TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Sunday, October 2, 2016

The Top 5 Tax Paper Downloads

SSRN LogoThis week's list of the Top 5 Recent Tax Paper Downloads is the same as last week's, with some reshuffling of the order of the papers within the Top 5:

  1. [391 Downloads]  Property Is Another Name for Monopoly Facilitating Efficient Bargaining with Partial Common Ownership of Spectrum, Corporations, and Land, by Eric A. Posner (Chicago) & E. Glen Weyl (Yale)
  2. [210 Downloads]  Transfer Pricing Money: The Chevron Case, by Richard J. Vann (Sydney) & Graeme S. Cooper (Sydney)
  3. [175 Downloads]  Financial Advisers Can't Overlook the Prudent Investor Rule, by Max M. Schanzenbach (Northwestern) & Robert H. Sitkoff (Harvard)
  4. [159 Downloads]  Law and Macroeconomics: The Law and Economics of Recessions, by Yair Listokin (Yale)
  5. [151 Downloads]  Taxation and Human Rights: A Delicate Balance, by Reuven Avi-Yonah (Michigan) & Gianluca Mazzoni (S.J.D. 2017, Michigan)

October 2, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 1242

IRS Logo 2Politico, The Other Speaker of the House:

Jim Jordan might be the most powerful Republican in the House after Paul Ryan. But can the Freedom Caucus chief be anything more than a rebel leader?

For months, top House Republicans had blown off the House Freedom Caucus’ demands to launch impeachment proceedings against IRS Commissioner John Koskinen, seeing it as wrong on the merits and a political loser. But conservatives believe he’d lied to Congress. So Jordan — the ringleader of the 40-something rebels who’ve upended the House Republican Conference and drove John Boehner into early retirement — decided it was time for a more confrontational approach.

Early this month, he cornered Judiciary Chairman Bob Goodlatte on the House floor and presented him with a choice: Haul Koskinen in for questioning under oath, or the Freedom Caucus would force a vote on the sensitive impeachment matter just a few weeks before Election Day.
Within days, Jordan got his hearing.

In the 18-plus months since he helped launch the Freedom Caucus, Jordan has emerged as arguably the second-most influential Republican in the House after Speaker Paul Ryan (R-Wis.). The 52-year-old ex-wrestling champion from Ohio has routinely thwarted his own Republican leadership’s priorities in a drive to push his party’s agenda rightward, rallying his troops to sink Ryan-led legislative initiatives they feel are way too accommodating to the left.

His power, though, seems to have reached a tipping point. An increasing number of Jordan’s Republican House colleagues are fed up with his tactics. In the case of the impeachment hearing, it gave him and his allies another cathartic moment to rake Koskinen over the coals, but the exercise mostly just angered other Republicans. And the odds of Koskinen ultimately losing his job are next to nil.

“You have the tail wagging the dog, a small group of 40 people basically dictating to leadership: This is what we will or will not allow you to do,” said one senior Republican allied with House GOP leadership. “It’s an inversion of political influence.”

Jordan stands by the group’s damn-the-torpedoes approach, on impeachment and plenty of other matters (and there have been plenty). He says Republicans have a disturbing habit of caving to Democrats, and a different approach is needed to start securing some GOP victories, especially on fiscal policy.

“We have to win on something,” he said during an interview in his central Ohio district, frustration bubbling in his voice. “It’s like a football team that’s 0 and 9. The last week of the season, you’re not playing for the state playoffs; you’re playing to win the game and set the tone for the future. My attitude is: Let’s win on one issue to set a different tone and create a different dynamic … We have to win on something!”

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October 2, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Saturday, October 1, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Death Of Senate Finance Committee Republican Tax Staffer Jim Lyons (Age 43)

Senate Finance Committee tax counsel Jim Lyons died Thursday at the age of 43 after suffering cardiac arrest while playing in a charity basketball game at George Washington University.  Here is his professional CV:

  • J.D. (1999), Texas
  • Tax LL.M. (2000), NYU
  • Law Clerk (2000-01), W. Eugene Davis, U.S. Court of Appeals for the Fifth Circuit
  • Tax Associate (2001-04), Cleary, Gottleib, Steen & Hamilton, New York
  • Republican Tax Staff (2004-05), House Ways & Means Committee
  • Civil Trial Attorney (2005-08), U.S. Department of Justice Tax Division 
  • Republican Tax Staff (2008-16), Senate Finance Committee

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October 1, 2016 in Congressional News, Tax | Permalink | Comments (0)

ABA Tax Section Fall CLE Meeting

ABA Tax Section Logo (2012)The ABA Tax Section concludes its three-day joint Fall CLE Meeting with the ABA Real Property, Trust and Estate Law Section today in Boston. The full program is here.  Tax Profs with speaking roles today include:

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October 1, 2016 in ABA Tax Section, Conferences, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1241

IRS Logo 2Judicial Watch Press Release, Democratic Senator Sought Justice Department and IRS Criminal Prosecutions of Conservatives in 2013:

Judicial Watch today released 72 pages of Department of Justice documents revealing email conversations between Department of Justice officials and the staff of Sen. Sheldon Whitehouse (D-RI) regarding the criminal prosecution of Tea Party groups for alleged violation of IRS rules.

The conversations were in preparation for a briefing by Justice Department officials for Sen. Whitehouse’s staff and for a Senate Judiciary Subcommittee on Crime and Terrorism hearing on April 9, 2013. ...

Judicial Watch obtained the documents through a federal court order in a Judicial Watch Freedom of Information Act (FOIA) lawsuit (Judicial Watch v Department of Justice (No. 1:14-cv-01239)).

Later, at the Judiciary Subcommittee hearing, Sen. Whitehouse asked why the Department of Justice wasn’t prosecuting political groups on its own, independently of the IRS. ...

The newly released emails show that following the hearing, at the request of Justice Department lawyers, Sen. Whitehouse’s staff sent over examples of the organizations Whitehouse had in mind for prosecution. They included American Future Fund, Crossroads GPS, Americans for Responsible Leadership, Freedom Path, American is Not Stupid, Inc., II, and A Better America Now. All of these are conservative organizations.

The new emails also show collaboration in the Department of Justice with officials in the IRS in preparing for the hearing. The IRS sent a draft of its planned testimony for the hearing to the Justice Department.  Judicial Watch previously exposed a plan by the Obama IRS and Justice Department prosecutors to pursue criminal charges against the very Tea Party and anti-Obama groups that the IRS was targeting.

The Obama administration prosecution effort seemingly ended with the exposure of the IRS targeting in a May 2013 report by the Treasury Inspector General for Tax Administration (TIGTA).  IRS official Lois Lerner did not reveal the targeting until just before the report’s release, in response to a planted question at an American Bar Association conference.

“The Obama IRS scandal includes abuse of power by Democrats in Congress who wanted to jail Obama’s political opponents to help secure Obama’s reelection,” said Judicial Watch President Tom Fitton.  “And Americans should know that the courts have recently concluded the Obama IRS abuses haven’t stopped – even as we approach another presidential election.”

A 2013 study by scholars from the American Enterprise Institute and the John F. Kennedy School of Government at Harvard University found that, “had the Tea Party groups continued to grow at the pace seen in 2009 and 2010, and had their effect on the 2012 vote been similar to that seen in 2010, they would have brought the Republican Party as many as 5 – 8.5 million votes compared to Obama’s victory margin of 5 million.”

In March 2010, the IRS decided to single Tea Party groups out for special treatment when applying for tax-exempt status by flagging organizations with names containing “Tea Party,” “patriot,” or “9/12.” For the next two years, the IRS approved the applications of only four such groups, delaying all others while subjecting the applicants to highly intrusive, intimidating requests for information regarding their activities, membership, contacts, Facebook posts, and private thoughts.

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October 1, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (5)

Friday, September 30, 2016

Weekly SSRN Tax Article Review And Roundup

This week, David Gamage (UC-Berkeley) reviews a new paper on a topic of great concern to many law students:  Treasury Should Exclude Income from Discharge of Student Loans, by John R. Brooks (Georgetown), 152 Tax Notes 751 (Aug. 1, 2016).

Gamage (2016)As anyone who has taken the basic law school tax course should know, the doctrines surrounding discharge of indebtedness income are troubled and often incoherent.  I have found that law students are especially anxious about the possibility of having discharge of indebtedness income from the cancellation of student loans through the federal government’s Income-Based Repayment (IBR) and Pay as You Earn (PAYE) programs.  (Note to tax law professor readers: these topics make great vehicles for teaching discharge of indebtedness doctrines!)

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September 30, 2016 in Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (2)

Mason Presents Citizenship Taxation Today At Florida

Mason (2015)Ruth Mason (Virginia) presents Citizenship Taxation, 89 S. Cal. L. Rev. 169 (2016), at Florida today as part of its Tax Policy Colloquium Series hosted by Yariv Brauner:

The United States is the only country that taxes its citizens’ worldwide income, even when those citizens live indefinitely abroad. This Article critically evaluates the traditional equity, efficiency, and administrability arguments for taxing nonresident citizens. It also raises new arguments against citizenship taxation, including that it puts the United States at a disadvantage when competing with other countries for highly skilled migrant.

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September 30, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Tax Profs Weigh In On The Trump Foundation's Tax Issues

Washington Post, How Donald Trump Retooled His Charity to Spend Other People’s Money:

Trump 2

New York Times op-ed: An Uncharitable Foundation, by Linda Sugin (Fordham):

In addition to being the Republican nominee for president, Donald J. Trump is president of the relatively small Donald J. Trump Foundation and chairman of the relatively large Trump Organization. Although the foundation is a charitable organization, it appears to have been used for less than charitable purposes.

According to exhaustive reporting by David A. Fahrenthold of The Washington Post, Mr. Trump may have used the foundation to pay expenses for his business, to buy himself gifts and to make a political contribution. These things are all clearly prohibited under both federal and state charities law. No competent lawyer would advise a charitable foundation that such payments were allowable, and only someone with no respect for charity would so flagrantly violate these basic rules. ...

Americans who give to, volunteer with, or depend on charities should know that politicking and self-dealing by charities are never acceptable. The candidate’s apparent disregard for the law does not bode well for a Trump administration.

Slate:  What Is the Trump Foundation? It’s Supposed To Be A Charity. It Looks A Lot More Like A Personal Piggy Bank, by Adam Chodorow (Arizona State) 

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September 30, 2016 in Political News, Tax | Permalink | Comments (8)

ABA Tax Section Fall CLE Meeting

ABA Tax Section Logo (2012)The ABA Tax Section continues its three-day joint Fall CLE Meeting with the ABA Real Property, Trust and Estate Law Section today in Boston. The full program is here.  Today's highlight is the joint program of the Teaching Taxation and State & Local Taxes sections on Out of Ferguson: Misdemeanors as Taxes and Municipal Courts as Tax Collectors:

The 2014 events in Ferguson, Missouri brought the operation of the municipal justice system in St. Louis County, Missouri into the public eye. Most of the 91 municipalities in St. Louis County have their own police force and municipal court. Increasingly, the police and municipal courts have been charged with a revenue raising function. City administrators have encouraged police to issue misdemeanor citations, primarily for traffic offenses including driving without insurance and failure to renew vehicle registration or the operator’s license. According to a Department of Justice Report on Ferguson, policing in Ferguson had come to serve primarily a revenue function, so that the police and courts became relatively little concerned with public safety in enforcing laws and more in generating revenue. This joint program will consider the impact of reclassifying these fines and penalties as taxes.

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September 30, 2016 in ABA Tax Section, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1240

IRS Logo 2Letter To House Judiciary Committee Chair Bob Goodlatte and Ranking Member John Conyers, Jr. (Sept. 20, 2016):

As you know, certain Republican members of Congress have renewed their effort to impeach Commissioner Koskinen in recent weeks, and their core accusation is that Commissioner Koskinen ordered the destruction of documents to conceal them from congressional and law enforcement investigators. ...

The fundamental problem with this accusation is that there is no evidence to support it. To the contrary, this specific allegation has been investigated and debunked by the Treasury Inspector General for Tax Administration, which is led by J. Russell George, who formerly served as a Republican staff member of the House Committee on Oversight and Government Reform. 

On June 30, 2015, the Inspector General's office issued a Report of Investigation entitled "Exempt Organizations Data Loss" (#54-1406-008-I). According to this report, the Inspector General's staff interviewed 118 witnesses—far more than the Oversight and Government Reform Committee, Ways and Means Committee, or the Judiciary Committee—and they reviewed emails from employees in Martinsburg, West Virginia, where two low-level employees recycled, or "degaussed," backup tapes that included emails from lois Lerner.

In its report last year, the Inpsector General's office concluded:  "No evidence was uncovered that any IRS employees had been directed to destroy or hide information from Congress, the DOJ, or TIGTA." ...

We urge all Members to consider the evidence that has been obtained and the conclusions that several previous investigations have made in this case after reviewing a much more substantial record. If the Judiciary Committee decides to continue down this path with additional hearings, then we suggest that you invite the Inspector General to testify about his findings and the extensive investigation his office has conducted on this matter.

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September 30, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (2)

Thursday, September 29, 2016

2017 Business Tax Climate: Chilliest in Blue States

Tax Foundation logoThe Tax Foundation has released the 2017 State Business Tax Climate Index, which ranks the fifty states according to five indices: corporate tax, individual income tax, sales tax, unemployment insurance tax, and property tax. Here are the ten states with the best and worst business tax climates:






South Dakota










Rhode Island










New Hampshire


District of Columbia








New York




New Jersey

Interestingly, nine of the ten of the states with the worst business tax climates voted for Barack Obama in the 2012 presidential election, and six of the ten states with the best business tax climates voted for Mitt Romney.

2017 Business Tax Climate


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September 29, 2016 in Tax, Think Tank Reports | Permalink | Comments (2)

IRS 'Wealth Squad' Targets The Top 1%

IRS Logo 2Bloomberg, You Do Not Want to Be On the Radar of the IRS Wealth Squad:

The very rich are different from you and me. They even have their own IRS audit squad.

Saturday marks the start of the fourth quarter, a time of financial reckoning, of crashing toward quotas and scrambling to reach year-end targets. Corporations and individuals alike rush to cut the income tax they'll need to pay next year. Some go too far (or just miss things, or misunderstand what and how they need to report). The IRS collected $6.3 billion last year assessing taxpayers for underreported income. Among them are the big fish, honored with the IRS equivalent of a SWAT team.

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September 29, 2016 in IRS News, Tax | Permalink | Comments (1)

The IRS Scandal, Day 1239

IRS Logo 2Breitbart, Anti-Israel J Street Wants the IRS Scandal to Continue:

J Street, the far-left organization that styles itself as “pro-Israel, pro-peace” but in practice works to lobby against Israel in Congress and the media, is continuing its pursuit of conservative pro-Israel non-profit groups as if the IRS scandal had never happened.

In 2010, J Street began pressuring the U.S. Treasury to investigate pro-Israel non-profit groups and charities that spent money in the West Bank, accusing them of fueling the Israeli-Palestinian conflict by supporting Israeli settlements. (When pressed to explain why J Street was not also asking the federal government to investigate Islamic charities in the U.S. that may spend money on anti-Israel causes, J Street president Jeremy Ben-Ami memorably said: “I don’t give a shit about Islamic charities.”)

J Street’s efforts were part of a broad campaign by the Democratic Party and its senior leadership, in the wake of the Supreme Court’s decision in Citizens United, to encourage the IRS to investigate conservative non-profit groups and charities. As Wall Street Journalcolumnist Kimberley Strassel documents in her new book, The Intimidation Game: How the Left Is Silencing Free Speech, these efforts, encouraged by President Barack Obama, helped encourage the illegal behavior in the IRS scandal.

One of the groups singled out for discrimination by the IRS was the pro-Israel non-profit group Z Street, which was meant to be a counter-weight to J Street (which is itself a non-profit, with a separate political action committee). Like Tea Party groups and other conservative organizations seeking recognition from the IRS at the time, Z Street faced additional, unusual scrutiny, which included questions that challenged the group’s political beliefs — which are none of the federal government’s business.

In 2010, Matthew Hausman of the Jewish Policy Center noted that the discrimination against of Z Street “occurred not long after the left-wing organization J Street announced its campaign to lobby the Treasury Department to revoke the tax-exempt status of Jewish charities that support religious and cultural institutions in Judea and Samaria.” Z Street is still fighting, and winning, legal battles against the IRS. But other than that, the culprits in the IRS scandal remain unpunished and unashamed. ...

J Street’s shameless effort to encourage Treasury and the IRS to continue the abuse of pro-Israel, conservative groups right where they left off is not only a sign of how dangerous the group is to the future of free speech and freedom of assembly in the U.S., but also a warning of the kind of abuse conservatives can expect under a Hillary Clinton administration if she wins. Clinton has vowed to repeal Citizens United, and wants the IRS to have the authority to do legally what it once did illegally.

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September 29, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)

Wednesday, September 28, 2016

Slemrod Presents The Impact Of Public Tax-Return Disclosure Today At Pennsylvania

SlemrodJoel Slemrod (Michigan) presents The Impact of Public Tax-Return Disclosure (with Jeffrey L. Hoopes (North Carolina) & Leslie Robinson (Dartmouth)) at Pennsylvania today as part of its Tax Policy Workshop Series hosted by Chris Sanchirico and Reed Shuldiner:

We investigate the effect of public disclosure of information from corporate tax returns filed in Australia on consumers, investors, and the corporations themselves that were subject to disclosure. We find some evidence that, for firms subject to disclosure, consumer sentiment declines for relatively small private companies, and that investor reaction is negative for both Australian public firms and non-Australian public firms with Australian operations. Regarding firm behavior, we find evidence that some firms took action to avoid disclosure, adjusting their reported income in order to fall below the disclosure threshold. Other firms that did not avoid disclosure appear to have reported paying more in tax in the year of the disclosure.

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September 28, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Tax Break For Olympic Heroes? A Sole Lawmaker Says No

Olympic RingsNew York Times, Tax Break for Olympic Heroes? A Sole Lawmaker Says No:

A group of United States Olympians from the Rio Games is set to visit the White House on Thursday. It’s a safe bet that one particular lawmaker will be excluded from the guest list.

That would be Representative Jim Himes, Democrat of Connecticut, a former Harvard rower who last week cast the only vote against a bill that would give most United States Olympic and Paralympic medalists a tax break on their victory bonuses.

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September 28, 2016 in Tax | Permalink | Comments (1)

Oei & Ring:  Can Sharing Be Taxed?

AUShu-Yi Oei (Tulane) & Diane Ring (Boston College), Can Sharing Be Taxed?, 93 Wash. U. L. Rev. 987 (2016):

In the past few years, we have seen the rise of a new model of production and consumption of goods and services, often referred to as the “sharing economy.” Fueled by startups such as Uber and Airbnb, sharing enables individuals to obtain rides, accommodations, and other goods and services from peers via personal computer or mobile application in exchange for payment. The rise of sharing has raised questions about how it should be regulated, including whether existing laws and regulations can and should be enforced in this new sector or whether new ones are needed.

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September 28, 2016 in Scholarship, Tax | Permalink | Comments (1)

The IRS Scandal, Day 1238

IRS Logo 2Wall Street Journal, An Impeachment, the IRS and Accountability:

Regarding Rep. John Conyers’s op-ed A Dangerous Rush to Impeach John Koskinen (Sept. 23): My understanding of Mr. Koskinen’s actions is that as head of the IRS he did nothing to stop the destruction of email evidence, has not provided documentation requested under the FOIA and has continued to obstruct and obfuscate requests for information by the House of Representatives. If this is correct, I ask Rep. Conyers to explain, in a bipartisan fashion, why these as well as other IRS actions are not actions in “deliberate bad faith.” As head of the IRS, he is accountable for all actions taken by the IRS, period.
Stephen Kane
Troy, Mich.

Rep. Conyers lets the cat out of the bag in telling us that in government you must prove someone acted in bad faith to get fired. Mr. Conyers, in the private sector in Illinois and some other states, an employer doesn’t have to have a reason to fire someone. But Mr. Koskinen can be oblivious to employee malfeasance and not be held responsible. I bet Wells Fargo Chief Executive John Stumpf wishes he were head of a government agency.
Ken Nelson

I’m pretty sure that if John Koskinen’s agency had targeted liberals using the IRS’s vast power, John Conyers would be leading the charge for impeachment.
Tom Fleming
Caseyville, Ill.

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September 28, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Tuesday, September 27, 2016

Tax Court Allows Estate To Deduct Loss From Bernie Madoff Investment Account Held As Sole Asset Of Family LLC Of Which Decedent Owned 99%

BetrayalEstate of Heller v. Commissioner, 147 T.C. No. 11 (Sept. 26, 2016):

James Heller, a resident of New York, New York, died on January 31, 2008. At that time he owned a 99% interest in James Heller Family, LLC (JHF). James Heller's daughter, Barbara H. Freitag, and his son, Steven P. Heller, each held a 0.5% interest in JHF. Harry H. Falk managed JHF, the only asset of which was an account (JHF Madoff account) with Bernard L. Madoff Investment Securities, LLC (Madoff Securities). ... 

On December 11, 2008, Bernard Madoff, the chairman of Madoff Securities, was arrested, and the Securities and Exchange Commission issued a press release to alert the public that it had charged him with securities fraud relating to a multibillion-dollar Ponzi scheme. ... As a result of the Ponzi scheme, JHF's interest in the JHF Madoff account and the estate's interest in JHF became worthless.

The estate on April 1, 2009, timely filed Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, on which the estate reported a $26,296,807 gross estate, including the value of James Heller's 99% interest in JHF (i.e., $16,560,990). The estate also claimed a $5,175,990 theft loss deduction relating to the Ponzi scheme, the amount of which reflects the difference between the value of the estate's interest in JHF reported on the estate tax return and the estate's share of the amounts withdrawn from the JHF Madoff account. Respondent on February 9, 2012, issued the estate a notice of deficiency in which respondent determined that the estate was not entitled to the $5,175,990 theft loss deduction because the estate did not incur a theft loss during its settlement.

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September 27, 2016 in New Cases, Tax | Permalink | Comments (0)

Brooks:  Treasury Should Exclude Income From Discharge Of Student Loans

John R. Brooks (Georgetown), Treasury Should Exclude Income from Discharge of Student Loans, 152 Tax Notes 751 (Aug. 1, 2016):

There are several ways that a student loan borrower can have a federal student loan discharged. In some cases, that cancellation of student debt creates taxable income, but in others it does not. This Article argues that taxing cancellation of student debt undermines the purposes of loan discharge and income-driven repayment programs like IBR and PAYE. This Article further argues that, if Congress does not act to provide a clear exclusion, Treasury has sufficient statutory and common law authority to exclude that income, and that it should do so.

September 27, 2016 in Scholarship, Tax | Permalink | Comments (0)

Hillary Clinton's Proposed 65% Estate Tax Rate Causes Dilbert Creator Scott Adams To Switch His Endorsement To Trump

TrumpFollowing up on Friday's post, Hillary Clinton Proposes Raising Estate Tax Rate From 40% To 65%:, Why I Switched My Endorsement from Clinton to Trump:

As most of you know, I had been endorsing Hillary Clinton for president, for my personal safety, because I live in California. It isn’t safe to be a Trump supporter where I live. And it’s bad for business too. But recently I switched my endorsement to Trump, and I owe you an explanation. So here it goes.

Clinton proposed a new top Estate Tax of 65% on people with net worth over $500 million. Her website goes to great length to obscure the actual policy details, including the fact that taxes would increase on lower value estates as well. See the total lack of transparency here, where the text simply refers to going back to 2009 rates. It is clear that the intent of the page is to mislead, not inform.

So don’t fall for the claim that Clinton has plenty of policy details on her website.

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September 27, 2016 in Political News, Tax | Permalink | Comments (14)

The IRS Scandal, Day 1237


Politifact, John Fleming Attacks IRS in Inaccurate Radio Ad:

In a recent radio campaign ad, Louisiana senate candidate John Fleming claimed that the head of the Internal Revenue Service ordered 24,000 emails erased before Congress could see them.

"The head of the IRS ordered 24,000 emails erased before Congress could review them, making sure the American people will never know the real truth," Fleming’s ad says. "The officials in charge follow the same dishonest playbook they’ve used for every scandal from Fast and Furious to Hillary’s emails."

Fleming is running for senator of Louisiana against six Republican candidates, including David Duke, as well as three Democrats and one unaffiliated candidate.

Fleming — who currently represents Louisiana in the House — is calling for the impeachment of IRS commissioner John Koskinen.

So far, Democrats are largely against the impeachment, and Republicans are divided on it, citing due process concerns. A vote on the matter was expected on Sept. 15, 2016, but it was delayed.

Since destruction of documents is a serious charge, we wondered if it was true that the head of the IRS "ordered 24,000 emails erased before Congress could review them." Independent reports suggest that’s not the case. ...

Emails were erased, and up to 24,000 are likely unrecoverable. However, there’s zero evidence that the head of the IRS ordered them destroyed. Multiple independent investigations confirmed that the erasure was accidental and not intended to obstruct information from Congress. Fleming’s ad says the opposite.

We rate this claim False.

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September 27, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (23)

Monday, September 26, 2016

Peroni Presents Defending Worldwide Taxation Today At Loyola-L.A.

Peroni (2015)Robert J. Peroni (Texas) presents Defending Worldwide Taxation and Addressing Inversions with a Shareholder-Based Definition of Corporate Residence, 2016 BYU L. Rev. ___ (with J. Clifton Fleming, Jr. (BYU) & Stephen Shay (Harvard)), at Loyola-L.A. today as part of its Tax Policy Colloquium Series hosted by Ellen Aprill and Katherine Pratt:

This article argues that a principled, efficient, and practical definition of corporate residence is necessary even if some form of corporate integration is adopted, and that such a definition is a key element in designing either a real worldwide or a territorial income tax system as well as a potential restraint on the inversion phenomenon. The article proposes that the United States adopt a shareholder-based definition of corporate residence that is structured as follows:

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September 26, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

Batchelder:  Trump Plan Raises Taxes For Millions Of Low- And Middle-Income Families

Trump (2016-2)Lily L. Batchelder (NYU), Families Facing Tax Increases Under Trump's Latest Tax Plan:

Donald Trump’s latest tax plan would cost more than $5 trillion over 10 years. Trump claims his plan would cut taxes for every income group, with the largest tax cuts for working- and middle-class families. But despite its enormous price tag, his plan would actually significantly raise taxes for millions of low- and middle-income families with children, with especially large tax increases for working single parents.

This paper explains why Trump’s latest tax plan raises taxes on so many families and provides examples of how large these tax increases would be. I conservatively estimate that Trump’s plan would increase taxes for roughly 7.8 million families with minor children. These families who would pay more taxes represent roughly 20% of households with minor children and more than half of single parents. They include roughly 25 million individuals and 15 million children.

Washington Post, A New Study Says Trump Would Raise Taxes for Millions. Trump’s Campaign Insists He Won’t.:

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September 26, 2016 in Political News, Scholarship, Tax | Permalink | Comments (2)

The Top 1% By State, Metropolitan Area, And County

New York Times: Your Local 1-Percenters May Not Be as Rich as You Think, by Robert Frank & Karl Russell:

[D]efining America’s 1 percent — and finding out “where the money is” — has become an increasingly subjective endeavor. As wealth becomes more concentrated in certain states and even counties, the gap between the national 1 percent and the local 1 percent is growing, creating wealth clusters that are pulling away from the rest of the country.

To be in the top 1 percent of incomes nationally, families need to take in a minimum of $389,436. The average income of America’s 1-percenters is $1,153,293, according to a recent study by the Economic Policy Institute [Income Inequality in the U.S. by State, Metropolitan Area, and County]. Yet when incomes are measured state by state, the study shows wildly diverging fortunes for 1-percenters.


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September 26, 2016 in Tax | Permalink | Comments (0)

Husband Of Retired Tax Court Judge Pleads Guilty To Taking $1 Million In Fraudulent Deductions

TCKFollowing up on my previous posts:

Minneapolis Star Tribune, Twin Cities Husband of Ex-Tax Judge Admits Duping IRS; Charges Against Her Pending:

The husband of a former U.S. Tax Court judge has pleaded guilty to making nearly $1 million in fraudulent deductions on tax returns over much of her tenure on the bench and making several lavish purchases in that time through his consulting firm.

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September 26, 2016 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 1236

IRS Logo 2Wall Street Journal, Reputation Under Fire, the IRS Pulls a Gun—Al Capone’s:

The Internal Revenue Service doesn’t enjoy an abundance of favorable press. At present, it finds itself mired in controversy as its director, John Koskinen, hauled before Congress last week, tries to fend off an impeachment attempt.

On Tuesday, however, the IRS will participate in an unveiling ceremony it hopes will remind people of the positive things its agents have done. At least, one positive thing.

The agency is playing on the great American story of how Chicago mob boss Al Capone ended up in prison 85 years ago. It wasn’t the FBI’s “G-men” who put him in Alcatraz, nor Elliot Ness’s Prohibition-era agents. It wasn’t on account of gangland murders such as the 1929 Chicago Valentine’s Day Massacre, either.

Capone was undone by an undercover operation of the “T-men,” members of the Treasury Department’s IRS investigative division. He was pinched for cheating on his taxes.

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September 26, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

TaxProf Blog Weekend Roundup

Sunday, September 25, 2016

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 #4 and #5:

  1. [387 Downloads]  Property Is Another Name for Monopoly Facilitating Efficient Bargaining with Partial Common Ownership of Spectrum, Corporations, and Land, by Eric A. Posner (Chicago) & E. Glen Weyl (Yale)
  2. [178 Downloads]  Transfer Pricing Money: The Chevron Case, by Richard J. Vann (Sydney) & Graeme S. Cooper (Sydney)
  3. [170 Downloads]  Financial Advisers Can't Overlook the Prudent Investor Rule, by Max M. Schanzenbach (Northwestern) & Robert H. Sitkoff (Harvard)
  4. [119 Downloads]  Taxation and Human Rights: A Delicate Balance, by Reuven Avi-Yonah (Michigan) & Gianluca Mazzoni (S.J.D. 2017, Michigan)
  5. [105 Downloads]  Law and Macroeconomics: The Law and Economics of Recessions, by Yair Listokin (Yale)

September 25, 2016 in Scholarship, Tax, Top 5 Downloads | Permalink | Comments (0)

The IRS Scandal, Day 1235

IRS Logo 2Wall Street Journal op-ed: A Dangerous Rush to Impeach John Koskinen, by John Conyers (D-MI; Ranking Member, House Judiciary Committee):

The power of impeachment is a responsibility entrusted to the House of Representatives by the Constitution and to the House Judiciary Committee by our peers. I take this charge very seriously—and, for the most part, so do my colleagues in the majority.

I have served on the House Judiciary Committee long enough now to see impeachment done right and to see impeachment done wrong. I have participated in six of the 19 impeachments approved by the House since its inception. I voted in favor of five of them. In the early 1970s I helped to draft articles of impeachment against President Richard Nixon. I joined with 20 Democrats and six Republicans to send three of those articles to the House floor.

But I have never seen anything quite like the obsession of a few House members determined to impeach IRS Commissioner John Koskinen—without much evidence to back their claims, without an independent investigation by the House Judiciary Committee, and without even basic due process for the accused. ...

In the past few days, the actions of a small group of conservative House members threaten to break from this precedent and to lead us down a dangerous path. ...

On the merits, Mr. Koskinen’s critics have simply failed to make their case. They have been unable to produce evidence that the commissioner acted in bad faith at any point in his tenure. The Senate Finance Committee, the Justice Department and the Treasury Inspector General for Tax Administration have all concluded that there is “no evidence” of intentional misconduct of any kind.

But even if there were some evidence of Mr. Koskinen’s wrongdoing, the push to impeach him without due process in the House Judiciary Committee is dangerously misguided. Never, in the history of this body, have we impeached a government official without first proving he has acted in deliberate bad faith. ...

If the commissioner’s critics have their way, I fear we will have a new rule going forward: The House may impeach any government official, for any reason, without supplying evidence of deliberate wrongdoing, without an independent investigation, and without regard to basic fairness toward the accused.

Forcing a vote on impeachment in this manner will certainly not result in the removal of Commissioner Koskinen. Even if his critics succeed in the House, Senators of both parties have already stated their intent to bury the matter. So for all their efforts they will have profited nothing. And in the process they will have turned impeachment from a constitutional check of last resort into a tool of political convenience.

Washington Post op-ed:  Republicans’ Kangaroo Court, by Dana Milbank:

Impeachment is among the most severe and solemn powers Congress has, right up there with declaring war. Not since 1876 has an executive-branch appointee been impeached, and not in the history of the republic has Congress impeached an executive-branch official below the Cabinet level.

Now, Republicans in Congress would change that. On Wednesday, they wheeled out the sacred tool of impeachment — weeks before an election — for the purpose of smearing an honorable public servant, IRS Commissioner John Koskinen, in service of a lie. ...

There are just a few wee problems with the Republicans’ logic. The targeting of conservative groups ended in 2013. The Treasury Department’s inspector general, originally a Republican appointee, reported no evidence of political motivation in the targeting. The Justice Department, too, found “no evidence that any IRS official acted based on political, discriminatory, corrupt, or other inappropriate motives” and “no evidence that any official attempted to obstruct justice.” The official responsible for the targeting resigned before Koskinen came to the IRS at the end of 2013. And the same IG said last year that “no evidence was uncovered that any IRS employees had been directed to destroy or hide information from Congress, the DOJ, or [the IG].”

House Speaker Paul Ryan, eager to avoid the spectacle of the House voting to impeach an innocent man based on false charges without a proper hearing, got impeachment advocates to settle for Wednesday’s hearing in which Koskinen testified before the House Judiciary Committee. But that hardly improved matters: To say this impeachment inquiry is a kangaroo court would be an insult to marsupials. ...

There’s no dispute that Koskinen misinformed lawmakers in 2014 when he said that all evidence had been preserved relevant to the targeting. In fact, IRS workers a few months earlier had destroyed backup tapes that contained relevant emails. Koskinen says he didn’t know that at the time. The IG spent a year investigating the matter and attributed the erasure to bureaucratic errors, finding “no evidence that the IRS and its employees purposely erased the tapes in order to conceal responsive e-mails from the Congress.”

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September 25, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (3)

Saturday, September 24, 2016

This Week's Ten Most Popular TaxProf Blog Posts

Obama Has Redistributed More Wealth To The Bottom 99% Through The Tax Code Than Any Administration Since At Least 1960

White HouseWall Street Journal, The White House Says Its Policies Slashed the Income Gap:

One of the big criticisms of the current economic expansion—and also the one that ran from 2001 through 2007—is that most of the gains accrued to the best off, unleashing a populist groundswell in the presidential election campaign.

The White House lays out the case in a new report that the Obama administration’s policies have done more than any administration in the last half-century to reduce inequality [The Economic Record of the Obama Administration: Progress Reducing Inequality] ...

The upshot is these changes in tax and health-care policy will increase the share of after-tax income by the poorest fifth of households by 0.6 percentage point while reducing the share of the wealthiest 1% of households by 1.2 percentage points.

Taken together, the administration says that it has done more to redistribute wealth to the bottom 99% of families through tax-code changes than any administration since at least 1960. The share of after-tax income from the poorest fifth of households fell by nearly 25% from 1979 to 2007, and the White House says its tax and health-care changes have reversed one-third of that decline.


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September 24, 2016 in Gov't Reports, Tax | Permalink | Comments (3)

The IRS Scandal, Day 1234

IRS Logo 2Hot Air, The IRS Chief’s Meeting With the Judiciary Committee Didn’t Go Particularly Well:

You may recall that only a week ago the House decided to postpone an impeachment vote for IRS commissioner John Koskinen in favor of holding hearings instead. This clearly distressed a number of conservatives who feel that the mismanagement of the agency and its various scandals were more than sufficient grounds to give the man his walking papers. Still, the hearings were bound to produce some fireworks and the first round certainly didn’t disappoint. Today I wanted to hit a few of the highlights.

Right out of the gate, Koskinen was asked about previous statements he’d made under oath regarding the preservation and recovery of emails and other documents from the entire Lois Lerner affair. When pressed on the subject, the commissioner didn’t exactly say that he’d lied about it, but did admit that some of the things he said turned out not to be true. ...

I suppose that comes down to the age old question of whether you lied or you were simply wrong about something. That’s a question which the committee (and the public) will have to answer for themselves.

There was another question raised concerning the IRS employees who were found to have deleted all of those Lois Lerner emails. Surely these are the culprits we’re looking for here. I imagine they must be cooling their heels in jail by now or at least awaiting trial, right? Nope. Turns out that they are both still on the IRS payroll… just in a different department....

Don’t even get me started on that entire saga again. We’ve written about it here extensively and the idea that someone in that department could have been “unaware” of the maelstrom surrounding their office is beyond the pale. But as long as the stonewall continues, there doesn’t seem to be much that anyone can do about it… short of impeaching the boss. Yet when he was asked about the rather, er… suspicious timing of all those records being destroyed, Koskinen didn’t have much of an answer.


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September 24, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Friday, September 23, 2016

Weekly SSRN Tax Article Review And Roundup

This week, Ari Glogower (Ohio State) reviews a new paper by Edward Kleinbard (USC), Capital Taxation in an Age of Inequality, the first installment of a two-part project proposing a new tax instrument, the Dual Business Enterprise Income Tax (BEIT).  Kleinbard’s current article explores the theory behind the Dual BEIT, while a subsequent follow up article will describe its technical operation.  

Glogower (2016)In brief, the Dual BEIT, which builds on Kleinbard’s prior proposals, operates as a single flat-rate tax on capital income, divided between an investor-level tax on normal returns, and a business-level tax on profits.  The investor-level tax is implemented through a tax on deemed normal returns to investments.  Businesses deduct a cost of capital allowance of the same normal return (regardless of whether the business is financed by debt or equity), resulting in a business-level tax on profits.

The article begins with a series of arguments justifying capital income taxation in general:  First, the classic optimal tax theory result that normal returns to saving should not be taxed has “no practical lessons to teach” in a world with inherited capital and gratuitous transfers.  Second, capital income taxation addresses increasing concerns with wealth and income concentration.  Third, taxing capital income taxes is necessary to raise revenue for public investment and social insurance programs.  Fourth, recent studies, including by the IMF and the OECD, suggest that reducing inequality may increase economic growth.

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September 23, 2016 in Legal Education, Scholarship, Tax, Weekly SSRN Roundup | Permalink | Comments (0)

Hillary Clinton Proposes Raising Estate Tax Rate From 40% To 65%

Clinton KaineWall Street Journal, Hillary Clinton Proposes 65% Top Rate for Estate Tax:

Democratic presidential candidate Hillary Clinton would levy a 65% tax on the largest estates and make it harder for wealthy people to pass appreciated assets to their heirs without paying taxes, expanding the list of tax increases she would impose on the top sliver of America’s affluent.

The estate-tax increase and other new proposals that Mrs. Clinton detailed on Thursday would generate $260 billion over the next decade, enough to pay for her plans to simplify small business taxes and expand the child tax credit, according to the nonpartisan Committee for a Responsible Federal Budget [more here], which advocates fiscal restraint.

In all, Mrs. Clinton would increase taxes by about $1.5 trillion over the next decade, increasing federal revenue by about 4%, though that new burden would be concentrated on relatively few households. There is at least a $6 trillion gap between her plan and the tax cuts proposed by her Republican rival Donald Trump.

The Clinton campaign changed its previous plan—which called for a 45% top rate—by adding three new tax brackets and adopting the structure proposed by Sen. Bernie Sanders of Vermont during the Democratic primaries. She would impose a 50% rate that would apply to estates over $10 million a person, a 55% rate that starts at $50 million a person, and the top rate of 65%, which would affect only those with assets exceeding $500 million for a single person and $1 billion for married couples.


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September 23, 2016 in Political News, Scholarship, Tax | Permalink | Comments (6)

28 Florida Graduate Tax Alumni Academics Respond To Robert Rhee's Critique Of The Program

Florida Logo (GIF)Florida Graduate Tax Program Alumni Academics Letter:

Dear Ladies and Gentlemen:

We the undersigned graduates of the UF Tax Program have read the various blog posts and other public information that have emerged regarding the Tax Program at the University of Florida Frederic G. Levin College of Law. As alumni in academia, we write to express gratitude to Tax Program faculty, appreciation for its in-residence structure, and stress the importance of preserving (and even enhancing) one of the truly great programs in legal education. The UF Tax Program represents much of what is good in legal education.

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September 23, 2016 in Legal Education, Tax | Permalink | Comments (2)

Omri Marian Responds To Robert Rhee's Critique Of Florida's Graduate Tax Program

Marian (2016)Following up on my previous posts (links below) on the controversy surrounding the Florida Graduate Tax Program: Omri Marian, who started his academic career at Florida before joining the UC-Irvine faculty in 2015, has written a withering 28-page letter responding to Robert Rhee's 24-page critique of Florida's graduate tax program. Here are the introduction and conclusion to the letter:

Dear community of tax students, tax professionals, and tax academics,

As I am sure you are aware, over the past few months, the Graduate Tax Program (the “Program”) at the University of Florida (“UF”) has been embroiled in a heated controversy. This controversy started after the arrival of a new Dean, Laura Rosenbury, and significantly escalated with the publication of a letter criticizing the Program, written by Robert Rhee, a non-tax law faculty member at UF.

Rhee’s letter was not written in a vacuum. It is a result of a toxic organizational environment full of anger and distrust. I do not know who is responsible for breeding such an environment, as I have little firsthand knowledge of the events leading to Rhee’s letter. My best guess is that many individuals, of all parties involved, share the blame.

The purpose of this response letter is to make three arguments:

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September 23, 2016 in Legal Education, Tax | Permalink | Comments (4)

Brian Leiter Weighs In On 'The Turmoil At The University Of Florida Over Its Tax Program'

Florida Logo (GIF)Brian Leiter (Chicago), The Turmoil at the University of Florida Over Its Tax Program:

One peculiarity of the critical analysis of the tax program by UF faculty member Robert Rhee is that, in discussing the Sisk data on faculty citations, he fails to note (at least not that I saw) that tax is a low-citation field compared to corporate or constitutional law or just about every other field!  That does lead me to wonder about the reliability of other parts of his analysis. ...

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September 23, 2016 in Legal Education, Tax | Permalink | Comments (4)

NYU Symposium:  Human Rights And Tax In An Unequal World

HRThe two-day symposium on Human Rights and Tax in an Unequal World concludes today at NYU:

Session #3:   Beyond “Spillover”: North-South Dimensions of Tax and Tax Abuse

This panel will situate the discussion of tax abuse and human rights in its geopolitical context, addressing the differentiated responsibilities of the Global North and South for the causes and consequences of tax abuse, and the relationship between cross-border tax abuse and inter-State inequalities. Experts from the fields of tax and human rights will discuss the methodological challenges of assessing the extraterritorial impacts of tax policies and secrecy regimes, some of which were laid bare in recent attempts to conduct “spillover analyses” of laws and regulations in the Global North. How can studies capture the human rights consequences of the policies that enable cross-border tax abuse, including the gendered impacts? Panelists will explore options for enforcing global tax rules and holding actors accountable for tax abuses that affect human rights, including the potential role for domestic courts, as well as regional and international human rights bodies.

Session #4:  Private Actors and the Public Purse: The Roles of Corporations, Lawyers, and Accountants in Tax Abuse

Consumers and regulators are increasingly scrutinizing the practices of corporations that hide assets to avoid or minimize taxes paid on the benefits they reap from operating in various jurisdictions, and the responsibilities of the law firms (like Mossack Fonseca of Panama Papers fame) and accountants that facilitate such practices. Recent high-profile tax scandals have underscored the reputational risks of tax abuses and have made tax planning an issue of corporate social responsibility and business ethics. Some of the questions panelists will explore include: How realistic is it to expect serious reform of tax practices to come from private actors? Are efforts to encourage ‘good corporate tax behavior’ delaying compulsory measures by suggesting there is voluntary progress? How do human rights principles and policies bear on the ethical obligations of accountants and lawyers who work in the area of taxation? In what ways, if any, should considerations of human rights law affect the ethics of accountants and lawyers in this field?

Session #5:  The Responsibilities of Governments: The Case of Transparency

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September 23, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1233

Thursday, September 22, 2016

Kahng Presents Who Owns Human Capital? At Emory

Kahng (2017)Lily Kahng (Seattle) presented Who Owns Human Capital?, 93 Wash. U. L. Rev. ___ (2017), at Emory yesterday as part of its Faculty Colloquium Series:

This Article analyzes the tax law’s capital income preference through the lens of intellectual capital, an increasingly important driver of economic productivity whose value derives primarily from workers’ knowledge, experience and skills. The Article discusses how business owners increasingly are able to “propertize” labor into intellectual capital — to control their workers and appropriate the returns on their labor through the expansive use of intellectual property laws, contract and employment laws, and other legal mechanisms. The Article then shows how the tax law provides significant subsidies to the process of propertization and thereby contributes to the inequitable distribution of returns between business owners and workers. The Article’s analysis further reveals the tax law’s fundamental capital-labor distinction to be questionable, perhaps even illusory, an insight which has profound implications for the tax law.

September 22, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (1)

Joshua Blank Named Vice Dean At NYU

Blank (2016)Press Release:

Professor of Tax Law Joshua Blank LLM ’07, faculty director of the Graduate Tax Program, has been named NYU Law’s vice dean for technology-enhanced education.

In his new vice deanship, Blank will focus initially on four areas: working with faculty to introduce and enhance the use of technology in their teaching; overseeing the current online degree programs, the Executive LLM in Taxation and the Master of Studies in Law in Taxation, and helping to launch new degree programs with significant online components; leading the Law School’s efforts in developing open education content; and representing NYU Law on University-level technology committees. While continuing work on current technology-based initiatives, he will also actively seek new and forward-thinking opportunities for the Law School to evolve technologically.

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September 22, 2016 in Legal Education, Tax | Permalink | Comments (2)

Second Circuit Affirms Paul Daugerdas' Conviction And Sentence For Tax Shelter Fraud

Helter ShelterUnited States v. Daugerdas, No. 14-2437 (2d Cir. Sept. 21, 2016):

Paul M. Daugerdas was a Certified Public Accountant (“CPA”) and tax attorney at Arthur Andersen through August of 9 1994; the law firm Altheimer & Gray from the end of 1994 through 1998; and the Chicago office of the law firm Jenkens & Gilchrist (“J&G”) from 1999 through April 2004. Throughout his career, Daugerdas developed, sold, and implemented a variety of tax‐reduction strategies for wealthy clients: the so‐called Short Sale Shelter, Short Option Shelter, Swaps Shelter, and HOMER Shelter. Besides Daugerdas’s employers, two other entities had significant involvement in this undertaking.    The accounting firm BDO Seidman (“BDO”) referred its clients to J&G and helped to sell the shelters, and the investment bank Deutsche Bank. Alex Brown (“DB”) assisted J&G in the design of the shelters, held informational meetings with clients, and implemented the transactions that composed the shelters.

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September 22, 2016 in New Cases, Tax | Permalink | Comments (0)

NYU Symposium:  Human Rights And Tax In An Unequal World

HRThe two-day symposium on Human Rights and Tax in an Unequal World kicks off today at NYU:

Session #1:  Are Human Rights Really Relevant to Tax?

This panel will ask a range of leading tax scholars and practitioners what relevance human rights law has or could have to the field of tax law. Do human rights matter to tax policy and practice? Are human rights laws and institutions relevant to understanding and regulating the global tax system? How do the core principles of the human rights regime—non-discrimination, equality, and dignity— inform thinking on the power to tax, the design of tax policies, and the implementation and enforcement of tax laws? Can human rights law help trace the line between permissible tax competition and impermissible interference with other States’ tax sovereignty? Panelists will discuss how tax experts are, or whether they should be, grappling with concepts of human rights and corresponding duties as they chart reforms of domestic and global tax policies, and what they need from the human rights community to do so.

Session #2:  The Human Rights Dimensions of Tax and Tax Abuse

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September 22, 2016 in Conferences, Scholarship, Tax | Permalink | Comments (0)

The IRS Scandal, Day 1232

IRS Logo 2New York Times, I.R.S. Chief Calls Efforts to Oust Him ‘Improper’:

The commissioner of the Internal Revenue Service, John A. Koskinen, expressed regret Wednesday for management mistakes, but called the attempt by House Republicans to impeach him “improper,” warning that such threats would discourage people from government service. ...

He also rejected Republican calls for him to resign, but said he would leave office if the next president so wishes. Otherwise, Mr. Koskinen’s term ends in November 2017. ...

At the Judiciary hearing on Wednesday, Mr. Koskinen again testified that the destruction of emails was inadvertent, and that his testimony in 2014 was based on what he thought was factual at the time. But he expressed regrets.

“The truth is, we did not succeed in preserving all of the information requested. And some of my testimony later proved mistaken,” Mr. Koskinen said. He added, “Even closer communication with Congress would have been advisable.” ...

Several Democrats denounced the hearings as a “sham,” and many changed the subject, instead asking Mr. Koskinen leading questions in reference to the Republican presidential nominee, Donald J. Trump.

While Mr. Koskinen said he could not talk about any specific taxpayer, he said the I.R.S. would not object to someone releasing tax returns under audit — as Mr. Trump has suggested the I.R.S. would do in refusing to release his own returns. Mr. Koskinen also described violations of tax law by charitable foundations in hypothetical terms, much like critics have alleged against Mr. Trump’s foundation.

“I appreciate your being here to clear some of that up,” said Representative Ted Deutch, Democrat of Florida.

Wall Street Journal, IRS Commissioner Pushes Back on Impeachment Attempt:

Internal Revenue Service Commissioner John Koskinen defended himself Wednesday against an impeachment attempt, labeling Republicans’ push to remove him from office as “improper” and warning that such a move would deter qualified people from serving in government.

House GOP hard-liners say impeachment is warranted because of the destruction of evidence sought by congressional investigators and because Mr. Koskinen failed to promptly inform Congress when he learned of the destruction. They also pressed him on the thoroughness of the agency’s search for records, which Congress demanded as part of inquiries into the IRS treatment of conservative groups under Mr. Koskinen’s predecessors.

“Your overall record is one of gross incompetence and extreme negligence,” Rep. Raul Labrador (R., Idaho) told Mr. Koskinen during a House Judiciary Committee hearing on Wednesday, urging the commissioner to resign.

Although he expressed regret for the agency’s shortcomings in protecting evidence and the fact that some of his statements later proved mistaken, Mr. Koskinen said he wouldn’t quit and said he hadn’t done anything to deserve impeachment.

“There is no evidence anywhere that I knew something I didn’t tell people about, that I falsified or misrepresented or lied,” he told reporters after the hearing, adding that it would set a “terrible precedent” if he were pressured out of office.

National Review: The IRS Commissioner Belongs in Prison, by Kevin D. Williamson:

I do not usually go out of my way to publicly disagree with National Review editorials, but I respectfully dissent from our piece calling for the impeachment of IRS commissioner John Koskinen.

He shouldn’t be impeached. He should be imprisoned.

When the feds couldn’t make ordinary criminal charges stick to the organized-crime syndicate that turned 1920s Chicago into a free-fire zone, they went after the boss, Al Capone, on tax charges. Under Barack Obama, the weaponized IRS has been transformed into a crime syndicate far worse than anything dreamt of by pinstriped Model-T gangsters — because Al Capone and Meyer Lansky did not have the full force of the federal government behind them. 

Koskinen was called before the House on Tuesday to explain a few things. One of those things is: Why is the IRS destroying evidence under subpoena in this case? Another was: Why is the IRS commissioner lying to Congress?

Koskinen is fluent in the mustelid dialect of Washington: “We did not succeed in preserving all of the information requested, and some of my testimony later proved mistaken.” There is a term for failing to “succeed in preserving information requested” during an official investigation: obstruction of justice.

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September 22, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (1)

Wednesday, September 21, 2016

Duff Presents Dworkinian Equality And Redistributive Taxation Today At Toronto

Duff (2016)David Duff (British Columbia) presents Tax Policy and the Virtuous Sovereign: Dworkinian Equality and Redistributive Taxation at Toronto today as part of its James Hausman Tax Law and Policy Workshop Series:

Among the purposes of a tax system, it is generally accepted that one role is to implement a society’s conception of distributive justice. Indeed, if justice is, as John Rawls famously declared, “the first virtue of social institutions,” distributive justice may properly be regarded as the first or sovereign virtue of a society’s tax system – to which a virtuous sovereign should properly attend.

This article reviews Ronald Dworkin’s theory of distributive justice as equality of resources and its implications for redistributive taxation. Part II examines the theory itself in contrast to other prominent theories of distributive justice, arguing that Dworkin’s approach provides a more compelling conception of distributive justice than welfare-based theories that do not take rights and responsibilities seriously, Rawlsian theory which is insufficiently attentive to individual rights and responsibilities, and classical libertarianism which fails to take equality seriously.

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September 21, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (3)

Buchanan Presents Social Security, Inequality, And Younger Generations Today At Northwestern

BuchananNeil Buchanan (George Washington) presents Social Security, Inequality, and Younger Generations at Northwestern today as part of its Advanced Topics in Taxation Workshop Series hosted by Sarah Lawsky:

Are older generations of Americans using Social Security to enrich themselves at the expense of their children and grandchildren? To listen to the public debate in the United States, one could be forgiven for thinking so. Derogatory labels for older people, such as “greedy geezers,” have become common in the American political debate, with news commentators, politicians, and even the popular culture chiming in with claims that older Americans are the cause of otherwise-solvable budget problems, and more generally that they are a cohort of selfish retirees and near-retirees who refuse to give up their excessive government-provided benefits, which will inevitably lead to disastrous outcomes for the generations to follow.

September 21, 2016 in Colloquia, Scholarship, Tax | Permalink | Comments (0)

The SEC Should Demand More Tax Disclosure From Public Companies

New York Times op-ed: How Companies Like Apple Dodge Taxes and Their Own Investors, by Morris Pearl (former Managing Director, BlackRock; Chairman, Patriotic Millionaires):

As an investor, one who has been entrusted with helping to safeguard other people’s money over many years, I value the high degree of disclosure required from American public companies. Corporations and the world in which they operate change every day, so investors need to know the risks their money faces.

No area of business demonstrates the need for full disclosure as much as one that has been in the news a lot lately: large American companies’ shifting profits overseas to minimize tax bills, or to avoid taxes altogether. These schemes are starting to attract the attention of regulators and governments who view them more as tax dodges than as legitimate financial arrangements.

Given the risks, the last thing investors need is less disclosure. But the Securities and Exchange Commission, the agency responsible to ensure that companies are being open and honest, is considering exactly that: scaling back the information available to the public. ... This is the wrong direction. We need more information, not less.

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September 21, 2016 in Tax | Permalink | Comments (0)

IRS Maps Same-Sex Marriages By City, State

Robin Fisher, Geof Gee & Adam Looney (U.S. Treasury Department, Office of Tax Analysis), Joint Filing by Same-Sex Couples after Windsor: Characteristics of Married Tax Filers in 2013 and 2014:

In June 2013, the Supreme Court invalidated a key provision of the 1996 Defense of Marriage Act (Windsor v. United States), allowing same-sex spouses to be treated as married for all federal tax purposes. Treasury and the Internal Revenue Service (IRS) subsequently ruled that same-sex spouses legally married in jurisdictions that recognize their marriages will be treated as married for federal tax purposes. This paper provides estimates of the population of same-sex tax filers in the first two years affected by the decision drawn from the population of returns filed and using methods developed by the Census to address measurement error in gender classification. In 2014, we estimate that about 0.35 percent of all joint filers were same-sex couples or about 183,280 couples.

New York Times, The Most Detailed Map of Gay Marriage in America:

NY Times

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September 21, 2016 in Tax | Permalink | Comments (0)

The IRS Scandal, Day 1231

IRS Logo 2The Daily Signal, Judiciary Committee Set to Audit Top IRS Tax Agent:

A last-minute deal between House conservatives and Republican leadership delayed a floor vote to impeach the head of the IRS last week. But the top taxman isn’t in the clear just yet.

For the first time, IRS Commissioner John Koskinen will come under oath to plead his case, appearing before the House Judiciary Committee on Wednesday. A product of compromise, that impeachment hearing means different things to different factions of Congress.

Freedom Caucus members, who have been demanding Koskinen’s early retirement for months, see the hearing as a formality necessary to fire Koskinen. Others see it as a prerequisite to a longer impeachment process and an opportunity to afford the taxman his right to due process.

It’s undisputed that Koskinen will face an unfriendly jury Wednesday, though.

Fourteen of the 23 Republican Judiciary Committee members have said already that the taxman is guilty of wrongdoing, including Oversight Committee Chairman Jason Chaffetz, R-Utah, who first filed articles of impeachment last October.

Making matters worse for the IRS chief, seven Freedom Caucus members sit on the committee, including Chairman Jim Jordan, R-Ohio, who has helped quarterback the effort to send Koskinen into early retirement.

Conservatives argue that Koskinen is unfit to lead the IRS because he obstructed a congressional investigation into the agency’s unfair treatment of tea party groups applying for tax-exempt status before the 2012 elections.

The White House has been unwavering in their support of Koskinen. Speaking at a Democrat fundraiser last week, President Barack Obama said the impeachment effort “is crazy.” And Koskinen, who has hired a personal defense attorney, maintains that those allegations “lack merit.”

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September 21, 2016 in IRS News, IRS Scandal, Tax | Permalink | Comments (0)