscal sustainability and renewable energy through capital markets and crowdfunding.

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February 11, 2015 in Scholarship, Tax | Permalink | Comments (0)

Graetz: Goodbye to Tax Notes

Graetz (2015)TaxProf Blog op-ed:  Goodbye to Tax Notes, by Michael J. Graetz (Columbia):

Today, I received the following email from the Columbia Law librarian announcing a new policy of Tax Analysts:

Tax Analysts is in the process of eliminating their complementary professorial accounts. They have presented us with the following terms, and they will maintain your access for the rest of this work week.

In this case, the alternatives are the library paying $8,500 a year for an broad account shared by the library with individual direct access limited to three professors, or you paying $780 a year for your individual access to Tax Notes and Tax Notes International .... They will not sell access to the “Lawref” e-dress because that is a shared account.....

When Tom Field started a nonprofit publisher and public interest law firm in 1969, he could not have imagined the success Tax Analysts would enjoy. It has for nearly a half century provided a unique and invaluable service to the tax community. I have long relied on it myself for timely information and have had many students use its resources for their papers and publications, even though much of its most useful content is in the public domain. And I have frequently published there and speak often with its correspondents. But with this latest turn, Tax Analysts may be losing sight of its mission. According to its Form 990 for the fiscal year ending June 30, 2013 (which is the most recent readily available) Tax Analysts had over $23 million in revenues from its publications, cash and securities on hand exceeding $40 million and more than $60 million in total assets. Its revenue exceeded its expenses by nearly $4 million. It is difficult to believe that this change in policy is prompted by financial necessity. And the timing is especially unfortunate for many law schools around the country.

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February 11, 2015 in Legal Education, Tax, Tax Analysts | Permalink | Comments (6)

Postlewaite: The Omnipresence of Subchapter K in the International Arena?

Philip Postlewaite (Northwestern), The Omnipresence of Subchapter K in the International Arena?, 93 Taxes ___ (2015):

The purpose of Subchapter K is to provide certainty as to the appropriate focal point for making tax determinations, i.e., at the partner level or the partnership level, dictating which level is determinative for what purpose. Subchapter K generally ensures that partners are ultimately taxed similarly under the three possible methods of realization upon their investment. Whether (1) the partnership run its course and disposed of its assets for cash and liquidated thereafter, (2) the partner sells his partnership interest to another for cash, or (3) the partnership liquidates by distributing its assets to the partner for sale thereafter, the amount and character of the gain or loss is generally the same, albeit with some deferral in the liquidation context. Regardless of the method chosen, tax consequences ensue.

Subchapter N’s treatment of inbound and outbound activity reflects different overriding purposes. Regarding inbound activity, the goal is to ensure that foreign persons are subject to tax on income, whether investment or business oriented, derived with a nexus to the United States. Regarding outbound activity, the focus is on the avoidance of double taxation by United States persons on income earned abroad as well as limiting the deferral of income by United States persons investing abroad through foreign corporations.

The difficulty arises when partnerships operate internationally, i.e., where Subchapter K and Subchapter N may potentially overlap. Does Subchapter K always control; does Subchapter N? Is the entity approach determinative, the aggregate, or either depending upon the context? What is the ideal model for resolving such issues?

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February 11, 2015 in Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 643

IRS Logo 2The Hill, Obama Administration Won’t Release IRS Targeting Documents:

The Obama administration is refusing to publicly release more than 500 documents on the IRS’s targeting of Tea Party groups.

Twenty months after the IRS scandal broke, there are still many unanswered questions about who was spearheading the agency’s scrutiny of conservative-leaning organizations.

The Hill sought access to government documents that might provide a glimpse of the decision-making through a Freedom of Information Act (FOIA) request.

The Hill asked for 2013 emails and other correspondence between the IRS and the Treasury Inspector General for Tax Administration (TIGTA). The request specifically sought emails from former IRS official Lois Lerner and Treasury officials, including Secretary Jack Lew, while the inspector general was working on its explosive May 2013 report that the IRS used “inappropriate criteria” to review the political activities of tax-exempt groups.

TIGTA opted not to release any of the 512 documents covered by the request, citing various exemptions in the law. The Hill recently appealed the FOIA decision, but TIGTA denied the appeal. TIGTA also declined to comment for this article.

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February 11, 2015 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Tuesday, February 10, 2015

Yin Presents Protecting Taxpayers from Congressional Lawbreaking Today at Georgetown

Yin (2015)George K. Yin (Virginia) presents Protecting Taxpayers from Congressional Lawbreaking at Georgetown today as part of its Tax Law and Public Finance Workshop Series hosted by John Brooks, Itai Grinberg, and David Schizer:

This paper describes how the U.S. House Ways & Means Committee broke the law in 2014 when it approved public release of the confidential tax return information of 51 taxpayers. Because the Speech or Debate Clause insulates the legislators and their staff from prosecution if they carry out their violation in the context of a protected legislative act, to prevent a future violation, the paper recommends a new restriction on the access of the tax committees to tax return information.

February 10, 2015 in Colloquia, Tax | Permalink | Comments (0)

Toder Presents U.S. Lessons From Other Countries' Taxation of Multinational Corporations Today at NYU

ToderEric Toder (Tax Policy Center) presents Lessons the United States Can Learn From Other Countries' Territorial Systems for Taxing Income of Multinational Corporations (with Rosanne Altshuler (Rutgers) & Stephen Shay (Harvard)) at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Alan Viard:

The United States has a worldwide system that taxes the dividends its resident multinational corporations receive from their foreign affiliates, while most other countries have territorial systems that exempt these dividends. This report examines the experience of four countries – two with long-standing territorial systems and two that have recently eliminated taxation of repatriated dividends. We find that the reasons for maintaining or introducing dividend exemption systems varied greatly among them and do not necessarily apply to the United States. Moreover, classification of tax systems as worldwide or territorial does not adequately capture differences in how countries tax foreign-source income.  

February 10, 2015 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Number of Americans Renouncing Their U.S. Citizenship Hit All-Time High in 2014

International Tax Blog, 2014 - More Expatriations Than Ever:

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 2014. .... The [3,415] total for the year breaks last year’s record number of 2,999 published expatriates. The number of expatriates for 2014 is a 14% increase over 2013. 


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February 10, 2015 in Tax | Permalink | Comments (1)

Senate Holds Hearing Today On Lessons From The 1986 Tax Reform

Senate LogoThe Senate Finance Committee holds a hearing today on Getting to Yes on Tax Reform: What Lessons Can Congress Learn from the Tax Reform Act of 1986?:

Press and blogosphere coverage:

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February 10, 2015 in Congressional News, Tax | Permalink | Comments (1)

WSJ: Avoid These 12 Tax Traps This Filing Season

Tax TrapWall Street Journal Tax Report:  Don’t Fall Into a Tax Trap: These Hidden Hazards Can Cost Taxpayers Money—or Get Them in Trouble With the IRS, by Laura Saunders:

With taxes, what you don’t know can hurt you. ... These errors aren’t the obvious bloopers that cause trouble, such as entering income information incorrectly or misstating Social Security numbers. Instead, they are tricky issues that often confuse taxpayers who do their own returns—and even some paid preparers—and cause people either to overpay Uncle Sam or invite an IRS challenge. 

Here are issues to be aware of, starting with those that are new this year.

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February 10, 2015 in IRS News, Tax | Permalink | Comments (0)

NY Times Debate: Are Economists Overrated?

NY Times Room for DebateNew York Times Room for Debate, Are Economists Overrated?:

One in 100 articles in The New York Times over the past few years have used the term “economist,” a much greater rate than other academic professions, according to a recent article in The Upshot. Economic analysis and pronouncements are crucial to most policy decisions and debates.

But given the profession’s poor track record in forecasting and planning, and the continued struggles of many Americans, have we given economists too much authority?

  • Philip Cohen (Maryland), Exceptions Overwhelm Economic Rules:  "Exploitation, dishonesty, violence, ignorance and demagoguery set vast areas of social life apart outside of economic models."
  • Diane Coyle (Manchester), Economists Deal With the Pie on the Table, Not in the Sky:  "Government decisions balance costs and benefits, winners and losers. It is best to do this explicitly, which is what economists do."
  • Marion Fourcade (UC-Berkeley), An Ambivalent Authority:  "Much of economic science is esoteric and preoccupied with internal struggles. Ideological divisions, exploited by politicians, defy clarity."
  • Peter Henry (NYU), Analyze and Explain, Don’t Prognosticate:  "Economics succeeds when used as a forensic tool, employing history and data, not creating unrealistic expectations."
  • Orlando Patterson (Harvard) & Ethan Fosse (Harvard), Don’t Rely on Pseudo-Science:  "Implementation of mainstream economic ideas has led to massive failures after expertise of other academics were ignored."
  • Charles Plott (Cal-Tech), Failures Shouldn’t Obscure Widespread Success:  "Economic science is the foundation of sound policies and techniques in business and government."

February 10, 2015 in Legal Education, Tax | Permalink | Comments (0)

Why Do Developing Countries Tax So Little?

Timothy Besley (London School of Economics) & Torsten Persson (Stockholm University), Why Do Developing Countries Tax So Little?, 28 J. Econ. Perspectives 99 (Fall 2014):

Low-income countries typically collect taxes of between 10 to 20 percent of GDP while the average for high-income countries is more like 40 percent. In order to understand taxation, economic development, and the relationships between them, we need to think about the forces that drive the development process. Poor countries are poor for certain reasons, and these reasons can also help to explain their weakness in raising tax revenue. We begin by laying out some basic relationships regarding how tax revenue as a share of GDP varies with per capita income and with the breadth of a country's tax base. We sketch a baseline model of what determines a country's tax revenue as a share of GDP. We then turn to our primary focus: why do developing countries tax so little? We begin with factors related to the economic structure of these economies. But we argue that there is also an important role for political factors, such as weak institutions, fragmented polities, and a lack of transparency due to weak news media. Moreover, sociological and cultural factors- such as a weak sense of national identity and a poor norm for compliance- may stifle the collection of tax revenue. In each case, we suggest the need for a dynamic approach that encompasses the two-way interactions between these political, social, and cultural factors and the economy.

February 10, 2015 in Scholarship, Tax | Permalink | Comments (1)